Contents

1. Contents

2. HBR’s 10 Must Reads on Reinventing HR

1. Title Page

2. Copyright

3. Contents

4. BONUS ARTICLE: People Before Strategy: A New Role for the CHRO

5. How Netflix Reinvented HR

6. HR Goes Agile

7. Reinventing Performance Management

8. Better People Analytics

9. 21st-Century Talent Spotting

10. Tours of Duty: The New Employer-Employee Compact

11. Creating the Best Workplace on Earth

12. Why Diversity Programs Fail

13. When No One Retires

14. Collaborative Intelligence: Humans and AI Are Joining Forces

15. About the Contributors

16. Index

3. HBR’s 10 Must Reads on Building a Great Culture

1. Title Page

2. Copyright

3. Contents

4. The Leader’s Guide to Corporate Culture

5. Manage Your Emotional Culture

6. The Neuroscience of Trust

7. Creating a Purpose-Driven Organization

8. Creating the Best Workplace on Earth

9. Cultural Change That Sticks

10. BONUS ARTICLE: How to Build a Culture of Originality

11. When Culture Doesn’t Translate

12. Culture Is Not the Culprit

13. Conquering a Culture of Indecision

14. Radical Change, the Quiet Way

15. About the Contributors

16. Index

4. HBR’s 10 Must Reads on Diversity

1. Title Page

2. Copyright

3. Contents

4. BONUS ARTICLE: Making Differences Matter: A New Paradigm for Managing Diversity

5. Why Diversity Programs Fail

6. “Numbers Take Us Only So Far”

7. Race Matters: The Truth About Mentoring Minorities

8. Leadership in Your Midst: Tapping the Hidden Strengths of Minority Executives

9. What Most People Get Wrong About Men and Women

10. Hacking Tech’s Diversity Problem

11. Why Men Still Get More Promotions Than Women

12. When No One Retires

13. Neurodiversity as a Competitive Advantage

14. Managing Multicultural Teams

15. BONUS ARTICLE FROM HBR.ORG: 7 Myths About Coming Out at Work

16. About the Contributors

17. Index

5. HBR’s 10 Must Reads on Change Management

1. Title Page

2. Copyright

3. Contents

4. Leading Change: Why Transformation Efforts Fail

5. Change Through Persuasion

6. Leading Change When Business Is Good: An Interview with Samuel J. Palmisano

7. Radical Change, the Quiet Way

8. Tipping Point Leadership

9. A Survival Guide for Leaders

10. The Real Reason People Won’t Change

11. Cracking the Code of Change

12. The Hard Side of Change Management

13. Why Change Programs Don’t Produce Change

14. About the Contributors

15. Index

16. Back Cover

6. HBR’s 10 Must Reads on Managing People

1. Title Page

2. Copyright

3. Contents

4. Leadership That Gets Results

5. One More Time: How Do You Motivate Employees?

6. The Set-Up-to-Fail Syndrome

7. Saving Your Rookie Managers from Themselves

8. What Great Managers Do

9. Fair Process: Managing in the Knowledge Economy

10. Teaching Smart People How to Learn

11. How (Un)ethical Are You?

12. The Discipline of Teams

13. Managing Your Boss

14. About the Contributors

15. Index

16. Back Cover

Guide

1. Cover

2. Table of Contents

3. Cover

Contents

HBR’s 10 Must Reads on Reinventing HR

HBR’s 10 Must Reads on Building a Great Culture

HBR’s 10 Must Reads on Diversity

HBR’s 10 Must Reads on Change Management

HBR’s 10 Must Reads on Managing People

Harvard Business Review Press

Boston, Massachusetts

HBR’s 10 Must Reads series is the definitive collection of ideas and best practices for aspiring and experienced leaders alike. These books offer essential reading selected from the pages of Harvard Business Review on topics critical to the success of every manager.

Titles include:

HBR’s 10 Must Reads 2015

HBR’s 10 Must Reads 2016

HBR’s 10 Must Reads 2017

HBR’s 10 Must Reads 2018

HBR’s 10 Must Reads 2019

HBR’s 10 Must Reads 2020

HBR’s 10 Must Reads for CEOs

HBR’s 10 Must Reads for New Managers

HBR’s 10 Must Reads on AI, Analytics, and the New Machine Age

HBR’s 10 Must Reads on Business Model Innovation

HBR’s 10 Must Reads on Change Management

HBR’s 10 Must Reads on Collaboration

HBR’s 10 Must Reads on Communication

HBR’s 10 Must Reads on Diversity

HBR’s 10 Must Reads on Emotional Intelligence

HBR’s 10 Must Reads on Entrepreneurship and Startups

HBR’s 10 Must Reads on Innovation

HBR’s 10 Must Reads on Leadership

HBR’s 10 Must Reads on Leadership for Healthcare

HBR’s 10 Must Reads on Leadership Lessons from Sports

HBR’s 10 Must Reads on Making Smart Decisions

HBR’s 10 Must Reads on Managing Across Cultures

HBR’s 10 Must Reads on Managing People

HBR’s 10 Must Reads on Managing Yourself

HBR’s 10 Must Reads on Mental Toughness

HBR’s 10 Must Reads on Negotiation

HBR’s 10 Must Reads on Nonprofits and the Social Sectors

HBR’s 10 Must Reads on Reinventing HR

HBR’s 10 Must Reads on Sales

HBR’s 10 Must Reads on Strategic Marketing

HBR’s 10 Must Reads on Strategy

HBR’s 10 Must Reads on Strategy for Healthcare

HBR’s 10 Must Reads on Teams

HBR’s 10 Must Reads on Women and Leadership

HBR’s 10 Must Reads: The Essentials

On

Diversity

HARVARD BUSINESS REVIEW PRESS

Boston, Massachusetts

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First eBook Edition: May 2019

ISBN: 9781633697720

eISBN: 9781633697737

Contents

Cover

Title Page

Copyright

BONUS ARTICLE

Making Differences Matter: A New Paradigm for Managing Diversity

by David A. Thomas and Robin J. Ely

Why Diversity Programs Fail

by Frank Dobbin and Alexandra Kalev

“Numbers Take Us Only So Far”

by Maxine Williams

Race Matters: The Truth About Mentoring Minorities

by David A. Thomas

Leadership in Your Midst: Tapping the Hidden Strengths of Minority Executives

by Sylvia Ann Hewlett, Carolyn Buck Luce, and Cornel West

What Most People Get Wrong About Men and Women

by Catherine H. Tinsley and Robin J. Ely

Hacking Tech’s Diversity Problem

by Joan C. Williams

Why Men Still Get More Promotions Than Women

by Herminia Ibarra, Nancy M. Carter, and Christine Silva

When No One Retires

by Paul Irving

Neurodiversity as a Competitive Advantage

by Robert D. Austin and Gary P. Pisano

Managing Multicultural Teams

by Jeanne Brett, Kristin Behfar, and Mary C. Kern

BONUS ARTICLE FROM HBR.ORG

7 Myths About Coming Out at Work

by Raymond Trau, Jane O’Leary, and Cathy Brown

About the Contributors

Index

Making Differences Matter

A New Paradigm for Managing Diversity.

by David A. Thomas and Robin J. Ely

WHY SHOULD COMPANIES CONCERN THEMSELVES with diversity? Until recently, many managers answered this question with the assertion that discrimination is wrong, both legally and morally. But today managers are voicing a second notion as well. A more diverse workforce, they say, will increase organizational effectiveness. It will lift morale, bring greater access to new segments of the marketplace, and enhance productivity. In short, they claim, diversity will be good for business.

Yet if this is true—and we believe it is—where are the positive impacts of diversity? Numerous and varied initiatives to increase diversity in corporate America have been under way for more than two decades. Rarely, however, have those efforts spurred leaps in organizational effectiveness. Instead, many attempts to increase diversity in the workplace have backfired, sometimes even heightening tensions among employees and hindering a company’s performance.

This article offers an explanation for why diversity efforts are not fulfilling their promise and presents a new paradigm for understanding—and leveraging—diversity. It is our belief that there is a distinct way to unleash the powerful benefits of a diverse workforce. Although these benefits include increased profitability, they go beyond financial measures to encompass learning, creativity, flexibility, organizational and individual growth, and the ability of a company to adjust rapidly and successfully to market changes. The desired transformation, however, requires a fundamental change in the attitudes and behaviors of an organization’s leadership. And that will come only when senior managers abandon an underlying and flawed assumption about diversity and replace it with a broader understanding.

Most people assume that workplace diversity is about increasing racial, national, gender, or class representation—in other words, recruiting and retaining more people from traditionally underrepresented “identity groups.” Taking this commonly held assumption as a starting point, we set out six years ago to investigate its link to organizational effectiveness. We soon found that thinking of diversity simply in terms of identity-group representation inhibited effectiveness.

Organizations usually take one of two paths in managing diversity. In the name of equality and fairness, they encourage (and expect) women and people of color to blend in. Or they set them apart in jobs that relate specifically to their backgrounds, assigning them, for example, to areas that require them to interface with clients or customers of the same identity group. African American MBA’s often find themselves marketing products to inner-city communities; Hispanics frequently market to Hispanics or work for Latin American subsidiaries. In those kinds of cases, companies are operating on the assumption that the main virtue identity groups have to offer is a knowledge of their own people. This assumption is limited—and limiting—and detrimental to diversity efforts.

What we suggest here is that diversity goes beyond increasing the number of different identity-group affiliations on the payroll to recognizing that such an effort is merely the first step in managing a diverse workforce for the organization’s utmost benefit. Diversity should be understood as the varied perspectives and approaches to work that members of different identity groups bring.

Idea in Brief

You know that workforce diversity is smart business: It opens markets, lifts morale, and enhances productivity. So why do most diversity initiatives backfire—heightening tensions and hindering corporate performance?

Many of us simply hire employees with diverse backgrounds—then await the payoff. We don’t enable employees’ differences to transform how our organization does work.

When employees use their differences to shape new goals, processes, leadership approaches, and teams, they bring more of themselves to work. They feel more committed to their jobs—and their companies grow.

How to activate this virtuous cycle? Transcend two existing diversity paradigms: assimilation (“we’re all the same”) or differentiation (“we celebrate differences”). Adopt a new paradigm—integration—that enables employees’ differences to matter.

Idea in Practice

The Integration Paradigm

The integration paradigm transcends assimilation and differentiation—promoting equal opportunity and valuing cultural differences. Result? Employees’ diverse perspectives positively impact companies’ work.

Example: A public-interest law firm’s all-white staff’s clients are exclusively white. It hires female attorneys of color, who encourage it to pursue litigation challenging English-only policies. Since such cases didn’t fall under traditional affirmative-action work, the firm had ignored them. By taking them, it begins serving more women—immigrants—and enhances the quality of its work. The attorneys of color feel valued, and the firm attracts competent, diverse staff.

Additional suggestions for achieving integration:

1. Encourage open discussion of cultural backgrounds.

Example: A food company’s Chinese chemist draws on her cooking—not her scientific— experience to solve a soup-flavoring problem. But to fit in, she avoids sharing the real source of her inspiration with her colleagues—all white men. Open discussion of cultural differences would engage her more fully in work and workplace relationships.

2. Eliminate all forms of dominance (by hierarchy, function, race, gender, etc.) that inhibit full contribution. When one firm opened its annual strategy conference to people from all hierarchy levels, everyone knew their contributions were valued.

3. Secure organizational trust. In diverse workforces, people share more feelings and ideas. Tensions naturally arise. Demonstrate your commitment to diversity by acknowledging tensions—and resolving them swiftly.

Women, Hispanics, Asian Americans, African Americans, Native Americans—these groups and others outside the mainstream of corporate America don’t bring with them just their “insider information.” They bring different, important, and competitively relevant knowledge and perspectives about how to actually do work—how to design processes, reach goals, frame tasks, create effective teams, communicate ideas, and lead. When allowed to, members of these groups can help companies grow and improve by challenging basic assumptions about an organization’s functions, strategies, operations, practices, and procedures. And in doing so, they are able to bring more of their whole selves to the workplace and identify more fully with the work they do, setting in motion a virtuous circle. Certainly, individvuals can be expected to contribute to a company their firsthand familiarity with niche markets. But only when companies start thinking about diversity more holistically—as providing fresh and meaningful approaches to work—and stop assuming that diversity relates simply to how a person looks or where he or she comes from, will they be able to reap its full rewards.

Two perspectives have guided most diversity initiatives to date: the discrimination-and-fairness paradigm and the access-and-legitimacy paradigm. But we have identified a new, emerging approach to this complex management issue. This approach, which we call the learning-and-effectiveness paradigm, incorporates aspects of the first two paradigms but goes beyond them by concretely connecting diversity to approaches to work. Our goal is to help business leaders see what their own approach to diversity currently is and how it may already have influenced their companies’ diversity efforts. Managers can learn to assess whether they need to change their diversity initiatives and, if so, how to accomplish that change.

The following discussion will also cite several examples of how connecting the new definition of diversity to the actual doing of work has led some organizations to markedly better performance. The organizations differ in many ways—none are in the same industry, for instance—but they are united by one similarity: Their leaders realize that increasing demographic variation does not in itself increase organizational effectiveness. They realize that it is how a company defines diversity—and what it does with the experiences of being a diverse organization—that delivers on the promise.

The Discrimination-and-Fairness Paradigm

Using the discrimination-and-fairness paradigm is perhaps thus far the dominant way of understanding diversity. Leaders who look at diversity through this lens usually focus on equal opportunity, fair treatment, recruitment, and compliance with federal Equal Employment Opportunity requirements. The paradigm’s underlying logic can be expressed as follows:

Prejudice has kept members of certain demographic groups out of organizations such as ours. As a matter of fairness and to comply with federal mandates, we need to work toward restructuring the makeup of our organization to let it more closely reflect that of society. We need managerial processes that ensure that all our employees are treated equally and with respect and that some are not given unfair advantage over others.

Although it resembles the thinking behind traditional affirmative-action efforts, the discrimination-and-fairness paradigm does go beyond a simple concern with numbers. Companies that operate with this philosophical orientation often institute mentoring and career-development programs specifically for the women and people of color in their ranks and train other employees to respect cultural differences. Under this paradigm, nevertheless, progress in diversity is measured by how well the company achieves its recruitment and retention goals rather than by the degree to which conditions in the company allow employees to draw on their personal assets and perspectives to do their work more effectively. The staff, one might say, gets diversified, but the work does not.

What are some of the common characteristics of companies that have used the discrimination-and-fairness paradigm successfully to increase their demographic diversity? Our research indicates that they are usually run by leaders who value due process and equal treatment of all employees and who have the authority to use top-down directives to enforce initiatives based on those attitudes. Such companies are often bureaucratic in structure, with control processes in place for monitoring, measuring, and rewarding individual performance. And finally, they are often organizations with entrenched, easily observable cultures, in which values like fairness are widespread and deeply inculcated and codes of conduct are clear and unambiguous. (Perhaps the most extreme example of an organization in which all these factors are at work is the United States Army.)

Without doubt, there are benefits to this paradigm: it does tend to increase demographic diversity in an organization, and it often succeeds in promoting fair treatment. But it also has significant limitations. The first of these is that its color-blind, gender-blind ideal is to some degree built on the implicit assumption that “we are all the same” or “we aspire to being all the same.” Under this paradigm, it is not desirable for diversification of the workforce to influence the organization’s work or culture. The company should operate as if every person were of the same race, gender, and nationality. It is unlikely that leaders who manage diversity under this paradigm will explore how people’s differences generate a potential diversity of effective ways of working, leading, viewing the market, managing people, and learning.

Not only does the discrimination-and-fairness paradigm insist that everyone is the same, but, with its emphasis on equal treatment, it puts pressure on employees to make sure that important differences among them do not count. Genuine disagreements about work definition, therefore, are sometimes wrongly interpreted through this paradigm’s fairness-unfairness lens—especially when honest disagreements are accompanied by tense debate. A female employee who insists, for example, that a company’s advertising strategy is not appropriate for all ethnic segments in the marketplace might feel she is violating the code of assimilation upon which the paradigm is built. Moreover, if she were then to defend her opinion by citing, let us say, her personal knowledge of the ethnic group the company wanted to reach, she might risk being perceived as importing inappropriate attitudes into an organization that prides itself on being blind to cultural differences.

Workplace paradigms channel organizational thinking in powerful ways. By limiting the ability of employees to acknowledge openly their work-related but culturally based differences, the paradigm actually undermines the organization’s capacity to learn about and improve its own strategies, processes, and practices. And it also keeps people from identifying strongly and personally with their work—a critical source of motivation and self-regulation in any business environment.

As an illustration of the paradigm’s weaknesses, consider the case of Iversen Dunham, an international consulting firm that focuses on foreign and domestic economic-development policy. (Like all the examples in this article, the company is real, but its name is disguised.) Not long ago, the firm’s managers asked us to help them understand why race relations had become a divisive issue precisely at a time when Iversen was receiving accolades for its diversity efforts. Indeed, other organizations had even begun to use the firm to benchmark their own diversity programs.

Iversen’s diversity efforts had begun in the early 1970s, when senior managers decided to pursue greater racial and gender diversity in the firm’s higher ranks. (The firm’s leaders were strongly committed to the cause of social justice.) Women and people of color were hired and charted on career paths toward becoming project leaders. High performers among those who had left the firm were persuaded to return in senior roles. By 1989, about 50% of Iversen’s project leaders and professionals were women, and 30% were people of color. The 13-member management committee, once exclusively white and male, included five women and four people of color. Additionally, Iversen had developed a strong contingent of foreign nationals.

It was at about this time, however, that tensions began to surface. Senior managers found it hard to believe that, after all the effort to create a fair and mutually respectful work community, some staff members could still be claiming that Iversen had racial discrimination problems. The management invited us to study the firm and deliver an outsider’s assessment of its problem.

We had been inside the firm for only a short time when it became clear that Iversen’s leaders viewed the dynamics of diversity through the lens of the discrimination-and-fairness paradigm. But where they saw racial discord, we discerned clashing approaches to the actual work of consulting. Why? Our research showed that tensions were strongest among midlevel project leaders. Surveys and interviews indicated that white project leaders welcomed demographic diversity as a general sign of progress but that they also thought the new employees were somehow changing the company, pulling it away from its original culture and its mission. Common criticisms were that African American and Hispanic staff made problems too complex by linking issues the organization had traditionally regarded as unrelated and that they brought on projects that seemed to require greater cultural sensitivity. White male project leaders also complained that their peers who were women and people of color were undermining one of Iversen’s traditional strengths: its hard-core quantitative orientation. For instance, minority project leaders had suggested that Iversen consultants collect information and seek input from others in the client company besides senior managers—that is, from the rank and file and from middle managers. Some had urged Iversen to expand its consulting approach to include the gathering and analysis of qualitative data through interviewing and observation. Indeed, these project leaders had even challenged one of Iversen’s long-standing, core assumptions: that the firm’s reports were objective. They urged Iversen Dunham to recognize and address the subjective aspect of its analyses; the firm could, for example, include in its reports to clients dissenting Iversen views, if any existed.

For their part, project leaders who were women and people of color felt that they were not accorded the same level of authority to carry out that work as their white male peers. Moreover, they sensed that those peers were skeptical of their opinions, and they resented that doubts were not voiced openly.

Meanwhile, there also was some concern expressed about tension between white managers and nonwhite subordinates, who claimed they were being treated unfairly. But our analysis suggested that the manager-subordinate conflicts were not numerous enough to warrant the attention they were drawing from top management. We believed it was significant that senior managers found it easier to focus on this second type of conflict than on midlevel conflicts about project choice and project definition. Indeed, Iversen Dunham’s focus seemed to be a result of the firm’s reliance on its particular diversity paradigm and the emphasis on fairness and equality. It was relatively easy to diagnose problems in light of those concepts and to devise a solution: just get managers to treat their subordinates more fairly.

The Research

THIS ARTICLE IS BASED ON a three-part research effort that began in 1990. Our subject was diversity; but, more specifically, we sought to understand three management challenges under that heading. First, how do organizations successfully achieve and sustain racial and gender diversity in their executive and middle-management ranks? Second, what is the impact of diversity on an organization’s practices, processes, and performance? And, finally, how do leaders influence whether diversity becomes an enhancing or detracting element in the organization?

Over the following six years, we worked particularly closely with three organizations that had attained a high degree of demographic diversity: a small urban law firm, a community bank, and a 200-person consulting firm. In addition, we studied nine other companies in varying stages of diversifying their workforces. The group included two financial-services firms, three Fortune 500 manufacturing companies, two midsize high-technology companies, a private foundation, and a university medical center. In each case, we based our analysis on interviews, surveys, archival data, and observation. It is from this work that the third paradigm for managing diversity emerged and with it our belief that old and limiting assumptions about the meaning of diversity must be abandoned before its true potential can be realized as a powerful way to increase organizational effectiveness.

In contrast, it was difficult to diagnose peer-to-peer tensions in the framework of this model. Such conflicts were about the very nature of Iversen’s work, not simply unfair treatment. Yes, they were related to identity-group affiliations, but they were not symptomatic of classic racism. It was Iversen’s paradigm that led managers to interpret them as such. Remember, we were asked to assess what was supposed to be a racial discrimination problem. Iversen’s discrimination-and-fairness paradigm had created a kind of cognitive blind spot; and, as a result, the company’s leadership could not frame the problem accurately or solve it effectively. Instead, the company needed a cultural shift—it needed to grasp what to do with its diversity once it had achieved the numbers. If all Iversen Dunham employees were to contribute to the fullest extent, the company would need a paradigm that would encourage open and explicit discussion of what identity-group differences really mean and how they can be used as sources of individual and organizational effectiveness.

Today, mainly because of senior managers’ resistance to such a cultural transformation, Iversen continues to struggle with the tensions arising from the diversity of its workforce.

The Access-and-Legitimacy Paradigm

In the competitive climate of the 1980s and 1990s, a new rhetoric and rationale for managing diversity emerged. If the discrimination-and-fairness paradigm can be said to have idealized assimilation and color- and gender-blind conformism, the access-and-legitimacy paradigm was predicated on the acceptance and celebration of differences. The underlying motivation of the access-and-legitimacy paradigm can be expressed this way:

We are living in an increasingly multicultural country, and new ethnic groups are quickly gaining consumer power. Our company needs a demographically more diverse workforce to help us gain access to these differentiated segments. We need employees with multilingual skills in order to understand and serve our customers better and to gain legitimacy with them. Diversity isn’t just fair; it makes business sense.

Where this paradigm has taken hold, organizations have pushed for access to—and legitimacy with—a more diverse clientele by matching the demographics of the organization to those of critical consumer or constituent groups. In some cases, the effort has led to substantial increases in organizational diversity. In investment banks, for example, municipal finance departments have long led corporate finance departments in pursuing demographic diversity because of the typical makeup of the administration of city halls and county boards. Many consumer-products companies that have used market segmentation based on gender, racial, and other demographic differences have also frequently created dedicated marketing positions for each segment. The paradigm has therefore led to new professional and managerial opportunities for women and people of color.

What are the common characteristics of organizations that have successfully used the access-and-legitimacy paradigm to increase their demographic diversity? There is but one: such companies almost always operate in a business environment in which there is increased diversity among customers, clients, or the labor pool—and therefore a clear opportunity or an imminent threat to the company.

Again, the paradigm has its strengths. Its market-based motivation and the potential for competitive advantage that it suggests are often qualities an entire company can understand and therefore support. But the paradigm is perhaps more notable for its limitations. In their pursuit of niche markets, access-and-legitimacy organizations tend to emphasize the role of cultural differences in a company without really analyzing those differences to see how they actually affect the work that is done. Whereas discrimination-and-fairness leaders are too quick to subvert differences in the interest of preserving harmony, access-and-legitimacy leaders are too quick to push staff with niche capabilities into differentiated pigeonholes without trying to understand what those capabilities really are and how they could be integrated into the company’s mainstream work. To illustrate our point, we present the case of Access Capital.

Access Capital International is a U.S. investment bank that in the early 1980s launched an aggressive plan to expand into Europe. Initially, however, Access encountered serious problems opening offices in international markets; the people from the United States who were installed abroad lacked credibility, were ignorant of local cultural norms and market conditions, and simply couldn’t seem to connect with native clients. Access responded by hiring Europeans who had attended North American business schools and by assigning them in teams to the foreign offices. This strategy was a marked success. Before long, the leaders of Access could take enormous pride in the fact that their European operations were highly profitable and staffed by a truly international corps of professionals. They took to calling the company “the best investment bank in the world.”

Several years passed. Access’s foreign offices continued to thrive, but some leaders were beginning to sense that the company was not fully benefiting from its diversity efforts. Indeed, some even suspected that the bank had made itself vulnerable because of how it had chosen to manage diversity. A senior executive from the United States explains:

If the French team all resigned tomorrow, what would we do? I’m not sure what we could do! We’ve never attempted to learn what these differences and cultural competencies really are, how they change the process of doing business. What is the German country team actually doing? We don’t know. We know they’re good, but we don’t know the subtleties of how they do what they do. We assumed—and I think correctly—that culture makes a difference, but that’s about as far as we went. We hired Europeans with American MBA’s because we didn’t know why we couldn’t do business in Europe—we just assumed there was something cultural about why we couldn’t connect. And ten years later, we still don’t know what it is. If we knew, then perhaps we could take it and teach it. Which part of the investment banking process is universal and which part of it draws upon particular cultural competencies? What are the commonalities and differences? I may not be German, but maybe I could do better at understanding what it means to be an American doing business in Germany. Our company’s biggest failing is that the department heads in London and the directors of the various country teams have never talked about these cultural identity issues openly. We knew enough to use people’s cultural strengths, as it were, but we never seemed to learn from them.

Access’s story makes an important point about the main limitation of the access-and-legitimacy paradigm: under its influence, the motivation for diversity usually emerges from very immediate and often crisis-oriented needs for access and legitimacy—in this case, the need to broker deals in European markets. However, once the organization appears to be achieving its goal, the leaders seldom go on to identify and analyze the culturally based skills, beliefs, and practices that worked so well. Nor do they consider how the organization can incorporate and learn from those skills, beliefs, or practices in order to capitalize on diversity in the long run.

Under the access-and-legitimacy paradigm, it was as if the bank’s country teams had become little spin-off companies in their own right, doing their own exotic, slightly mysterious cultural-diversity thing in a niche market of their own, using competencies that for some reason could not become more fully integrated into the larger organization’s understanding of itself. Difference was valued within Access Capital—hence the development of country teams in the first place—but not valued enough that the organization would try to integrate it into the very core of its culture and into its business practices.

Finally, the access-and-legitimacy paradigm can leave some employees feeling exploited. Many organizations using this paradigm have diversified only in those areas in which they interact with particular niche-market segments. In time, many individuals recruited for this function have come to feel devalued and used as they begin to sense that opportunities in other parts of the organization are closed to them. Often the larger organization regards the experience of these employees as more limited or specialized, even though many of them in fact started their careers in the mainstream market before moving to special markets where their cultural backgrounds were a recognized asset. Also, many of these people say that when companies have needed to downsize or narrow their marketing focus, it is the special departments that are often the first to go. That situation creates tenuous and ultimately untenable career paths for employees in the special departments.

The Emerging Paradigm: Connecting Diversity to Work Perspectives

Recently, in the course of our research, we have encountered a small number of organizations that, having relied initially on one of the above paradigms to guide their diversity efforts, have come to believe that they are not making the most of their own pluralism. These organizations, like Access Capital, recognize that employees frequently make decisions and choices at work that draw upon their cultural background—choices made because of their identity-group affiliations. The companies have also developed an outlook on diversity that enables them to incorporate employees’ perspectives into the main work of the organization and to enhance work by rethinking primary tasks and redefining markets, products, strategies, missions, business practices, and even cultures. Such companies are using the learning-and-effectiveness paradigm for managing diversity and, by doing so, are tapping diversity’s true benefits.

A case in point is Dewey & Levin, a small public-interest law firm located in a northeastern U.S. city. Although Dewey & Levin had long been a profitable practice, by the mid-1980s its all-white legal staff had become concerned that the women they represented in employment-related disputes were exclusively white. The firm’s attorneys viewed that fact as a deficiency in light of their mandate to advocate on behalf of all women. Using the thinking behind the access-and-legitimacy paradigm, they also saw it as bad for business.

Shortly thereafter, the firm hired a Hispanic female attorney. The partners’ hope, simply put, was that she would bring in clients from her own community and also demonstrate the firm’s commitment to representing all women. But something even bigger than that happened. The new attorney introduced ideas to Dewey & Levin about what kinds of cases it should take on. Senior managers were open to those ideas and pursued them with great success. More women of color were hired, and they, too, brought fresh perspectives. The firm now pursues cases that its previously all-white legal staff would not have thought relevant or appropriate because the link between the firm’s mission and the employment issues involved in the cases would not have been obvious to them. For example, the firm has pursued precedent-setting litigation that challenges English-only policies—an area that it once would have ignored because such policies did not fall under the purview of traditional affirmative-action work. Yet it now sees a link between English-only policies and employment issues for a large group of women—primarily recent immigrants—whom it had previously failed to serve adequately. As one of the white principals explains, the demographic composition of Dewey & Levin “has affected the work in terms of expanding notions of what are [relevant] issues and taking on issues and framing them in creative ways that would have never been done [with an all-white staff]. It’s really changed the substance—and in that sense enhanced the quality—of our work.”

Dewey & Levin’s increased business success has reinforced its commitment to diversity. In addition, people of color at the firm uniformly report feeling respected, not simply “brought along as window dressing.” Many of the new attorneys say their perspectives are heard with a kind of openness and interest they have never experienced before in a work setting. Not surprisingly, the firm has had little difficulty attracting and retaining a competent and diverse professional staff.

If the discrimination-and-fairness paradigm is organized around the theme of assimilation—in which the aim is to achieve a demographically representative workforce whose members treat one another exactly the same—then the access-and-legitimacy paradigm can be regarded as coalescing around an almost opposite concept: differentiation, in which the objective is to place different people where their demographic characteristics match those of important constituents and markets.

The emerging paradigm, in contrast to both, organizes itself around the overarching theme of integration. Assimilation goes too far in pursuing sameness. Differentiation, as we have shown, overshoots in the other direction. The new model for managing diversity transcends both. Like the fairness paradigm, it promotes equal opportunity for all individuals. And like the access paradigm, it acknowledges cultural differences among people and recognizes the value in those differences. Yet this new model for managing diversity lets the organization internalize differences among employees so that it learns and grows because of them. Indeed, with the model fully in place, members of the organization can say, We are all on the same team, with our differences—not despite them.

Eight Preconditions for Making the Paradigm Shift

Dewey & Levin may be atypical in its eagerness to open itself up to change and engage in a long-term transformation process. We remain convinced, however, that unless organizations that are currently in the grip of the other two paradigms can revise their view of diversity so as to avoid cognitive blind spots, opportunities will be missed, tensions will most likely be misdiagnosed, and companies will continue to find the potential benefits of diversity elusive.

Hence the question arises: What is it about the law firm of Dewey & Levin and other emerging third-paradigm companies that enables them to make the most of their diversity? Our research suggests that there are eight preconditions that help to position organizations to use identity-group differences in the service of organizational learning, growth, and renewal.

1. The leadership must understand that a diverse workforce will embody different perspectives and approaches to work, and must truly value variety of opinion and insight. We know of a financial services company that once assumed that the only successful sales model was one that utilized aggressive, rapid-fire cold calls. (Indeed, its incentive system rewarded salespeople in large part for the number of calls made.) An internal review of the company’s diversity initiatives, however, showed that the company’s first- and third-most-profitable employees were women who were most likely to use a sales technique based on the slow but sure building of relationships. The company’s top management has now made the link between different identity groups and different approaches to how work gets done and has come to see that there is more than one right way to get positive results.

2. The leadership must recognize both the learning opportunities and the challenges that the expression of different perspectives presents for an organization. In other words, the second precondition is a leadership that is committed to persevering during the long process of learning and relearning that the new paradigm requires.

3. The organizational culture must create an expectation of high standards of performance from everyone. Such a culture isn’t one that expects less from some employees than from others. Some organizations expect women and people of color to underperform—a negative assumption that too often becomes a self-fulfilling prophecy. To move to the third paradigm, a company must believe that all its members can and should contribute fully.

4. The organizational culture must stimulate personal development. Such a culture brings out people’s full range of useful knowledge and skills—usually through the careful design of jobs that allow people to grow and develop but also through training and education programs.

5. The organizational culture must encourage openness. Such a culture instills a high tolerance for debate and supports constructive conflict on work-related matters.

6. The culture must make workers feel valued. If this precondition is met, workers feel committed to—and empowered within—the organization and therefore feel comfortable taking the initiative to apply their skills and experiences in new ways to enhance their job performance.

7. The organization must have a well-articulated and widely understood mission. Such a mission enables people to be clear about what the company is trying to accomplish. It grounds and guides discussions about work-related changes that staff members might suggest. Being clear about the company’s mission helps keep discussions about work differences from degenerating into debates about the validity of people’s perspectives. A clear mission provides a focal point that keeps the discussion centered on accomplishment of goals.

8. The organization must have a relatively egalitarian, nonbureaucratic structure. It’s important to have a structure that promotes the exchange of ideas and welcomes constructive challenges to the usual way of doing things—from any employee with valuable experience. Forward-thinking leaders in bureaucratic organizations must retain the organization’s efficiency-promoting control systems and chains of command while finding ways to reshape the change-resisting mind-set of the classic bureaucratic model. They need to separate the enabling elements of bureaucracy (the ability to get things done) from the disabling elements of bureaucracy (those that create resistance to experimentation).

First Interstate Bank: A Paradigm Shift in Progress

All eight preconditions do not have to be in place in order to begin a shift from the first or second diversity orientations toward the learning-and-effectiveness paradigm. But most should be. First Interstate Bank, a midsize bank operating in a midwestern city, illustrates this point.

First Interstate, admittedly, is not a typical bank. Its client base is a minority community, and its mission is expressly to serve that base through “the development of a highly talented workforce.” The bank is unique in other ways: its leadership welcomes constructive criticism; its structure is relatively egalitarian and nonbureaucratic; and its culture is open-minded. Nevertheless, First Interstate had long enforced a policy that loan officers had to hold college degrees. Those without were hired only for support-staff jobs and were never promoted beyond or outside support functions.

Two years ago, however, the support staff began to challenge the policy. Many of them had been with First Interstate for many years and, with the company’s active support, had improved their skills through training. Others had expanded their skills on the job, again with the bank’s encouragement, learning to run credit checks, prepare presentations for clients, and even calculate the algorithms necessary for many loan decisions. As a result, some people on the support staff were doing many of the same tasks as loan officers. Why, then, they wondered, couldn’t they receive commensurate rewards in title and compensation?

This questioning led to a series of contentious meetings between the support staff and the bank’s senior managers. It soon became clear that the problem called for managing diversity—diversity based not on race or gender but on class. The support personnel were uniformly from lower socioeconomic communities than were the college-educated loan officers. Regardless, the principle was the same as for race-or gender-based diversity problems. The support staff had different ideas about how the work of the bank should be done. They argued that those among them with the requisite skills should be allowed to rise through the ranks to professional positions, and they believed their ideas were not being heard or accepted.

Their beliefs challenged assumptions that the company’s leadership had long held about which employees should have the authority to deal with customers and about how much responsibility administrative employees should ultimately receive. In order to take up this challenge, the bank would have to be open to exploring the requirements that a new perspective would impose on it. It would need to consider the possibility of mapping out an educational and career path for people without degrees—a path that could put such workers on the road to becoming loan officers. In other words, the leadership would have to transform itself willingly and embrace fluidity in policies that in times past had been clearly stated and unquestioningly held.

Today the bank’s leadership is undergoing just such a transformation. The going, however, is far from easy. The bank’s senior managers now must look beyond the tensions and acrimony sparked by the debate over differing work perspectives and consider the bank’s new direction an important learning and growth opportunity.

Shift Complete: Third-Paradigm Companies in Action

First Interstate is a shift in progress; but, in addition to Dewey & Levin, there are several organizations we know of for which the shift is complete. In these cases, company leaders have played a critical role as facilitators and tone setters. We have observed in particular that in organizations that have adopted the new perspective, leaders and managers—and, following in their tracks, employees in general—are taking four kinds of action.

They are making the mental connection

First, in organizations that have adopted the new perspective, the leaders are actively seeking opportunities to explore how identitygroup differences affect relationships among workers and affect the way work gets done. They are investing considerable time and energy in understanding how identity-group memberships take on social meanings in the organization and how those meanings manifest themselves in the way work is defined, assigned, and accomplished. When there is no proactive search to understand, then learning from diversity, if it happens at all, can occur only reactively—that is, in response to diversity-related crises.

The situation at Iversen Dunham illustrates the missed opportunities resulting from that scenario. Rather than seeing differences in the way project leaders defined and approached their work as an opportunity to gain new insights and develop new approaches to achieving its mission, the firm remained entrenched in its traditional ways, able to arbitrate such differences only by thinking about what was fair and what was racist. With this quite limited view of the role race can play in an organization, discussions about the topic become fraught with fear and defensiveness, and everyone misses out on insights about how race might influence work in positive ways.

A second case, however, illustrates how some leaders using the new paradigm have been able to envision—and make—the connection between cultural diversity and the company’s work. A vice president of Mastiff, a large national insurance company, received a complaint from one of the managers in her unit, an African American man. The manager wanted to demote an African American woman he had hired for a leadership position from another Mastiff division just three months before. He told the vice president he was profoundly disappointed with the performance of his new hire.

“I hired her because I was pretty certain she had tremendous leadership skill,” he said. “I knew she had a management style that was very open and empowering. I was also sure she’d have a great impact on the rest of the management team. But she hasn’t done any of that.”

Surprised, the vice president tried to find out from him what he thought the problem was, but she was not getting any answers that she felt really defined or illuminated the root of the problem. Privately, it puzzled her that someone would decide to demote a 15-year veteran of the company—and a minority woman at that—so soon after bringing her to his unit.

The vice president probed further. In the course of the conversation, the manager happened to mention that he knew the new employee from church and was familiar with the way she handled leadership there and in other community settings. In those less formal situations, he had seen her perform as an extremely effective, sensitive, and influential leader.

That is when the vice president made an interpretive leap. “If that’s what you know about her,” the vice president said to the manager, “then the question for us is, why can’t she bring those skills to work here?” The vice president decided to arrange a meeting with all three present to ask this very question directly. In the meeting, the African American woman explained, “I didn’t think I would last long if I acted that way here. My personal style of leadership—that particular style—works well if you have the permission to do it fully; then you can just do it and not have to look over your shoulder.”

Pointing to the manager who had planned to fire her, she added, “He’s right. The style of leadership I use outside this company can definitely be effective. But I’ve been at Mastiff for 15 years. I know this organization, and I know if I brought that piece of myself—if I became that authentic—I just wouldn’t survive here.”

What this example illustrates is that the vice president’s learning-and-effectiveness paradigm led her to explore and then make the link between cultural diversity and work style. What was occurring, she realized, was a mismatch between the cultural background of the recently promoted woman and the cultural environment of her work setting. It had little to do with private attitudes or feelings, or gender issues, or some inherent lack of leadership ability. The source of the underperformance was that the newly promoted woman had a certain style and the organization’s culture did not support her in expressing it comfortably. The vice president’s paradigm led her to ask new questions and to seek out new information, but, more important, it also led her to interpret existing information differently.

The two senior managers began to realize that part of the African American woman’s inability to see herself as a leader at work was that she had for so long been undervalued in the organization. And, in a sense, she had become used to splitting herself off from who she was in her own community. In the 15 years she had been at Mastiff, she had done her job well as an individual contributor, but she had never received any signals that her bosses wanted her to draw on her cultural competencies in order to lead effectively.

They are legitimating open discussion

Leaders and managers who have adopted the new paradigm are taking the initiative to “green light” open discussion about how identity-group memberships inform and influence an employee’s experience and the organization’s behavior. They are encouraging people to make explicit use of background cultural experience and the pools of knowledge gained outside the organization to inform and enhance their work. Individuals often do use their cultural competencies at work, but in a closeted, almost embarrassed, way. The unfortunate result is that the opportunity for collective and organizational learning and improvement is lost.

The case of a Chinese woman who worked as a chemist at Torinno Food Company illustrates this point. Linda was part of a product development group at Torinno when a problem arose with the flavoring of a new soup. After the group had made a number of scientific attempts to correct the problem, Linda came up with the solution by “setting aside my chemistry and drawing on my understanding of Chinese cooking.” She did not, however, share with her colleagues—all of them white males—the real source of her inspiration for the solution for fear that it would set her apart or that they might consider her unprofessional. Overlaid on the cultural issue, of course, was a gender issue (women cooking) as well as a work-family issue (women doing home cooking in a chemistry lab). All of these themes had erected unspoken boundaries that Linda knew could be career-damaging for her to cross. After solving the problem, she simply went back to the so-called scientific way of doing things.

Senior managers at Torinno Foods in fact had made a substantial commitment to diversifying the workforce through a program designed to teach employees to value the contributions of all its members. Yet Linda’s perceptions indicate that, in the actual day-to-day context of work, the program had failed—and in precisely one of those areas where it would have been important for it to have worked. It had failed to affirm someone’s identity-group experiences as a legitimate source of insight into her work. It is likely that this organization will miss future opportunities to take full advantage of the talent of employees such as Linda. When people believe that they must suggest and apply their ideas covertly, the organization also misses opportunities to discuss, debate, refine, and build on those ideas fully. In addition, because individuals like Linda will continue to think that they must hide parts of themselves in order to fit in, they will find it difficult to engage fully not only in their work but also in their workplace relationships. That kind of situation can breed resentment and misunderstanding, fueling tensions that can further obstruct productive work relationships.

They actively work against forms of dominance and subordination that inhibit full contribution

Companies in which the third paradigm is emerging have leaders and managers who take responsibility for removing the barriers that block employees from using the full range of their competencies, cultural or otherwise. Racism, homophobia, sexism, and sexual harassment are the most obvious forms of dominance that decrease individual and organizational effectiveness—and third-paradigm leaders have zero tolerance for them. In addition, the leaders are aware that organizations can create their own unique patterns of dominance and subordination based on the presumed superiority and entitlement of some groups over others. It is not uncommon, for instance, to find organizations in which one functional area considers itself better than another. Members of the presumed inferior group frequently describe the organization in the very terms used by those who experience identity-group discrimination. Regardless of the source of the oppression, the result is diminished performance and commitment from employees.

What can leaders do to prevent those kinds of behaviors beyond explicitly forbidding any forms of dominance? They can and should test their own assumptions about the competencies of all members of the workforce because negative assumptions are often unconsciously communicated in powerful—albeit nonverbal—ways. For example, senior managers at Delta Manufacturing had for years allowed productivity and quality at their inner-city plants to lag well behind the levels of other plants. When the company’s chief executive officer began to question why the problem was never addressed, he came to realize that, in his heart, he had believed that inner-city workers, most of whom were African American or Hispanic, were not capable of doing better than subpar. In the end, the CEO and his senior management team were able to reverse their reasoning and take responsibility for improving the situation. The result was a sharp increase in the performance of the inner-city plants and a message to the entire organization about the capabilities of its entire workforce.

At Mastiff, the insurance company discussed earlier, the vice president and her manager decided to work with the recently promoted African American woman rather than demote her. They realized that their unit was really a pocket inside the larger organization: they did not have to wait for the rest of the organization to make a paradigm shift in order for their particular unit to change. So they met again to think about how to create conditions within their unit that would move the woman toward seeing her leadership position as encompassing all her skills. They assured her that her authentic style of leadership was precisely what they wanted her to bring to the job. They wanted her to be able to use whatever aspects of herself she thought would make her more effective in her work because the whole purpose was to do the job effectively, not to fit some preset traditional formula of how to behave. They let her know that, as a management team, they would try to adjust and change and support her. And they would deal with whatever consequences resulted from her exercising her decision rights in new ways.

Another example of this line of action—working against forms of dominance and subordination to enable full contribution—is the way the CEO of a major chemical company modified the attendance rules for his company’s annual strategy conference. In the past, the conference had been attended only by senior executives, a relatively homogeneous group of white men. The company had been working hard on increasing the representation of women and people of color in its ranks, and the CEO could have left it at that. But he reckoned that, unless steps were taken, it would be ten years before the conferences tapped into the insights and perspectives of his newly diverse workforce. So he took the bold step of opening the conference to people from across all levels of the hierarchy, bringing together a diagonal slice of the organization. He also asked the conference organizers to come up with specific interventions, such as small group meetings before the larger session, to ensure that the new attendees would be comfortable enough to enter discussions. The result was that strategy-conference participants heard a much broader, richer, and livelier discussion about future scenarios for the company.

They are making sure that organizational trust stays intact

Few things are faster at killing a shift to a new way of thinking about diversity than feelings of broken trust. Therefore, managers of organizations that are successfully shifting to the learning-and-effectiveness paradigm take one more step: they make sure their organizations remain “safe” places for employees to be themselves. These managers recognize that tensions naturally arise as an organization begins to make room for diversity, starts to experiment with process and product ideas, and learns to reappraise its mission in light of suggestions from newly empowered constituents in the company. But as people put more of themselves out and open up about new feelings and ideas, the dynamics of the learning-and-effectiveness paradigm can produce temporary vulnerabilities. Managers who have helped their organizations make the change successfully have consistently demonstrated their commitment to the process and to all employees by setting a tone of honest discourse, by acknowledging tensions, and by resolving them sensitively and swiftly.

Our research over the past six years indicates that one cardinal limitation is at the root of companies’ inability to attain the expected performance benefits of higher levels of diversity: the leadership’s vision of the purpose of a diversified workforce. We have described the two most dominant orientations toward diversity and some of their consequences and limitations, together with a new framework for understanding and managing diversity. The learning-and-effectiveness paradigm we have outlined here is, undoubtedly, still in an emergent phase in those few organizations that embody it. We expect that as more organizations take on the challenge of truly engaging their diversity, new and unforeseen dilemmas will arise. Thus, perhaps more than anything else, a shift toward this paradigm requires a high-level commitment to learning more about the environment, structure, and tasks of one’s organization, and giving improvement-generating change greater priority than the security of what is familiar. This is not an easy challenge, but we remain convinced that unless organizations take this step, any diversity initiative will fall short of fulfilling its rich promise.

Originally published in September–October 1996. Reprint 96510

Why Diversity Programs Fail

by Frank Dobbin and Alexandra Kalev

BUSINESSES STARTED CARING A LOT more about diversity after a series of high-profile lawsuits rocked the financial industry. In the late 1990s and early 2000s, Morgan Stanley shelled out $54 million—and Smith Barney and Merrill Lynch more than $100 million each—to settle sex discrimination claims. In 2007, Morgan was back at the table, facing a new class action, which cost the company $46 million. In 2013, Bank of America Merrill Lynch settled a race discrimination suit for $160 million. Cases like these brought Merrill’s total 15-year payout to nearly half a billion dollars.

It’s no wonder that Wall Street firms now require new hires to sign arbitration contracts agreeing not to join class actions. They have also expanded training and other diversity programs. But on balance, equality isn’t improving in financial services or elsewhere. Although the proportion of managers at U.S. commercial banks who were Hispanic rose from 4.7% in 2003 to 5.7% in 2014, white women’s representation dropped from 39% to 35%, and black men’s from 2.5% to 2.3%. The numbers were even worse in investment banks (though that industry is shrinking, which complicates the analysis). Among all U.S. companies with 100 or more employees, the proportion of black men in management increased just slightly—from 3% to 3.3%—from 1985 to 2014. White women saw bigger gains from 1985 to 2000—rising from 22% to 29% of managers—but their numbers haven’t budged since then. Even in Silicon Valley, where many leaders tout the need to increase diversity for both business and social justice reasons, bread-and-butter tech jobs remain dominated by white men.

It shouldn’t be surprising that most diversity programs aren’t increasing diversity. Despite a few new bells and whistles, courtesy of big data, companies are basically doubling down on the same approaches they’ve used since the 1960s—which often make things worse, not better. Firms have long relied on diversity training to reduce bias on the job, hiring tests and performance ratings to limit it in recruitment and promotions, and grievance systems to give employees a way to challenge managers. Those tools are designed to preempt lawsuits by policing managers’ thoughts and actions. Yet laboratory studies show that this kind of force-feeding can activate bias rather than stamp it out. As social scientists have found, people often rebel against rules to assert their autonomy. Try to coerce me to do X, Y, or Z, and I’ll do the opposite just to prove that I’m my own person.

In analyzing three decades’ worth of data from more than 800 U.S. firms and interviewing hundreds of line managers and executives at length, we’ve seen that companies get better results when they ease up on the control tactics. It’s more effective to engage managers in solving the problem, increase their on-the-job contact with female and minority workers, and promote social accountability—the desire to look fair-minded. That’s why interventions such as targeted college recruitment, mentoring programs, self-managed teams, and task forces have boosted diversity in businesses. Some of the most effective solutions aren’t even designed with diversity in mind.

Here, we dig into the data, the interviews, and company examples to shed light on what doesn’t work and what does.

Why You Can’t Just Outlaw Bias

Executives favor a classic command-and-control approach to diversity because it boils expected behaviors down to dos and don’ts that are easy to understand and defend. Yet this approach also flies in the face of nearly everything we know about how to motivate people to make changes. Decades of social science research point to a simple truth: You won’t get managers on board by blaming and shaming them with rules and reeducation. Let’s look at how the most common top-down efforts typically go wrong.

Idea in Brief

The Problem

To reduce bias and increase diversity, organizations are relying on the same programs they’ve been using since the 1960s. Some of these efforts make matters worse, not better.

The Reason

Most diversity programs focus on controlling managers’ behavior, and as studies show, that approach tends to activate bias rather than quash it. People rebel against rules that threaten their autonomy.

The Solution

Instead of trying to police managers’ decisions, the most effective programs engage people in working for diversity, increase their contact with women and minorities, and tap into their desire to look good to others.

Diversity training

Do people who undergo training usually shed their biases? Researchers have been examining that question since before World War II, in nearly a thousand studies. It turns out that while people are easily taught to respond correctly to a questionnaire about bias, they soon forget the right answers. The positive effects of diversity training rarely last beyond a day or two, and a number of studies suggest that it can activate bias or spark a backlash. Nonetheless, nearly half of midsize companies use it, as do nearly all the Fortune 500.

Many firms see adverse effects. One reason is that three-quarters use negative messages in their training. By headlining the legal case for diversity and trotting out stories of huge settlements, they issue an implied threat: “Discriminate, and the company will pay the price.” We understand the temptation—that’s how we got your attention in the first paragraph—but threats, or “negative incentives,” don’t win converts.

Another reason is that about three-quarters of firms with training still follow the dated advice of the late diversity guru R. Roosevelt Thomas Jr. “If diversity management is strategic to the organization,” he used to say, diversity training must be mandatory, and management has to make it clear that “if you can’t deal with that, then we have to ask you to leave.” But five years after instituting required training for managers, companies saw no improvement in the proportion of white women, black men, and Hispanics in management, and the share of black women actually decreased by 9%, on average, while the ranks of Asian-American men and women shrank by 4% to 5%. Trainers tell us that people often respond to compulsory courses with anger and resistance—and many participants actually report more animosity toward other groups afterward.

But voluntary training evokes the opposite response (“I chose to show up, so I must be pro-diversity”), leading to better results: increases of 9% to 13% in black men, Hispanic men, and Asian-American men and women in management five years out (with no decline in white or black women). Research from the University of Toronto reinforces our findings: In one study white subjects read a brochure critiquing prejudice toward blacks. When people felt pressure to agree with it, the reading strengthened their bias against blacks. When they felt the choice was theirs, the reading reduced bias.

Companies too often signal that training is remedial. The diversity manager at a national beverage company told us that the top brass uses it to deal with problem groups. “If there are a number of complaints . . . or, God forbid, some type of harassment case . . . leaders say, ‘Everyone in the business unit will go through it again.’” Most companies with training have special programs for managers. To be sure, they’re a high-risk group because they make the hiring, promotion, and pay decisions. But singling them out implies that they’re the worst culprits. Managers tend to resent that implication and resist the message.

Hiring tests

Some 40% of companies now try to fight bias with mandatory hiring tests assessing the skills of candidates for frontline jobs. But managers don’t like being told that they can’t hire whomever they please, and our research suggests that they often use the tests selectively. Back in the 1950s, following the postwar migration of blacks northward, Swift & Company, Chicago meatpackers, instituted tests for supervisor and quality-checking jobs. One study found managers telling blacks that they had failed the test and then promoting whites who hadn’t been tested. A black machine operator reported: “I had four years at Englewood High School. I took an exam for a checker’s job. The foreman told me I failed” and gave the job to a white man who “didn’t take the exam.”

This kind of thing still happens. When we interviewed the new HR director at a West Coast food company, he said he found that white managers were making only strangers—most of them minorities—take supervisor tests and hiring white friends without testing them. “If you are going to test one person for this particular job title,” he told us, “you need to test everybody.”

But even managers who test everyone applying for a position may ignore the results. Investment banks and consulting firms build tests into their job interviews, asking people to solve math and scenario-based problems on the spot. While studying this practice, Kellogg professor Lauren Rivera played a fly on the wall during hiring meetings at one firm. She found that the team paid little attention when white men blew the math test but close attention when women and blacks did. Because decision makers (deliberately or not) cherry-picked results, the testing amplified bias rather than quashed it.

Companies that institute written job tests for managers—about 10% have them today—see decreases of 4% to 10% in the share of managerial jobs held by white women, African-American men and women, Hispanic men and women, and Asian-American women over the next five years. There are significant declines among white and Asian-American women—groups with high levels of education, which typically score well on standard managerial tests. So group differences in test-taking skills don’t explain the pattern.

Performance ratings

More than 90% of midsize and large companies use annual performance ratings to ensure that managers make fair pay and promotion decisions. Identifying and rewarding the best workers isn’t the only goal—the ratings also provide a litigation shield. Companies sued for discrimination often claim that their performance rating systems prevent biased treatment.

But studies show that raters tend to lowball women and minorities in performance reviews. And some managers give everyone high marks to avoid hassles with employees or to keep their options open when handing out promotions. However managers work around performance systems, the bottom line is that ratings don’t boost diversity. When companies introduce them, there’s no effect on minority managers over the next five years, and the share of white women in management drops by 4%, on average.

Grievance procedures

This last tactic is meant to identify and rehabilitate biased managers. About half of midsize and large firms have systems through which employees can challenge pay, promotion, and termination decisions. But many managers—rather than change their own behavior or address discrimination by others—try to get even with or belittle employees who complain. Among the nearly 90,000 discrimination complaints made to the Equal Employment Opportunity Commission in 2015, 45% included a charge of retaliation—which suggests that the original report was met with ridicule, demotion, or worse.

Once people see that a grievance system isn’t warding off bad behavior in their organization, they may become less likely to speak up. Indeed, employee surveys show that most people don’t report discrimination. This leads to another unintended consequence: Managers who receive few complaints conclude that their firms don’t have a problem. We see this a lot in our interviews. When we talked with the vice president of HR at an electronics firm, she mentioned the widely publicized “difficulties other corporations are having” and added, “We have not had any of those problems . . . we have gone almost four years without any kind of discrimination complaint!” What’s more, lab studies show that protective measures like grievance systems lead people to drop their guard and let bias affect their decisions, because they think company policies will guarantee fairness.

Things don’t get better when firms put in formal grievance systems; they get worse. Our quantitative analyses show that the managerial ranks of white women and all minority groups except Hispanic men decline—by 3% to 11%—in the five years after companies adopt them.

Still, most employers feel they need some sort of system to intercept complaints, if only because judges like them. One strategy that is gaining ground is the “flexible” complaint system, which offers not only a formal hearing process but also informal mediation. Since an informal resolution doesn’t involve hauling the manager before a disciplinary body, it may reduce retaliation. As we’ll show, making managers feel accountable without subjecting them to public rebuke tends to help.

Tools for Getting Managers on Board

If these popular solutions backfire, then what can employers do instead to promote diversity?

A number of companies have gotten consistently positive results with tactics that don’t focus on control. They apply three basic principles: engage managers in solving the problem, expose them to people from different groups, and encourage social accountability for change.

Engagement

When someone’s beliefs and behavior are out of sync, that person experiences what psychologists call “cognitive dissonance.” Experiments show that people have a strong tendency to “correct” dissonance by changing either the beliefs or the behavior. So, if you prompt them to act in ways that support a particular view, their opinions shift toward that view. Ask them to write an essay defending the death penalty, and even the penalty’s staunch opponents will come to see some merits. When managers actively help boost diversity in their companies, something similar happens: They begin to think of themselves as diversity champions.

Take college recruitment programs targeting women and minorities. Our interviews suggest that managers willingly participate when invited. That’s partly because the message is positive: “Help us find a greater variety of promising employees!” And involvement is voluntary: Executives sometimes single out managers they think would be good recruiters, but they don’t drag anyone along at gunpoint.

Managers who make college visits say they take their charge seriously. They are determined to come back with strong candidates from underrepresented groups—female engineers, for instance, or African-American management trainees. Cognitive dissonance soon kicks in—and managers who were wishy-washy about diversity become converts.

The effects are striking. Five years after a company implements a college recruitment program targeting female employees, the share of white women, black women, Hispanic women, and Asian-American women in its management rises by about 10%, on average. A program focused on minority recruitment increases the proportion of black male managers by 8% and black female managers by 9%.

Mentoring is another way to engage managers and chip away at their biases. In teaching their protégés the ropes and sponsoring them for key training and assignments, mentors help give their charges the breaks they need to develop and advance. The mentors then come to believe that their protégés merit these opportunities—whether they’re white men, women, or minorities. That is cognitive dissonance—“Anyone I sponsor must be deserving”—at work again.

While white men tend to find mentors on their own, women and minorities more often need help from formal programs. One reason, as Georgetown’s business school dean David Thomas discovered in his research on mentoring, is that white male executives don’t feel comfortable reaching out informally to young women and minority men. Yet they are eager to mentor assigned protégés, and women and minorities are often first to sign up for mentors.

Mentoring programs make companies’ managerial echelons significantly more diverse: On average they boost the representation of black, Hispanic, and Asian-American women, and Hispanic and Asian-American men, by 9% to 24%. In industries where plenty of college-educated nonmanagers are eligible to move up, like chemicals and electronics, mentoring programs also increase the ranks of white women and black men by 10% or more.

Only about 15% of firms have special college recruitment programs for women and minorities, and only 10% have mentoring programs. Once organizations try them out, though, the upside becomes clear. Consider how these programs helped Coca-Cola in the wake of a race discrimination suit settled in 2000 for a record $193 million. With guidance from a court-appointed external task force, executives in the North America group got involved in recruitment and mentoring initiatives for professionals and middle managers, working specifically toward measurable goals for minorities. Even top leaders helped to recruit and mentor, and talent-sourcing partners were required to broaden their recruitment efforts. After five years, according to former CEO and chairman Neville Isdell, 80% of all mentees had climbed at least one rung in management. Both individual and group mentoring were open to all races but attracted large numbers of African-Americans (who accounted for 36% of protégés). These changes brought important gains. From 2000 to 2006, African-Americans’ representation among salaried employees grew from 19.7% to 23%, and Hispanics’ from 5.5% to 6.4%. And while African-Americans and Hispanics respectively made up 12% and 4.9% of professionals and middle managers in 2002, just four years later those figures had risen to 15.5% and 5.9%.

This began a virtuous cycle. Today, Coke looks like a different company. This February, Atlanta Tribune magazine profiled 17 African-American women in VP roles and above at Coke, including CFO Kathy Waller.

Contact

Evidence that contact between groups can lessen bias first came to light in an unplanned experiment on the European front during World War II. The U.S. army was still segregated, and only whites served in combat roles. High casualties left General Dwight Eisenhower understaffed, and he asked for black volunteers for combat duty. When Harvard sociologist Samuel Stouffer, on leave at the War Department, surveyed troops on their racial attitudes, he found that whites whose companies had been joined by black platoons showed dramatically lower racial animus and greater willingness to work alongside blacks than those whose companies remained segregated. Stouffer concluded that whites fighting alongside blacks came to see them as soldiers like themselves first and foremost. The key, for Stouffer, was that whites and blacks had to be working toward a common goal as equals—hundreds of years of close contact during and after slavery hadn’t dampened bias.

Business practices that generate this kind of contact across groups yield similar results. Take self-managed teams, which allow people in different roles and functions to work together on projects as equals. Such teams increase contact among diverse types of people, because specialties within firms are still largely divided along racial, ethnic, and gender lines. For example, women are more likely than men to work in sales, whereas white men are more likely to be in tech jobs and management, and black and Hispanic men are more likely to be in production.

As in Stouffer’s combat study, working side-by-side breaks down stereotypes, which leads to more equitable hiring and promotion. At firms that create self-managed work teams, the share of white women, black men and women, and Asian-American women in management rises by 3% to 6% over five years.

Rotating management trainees through departments is another way to increase contact. Typically, this kind of cross-training allows people to try their hand at various jobs and deepen their understanding of the whole organization. But it also has a positive impact on diversity, because it exposes both department heads and trainees to a wider variety of people. The result, we’ve seen, is a bump of 3% to 7% in white women, black men and women, and Asian-American men and women in management.

About a third of U.S. firms have self-managed teams for core operations, and nearly four-fifths use cross-training, so these tools are already available in many organizations. Though college recruitment and mentoring have a bigger impact on diversity—perhaps because they activate engagement in the diversity mission and create intergroup contact—every bit helps. Self-managed teams and cross-training have had more positive effects than mandatory diversity training, performance evaluations, job testing, or grievance procedures, which are supposed to promote diversity.

Social accountability

The third tactic, encouraging social accountability, plays on our need to look good in the eyes of those around us. It is nicely illustrated by an experiment conducted in Israel. Teachers in training graded identical compositions attributed to Jewish students with Ashkenazic names (European heritage) or with Sephardic names (African or Asian heritage). Sephardic students typically come from poorer families and do worse in school. On average, the teacher trainees gave the Ashkenazic essays Bs and the Sephardic essays Ds. The difference evaporated, however, when trainees were told that they would discuss their grades with peers. The idea that they might have to explain their decisions led them to judge the work by its quality.

In the workplace you’ll see a similar effect. Consider this field study conducted by Emilio Castilla of MIT’s Sloan School of Management: A firm found it consistently gave African-Americans smaller raises than whites, even when they had identical job titles and performance ratings. So Castilla suggested transparency to activate social accountability. The firm posted each unit’s average performance rating and pay raise by race and gender. Once managers realized that employees, peers, and superiors would know which parts of the company favored whites, the gap in raises all but disappeared.

Corporate diversity task forces help promote social accountability. CEOs usually assemble these teams, inviting department heads to volunteer and including members of underrepresented groups. Every quarter or two, task forces look at diversity numbers for the whole company, for business units, and for departments to figure out what needs attention.

After investigating where the problems are—recruitment, career bottlenecks, and so on—task force members come up with solutions, which they then take back to their departments. They notice if their colleagues aren’t volunteering to mentor or showing up at recruitment events. Accountability theory suggests that having a task force member in a department will cause managers in it to ask themselves, “Will this look right?” when making hiring and promotion decisions.

Which Diversity Efforts Actually Succeed?

IN 829 MIDSIZE AND LARGE U.S. FIRMS, we analyzed how various diversity initiatives affected the proportion of women and minorities in management. Here you can see which ones helped different groups gain ground—and which set them back, despite good intentions. (No bar means we can’t say with statistical certainty if the program had any effect.)

Poor returns on the usual programs

The three most popular interventions made firms less diverse, not more, because managers resisted strong-arming.

Programs that get results

Companies do a better job of increasing diversity when they forgo the control tactics and frame their efforts more positively. The most effective programs spark engagement, increase contact among different groups, or draw on people’s strong desire to look good to others.

Note: In our analysis, we’ve isolated the effects of diversity programs from everything else going on in the companies and in the economy.

Deloitte has seen how powerful social accountability can be. In 1992, Mike Cook, who was then the CEO, decided to try to stanch the hemorrhaging of female associates. Half the company’s hires were women, but nearly all of them left before they were anywhere near making partner. As Douglas McCracken, CEO of Deloitte’s consulting unit at the time, later recounted in HBR, Cook assembled a high-profile task force that “didn’t immediately launch a slew of new organizational policies aimed at outlawing bad behavior” but, rather, relied on transparency to get results.

The task force got each office to monitor the career progress of its women and set its own goals to address local problems. When it became clear that the CEO and other managing partners were closely watching, McCracken wrote, “women started getting their share of premier client assignments and informal mentoring.” And unit heads all over the country began getting questions from partners and associates about why things weren’t changing faster. An external advisory council issued annual progress reports, and individual managers chose change metrics to add to their own performance ratings. In eight years turnover among women dropped to the same level as turnover among men, and the proportion of female partners increased from 5% to 14%—the highest percentage among the big accounting firms. By 2015, 21% of Deloitte’s global partners were women, and in March of that year, Deloitte LLP appointed Cathy Engelbert as its CEO—making her the first woman to head a major accountancy.

Task forces are the trifecta of diversity programs. In addition to promoting accountability, they engage members who might have previously been cool to diversity projects and increase contact among the women, minorities, and white men who participate. They pay off, too: On average, companies that put in diversity task forces see 9% to 30% increases in the representation of white women and of each minority group in management over the next five years.

Diversity managers, too, boost inclusion by creating social accountability. To see why, let’s go back to the finding of the teacher-in-training experiment, which is supported by many studies: When people know they might have to explain their decisions, they are less likely to act on bias. So simply having a diversity manager who could ask them questions prompts managers to step back and consider everyone who is qualified instead of hiring or promoting the first people who come to mind. Companies that appoint diversity managers see 7% to 18% increases in all underrepresented groups—except Hispanic men—in management in the following five years. Those are the gains after accounting for both effective and ineffective programs they put in place.

Only 20% of medium and large employers have task forces, and just 10% have diversity managers, despite the benefits of both. Diversity managers cost money, but task forces use existing workers, so they’re a lot cheaper than some of the things that fail, such as mandatory training.

Leading companies like Bank of America Merrill Lynch, Facebook, and Google have placed big bets on accountability in the past couple of years. Expanding on Deloitte’s early example, they’re now posting complete diversity numbers for all to see. We should know in a few years if that moves the needle for them.

Strategies for controlling bias—which drive most diversity efforts—have failed spectacularly since they were introduced to promote equal opportunity. Black men have barely gained ground in corporate management since 1985. White women haven’t progressed since 2000. It isn’t that there aren’t enough educated women and minorities out there—both groups have made huge educational gains over the past two generations. The problem is that we can’t motivate people by forcing them to get with the program and punishing them if they don’t.

The numbers sum it up. Your organization will become less diverse, not more, if you require managers to go to diversity training, try to regulate their hiring and promotion decisions, and put in a legalistic grievance system.

The very good news is that we know what does work—we just need to do more of it.

Originally published in July–August 2016. Reprint R1607C

“Numbers Take Us Only So Far”

by Maxine Williams

I WAS ONCE EVICTED FROM an apartment because I was black. I had secured a lovely place on the banks of Lake Geneva through an agent and therefore hadn’t met the owner in person before signing the lease. Once my family and I moved in and the color of my skin was clear to see, the landlady asked us to leave. If she had known that I was black, I was told, she would never have rented to me.

Terrible as it felt at the time, her directness was useful to me. It meant I didn’t have to scour the facts looking for some other, nonracist rationale for her sudden rejection.

Many people have been denied housing, bank loans, jobs, promotions, and more because of their race. But they’re rarely told that’s the reason, as I was—particularly in the workplace. For one thing, such discrimination is illegal. For another, executives tend to think—and have a strong desire to believe—that they’re hiring and promoting people fairly when they aren’t. (Research shows that individuals who view themselves as objective are often the ones who apply the most unconscious bias.) Though managers don’t cite or (usually) even perceive race as a factor in their decisions, they use ambiguous assessment criteria to filter out people who aren’t like them, research by Kellogg professor Lauren Rivera shows. People in marginalized racial and ethnic groups are deemed more often than whites to be “not the right cultural fit” or “not ready” for high-level roles; they’re taken out of the running because their “communication style” is somehow off the mark. They’re left only with lingering suspicions that their identity is the real issue, especially when decision makers’ bias is masked by good intentions.

I work in the field of diversity. I’ve also been black my whole life. So I know that underrepresented people in the workplace yearn for two things: The first is to hear that they’re not crazy to suspect, at times, that there’s a connection between negative treatment and bias. The second is to be offered institutional support.

The first need has a clear path to fulfillment. When we encounter colleagues or friends who have been mistreated and who believe that their identity may be the reason, we should acknowledge that it’s fair to be suspicious. There’s no leap of faith here—numerous studies show how pervasive such bias still is.

But how can we address the second need? In an effort to find valid, scalable ways to counteract or reverse bias and promote diversity, organizations are turning to people analytics—a relatively new field in business operations and talent management that replaces gut decisions with data-driven practices. People analytics aspires to be “evidence based.” And for some HR issues—such as figuring out how many job interviews are needed to assess a candidate, or determining how employees’ work commutes affect their job satisfaction—it is. Statistically significant findings have led to some big changes in organizations. Unfortunately, companies that try to apply analytics to the challenges of underrepresented groups at work often complain that the relevant data sets don’t include enough people to produce reliable insights—the sample size, the n, is too small. Basically they’re saying, “If only there were more of you, we could tell you why there are so few of you.”

Companies have access to more data than they realize, however. To supplement a small n, they can venture out and look at the larger context in which they operate. But data volume alone won’t give leaders the insight they need to increase diversity in their organizations. They must also take a closer look at the individuals from underrepresented groups who work for them—those who barely register on the analytics radar.

Idea in Brief

Though executives tend to think—and want to believe—they’re hiring and promoting fairly, bias still creeps into their decisions. They often use ambiguous criteria to filter out people who aren’t like them or deem people from minority groups to be “not the right cultural fit,” leaving those employees with the uneasy feeling that their identity might be the real issue.

Companies need to acknowledge that it’s fair for employees from underrepresented groups to be suspicious about bias, says Williams, Facebook’s global director of diversity. They also must find ways to give those workers more support. To that end, many organizations are turning to people analytics, which aspires to replace gut decisions with data-driven ones. Unfortunately, firms often say that they don’t have enough people from marginalized groups in their data sets to produce reliable insights.

But there are things employers can do to supplement small n’s: draw on industry or sector data; learn from what’s happening in other companies; and deeply examine the experiences of individuals who work for them, talking with them to gather critical qualitative information. If firms are systematic and comprehensive in these efforts, they’ll have a better chance of improving diversity and inclusion.

Supplementing the n

Nonprofit research organizations are doing important work that sheds light on how bias shapes hiring and advancement in various industries and sectors. For example, a study by the Ascend Foundation showed that in 2013 white men and white women in five major Silicon Valley firms were 154% more likely to become executives than their Asian counterparts were. And though both race and gender were factors in the glass ceiling for Asians, race had 3.7 times the impact that gender did.

It took two more years of research and analysis—using data on several hundred thousand employees, drawn from the EEOC’s aggregation of all Bay Area technology firms and from the individual reports of 13 U.S. tech companies—before Ascend determined how bias affected the prospects of blacks and Hispanics. Among those groups it again found that, overall, race had a greater negative impact than gender on advancement from the professional to the executive level. In the Bay Area white women fared worse than white men but much better than all Asians, Hispanics, and blacks. Minority women faced the biggest obstacle to entering the executive ranks. Black and Hispanic women were severely challenged by both their low numbers at the professional level and their lower chances of rising from professional to executive. Asian women, who had more representation at the professional level than other minorities, had the lowest chances of moving up from professional to executive. An analysis of national data found similar results.

Asian Americans Are the Least Likely Group in the U.S. to Be Promoted to Management

by Buck Gee and Denise Peck

Asian Americans are the forgotten minority in the glass-ceiling conversation.

This was painfully obvious to us as we read the newly released diversity and inclusion report from a large Silicon Valley company: Its 19 pages never specifically address Asian Americans. Asian men are lumped into a “non-underrepresented” category with white men, and Asian women are assigned to a category that includes women of all races. In contrast, the report addresses Hispanics, African Americans, and Native Americans as distinct categories. Ironically, the chief diversity and inclusion officer of the company remarked about its efforts, “If you do not intentionally include, you will unintentionally exclude.”

But excluded from the report is the fact that Asian Americans are the least likely racial group to be promoted into Silicon Valley’s management and executive levels, even though they are the most likely to be hired into high-tech jobs. This was a key finding in a 2017 report we coauthored for the Ascend Foundation (“The Illusion of Asian Success”), analyzing EEOC data on Silicon Valley’s management pipeline.

Across the country, the results are the same. Our analysis of national EEOC workforce data found that Asian American white-collar professionals are the least likely group to be promoted from individual contributor roles into management—less likely than any other race, including blacks and Hispanics. And our analysis found that white professionals are about twice as likely to be promoted into management as their Asian American counterparts.

It’s easy to understand why Asian American representation in the workforce may not seem to be an issue. In some key measures, Asian Americans are the most successful U.S. demographic—more highly educated, for example, and with higher median incomes than any other racial group, according to the Pew Research Center. More significant, Asian Americans make up 12% of the professional workforce even though they form only 5.6% of the U.S. population. This fact underlies the potential blind spot for many companies: Because Asian Americans are not considered an underrepresented minority, they are given little priority or attention in diversity programs. We have found that in many companies throughout the country, Asian-related programs are geared toward cultural inclusion, not management diversity.

When we were tech executives in Silicon Valley, our corporate responsibility was to grow the business by building a highly skilled and motivated workforce through hiring, developing, and promoting the best talent. The large numbers of Asian Americans in the professional workforce confirm that businesses are finding qualified Asian Americans to hire. However, the disparity in numbers between the lower ranks and the executive levels suggests either that leadership potential is disproportionately lacking in Asian Americans or—much more likely—that companies have not done an adequate job of identifying and developing Asian American talent.

These issues aren’t confined to the tech industry. Similar concerns were raised about the legal profession in a 2017 study coauthored by Goodwin Liu, associate justice of the California Supreme Court. Published by Yale Law School and the National Asian Pacific American Bar Association, the report found that Asian Americans are well represented in law—they constitute more than 10% of the graduates of the top 30 law schools—yet “have the highest attrition rates and lowest ratio of partners to associates among all [racial] groups.”

A similar finding with New York banks was reported in Bloomberg Businessweek last year. As one example, Goldman Sachs reported that 27% of its U.S. professional workforce was Asian American, but only 11% of its U.S. executives and senior managers, and none of its executive officers, were.

The list of industries goes on. The Ascend Foundation, the pan-Asian organization that published our 2017 paper, was established by a group of pan-Asian accounting partners. They had found that while over 20% of the associates in many of the larger accounting firms were Asian American, very few were being promoted to the partner level.

And this problem is not limited to private industry: While Asian Americans made up 9.8% of the federal professional workforce in 2016, they represented only 4.4% of the workforce at the highest federal level.

Buck Gee is a former Silicon Valley executive and a member of the Committee of 100. He received his BS/MSEE from Stanford University and his MBA from Harvard Business School. Denise Peck is a former executive at Cisco Systems and Sun Microsystems and is currently an Executive Advisor at the Ascend Foundation. She received her BA from the University of California, Berkeley, and her MBA from Stanford University.

Originally published in May 2018. Reprint H04D81

By analyzing industry or sector data on underrepresented groups—and examining patterns in hiring, promotions, and other decisions about talent—we can better manage the problems and risks in our own organizations. Tech companies may look at the Ascend reports and say, “Hey, let’s think about what’s happening with our competitors’ talent. There’s a good chance it’s happening here, too.” Their HR teams might then add a layer of career tracking for women of color, for example, or create training programs for managing diverse teams.

Another approach is to extrapolate lessons from other companies’ analyses. We might look, for instance, at Red Ventures, a Charlotte-based digital media company. Red Ventures is diverse by several measures. (It has a Latino CEO, and about 40% of its employees are people of color.) But that doesn’t mean there aren’t problems to solve. When I met with its top executives, they told me they had recently done an analysis of performance reviews at the firm and found that internalized stereotypes were having a negative effect on black and Latino employees’ self-assessments. On average, members of those two groups rated their performance 30% lower than their managers did (whereas white male employees scored their performance 10% higher than their managers did). The study also uncovered a correlation between racial isolation and negative self-perception. For example, people of color who worked in engineering generally rated themselves lower than those who worked in sales, where there were more blacks and Latinos. These patterns were consistent at all levels, from junior to senior staff.

In response, the HR team at Red Ventures trained employees in how to do self-assessments, and that has started to close the gap for blacks and Latinos (who more recently rated themselves 22% lower than their managers did). Hallie Cornetta, the company’s VP of human capital, explained that the training “focused on the importance of completing quantitative and qualitative self-assessments honestly, in a way that shows how employees personally view their performance across our five key dimensions, rather than how they assume their manager or peers view their performance.” She added: “We then shared tangible examples of what ‘exceptional’ versus ‘solid’ versus ‘needs improvement’ looks like in these dimensions to remove some of the subjectivity and help minority—and all— employees assess with greater direction and confidence.”

Getting Personal

Once we’ve gone broader by supplementing the n, we can go deeper by examining individual cases. This is critical. Algorithms and statistics do not capture what it feels like to be the only black or Hispanic team member or the effect that marginalization has on individual employees and the group as a whole. We must talk openly with people, one-on-one, to learn about their experiences with bias, and share our own stories to build trust and make the topic safe for discussion. What we discover through those conversations is every bit as important as what shows up in the aggregated data.

An industry colleague, who served as a lead on diversity at a tech company, broke it down for me like this: “When we do our employee surveys, the Latinos always say they are happy. But I’m Latino, and I know that we are often hesitant to rock the boat. Saying the truth is too risky, so we’ll say what you want to hear—even if you sit us down in a focus group. I also know that those aggregated numbers where there are enough of us for the n to be significant don’t reflect the heterogeneity in our community. Someone who is light-skinned and grew up in Latin America in an upper-middle-class family probably is very happy and comfortable indeed. Someone who is darker-skinned and grew up working-class in America is probably not feeling that same sense of belonging. I’m going to spend time and effort trying to build solutions for the ones I know are at a disadvantage, whether the data tells me that there’s a problem with all Latinos or not.”

This is a recurring theme. I spoke with 10 diversity and HR professionals at companies with head counts ranging from 60 to 300,000, all of whom are working on programs or interventions for the people who don’t register as “big” in big data. They rely at least somewhat on their own intuition when exploring the impact of marginalization. This may seem counter to the mission of people analytics, which is to remove personal perspective and gut feelings from the talent equation entirely. But to discover the effects of bias in our organizations—and to identify complicating factors within groups, such as class and colorism among Latinos and others—we need to collect and analyze qualitative data, too. Intuition can help us find it. The diversity and HR folks described using their “spidey sense” or knowing there is “something in the water”—essentially, understanding that bias is probably a factor, even though people analytics doesn’t always prove causes and predict outcomes. Through conversations with employees—and sometimes through focus groups, if the resources are there and participants feel it’s safe to be honest—they reality-check what their instincts tell them, often drawing on their own experiences with bias. One colleague said, “The combination of qualitative and quantitative data is ideal, but at the end of the day there is nothing that data will tell us that we don’t already know as black people. I know what my experience was as an African-American man who worked for 16 years in roles that weren’t related to improving diversity. It’s as much heart as head in this work.”

A Call to Action

The proposition at the heart of people analytics is sound—if you want to hire and manage fairly, gut-based decisions are not enough. However, we have to create a new approach, one that also works for small data sets—for the marginalized and the underrepresented.

Here are my recommendations:

First, analysts must challenge the traditional minimum confident n, pushing themselves to look beyond the limited hard data. They don’t have to prove that the difference in performance ratings between blacks and whites is “statistically significant” to help managers understand the impact of bias in performance reviews. We already know from the breadth and depth of social science research about bias that it is pervasive in the workplace and influences ratings, so we can combine those insights with what we hear and see on the ground and simply start operating as if bias exists in our companies. We may have to place a higher value on the experiences shared by five or 10 employees—or look more carefully at the descriptive data, such as head counts for underrepresented groups and average job satisfaction scores cut by race and gender—to examine the impact of bias at a more granular level.

In addition, analysts should frequently provide confidence intervals—that is, guidance on how much managers can trust the data if the n’s are too small to prove statistical significance. When managers get that information, they’re more likely to make changes in their hiring and management practices, even if they believe—as most do—that they are already treating people fairly. Suppose, for example, that as Red Ventures began collecting data on self-assessments, analysts had a 75% confidence level that blacks and Latinos were underrating themselves. The analysts could then have advised managers to go to their minority direct reports, examine the results from that performance period, and determine together whether the self-reviews truly reflected their contributions. It’s a simple but collaborative way to address implicit bias or stereotyping that you’re reasonably sure is there while giving agency to each employee.

Second, companies also need to be more consistent and comprehensive in their qualitative analysis. Many already conduct interviews and focus groups to gain insights on the challenges of the underrepresented; some even do textual analysis of written performance reviews, exit interview notes, and hiring memos, looking for language that signals bias or negative stereotyping. But we have to go further. We need to find a viable way to create and process more-objective performance evaluations, given the internalized biases of both employees and managers, and to determine how those biases affect ratings.

This journey begins with educating all employees on the real-life impact of bias and negative stereotypes. At Facebook we offer a variety of training programs with an emphasis on spotting and counteracting bias, and we keep reinforcing key messages post-training, since we know these muscles take time to build. We issue reminders at critical points to shape decision making and behavior. For example, in our performance evaluation tool, we incorporate prompts for people to check word choice when writing reviews and self-assessments. We remind them, for instance, that terms like “cultural fit” can allow bias to creep in and that they should avoid describing women as “bossy” if they wouldn’t describe men who demonstrated the same behaviors that way. We don’t yet have data on how this is influencing the language used—it’s a new intervention—but we will be examining patterns over time.

Perhaps above all, HR and analytics departments must value both qualitative and quantitative expertise and apply mixed-method approaches everywhere possible. At Facebook we’re building cross-functional teams with both types of specialists, because no single research method can fully capture the complex layers of bias that everyone brings to the workplace. We view all research methods as trying to solve the same problem from different angles. Sometimes we approach challenges from a quantitative perspective first, to uncover the “what” before looking to the qualitative experts to dive into the “why” and “how.” For instance, if the numbers showed that certain teams were losing or attracting minority employees at higher rates than others (the “what”), we might conduct interviews, run focus groups, or analyze text from company surveys to understand the “why,” and pull out themes or lessons for other parts of the company. In other scenarios we might reverse the order of those steps. For example, if we repeatedly heard from members of one social group that they weren’t seeing their peers getting recognized at the same rate as people in other groups, we could then investigate whether numerical trends confirmed those observations, or conduct statistical analyses to figure out which organizational circumstances were associated with employees’ being more or less likely to get recognized.

Cross-functional teams also help us reap the benefits of cognitive diversity. Working together stretches everyone, challenging team members’ own assumptions and biases. Getting to absolute “whys” and “hows” on any issue, from recruitment to engagement to performance, is always going to be tough. But we believe that with this approach, we stand the best chance of making improvements across the company. As we analyze the results of Facebook’s Pulse survey, given twice a year to employees, and review Performance Summary Cycle inputs, we’ll continue to look for signs of problems as well as progress.

Evidence of discrimination or unfair outcomes may not be as certain or obvious in the workplace as it was for me the time I was evicted from my apartment. But we can increase our certainty, and it’s essential that we do so. The underrepresented people at our companies are not crazy to perceive biases working against them, and they can get institutional support.

Originally published in November–December 2017. Reprint R1706L

Race Matters

The Truth About Mentoring Minorities.

by David A. Thomas

DIVERSITY HAS BECOME A TOP priority in corporate America. Despite the best intentions, though, many organizations have failed to achieve racial balance within their executive teams. Some have revolving doors for talented minorities, recruiting the best and brightest only to see them leave, frustrated and even angered by the barriers they encounter. Other companies are able to retain high-potential professionals of color only to have them become mired in middle management. Still others have minorities in their executive ranks, but only in racialized positions, such as those dealing with community relations, equal employment opportunity, or ethnic markets.

In my research on the career progression of minorities at U.S. corporations, I have found that whites and minorities follow distinct patterns of advancement. Specifically, promising white professionals tend to enter a fast track early in their careers, whereas high-potential minorities take off much later, typically after they have reached middle management. I’ve also found that the people of color who advance the furthest all share one characteristic—a strong network of mentors and corporate sponsors who nurture their professional development.

These findings have key implications for mentors—mainly that to be effective, they must fully appreciate all the developmental roles they play (such as that of coach, advocate, and counselor) and understand the importance of each at different stages of their protégé’s career. The mentor of a professional of color must also be aware of the challenges race can present to his protégé’s career development and advancement. Only then can the mentor help his protégé build a network of relationships with people who can pave the way to the executive level. As a foundation, then, mentors must first understand how people of color tend to climb the corporate ladder.

Patterns of Movement

In a three-year research project, I studied the career trajectories of minority and white professionals at three major U.S. corporations. The story of one of the participants—Stephen Williams—sheds light on many of the differences in career advancement between whites and minorities. (In the interest of privacy, I have used pseudonyms for the participants. For additional details about the study, see the sidebar “About the Research.”)

About the Research

MY THREE-YEAR RESEARCH PROJECT took place at three major U.S. corporations: a manufacturer of commodity products, an electronics company, and a high-tech firm. At these multibillion-dollar organizations, I conducted in-depth case studies of 20 minority executives, predominantly African-Americans but also Asian- and Hispanic-Americans. For comparison purposes, I also conducted in-depth studies of 13 white executives as well as 21 nonexecutives (people who had plateaued in middle management), both white and minority, from the same companies. In addition, I reviewed the promotion records of more than 500 managers and executives at one of the companies studied.

Each corporation in the study had a long history of commitment to diversity. Amid the civil rights environment of the 1960s and early 1970s, all had strongly supported both affirmative action and equal employment opportunities. Their civic and community involvement helped their initial efforts to recruit minorities for professional and managerial positions. By the early 1990s, these companies had achieved racial integration within their management ranks.

Some people have questioned my decision to study only companies with a good track record in terms of diversity. The reason is simple: I felt that these companies would have more to teach us about how minority executives could succeed—even given various obstacles. I do not, however, mean to gloss over the very real—and sometimes insurmountable—barriers that many nonwhites face in their quest for advancement in corporate America. Indeed, there are still many companies at which no amount of individual effort, preparation, or performance is likely to propel a person of color into an executive position.

Idea in Brief

You’ve hired the best and brightest—only to watch many promising minority professionals get mired in middle management and leave, frustrated and angry, for better careers with your competitors.

Why the exodus? It’s the two-tournament system: According to a recent study, whites tend to fast track early; minorities, after years in middle management. Minority managers who stay motivated during the protracted early stages of their careers—and finally reach the executive level—share a key resource: a strong network of mentors and corporate sponsors who provide instruction, coaching, and—most important—long-term, close developmental support.

The two-tournament system isn’t fair. But until it’s eradicated, minorities can best advance by building and drawing on a solid mentoring network. They and their companies win.

Williams, an African-American, was born and raised in a middle-class neighborhood in Washington, DC. After earning his bachelor’s degree at one of the nation’s leading colleges, he began his career as a design engineer at a multibillion-dollar electronics corporation. On his first day in the lab there, he encountered a large banner that read, “George Wallace for President.” That proclamation for the pro-segregationist former governor of Alabama was an omen of the uphill battle Williams faced. And yet Williams eventually reached the executive level at his organization. Why did he make it when so many other minorities plateaued in middle management?

First, Williams had the good fortune to be hired by Nathan Barrett, a white manager who continually expanded Williams’s responsibilities and advised him on office politics. By the end of his early career, Williams had won additional supporters within the company, including Barrett’s boss and several white peers who, when they were promoted to management before Williams, vouched for him with their colleagues and recruited him for plum assignments.

Idea in Practice

The stark difference in career trajectories of white and minority executives has major implications for high-potential minorities—and their mentors—during each career-development stage:

Stage 1: Entry Level to Middle Management

As minorities watch their white counterparts quickly receive plum assignments and promotions into middle management, many grow discouraged. But some remain motivated. How? They forge mentoring relationships with widely diverse individuals who open the door to challenging assignments and expanded responsibilities, sending the message, “These are high performers.” Mentors also provide career advice and protect protégés from people leveling unfair criticism.

Result? During this stage, future minority executives evaluate themselves in terms of personal growth, not external rewards. Less concerned with how slowly they’re climbing the corporate ladder, they embrace the work itself.

Stage 2: Middle to Upper Middle Management

Promising minorities “catch up” to fast-tracked whites. Through promotions, they deepen and broaden their functional expertise, gaining influence over subordinates who might otherwise be resistant to minority leaders.

Tackling more complex challenges, minorities demonstrate their potential and extend their credibility. By changing functions, requesting special projects, and switching locations, they further enhance their success. At this stage, they extend their mentoring relationships to include powerful corporate-level sponsors.

Stage 3: Upper Middle to Executive Level

Minority and white executives finally converge. Minority managers take on challenges specific to working cross-functionally, learning to think and act more strategically and politically. To further distinguish themselves, they score highly visible successes directly related to the company’s core strategy.

They also continue developing their networks of highly placed mentors and sponsors. Their relationships with their immediate bosses become particularly crucial. They establish several new, long-term relationships with other executives as well, both white and minority.

Cross-Race Mentoring Challenges

Cross-race mentoring relationships raise unique challenges. For example, some minority protégés may avoid such relationships so as not to attract scrutiny, spawn peers’ resentment, or “sell out” their culture.

But if both parties can build a strong foundation of mutual trust, they’ll more likely surmount those challenges. If you’re a mentor:

- Openly discuss racial sensitivities. Minorities tend to advance further when their white mentors acknowledge race as a potential barrier.

- See yourself in your protégés—they’re like you were, years ago. If you can identify with each other, you’ll forge closer relationships.

- If you’re unsure whether you’re the best role model, help protégés identify other appropriate supporters.

Although it took Williams longer to reach middle management than he thought it should, he avoided becoming cynical even as his white peers were being promoted. Instead, he concentrated on strengthening his technical proficiency, taking numerous in-house courses and seminars. He also chose his assignments judiciously, consciously avoiding being sidetracked into nontechnical or support jobs. Throughout this period, he earned the reputation for being an excellent performer, and he gained the cooperation, respect, and sometimes the friendship of whites who were initially either resistant or hesitant to work with him. After seven years as an engineer, Williams decided to pursue his MBA while continuing to work in engineering and design assignments. The education facilitated his transition into management when he was finally promoted two years later.

Once in middle management, Williams’s career took off; he was charged with coordinating the engineering, manufacturing, and field service for ensuring the quality of what was to become a major product family. His success in that position propelled him to a series of other assignments, including a temporary one in strategic planning, that eventually landed him a promotion to vice president and general manager, with profit-and-loss responsibility for a major business unit.

Williams’s experiences were typical of the minority executives in my study, which tracked the various stages of career development. Stage 1 covered entry level to middle management. Stage 2 included middle management to upper middle management. (A person in Stage 2 supervised other managers and had responsibility for a functional department within a business unit—for example, the director of marketing or a plant manager.) And Stage 3 covered upper middle management to the executive level. (A person in this stage became a corporate officer or a direct report of a corporate officer, with responsibility for an integrated business unit—a division president, for instance—or leadership of a corporate function—such as a vice president of purchasing.)

The most striking aspect of my findings was the consistency of the data. (See the exhibit “Separate and unequal.”) White professionals who eventually became executives—a group I’ll henceforth refer to simply as “white executives”—usually entered a fast track in Stage 1, whereas both white and minority professionals who later plateaued in middle management and minorities who eventually became executives all inched along during that period. In Stages 2 and 3, the careers of minorities who ultimately became executives took off, surpassing those of the plateaued managers. This stark difference in the career trajectories of white and minority executives suggests that companies implicitly have two distinct tournaments for access to the top jobs. In the tournament for whites, contenders are sorted early on, and only those deemed most promising proceed to future competition. In the tournament for minorities, the screening process for the best jobs occurs much later. This and other differences have important implications for minority professionals—and for the people mentoring them through the different stages.

Separate and unequal

White and minority executives do not progress up the corporate ladder in the same way. Early in their careers, high-potential whites enter a fast track, arriving in middle management well before their peers. Promising professionals of color, on the other hand, break through much later, usually after their arrival in middle management. These data are for a multibillion-dollar manufacturer of commodity products; studies at two other large U.S. corporations have shown similar results.

Stage 1

According to my research, a pernicious result of the two-tournament system was that many high-potential minorities became discouraged when they failed to be fast-tracked early in their careers. They became demotivated—especially when they saw their white colleagues receive plum assignments and promotions—and deskilled. As a result, their performance fell to a level that matched their modest rewards.

But some minorities—those who eventually became executives—avoided that fate. What kept them motivated and prepared to take advantage of opportunities that arrived belatedly? A common thread among them was their relationships with mentors. Even though the minority executives were not on an obvious fast track, influential mentors were investing in them as if they were, which helped prevent them from either ratcheting down their performance or simply leaving the organization.

This is not to say that the minorities in the study who became executives didn’t experience their share of disappointments; they did. But they evaluated themselves in terms of personal growth, not external rewards. Committed to excellence, they found the process of learning new skills rewarding. Like Williams, many of them went to graduate school or took training courses to enhance their knowledge. In general, minority executives made early career choices that placed them at the leading edge of the work they liked. They were more enthusiastic about the work itself and less concerned with how quickly—or slowly—they were climbing the corporate ladder. In fact, two minority executives in the study actually took demotions to transfer from staff jobs into operations, where they saw a better match for their skills and a greater opportunity for professional growth. Stage 1 was thus a time for minority executives to gain the three C’s: confidence, competence, and credibility.

In contrast, minority professionals who subsequently plateaued in middle management tended to make their decisions based on perceived fast-track career opportunities, not on the actual work. They were more prone to take salary and title promotions that offered little increase in management responsibility.

Consider the career of Roosevelt James, a minority electrical engineer at the same company as Stephen Williams. While Williams was focused on engineering and design early in his career, James was motivated more by the prospect of getting into management. He took one transfer after another, accepting nominal promotions, believing they were stepping stones to a larger goal. Before reaching middle management, he had had a total of 12 different assignments (nearly all lateral moves) in seven different functional areas, including those in facilities management and affirmative action. Ironically, to fulfill their ambitions for upward mobility, professionals like James sometimes left the path that might have led to the executive suite.

Interestingly, minority executives were promoted to middle management only slightly faster than minority plateaued managers, but with much greater job continuity. They were much less likely to have changed departments, made lateral moves, or transferred away from core positions. Surprisingly, they even received, on average, fewer promotions within a given level than did minorities who failed to make it past middle management. A close inspection of the data, however, revealed that the promotions of minority managers like James offered little real expansion of responsibilities, as compared with the promotions of minority executives like Williams.

Minority executives attributed much of their later success to their immediate bosses, other superiors, and peers who helped them develop professionally. Of course, such developmental relationships are important for everybody climbing the corporate ladder, regardless of race, but what distinguished minority executives from white executives and plateaued managers was that they had many more such relationships and with a broader range of people, especially in the early years of their careers. Within the first three years at the organization, minority executives had established at least one developmental relationship, usually with a boss or a boss’s boss. These mentors provided critical support in five ways.

First, the relationships opened the door to challenging assignments that allowed the minority executives to gain professional competence. Second, by putting the future executives in high-trust positions, the mentors sent a message to the rest of the organization that these people were high performers, thus helping them to gain confidence and establish their credibility. Third, the mentors provided crucial career advice and counsel that prevented their protégés from getting sidetracked from the path leading to the executive level. Fourth, the mentors often became powerful sponsors later in the minority executives’ careers, recruiting them repeatedly to new positions. Fifth, the mentors often protected their protégés by confronting subordinates or peers who leveled unfair criticism, especially if it had racial undertones. For example, a superior-performing African-American in the study had a laid-back style that detractors said was an indication of his slacking off, playing on the stereotype that blacks are lazy. The mentor directly challenged the detractors by pointing out that his protégé was the leading salesperson in the division.

Such rich mentoring relationships enabled minority executives to build on the three C’s, despite temptations to become discouraged. It took Williams, for instance, nine years to reach middle management, whereas it took his white counterparts roughly five. In contrast, professionals of color who plateaued in middle management tended to have circumscribed relationships with their mentors, often limited to work-related issues.

In summary, in Stage 1, the winners in the white tournament earned fast promotions into middle management. In the minority tournament, the signals sent to winners were more subtle, taking the form of rich mentoring relationships, challenging assignments, and expanded responsibilities, which showed the rest of the organization that these people merited future investment. (Winners of the white tournament also received those benefits, but the most obvious prizes in that contest were fast promotions.)

Stage 2

Once minority executives entered middle management, they typically had to wait another ten to 15 years before reaching the executive level. But Stage 2 was usually where their careers took off. And without exception, the minority executives in the study vividly re-called that their initial middle-management jobs were critical to their eventual success. Interestingly, few of the white executives felt that way, perhaps because they didn’t regard their jobs in early Stage 2 as big opportunities to prove themselves in the same way that their minority counterparts did.

In Stage 2, minority executives continued to increase their functional knowledge, allowing them to deepen and broaden their foundation of the three C’s. When leading others, the sheer technical or functional competence they had acquired in Stage 1 often enabled them to influence subordinates who might otherwise have been resistant. Through that process, they were able to enhance their managerial skills and judgment.

Stage 2 was also an important period for the minority executives to apply their existing skills to complex situations, which then helped them to demonstrate their potential and extend their credibility within the larger organization. Because of that, they were able to expand their network of relationships, including those with mentors and sponsors, beyond the boundaries of their original functional groups. Williams, for example, received several assignments in Stage 2 that required him to develop working relationships with key people in other functional areas. By the end of Stage 2, every minority executive in the study had at least one influential executive as a mentor, and many were highly regarded by several executives who acted as sponsors.

The split between minority executives and plateaued managers became more pronounced in Stage 2. Minority executives still received fewer promotions than minority plateaued managers, but they reached upper middle management in less time because their promotions were bigger and more significant. The assignment patterns of the minority managers continued to be unfocused: they had more job changes—either by department, location, or function (especially changes from line to staff jobs)—and they tended to serve in fix-it roles involving the same kind of challenges over and over, with no opportunity to acquire new skills.

The career of Carlos Amado, one of the managers studied, is a case in point. By the end of Stage 1, Amado had acquired a deep expertise in manufacturing. He had also earned a reputation for turning around problem groups and making them into stars. But in Stage 2, he failed to learn other important skills, such as developing the supervisors who reported to him and delegating work, and his career subsequently stagnated. A lack of savvy mentoring probably contributed to Amado’s incomplete understanding that he was being boxed into a limited role.

Stage 2 was also when the careers of minority and white executives began to converge—their experiences, assignments, and pace of advancement became increasingly similar. There were still, however, some notable differences. Compared with their white counterparts, minority executives were twice as likely to change functions, twice as likely to take on special projects or task-force assignments, three times as likely to take a turnaround assignment, almost twice as likely to change locations, and four times as likely to report a big success. In many ways, these differences are a reversal of what occurred in Stage 1, where white executives had markedly more opportunities to prove themselves than minority executives did. For that reason, Stage 2 can be thought of as a catching-up and breaking-out period for minority executives.

Interestingly, although minority and white executives had a similar number of developmental relationships in Stage 2, minority executives were far more likely to have powerful corporate-level executives as sponsors and mentors. In reviewing their careers, minority executives usually described a senior person who had been watching their progress during this period without their full awareness.

Stage 3

The climb from upper middle management to the executive level required a broad base of experience—well beyond a functional expertise. In Stage 3, people took on issues specific to working across functional boundaries, and that change encouraged them to think and act more strategically and politically.

To distinguish oneself as executive-level material in Stage 3, an individual needed highly visible successes that were directly related to the company’s core strategy. For Stephen Williams, it was his critical role in developing and launching a product line that helped to reposition his company in the marketplace.

Minority executives in Stage 3 continued developing their network of highly placed mentors and sponsors. An individual’s relationship with his executive boss, in particular, became crucial; it played a central role in helping each minority executive break through to the highest level. Furthermore, in Stage 3 the minority executives reported developing at least two new relationships with other executives. In contrast, most of the minority plateaued managers did not establish any new developmental relationships during that time.

The networks of minority executives were also much more diverse than those of the minority managers. For example, African-American managers who plateaued either relied almost exclusively on members of their own racial group for key developmental support or they relied predominantly on whites. In contrast, those who reached the executive level, especially the most successful among them, had built genuine, personal long-term relationships with both whites and African-Americans.

The careers of minority and white executives continued to converge in Stage 3, especially with regard to developmental relationships. Clearly, it was impossible to make it to the executive level, regardless of race, without the active advocacy of an immediate boss and at least one other key sponsor or mentor. Nevertheless, as was the case in Stage 2, minority executives tended to have a higher proportion of their developmental relationships with the corporate elite than did white executives.

In summary, during Stages 2 and 3, the careers of minority executives became clearly differentiated from that of plateaued managers, and in Stage 3, the career trajectories and experiences of minority and white executives finally converged.

Mentoring Challenges

A key finding of this research is that professionals of color who plateaued in management received mentoring that was basically instructional; it helped them develop better skills. Minority executives, by contrast, enjoyed closer, fuller developmental relationships with their mentors. This was particularly true in people’s early careers, when they needed to build confidence, credibility, and competence. That is, purely instructional mentoring was not sufficient; protégés needed to feel connected to their mentors.

Specifically, a mentor must play the dual role of coach and counselor: coaches give technical advice—explaining how to do something—while counselors talk about the experience of doing it and offer emotional support. Both are crucial. If a protégé doesn’t have someone to talk to about his experiences in the organization, he will often have trouble implementing any coaching advice. This is especially true early in a person’s career, when the instructional advice requires him to assume behaviors that he is not yet comfortable with. Later in the protégé’s career, particularly in Stages 2 and 3, the mentor must focus on establishing and expanding a network of relationships, including sponsorship and connections to people who are higher in the organization. While the quality of the interpersonal relationships remains important, the diversity of the network becomes another crucial factor.

Many people, however, do not approach mentoring from a developmental perspective. They don’t understand how to work with subordinates, especially minorities, to prepare them for future opportunities. My own experience and the findings of other studies suggest that organizations can change this by educating managers about their developmental role and by teaching them how to mentor effectively. Of prime importance is an understanding of the kinds of developmental relationships that people need at different points in their careers. Also crucial is an appreciation that, because race and racism can pose significant obstacles for people of color, mentors of minorities may need to approach mentoring differently than they do with their white protégés.

Cross-race issues

This education process must include an awareness of the inherent difficulties of mentoring across race. A significant amount of research shows that cross-race (as well as cross-gender) relationships can have difficulty forming, developing, and maturing. Nevertheless, the mentoring of minority professionals must often be across race, as it was for most of the minority executives in my study. And to develop the personal connections that are the foundation of a good mentoring relationship, the participants must overcome the following potential obstacles.

Negative stereotypes. Mentors must be willing to give their protégés the benefit of the doubt: they invest in their protégés because they expect them to succeed. But a potential mentor who holds negative stereotypes about an individual, perhaps based on race, might withhold that support until the prospective protégé has proven herself worthy of investment. (Such subtle racism may help explain why none of the minority professionals in my study had been fast-tracked. Whites were placed on the fast track based on their perceived potential, whereas people of color had to display a proven and sustained record of solid performance—in effect, they often had to be overprepared—before they were placed on the executive track.)

On the other hand, when a person of color feels that he won’t be given the benefit of the doubt, he behaves in certain ways—for example, he might not take risks he should for fear that if he fails, he will be punished disproportionately.

Identification and role modeling. Close mentoring relationships are much more likely to form when both parties see parts of themselves in the other person: the protégé sees someone whom he wants to be like in the future. The mentor sees someone who reminds him of himself years ago. This identification process can help the mentor see beyond a protégé’s rough edges. But if the mentor has trouble identifying with his protégé—and sometimes differences in race are an obstacle—then he might not be able to see beyond the protégé’s weaknesses. Furthermore, when the mentoring relationship is across race, the mentor will often have certain limitations as a role model. That is, if the protégé adopts the behavior of the mentor, it might produce different results. In my study, an African-American participant recounted how his white mentor encouraged him to adopt the mentor’s more aggressive style. But when the protégé did so, others labeled him an “angry black man.”

Skepticism about intimacy. At companies without a solid track history of diversity, people might question whether close, high-quality relationships across race are possible. Does the mentor, for example, have an ulterior motive, or is the protégé selling out his culture?

Public scrutiny. Because cross-race relationships are rare in most organizations, they tend to be more noticeable, so people focus on them. The possibility of such scrutiny will often discourage people from participating in a cross-race relationship in the first place.

Peer resentment. A protégé’s peers can easily become jealous, prompting them to suggest or imply that the protégé does not deserve whatever benefits he’s received. Someone who fears such resentment might avoid forming a close relationship with a prospective mentor of another race. Of course, peer resentment occurs even with same-race mentorships, but it is a much greater concern in cross-race relationships because of their rarity.

Such obstacles often hinder cross-race mentoring from reaching its full potential. In my research, I have found that they make people less willing to open up about sensitive issues and more afraid of disagreements and confrontations. The general sense is that cross-race relationships are more fragile.

Not surprisingly, many cross-race mentoring relationships suffer from “protective hesitation”: both parties refrain from raising touchy issues. For example, Richard Davis, a white mentor in my study, thought that his African-American protégé’s style was abrasive, but he kept that feeling to himself in order to avoid any suggestion that he was prejudiced—specifically that he harbored the stereotype that all black men are brash and unpolished. Davis eventually found out that he was right when his protégé’s style became an issue with others. At that point, though, his protégé was deemed to have a problem—one that could have been prevented had Davis only spoken sooner.

Protective hesitation can become acute when the issue is race—a taboo topic for many mentors and protégés. People believe that they aren’t supposed to talk about race; if they have to discuss it, then it must be a problem. But that mind-set can cripple a relationship. Consider, for example, a protégé who thinks that a client is giving him a difficult time because of his race but keeps his opinion to himself for fear that his mentor will think he has a chip on his shoulder. Had the protégé raised the issue, his mentor might have been able to nip the problem early on. The mentor, for instance, might have sent the protégé to important client meetings alone, thereby signaling that the protégé has the backing of his mentor and the authority to make high-level decisions.

The above example highlights an important finding from my research: minorities tend to advance further when their white mentors understand and acknowledge race as a potential barrier. Then they can help their protégés deal effectively with some of those obstacles. In other words, relationships in which protégé and mentor openly discuss racial issues generally translate into greater opportunity for the protégé.

To encourage and foster that type of mentoring, organizations can teach people, especially managers, how to identify and surmount various race-related difficulties. For example, a white mentor might make a concerted effort to communicate to her minority protégé that she has already given him the benefit of the doubt. In a meeting, she could openly endorse his good ideas, thereby signaling to others that they, too, should value his opinions. Such actions would curb the protégé’s fear of failure and encourage him to take risks and speak about difficulties.

And consider the practice of role modeling. If a mentor accepts that he might be limited in his ability to serve as a role model, he can help his protégé identify other appropriate people. He can also offer open-ended advice, perhaps by using qualifying comments (“This might not work for you, but from my experience . . .”) and invite discussion of the advice rather than assume it will be taken. Otherwise, the mentor might easily misconstrue situations when his advice isn’t taken, which could make the mentor feel slighted and possibly even cause him to abandon the relationship.

It should be noted that when the complexities of cross-race relationships are handled well, they can strengthen a relationship. For one thing, if a mentor and protégé trust each other enough to work together in dealing with touchy race-related issues, then they will likely have a sturdy foundation to handle other problems. In fact, people have reported that race differences enabled them to explore other kinds of differences, thus broadening the perspectives of both parties. That education was invaluable because people who can fully appreciate the uniqueness of each individual are more likely to be better managers and leaders. Indeed, in my research on cross-race mentoring, mentors have frequently reported those relationships were the most fulfilling in terms of their own growth and transformation.

Network management

As discussed earlier, one of a mentor’s key tasks is to help the protégé build a large and diverse network of relationships. The network must be strong enough to withstand even the loss of the mentor. Stephen Williams’s mentor, for example, left the company after Williams had entered Stage 3 and was tackling increasingly challenging assignments.

From my research, I have found that the most effective network is heterogeneous along three dimensions. First, the network should have functional diversity; it should include mentors, sponsors, role models, peers, and even people whom the protégés themselves might be developing mentoring relationships toward. Second, the network should have variety with respect to position (seniors, colleagues, and juniors) as well as location (people within the immediate department, in other departments, and outside the organization). And third, the network should be demographically mixed in terms of race, gender, age, and culture.

Although a detailed description of the three dimensions is beyond the scope of this article, several points are worth noting. The difference between mentorship and sponsorship is that the former entails a much closer personal connection. Sponsors are coaches and advocates, whereas mentors are also counselors, friends, and in many ways surrogate family. Nevertheless, the role of sponsors can be critical when, for example, the protégé wants to pursue an opportunity outside the mentor’s department. Also, especially when key decisions at an organization are made by committee, the protégé will benefit from having as many sponsors as possible.

A frequently overlooked area is a protégé’s relationships with peers. People of color, in particular, can oftentimes become isolated from their peers due to resentment. But peer networks are crucial. For one thing, peers can help one another manage their careers and perform important self-assessments. They can be sympathetic sounding boards, useful information checks (what was your experience like when you first started in that division?), and helpful devil’s advocates. For Stephen Williams, participation in a self-help group of African-Americans at his organization provided valuable social support and also expanded his network beyond his association with his engineering colleagues.

To ensure that a protégé is not missing any important peer relationships, the mentor must sometimes intervene. For example, if a mentor notices that his protégé is not part of an informal go-to-lunch crowd, he might assign her to a certain project with people in that group to encourage those friendships to form.

Another often overlooked area is a protégé’s relationships with juniors, which will help the protégé become a valuable mentor in the future. Also, particularly for people in middle management, good relationships with junior staff can enable them to stay up-to-date with the latest technology. Furthermore, a protégé’s mentors and superiors can be influenced greatly by the opinions of junior staff.

A network of relationships becomes vulnerable when it lacks any one of the dimensions. For example, if a person’s network is limited to his organization, he will find it difficult to find employment elsewhere. On the other hand, people of color have the tendency to draw on a network from primarily outside their organizations. Such support can be invaluable, but it will provide little help when that individual is being considered for a highly desirable in house assignment. Establishing a diverse network is just the start—a person’s network must be replenished and modified continually.

Creating the Environment for Success

Many mentors of minority professionals assume that their job begins and ends with the one-on-one relationships they establish with their protégés. This is hardly true. Mentors, especially those at the executive level, must do much more by actively supporting broader efforts and initiatives at their organizations to help create the conditions that foster the upward mobility of people of color. Specifically, they can do the following:

- Ensure that the pool of people being considered for promotions and key assignments reflects the diversity in the organization.

- Promote executive development workshops and seminars that address racial issues.

- Support in-house minority associations, including networking groups.

- Help colleagues manage their discomfort with race. In a meeting to decide whether someone of color should be promoted, for example, a person can help focus the discussion on the individual’s actual performance while discounting racial issues disguised as legitimate concerns (such as vague criticisms that the managerial style of the minority candidate “doesn’t fit in”).

- Challenge implicit rules, such as those that assume that people who weren’t fast movers early in their careers will never rise to the executive suites.

In conclusion, I should address one of the most insidious implicit rules of all: the two-tournament model. Many companies might be tempted to accept it as an empirical reality. Some might even want to make it policy by tacitly accepting that minorities cannot be fast-tracked in their early careers or by formally creating two separate career tournaments—one for whites and one for minorities. They assume that minorities will move more slowly in Stage 1. So, the thinking goes, why not take that time to ensure that high-potential minorities are overprepared to meet the social, technical, and racial challenges when they reach Stage 2?

I believe that any acceptance—let alone conscious replication—of the two-tournament system is a mistake. First, it unfairly institutionalizes the “tax” of added time that minorities have to pay as a result of existing racial barriers. As a consequence, a higher standard is set for their participation in the main competition for executive jobs. Second, such a policy would likely result in a number of high-performing and ambitious minorities leaving in Stage 1, before their careers could accelerate. It was beyond the scope of my study to determine exactly how many people of color with executive potential left during Stage 1, but I did encounter many executives who were surprised when their best minority talent left “just as good things were about to happen.” Lastly, a two-tournament model could eventually lead to backlash among white plateaued managers who, not realizing that they had been passed over in Stage 1 because they were not deemed executive material, become resentful toward the promising minorities taking off in Stages 2 and 3.

But I am not advocating a one-tournament system of fast-tracking. After all, it is no accident that people of color haven’t been fast-tracked in the past. One reason is that organizations have been largely ineffective in helping minorities establish relationships with mentors. Thus, artificially placing minority professionals onto a fast track without first changing the underlying process dynamics would set up those individuals for failure.

Organizations instead should provide a range of career paths, all uncorrelated with race, that lead to the executive suite. Ideally, this system of movement would allow variation across all groups—people could move at their own speed through the three stages based on their individual strengths and needs, not their race. Achieving this system, however, would require integrating the principles of opportunity, development, and diversity into the fabric of the organization’s management practices and human resource systems. And an important element in the process would be to identify potential mentors, train them, and ensure that they are paired with promising professionals of color.

Originally published in April 2001. Reprint R0104F

Leadership in Your Midst

Tapping the Hidden Strengths of Minority Executives.

by Sylvia Ann Hewlett, Carolyn Buck Luce, and Cornel West

ALL COMPANIES VALUE LEADERSHIP—some of them enough to invest dearly in cultivating it. But few management teams seem to value one engine of leadership development that is right under their noses, churning out the kind of talent they need most. We’re referring to the deeply substantive outside lives of their minority executives.

If you know many minority professionals—particularly women of color—then you know that these are the people who are called upon inordinately to lend their energies, perspectives, and guidance to activities outside their jobs. (We use the term “minority” in the statistical sense to denote people who in terms of race or ethnicity are not in the majority in their corporations or organizations.) Because they have “made it,” and because often they have done so against heavy odds, they are mentors of choice to young people in their communities. Within their workplaces, they serve on numerous diversity-seeking task forces and spearhead minority recruitment efforts. They play high-profile volunteer roles in their towns, schools, and churches, and the amount of time they invest in these roles is substantial. In the words of Ella Bell, a professor at Dartmouth’s Tuck School of Business, “They comprise the backbone of religious organizations and provide a significant part of the energy driving community service in the United States.”

For many minority professionals, involvement in such activities is an important, inherently satisfying part of their lives. For some, it’s a way of giving back—or, more accurately, giving in turn the kind of help that benefited them early on. But it’s also a fertile source of continued personal growth. In these myriad roles, minority professionals hone valuable leadership skills. The problem is that those skills are not properly recognized by their employers. And no conscious attempt is made to transfer them into the corporate environment and develop them further. The disproportionate load of care that minority professionals bear in their extended families is also invisible to employers, and neither acknowledged nor supported by corporate benefits packages. The result: Too many high-potential employees end up feeling ignored and diminished, overextended and burned out. At the same time, organizations are being deprived of the strong and diverse leadership they could so easily draw upon.

Idea in Brief

A company’s leadership talent translates directly into competitive prowess. Yet many management teams are blind to one powerful engine of leadership development that’s right under their noses: community work performed by minority professionals in their off-hours. Such work teaches professionals crucial leadership skills such as strategic planning, negotiation, financial savvy, and change management.

So why aren’t more companies attuned to the treasure trove of leadership talent in their midst? Many minority professionals, fearful that their volunteer work in religious and ethnic organizations will earn them charges of being “different,” hide the work from supervisors. Result? Their talents, passion, and dedication remain invisible—and untapped.

How to leverage the unseen strengths your minority professionals are honing outside the office? Develop an appreciation for community work. Use telecommuting and flexible schedules to ease the heavy burden minority leaders shoulder when they add community work to their family responsibilities. Combat hidden biases—such as disapproval of ethnic dress or mannerisms—that discourage minorities from revealing their nonwork lives. And help minority employees apply lessons learned from community work to your company’s challenges.

As blockbuster companies such as General Electric, Unilever, and Time Warner have discovered, leveraging minority professionals’ off-hours experience infuses your leadership talent pool with fresh energy, vital skills, and deep commitment to your company.

In 2004, the Center for Work-Life Policy formed a private-sector task force called the Hidden Brain Drain to investigate the challenges faced by female and minority talent over the life span. In the spring of 2005, three member companies—Unilever, General Electric, and Time Warner—sponsored a cross-sectoral national survey and series of focus groups to discover the facts about minority professionals’ outside leadership work and why it remains unrecognized. (The exhibit “Off-the-job leadership development” describes the research.) A companion study, which targeted the global executives of a large multinational corporation, attests to the resonance of this research in other countries. (The sidebar “Invisible Lives in the Global Context” highlights some of these findings.)

Off-the-job leadership development

Professional women of color incubate leadership and other transferable skills in their neighborhoods and communities. Specifically, the highly educated African-American women in our study develop cultural capital in the following ways:

Invisible Lives in the Global Context

OUR RESEARCH SHOWS THAT MINORITY executives in the United States lead rich lives of leadership and responsibility that are largely invisible to their employers. Is the same true for global executives who do not share the dominant ethnicity of leaders at headquarters? To examine this question, we conducted an employee survey of one large company, a Europe-based multinational with extensive operations in the United Kingdom, India, and South Africa. Targeting midlevel managers and senior executives, we reached more than 1,900 employees. Our goal was to compare the experiences of a group of predominantly white executives in the UK (male and female) with those of a group of predominantly nonwhite executives in India and South Africa.

Like minority executives in the United States, this company’s global executives are rich in cultural capital

- 30% of South African executives are leaders in their religious organizations (compared with 10% of executives in the UK)

- 20% of Indian executives serve as mentors to young people in their communities (the figure for UK executives is 8%)

- 38% of South African executives are involved in social outreach programs, as are 27% of Indian executives

Global executives deal with an inordinate load of care responsibilities

- 32% of Indian respondents have elders in their households, while in South Africa, 46% regularly care for elderly relatives outside their homes (only 3% of UK executives have elders living in their homes)

- 33% of Indian respondents support children from extended families and the community (for UK executives, the figure is 12%)

Many global executives suspect hidden bias and choose to keep information about their personal lives close to the vest

- 49% of South African executives perceive “style compliance” pressures

- 78% of respondents in India and South Africa believe that colleagues whose looks and style mirror senior management’s are unfairly favored in promotions

- 48% of Indian executives don’t fully trust their employer with information about their private lives (compared with 35% of UK executives)

- Almost half of nonwhite global executives say their outside lives are invisible to the company

Among the initiatives suggested by the survey to improve the situation, the following were favored by an overwhelming majority of global executives

- cultural sensitivity training to break down stereotypes (89% to 96%)

- better access to mentors (88% to 95%)

- safe harbors for discussing issues in their private lives while maintaining anonymity (77% to 86%)

- evaluation of individual managers’ success in developing diverse talent based on input from subordinates (60% to 78%)

A detailed report of this survey’s findings and its underlying methodology is available from the Center for Talent Innovation.

Idea in Practice

To leverage your minority professionals’ unseen strengths:

Appreciate Minority Community Work

Support minority community organizations with the same commitment that your company supports other community organizations such as the United Way.

Example: Pitney Bowes supports Delta Sigma Theta sorority, a national African-American community service organization. It purchases advertising space in Delta Sigma Theta’s fundraising journals and matches employees’ donations. The company recruited one of its most talented black professionals through its participation in a leadership development program for minority youth sponsored by Delta Sigma Theta.

Lessen the Load

A disproportionate number of minority professionals shoulder responsibility not just for their immediate family, but for their extended families, too. Result? An extra-heavy workload that can lead to burnout.

To lessen their load, offer flextime and telecommuting. “Widen the tent” by offering employee benefits that address needs beyond nuclear family.

Example: Time Warner changed its Employee Assistance Program policies to extend certain provisions to extended family members at no extra cost. It also extended back-up childcare programs and college planning to grandparents, uncles, and aunts. These relatively inexpensive benefits have spurred a strong positive impact on minority recruitment and retention.

Embrace Diversity

“Walk the talk” in your diversity initiatives by evaluating managers on their track record in recruiting and retaining minority talent—and linking this evaluation to compensation.

Example: Lehman Brothers rewards senior managers who meet diversity goals with money from a bonus pool that’s divided and awarded at the end of each year. The company’s commitment to diversity attracts talented minorities—such as one black Wall Street banker who returned to the financial world after several years’ hiatus and accepted an offer from Lehman Brothers because of its diversity policies.

Encourage “Action Learning”

Help minority professionals reflect on their off-hours community experiences, extract and generalize lessons, and apply their learning in your company.

Example: Goldman Sachs has encouraged one minority investment banker to serve as a board vice-president and fundraiser for the Lincoln Square Neighborhood Center, a nonprofit organization that supports low-income families who share a ZIP code with wealthy families. The role teaches her how to work with diverse individuals and motivate prospective donors to maximize their contributions—skills Goldman Sachs wants her to have.

The U.S. research, which we share here for the first time, underscores that the lives of minority professionals are rich with experience that goes unleveraged by their employers. But it also reveals a startling fact: These lives remain invisible largely by choice. For many reasons, minority professionals are reluctant to speak of their outside pursuits and accomplishments to colleagues and managers. We are left with a dual challenge: Companies can’t leverage what they don’t see—and they can’t see what is purposely concealed.

Cultural Capital

One of the impressive professionals we encountered in our research is Sheryl Battles, an African-American vice president of corporate communications at a major global corporation. In addition to her primary responsibility managing executive and investor communications, she coordinates the corporation’s communications on issues of diversity and in that capacity supports 30 to 40 events a year. It’s a task that constitutes just 5% of her official job description but consumes roughly 25% of her 50-hour workweek. In her personal life, she speaks at community events and career seminars for minority students and is involved in the church that she, her husband, and their daughter attend. She is also on the board of a local organization for the arts and has been active in its African-American Cultural Heritage Series since its inception a decade ago.

Over the years, Sheryl has accumulated substantial cultural capital, sociologist Pierre Bourdieu’s term for nonmonetary wealth and relationship capital generated outside the workplace. Cultural capital is impossible to measure with any precision but is undeniably vital for anyone who wishes to exert influence in a neighborhood, a company, or a nation. Everyone accumulates a measure of cultural capital in their lives, but in the case of minority professionals, it is unusually rich. Consider, for example, the value of Joyce’s cultural capital. (All research participants referred to in this article by a first name only are disguised at their request.) Joyce is a change agent to be reckoned with in her community. In her church, she was recently inspired by a progressive pastor’s vision for transforming the congregation’s stance on a divisive social issue. At the same time, she knew he would face resistance—and that the intensity of his enthusiasm was blinding him to the harsh realities of making change happen. He needed a pragmatic strategist, and in her, he found one. Together they guided the church through the transition, crunching the numbers, outlining a plan, initiating a series of meetings with congregants, and evaluating progress. When we talked with Joyce, she reflected on the experience, noting the difficulty of simultaneously unleashing and controlling the energy that flows from transformational change.

Does all this sound like valuable leadership training? The irony is that, despite being a strategic planner at a Fortune 100 company, Joyce never heads up such comprehensive initiatives at work. “Sure, I develop strategic plans here,” she reflects, “but my hands are tied half the time. [At church] I have an audience that says, ‘Yeah, do your thing.’”

Beyond personal stories like these, statistics do even more to make the point. Among highly educated African-American female professionals, 25% are active leaders in their religious communities (compared with 16% of white men) and 41% are involved in social outreach activities (compared with 32% of white men). Most frequently, they volunteer in schools, hospitals, libraries, shelters, and other organizations in their communities. Minority women are also on the front lines helping young people in their communities as mentors, tutors, and “big sisters.” A quarter of African-American businesswomen (25%) take on these roles. (The figure for white businesswomen is 14%).

Such substantive community involvement develops strategic and interpersonal skills, hones core values, and builds organizational and communication capabilities—all of which are transferable to and highly valued in the workplace. Yet our research shows that these skills remain invisible to managers.

Under the Radar

Why aren’t companies more attuned to the untapped leadership in their ranks? First, because they haven’t looked for it. Traditionally, to the extent that management takes an interest in employees’ “extracurricular” lives, the focus has been on activities that have long been sanctioned by white male executives and are thought to burnish a company’s image or enhance client relationships: United Way drives, symphony orchestra sponsorships, and sporting events, for example. Most companies do not bother to note the kind of pursuit that Stephanie, a bright, young African-American manager we interviewed, is involved in: running an award-winning Girl Scout troop in a homeless shelter. “These kids are not going to Harvard, they don’t have a place to live, and they don’t know how many times they’re going to eat today,” she told us. Stephanie’s commitment to these homeless girls is expanding her leadership skill set as she navigates public- and nonprofit-sector bureaucracies while serving a population with myriad needs.

But Stephanie is convinced that her boss disapproves of her involvement in scouting, because it means she must leave work at 5:30 pm a few times a month. Despite the fact that she arrives at 7 am on those days, she is acutely concerned about being thought of as less than fully committed to her job. She refrains from talking about her Girl Scouts program at work—even though this initiative earned her a Future Leader Today award at a ceremony at the White House.

Stephanie’s reticence suggests a second reason that minority professionals’ lives remain invisible to their managers: because they are deliberately hidden. Sometimes this is simply because professionals themselves don’t recognize their outside affiliations as legitimate leadership development venues. One highly accomplished woman we met is on the board of an active and growing nonprofit organization, where she is gaining valuable skills in fundraising and finance. But she told us, “I have not made the choice to share my board involvement at work. . . . I have never found a natural segue to make it relevant to what I do for the firm.”

Sometimes the conversation doesn’t occur because it would necessarily touch on religion, an important part of many minorities’ nonwork lives. Joyce, the strategic planner we introduced earlier, feels she can’t talk about the change effort she managed for her church, which is a different denomination from that of the apparently homogeneous hierarchy of leaders at her company. The same fear makes Michael, an Asian-American executive at a large California-based energy company, reluctant to share with colleagues his involvement on the board of a prominent charity. His reticence stems from the fact that the charity supports faith-based organizations and targets minority families. According to Michael, colleagues are likely to react negatively to his involvement because it raises “the big taboo subjects of the workplace: religion and ethnicity.” In his view, it leads them to think, “You’re different. I have always suspected that—and now you’re confirming it.” Michael admits that if people, himself included, talked more openly, then the taboos might be lifted, and his charity work might gain legitimacy and heft. But his short-term view is strictly pragmatic: “Why give anyone ammo?”

The fact that many minorities fear giving employers “ammunition” to use against them is among the most disturbing findings of our research. As shown in the chart below, many minority women professionals feel they cannot trust their employers with even basic information about their private lives. In large corporations, the percentage rises to more than half.

The survey data show that the distrust and reluctance to discuss private lives are deeply rooted in minorities’ experiences of “hidden bias” in corporate cultures. Many avoid discussing their nonwork lives because they don’t want to run the risk of reinforcing negative stereotypes. Latisha, an African-American executive at a global consumer products company, described growing up in the Newark projects, her mother on welfare and both parents eventually succumbing to AIDS. “When I do try and open up personally, people just don’t get it . . . So you stop trying.” Others worry about a perception that they got their jobs through affirmative action rather than on the grounds of merit.

Some feel hemmed in by “style compliance” issues, such as speaking style, hand gestures, and appearance. Nearly one-third of minority female executives (32%) in large corporations worry that their quiet speaking style is equated with lack of leadership potential, while 23% worry that their animated hand gestures are perceived as inappropriate. Fully 34% of African-American women in the business sector believe that promotion at their companies is based on appearance rather than ability.

According to Sears executive Angela Williams, hidden biases can be debilitating because they lead minority professionals to “deny their authenticity” in their efforts to fit into the prevailing white male model. Indeed, our research shows that almost one-fifth of professional women of color (19%) perceive hidden biases severe enough for them to consider quitting. Focus group participants talked about “teetering on the edge” (thinking about quitting, looking for a new job, trying to figure out whether there is less bias elsewhere) for months, or even years, meanwhile downsizing effort and expectations. One participant told us she had “quit but stayed on the job”—with predictable effects on performance.

Leveraging Unseen Strengths

Companies stand to benefit enormously if they can learn to nurture and support the cultural capital that minority professionals routinely develop outside work. Our research reveals four ways companies can discover and leverage these hidden skills: Companies need to build a greater awareness of the invisible lives of their minority professionals; they need to appreciate and try to lighten the outsize burdens these professionals carry; they must build trust in their ranks by putting teeth into diversity goals and encouraging more latitude in leadership style; and they should finish the job of leadership development begun in minorities’ off-hours activities so that those nascent skills can make a difference to workplace performance and competitive strength.

Shine a light

First, greater awareness and appreciation of community work is key. A large number of minority women professionals (45%) do not feel that their roles and responsibilities outside the workplace are recognized or understood by their employers. Minority women in larger companies (56%), young women of color (50%), and Asian women (49%) are the most likely to feel that their lives are “invisible” to their employers.

Demitra Jones, on the other hand, has no such concern. A dedicated human resource generalist at Pitney Bowes, she feels her employer is fully supportive of the evenings and weekends she spends with her sorority sisters. When Demitra says “sorority,” she’s talking about Delta Sigma Theta, an African-American organization founded in 1913 that “places more emphasis on service than on socializing.” Her membership in the organization is a strenuous commitment, demanding 30 hours a month on top of 60-hour workweeks. It’s a win-win situation for her and for Pitney Bowes and has been since the beginning. It was a Delta Sigma Theta member who matched Demitra with the company even before she entered college through Inroads, a leadership development institute for minority youth. Since then, Pitney Bowes has continued to support Delta Sigma Theta in many ways, from purchasing advertising space in fundraising souvenir journals to matching Demitra’s own donations. More important, it has kept an eye on the cultivation and training of Demitra as a leader in both worlds. It’s no coincidence that her rapid rise in the company paralleled her progress through the leadership structure of the sorority, which she joined as a junior at Trinity College in Hartford, Connecticut.

What Pitney Bowes has done is not difficult; the company merely shined a light on an aspect of employee life that is often left in the shadows. This kind of light can take many forms. Some specific suggestions that came out of our survey include, for example, ensuring that recruiting activities are recognized explicitly in job descriptions and performance evaluations. Also, allowing employees to set aside time for volunteer activities—even a few hours a month—would send a message that employers recognize and value social outreach and community involvement. An overwhelming majority of our survey participants would welcome training from their companies in fundraising for volunteer activities. Companies could even take an active role in helping young minority professionals access nonprofit boards, thereby giving them an early opportunity to develop leadership skills they can bring back to their workplaces.

Lessen the load

Companies that are truly invested in seeing their diverse talent flourish must be better attuned to the extra burdens carried by many minorities—particularly minority women, whose load of care reaches beyond the nuclear family to extended family and the community. Over half of minority professional women are working mothers (51%), compared with 41% of professional white women. Many, too, are single moms or prime breadwinners. African-American professional women in our survey are more than twice as likely as white women to be single mothers (18%, compared with 7%). In addition, minority women spend significant amounts of time caring for elders and extended family. Seventeen percent of African-American female professionals care for elders and extended family, spending an average of 12.4 hours per week on this care. (The figures for professional white men and women are 6.6 and 9.5 hours, respectively.)

Given this heavy burden of care, some well-established practices like flextime and telecommuting may be especially attractive to minority professionals. Beyond these, there are forms of assistance that few companies have considered, but that might, at small expense, be of tremendous benefit. For example, in our survey there was considerable support for company initiatives that “widen the tent,” such as employee benefits that go beyond the nuclear family. Nearly three-quarters (74%) of minority women want help paying for health insurance for up to two members of their extended families. Many minority women (72%) want a few days of annual leave for the purpose of elder care or extended-family care. And 74% of minority women say they would appreciate help in accessing state and federal services for a range of nuclear- and extended-family needs.

Time Warner is one company that has begun to address the issue. Patricia Fili-Krushel, executive vice president of administration, explains, “I wanted to check if we were looking through a white lens in terms of how we organize benefits—and, sure enough, we were.” The company recently extended its employee assistance program (which includes, for example, access to child care referral services and company scholarship programs) to other reliant family members (perhaps an aunt or uncle). “In the last five months, there’s been a 200% increase in uptake,” she says. “There’s a lot we can do that doesn’t cost a lot of money. It just takes some different thinking.”

Reimagine inclusion

The research data underscore the need to expand and amplify what is meant by inclusion. We’re not talking here about the same old diversity initiatives, but specifically about innovative policies that build trust and foster workplace environments where minorities feel able to share the full round of their lives. Our survey revealed a widespread wish that companies establish “safe harbors”—places where employees can discuss issues, challenges, or opportunities in their private lives while maintaining anonymity. (Support for this notion was highest among Hispanic women professionals, at 75%, but it was also favored by majorities of African-American women, white women, and African-American men.)

Respondents in our survey also emphasize the need to “walk the talk” in diversity initiatives and put in place financial incentives to motivate managers. Fully 71% of minority businesswomen support the idea of evaluating managers on their track records in recruiting minority talent and favor linking this evaluation to compensation.

This was particularly important to Marie, a Wall Street professional coming back to the financial world after a few years doing client work. She wanted a company that not only had a diversity program, but had one with teeth. As an African-American woman, she was all too familiar with diversity initiatives that never seemed to amount to anything and diversity goals that were never evaluated past their inception. When Marie started work at Lehman Brothers, she was encouraged by the firm’s sizable diversity bonus pool—an incentive that recognizes individual managers and teams for their innovative diversity initiatives. The fact that her new firm encouraged investment bankers to take diversity seriously by providing meaningful incentives was a source of reassurance for Marie.

At Time Warner, there is a policy that for any hire at the vice president level or above, the slate of candidates must be diverse. In 2002, the company created the role of executive connector to make sure that there are viable candidates available for consideration. The connector uses contacts in numerous social and professional circles to develop an extensive pool of diverse candidates. Since taking on this role, Debra Langford has been instrumental in the hiring of 65 minority senior executives. She travels frequently to events and conferences looking for talented high-potential candidates. Once Debra has facilitated a minority hire, she monitors his or her progress. She knows that, unlike their white counterparts, the individuals may not have preexisting relationships within the company. Debra organizes formal and informal gatherings of employees with similar backgrounds—for instance, a lunch for African-American fathers or a dinner for minority lawyers.

Minority professionals are also reassured when they see companies actively combating hidden bias. According to DeAnne Aguirre, a senior vice president at Booz Allen Hamilton, a good way to begin is to “examine the prevailing mode of managerial behavior, determine where it is narrowly drawn, and reenvisage a much more inclusive model.” In our survey, 72% of minority women back cultural sensitivity training for managers to break down stereotypes.

One company that has historically welcomed diversity and champions the notion of bringing one’s whole self to work is Unilever. Through its Getting into the Skin program, introduced in 2002 as a key part of the company’s leadership development program, Unilever takes direct aim at hidden biases by asking selected groups of current and future leaders to spend time outside the realm of their normal experiences. Former Unilever co-chairman Niall FitzGerald helped create the program and was also a participant. Of a 2002 journey to Croatia, he remarked, “I lived the life of a Salvation Army volunteer and picked up an unkempt, uncared-for man off the street . . . we talked about his life. In an eerie twist of fate, he turned out to be from my hometown. We were two people who fate had dealt very different hands. He taught me, in a way no other experience has, the power of generous listening—without judgment.” Other participants have spent time at a rural hospital in Mexico, an AIDS clinic in Ireland, and a prison in Germany. The current CEO Patrick Cescau continues to build on Unilever’s mission of inclusion and has established a diversity board, which he chairs.

Finish the job of leadership development

Companies will reap the most benefit from the outside leadership experiences of their employees when they begin to consider this cultural capital explicitly as a form of leadership “action learning.” What this means is that they should observe established pedagogical practice, helping minority executives reflect on their experiences, extract and generalize the lessons, and apply what’s been learned to other settings.

Some leading corporations are beginning to view after-hours work as leadership training. Goldman Sachs is one, says Aynesh Johnson, an investment banker at Goldman. With the firm’s full knowledge and encouragement, Aynesh is sharpening her people skills by working as a board vice president for the Lincoln Square Neighborhood Center, a nonprofit organization that supports public housing residents who happen to share a zip code with some of the richest people in the world. In the process of figuring out how to fund-raise for these families, Aynesh has taken on a marketing task so challenging it would serve admirably as a business school case study. “It’s a very rich and wonderful opportunity,” Aynesh says, carefully. “But it’s not glamorous.” Nevertheless, Aynesh is proud to call her position on the center’s board “part of my career.” Describing her volunteer work, Aynesh says “it has taught me how to work with a wide range of individuals . . . maximizing their contributions.” She’s also learned how to listen gracefully when a prospective donor says no and how to refuse (also gracefully) to take no for an answer. These are skills her superiors at Goldman Sachs think are important. As a result, at work she does not hesitate to be open about this outside commitment. “Managers know, all the way up to the executive suite.”

Another way to transfer cultural capital to the workplace is through networks of mentors. Many minority businesswomen are skilled mentors themselves, having reached out to young people in their own communities. They therefore know the potential of these relationships and feel frustrated when they lack mentors in their own organizations. In our survey, a significant proportion of minority professionals (66%) supported the creation of mentoring programs across divisions and the matching of minority employees with senior colleagues from similar ethnic and cultural backgrounds.

About the Research

STATISTICS IN THIS ARTICLE ARE the findings of a 2005 survey, fielded by Charney Research under the auspices of the Center for Work-Life Policy. The targeted survey sample comprised 1,601 professionals in the United States, ages 28 to 55, with college or professional degrees. This included 1,001 minority women (of whom one-third were African-American, one-third were Hispanic, and one-third were Asian), 200 minority men (also equally divided among the three groups), 198 white women, and 202 white men. The survey targeted people equally in four professional areas: medicine, law, education, and business and accounting. Interviews averaged 20 minutes and were conducted by telephone between January 2005 and February 2005. (A detailed report of the findings is available at www.talentinnovation.org.)

When mentors build trusting, open relationships with minority protégés, companies gain an important window on leadership talent that is often hidden from view. Mentors can actively engage their protégés in discussions about their outside roles and work with them to apply and enhance those skills in their everyday jobs.

General Electric provides much-needed access to mentors and actively fosters leadership along the way through affinity networks. The African-American Forum is a case in point. It began informally—15 black managers coming together to study retention problems—and has grown into a major initiative that both serves as a vehicle through which minority employees find mentors and holds an annual meeting that draws nearly 1,400 people and features top executives. GE has integrated the AAF into succession planning. As Deborah Elam, manager of diversity and inclusive leadership, explains, “The practice of taking high-potential employees and placing them in leadership roles within the AAF allows top executives to better see the strengths of talented minority professionals.”

Lives Made Visible

In 1952, Ralph Waldo Ellison published his classic novel, Invisible Man. His central insight remains relevant more than 50 years later: Those rendered “invisible” may well be the key to maintaining America’s prosperity and integrity. This past half century has seen a sea change in terms of the opportunities available to minorities—especially female minorities. In response to the antidiscrimination laws of the 1960s and 1970s and the global talent shifts of the past 15 years, the face of power has begun to change. One only need look around the workplace. Whether you’re talking Wall Street, Main Street, or the White House, most management teams now include powerful and conspicuous nonwhite talent. Secretary of State Condoleezza Rice, Avon CEO Andrea Jung, and Time Warner CEO Dick Parsons are cases in point.

Still, the belief among many minority professionals that they must somehow cloak their real identities has been extremely debilitating. Every professional, no matter what color or creed, wants to be recognized, appreciated, and supported. As we can see from these new data, for a substantial number of minority professionals, covering up outside lives and staying below the radar has produced isolation, alienation, distrust, and disengagement, all of which helps explain why progress has stalled. According to Catalyst and other research organizations, the data show that minorities are not being promoted or advanced at a rate commensurate with their representation in the talent pool. They remain bunched in the early stretches of the career highway. Few make it into the fast lane.

Any company that hopes to compete on the world stage using superior leadership talent must look squarely at the problem of hidden lives and resolve to overcome it. The key is to value the cultural capital that minorities routinely develop in their communities and bring this to bear in their workplaces. Think of the extraordinary energy and purpose that will be released when minority professionals are finally able to speak openly and proudly of their lives, their core values, and their skills. It might well be transformative—of individuals, of companies, and of society.

Originally published in November 2005. Reprint R0511D

What Most People Get Wrong About Men and Women

by Catherine H. Tinsley and Robin J. Ely

THE CONVERSATION ABOUT THE TREATMENT of women in the workplace has reached a crescendo of late, and senior leaders—men as well as women—are increasingly vocal about a commitment to gender parity. That’s all well and good, but there’s an important catch. The discussions, and many of the initiatives companies have undertaken, too often reflect a faulty belief: that men and women are fundamentally different, by virtue of their genes or their upbringing or both. Of course, there are biological differences. But those are not the differences people are usually talking about. Instead, the rhetoric focuses on the idea that women are inherently unlike men in terms of disposition, attitudes, and behaviors. (Think headlines that tout “Why women do X at the office” or “Working women don’t Y.”)

One set of assumed differences is marshaled to explain women’s failure to achieve parity with men: Women negotiate poorly, lack confidence, are too risk-averse, or don’t put in the requisite hours at work because they value family more than their careers. Simultaneously, other assumed differences—that women are more caring, cooperative, or mission-driven—are used as a rationale for companies to invest in women’s success. But whether framed as a barrier or a benefit, these beliefs hold women back. We will not level the playing field so long as the bedrock on which it rests is our conviction about how the sexes are different.

The reason is simple: Science, by and large, does not actually support these claims. There is wide variation among women and among men, and meta-analyses show that, on average, the sexes are far more similar in their inclinations, attitudes, and skills than popular opinion would have us believe. We do see sex differences in various settings, including the workplace—but those differences are not rooted in fixed gender traits. Rather, they stem from organizational structures, company practices, and patterns of interaction that position men and women differently, creating systematically different experiences for them. When facing dissimilar circumstances, people respond differently—not because of their sex but because of their situations.

Emphasizing sex differences runs the risk of making them seem natural and inevitable. As anecdotes that align with stereotypes are told and retold, without addressing why and when stereotypical behaviors appear, sex differences are exaggerated and take on a determinative quality. Well-meaning but largely ineffectual interventions then focus on “fixing” women or accommodating them rather than on changing the circumstances that gave rise to different behaviors in the first place.

Take, for example, the common belief that women are more committed to family than men are. Research simply does not support that notion. In a study of Harvard Business School graduates that one of us conducted, nearly everyone, regardless of gender, placed a higher value on their families than on their work (see “Rethink What You ‘Know’ About High-Achieving Women,” HBR, December 2014). Moreover, having made career decisions to accommodate family responsibilities didn’t explain the gender achievement gap. Other research, too, makes it clear that men and women do not have fundamentally different priorities.

Numerous studies show that what does differ is the treatment mothers and fathers receive when they start a family. Women (but not men) are seen as needing support, whereas men are more likely to get the message—either explicit or subtle—that they need to “man up” and not voice stress and fatigue. If men do ask, say, for a lighter travel schedule, their supervisors may cut them some slack—but often grudgingly and with the clear expectation that the reprieve is temporary. Accordingly, some men attempt an under-the-radar approach, quietly reducing hours or travel and hoping it goes unnoticed, while others simply concede, limiting the time they spend on family responsibilities and doubling down at work. Either way, they maintain a reputation that keeps them on an upward trajectory. Meanwhile, mothers are often expected, indeed encouraged, to ratchet back at work. They are rerouted into less taxing roles and given less “demanding” (read: lower-status, less career-enhancing) clients.

Idea in Brief

The Belief

There’s a popular notion that men and women are fundamentally different in important (nonbiological) ways—and those differences are cited to explain women’s lagged achievement.

The Truth

According to numerous meta-analyses of published research, men and women are actually very similar with respect to key attributes such as confidence, appetite for risk, and negotiating skill.

Why It Matters

Too many managers try to “fix” women or accommodate their supposed differences—and that doesn’t work. Companies must instead address the organizational conditions that lead to lower rates of retention and promotion for women.

To sum up, men’s and women’s desires and challenges about work/family balance are remarkably similar. It is what they experience at work once they become parents that puts them in very different places.

Things don’t have to be this way. When companies observe differences in the overall success rates of women and men, or in behaviors that are critical to effectiveness, they can actively seek to understand the organizational conditions that might be responsible, and then they can experiment with changing those conditions.

Consider the example of a savvy managing director concerned about the leaky pipeline at her professional services firm. Skeptical that women were simply “opting out” following the birth of a child, she investigated and found that one reason women were leaving the firm stemmed from the performance appraisal system: Supervisors had to adhere to a forced distribution when rating their direct reports, and women who had taken parental leave were unlikely to receive the highest rating because their performance was ranked against that of peers who had worked a full year. Getting less than top marks not only hurt their chances of promotion but also sent a demoralizing message that being a mother was incompatible with being on a partner track. However, the fix was relatively easy: The company decided to reserve the forced distribution for employees who worked the full year, while those with long leaves could roll over their rating from the prior year. That applied to both men and women, but the policy was most heavily used by new mothers. The change gave women more incentive to return from maternity leave and helped keep them on track for advancement. Having more mothers stay on track, in turn, helped chip away at assumptions within the firm about women’s work/family preferences.

As this example reveals, companies need to dive deeper into their beliefs, norms, practices, and policies to understand how they position women relative to men and how the different positions fuel inequality. Seriously investigating the context that gives rise to differential patterns in the way men and women experience the workplace—and intervening accordingly—can help companies chart a path to gender parity.

Below, we address three popular myths about how the sexes differ and explain how each manifests itself in organizational discourse about women’s lagged advancement. Drawing on years of social science research, we debunk the myths and offer alternative explanations for observed sex differences—explanations that point to ways that managers can level the playing field. We then offer a four-pronged strategy for undertaking such actions.

Popular Myths

We’ve all heard statements in the media and in companies that women lack the desire or ability to negotiate, that they lack confidence, and that they lack an appetite for risk. And, the thinking goes, those shortcomings explain why women have so far failed to reach parity with men.

For decades, studies have examined sex differences on these three dimensions, enabling social scientists to conduct meta-analyses—investigations that reveal whether or not, on average across studies, sex differences hold, and if so, how large the differences are. (See the sidebar “The Power of Meta-Analysis.”) Just as importantly, meta-analyses also reveal the circumstances under which differences between men and women are more or less likely to arise. The aggregated findings are clear: Context explains any sex differences that exist in the workplace.

The Power of Meta-Analysis

A META-ANALYSIS IS A statistical technique used to combine the results of many studies, providing a more reliable basis for drawing conclusions from research. This approach has three advantages over a single study.

First, it is more accurate, because it is based on a very large sample—the total of the samples across all the studies—and because it contains data collected in many different contexts. Any single set of findings may reflect idiosyncrasies of the study’s sample or context and thus may not yield conclusions that are truly generalizable. A meta-analysis, in essence, averages across these idiosyncrasies to give us a truer answer to the research question (in this case, “Are men and women different with regard to a particular trait or behavior?”).

Second, a meta-analysis is more comprehensive. Because it contains studies conducted in many different contexts, it can tell us in which kinds of contexts we are more or less likely to see sex differences.

Third, a meta-analysis is more precise: It can tell us just how different men and women are. For any given trait or behavior, there is variability among men and among women; typically, those within-group differences are distributed around some “true” average for each group. Using the averages and the variability within each group, we can calculate an “effect size” that can be thought of as the impact that sex has on a particular trait. When testing for a sex difference, we are in essence asking the question “How much overlap is there between women and men, or, stated another way, how far apart are their respective averages, relative to the variability within each sex?”

Take the graph on the left below, which shows the distribution of men’s and women’s heights in the UK. We can see from the curves that men, on average, are quite a bit taller than women. In fact, men average five feet, nine inches, and women five feet, three inches—a six-inch difference. We can also see that a number of women are taller than the average man, just as a number of men are shorter than the average woman. The size of the sex effect on height is 1.72, which is considered “large.”

Using that sex difference as a reference point, we can see from the graph on the right that the difference between men and women in self-esteem, or confidence, is much smaller, with an effect size of 0.10. Although the difference in each graph is statistically significant, the difference in confidence is considered, from a statistical point of view, “trivial”—and from a managerial point of view, essentially meaningless. This same analysis for men’s and women’s negotiation outcomes and for their propensity to take risks yielded effect sizes of 0.20 (“small”) and 0.13 (“trivial”), respectively. In short, contrary to popular belief, all three sex differences we consider in this article are, for all intents and purposes, meaningless.

Note: Statisticians consider an effect size of less than 0.20 to be “trivial,” 0.20–0.49 to be “small,” 0.50–0.79 to be “medium,” and 0.80 or more to be “large.”

Take negotiation. Over and over, we hear that women are poor negotiators—they “settle too easily,” are “too nice,” or are “too cooperative.” But not so, according to research. Jens Mazei and colleagues recently analyzed more than 100 studies examining whether men and women negotiate different outcomes; they determined that gender differences were small to negligible. Men have a slight advantage in negotiations when they are advocating exclusively for themselves and when ambiguity about the stakes or opportunities is high. Larger disparities in outcomes occur when negotiators either have no prior experience or are forced to negotiate, as in a mandated training exercise. But such situations are atypical, and even when they do arise, statisticians would deem the resulting sex differences to be small. As for the notion that women are more cooperative than men, research by Daniel Balliet and colleagues refutes that.

The belief that women lack confidence is another fallacy. That assertion is commonly invoked to explain why women speak up less in meetings and do not put themselves forward for promotions unless they are 100% certain they meet all the job requirements. But research does not corroborate the idea that women are less confident than men. Analyzing more than 200 studies, Kristen Kling and colleagues concluded that the only noticeable differences occurred during adolescence; starting at age 23, differences become negligible.

What about risk taking—are women really more conservative than men? Many people believe that’s true—though they are split on whether being risk-averse is a strength or a weakness. On the positive side, the thinking goes, women are less likely to get caught up in macho displays of bluff and bravado and thus are less likely to take unnecessary risks. Consider the oft-heard sentiment following the demise of Lehman Brothers: “If Lehman Brothers had been Lehman Sisters, the financial crisis might have been averted.” On the negative side, women are judged as too cautious to make high-risk, potentially high-payoff investments.

But once again, research fails to support either of these stereotypes. As with negotiation, sex differences in the propensity to take risks are small and depend on the context. In a meta-analysis performed by James Byrnes and colleagues, the largest differences arise in contexts unlikely to exist in most organizations (such as among people asked to participate in a game of pure chance). Similarly, in a study Peggy Dwyer and colleagues ran examining the largest, last, and riskiest investments made by nearly 2,000 mutual fund investors, sex differences were very small. More importantly, when investors’ specific knowledge about the investments was added to the equation, the sex difference diminished to near extinction, suggesting that access to information, not propensity for risk taking, explains the small sex differences that have been documented.

In short, a wealth of evidence contradicts each of these popular myths. Yet they live on through oft-repeated narratives routinely invoked to explain women’s lagged advancement.

More-Plausible Explanations

The extent to which employees are able to thrive and succeed at work depends partly on the kinds of opportunities and treatment they receive. People are more likely to behave in ways that undermine their chances for success when they are disconnected from information networks, when they are judged or penalized disproportionately harshly for mistakes or failures, and when they lack feedback. Unfortunately, women are more likely than men to encounter each of these situations. And the way they respond—whether that’s by failing to drive a hard bargain, to speak up, or to take risks—gets unfairly attributed to “the way women are,” when in fact the culprit is very likely the differential conditions they face.

Multiple studies show, for example, that women are less embedded in networks that offer opportunities to gather vital information and garner support. When people lack access to useful contacts and information, they face a disadvantage in negotiations. They may not know what is on the table, what is within the realm of possibility, or even that a chance to strike a deal exists. When operating under such conditions, women are more likely to conform to the gender stereotype that “women don’t ask.”

We saw this dynamic vividly play out when comparing the experiences of two professionals we’ll call Mary and Rick. (In this example and others that follow, we have changed the names and some details to maintain confidentiality.) Mary and Rick were both midlevel advisers in the wealth management division of a financial services firm. Rick was able to bring in more assets to manage because he sat on the board of a nonprofit, giving him access to a pool of potential clients with high net worth. What Mary did not know for many years is how Rick had gained that advantage. Through casual conversations with one of the firm’s senior partners, with whom he regularly played tennis, Rick had learned that discretionary funds existed to help advisers cultivate relationships with clients. So he arranged for the firm to make a donation to the nonprofit. He then began attending the nonprofit’s fund-raising events and hobnobbing with key players, eventually parlaying his connections into a seat on the board. Mary, by contrast, had no informal relationships with senior partners at the firm and no knowledge of the level of resources that could have helped her land clients.

When people are less embedded, they are also less aware of opportunities for stretch assignments and promotions, and their supervisors may be in the dark about their ambitions. But when women fail to “lean in” and seek growth opportunities, it is easy to assume that they lack the confidence to do so—not that they lack pertinent information. Julie’s experience is illustrative. Currently the CEO of a major investment fund, Julie had left her previous employer of 15 years after learning that a more junior male colleague had leapfrogged over her to fill an opening she didn’t even know existed. When she announced that she was leaving and why, her boss was surprised. He told her that if he had realized she wanted to move up, he would have gladly helped position her for the promotion. But because she hadn’t put her hat in the ring, he had assumed she lacked confidence in her ability to handle the job.

How people react to someone’s mistake or failure can also affect that person’s ability to thrive and succeed. Several studies have found that because women operate under a higher-resolution microscope than their male counterparts do, their mistakes and failures are scrutinized more carefully and punished more severely. People who are scrutinized more carefully will, in turn, be less likely to speak up in meetings, particularly if they feel no one has their back. However, when women fail to speak up, it is commonly assumed that they lack confidence in their ideas.

We saw a classic example of this dynamic at a biotech company in which team leaders noticed that their female colleagues, all highly qualified research scientists, participated far less in team meetings than their male counterparts did, yet later, in one-on-one conversations, often offered insightful ideas germane to the discussion. What these leaders had failed to see was that when women did speak in meetings, their ideas tended to be either ignored until a man restated them or shot down quickly if they contained even the slightest flaw. In contrast, when men’s ideas were flawed, the meritorious elements were salvaged. Women therefore felt they needed to be 110% sure of their ideas before they would venture to share them. In a context in which being smart was the coin of the realm, it seemed better to remain silent than to have one’s ideas repeatedly dismissed.

It stands to reason that people whose missteps are more likely to be held against them will also be less likely to take risks. That was the case at a Big Four accounting firm that asked us to investigate why so few women partners were in formal leadership roles. The reason, many believed, was that women did not want such roles because of their family responsibilities, but our survey revealed a more complex story. First, women and men were equally likely to say they would accept a leadership role if offered one, but men were nearly 50% more likely to have been offered one. Second, women were more likely than men to say that worries about jeopardizing their careers deterred them from pursuing leadership positions—they feared they would not recover from failure and thus could not afford to take the risks an effective leader would need to take. Research confirms that such concerns are valid. For example, studies by Victoria Brescoll and colleagues found that if women in male-dominated occupations make mistakes, they are accorded less status and seen as less competent than men making the same mistakes; a study by Ashleigh Rosette and Robert Livingston demonstrated that black women leaders are especially vulnerable to this bias.

Research also shows that women get less frequent and lower-quality feedback than men. When people don’t receive feedback, they are less likely to know their worth in negotiations. Moreover, people who receive little feedback are ill-equipped to assess their strengths, shore up their weaknesses, and judge their prospects for success and are therefore less able to build the confidence they need to proactively seek promotions or make risky decisions.

Why the Sex-Difference Narrative Persists

BELIEFS IN SEX DIFFERENCES HAVE staying power partly because they uphold conventional gender norms, preserve the gender status quo, and require no upheaval of existing organizational practices or work arrangements. But they are also the path of least resistance for our brains. Three well-documented cognitive errors help explain the endurance of the sex-difference narrative.

First, when seeking to explain others’ behavior, we gravitate to explanations based on intrinsic personality traits—including stereotypically “male” traits and stereotypically “female” traits”—rather than contextual factors. (Social psychologists call this “the fundamental attribution error.”) For example, if a man speaks often and forcefully in a meeting, we are more likely to conclude that he is assertive and confident than to search for a situational explanation, such as that he’s been repeatedly praised for his contributions. Likewise, if a woman is quiet in a meeting, the easier explanation is that she’s meek or underconfident; it takes more cognitive energy to construct an alternative account, such as that she is used to being cut off or ignored when she speaks. In short, when we see men and women behaving in gender-stereotypical ways, we tend to make the most cognitively simple assumption—that the behavior reflects who they are rather than the situation they are in.

Second, mere exposure to a continuing refrain, such as “Women are X, and men are Y,” makes people judge the statement as true. Many beliefs—that bats are blind, that fresh produce is always more nutritious than frozen, that you shouldn’t wake a sleepwalker—are repeated so often that their mere familiarity makes them easier for our minds to accept as truth. (This is called the “mere exposure effect.”)

Third, once people believe something is true, they tend to seek, notice, and remember evidence that confirms the position and to ignore or forget evidence that would challenge it. (Psychologists call this “confirmation bias.”) If we believe that gender stereotypes are accurate, we are more likely to expect, notice, and remember times when men and women behave in gender-stereotypical ways and to overlook times when they don’t.

An example of this dynamic comes from a consulting firm in which HR staff members delivered partners’ annual feedback to associates. The HR folks noticed that when women were told they were “doing fine,” they “freaked out,” feeling damned by faint praise; when men received the same feedback, they left the meeting “feeling great.” HR concluded that women lack self-confidence and are therefore more sensitive to feedback, so the team advised partners to be especially encouraging to the women associates and to soften any criticism. Many of the partners were none too pleased to have to treat a subset of their associates with kid gloves, grousing that “if women can’t stand the heat, they should get out of the kitchen.” What these partners failed to realize, however, is that the kitchen was a lot hotter for women in the firm than for men. Why? Because the partners felt more comfortable with the men and so were systematically giving them more informal, day-to-day feedback. When women heard in their annual review that they were doing “fine,” it was often the first feedback they’d received all year; they had nothing else to go on and assumed it meant their performance was merely adequate. In contrast, when men heard they were doing “fine,” it was but one piece of information amidst a steady stream. The upshot was disproportionate turnover among women associates, many of whom left the firm because they believed their prospects for promotion were slim.

An Alternative Approach

The problem with the sex-difference narrative is that it leads companies to put resources into “fixing” women, which means that women miss out on what they need—and what every employee deserves: a context that enables them to reach their potential and maximizes their chances to succeed.

Managers who are advancing gender equity in their firms are taking a more inquisitive approach—rejecting old scripts, seeking an evidence-based understanding of how women experience the workplace, and then creating the conditions that increase women’s prospects for success. Their approach entails four steps:

1. Question the narrative

A consulting firm we worked with had recruited significant numbers of talented women into its entry ranks—and then struggled to promote them. Their supervisors’ explanations? Women are insufficiently competitive, lack “fire in the belly,” or don’t have the requisite confidence to excel in the job. But those narratives did not ring true to Sarah, a regional head, because a handful of women—those within her region—were performing and advancing at par. So rather than accept her colleagues’ explanations, she got curious.

2. Generate a plausible alternative explanation

Sarah investigated the factors that might have helped women in her region succeed and found that they received more hands-on training and more attention from supervisors than did women in other regions. This finding suggested that the problem lay not with women’s deficiencies but with their differential access to the conditions that enhance self-confidence and success.

To test that hypothesis, Sarah designed an experiment, with our help. First, we randomly split 60 supervisors into two groups of 30 for a training session on coaching junior consultants. Trainers gave both groups the same lecture on how to be a good coach. With one group, however, trainers shared research showing that differences in men’s and women’s self-confidence are minuscule, thus subtly giving the members of this “treatment” group reason to question gender stereotypes. The “control” group didn’t get that information. Next, trainers gave all participants a series of hypotheticals in which an employee—sometimes a man and sometimes a woman—was underperforming. In both groups, participants were asked to write down the feedback they would give the underperforming employee.

Clear differences emerged between the two groups. Supervisors in the control group took different tacks with the underperforming man and woman: They were far less critical of the woman and focused largely on making her feel good, whereas they gave the man feedback that was more direct, specific, and critical, often with concrete suggestions for how he could improve. In contrast, the supervisors who had been shown research that refuted sex differences in self-confidence gave both employees the same kind of feedback; they also asked for more-granular information about the employee’s performance so that they could deliver constructive comments. We were struck by how the participants who had been given a reason to question gender stereotypes focused on learning more about individuals’ specific performance problems.

The experiment confirmed Sarah’s sense that women’s lagged advancement might be due at least partly to supervisors’ assumptions about the training and development needs of their female direct reports. Moreover, her findings gave supervisors a plausible alternative explanation for women’s lagged advancement—a necessary precondition for taking the next step. Although different firms find different types of evidence more or less compelling—not all require as rigorous a test as this firm did—Sarah’s evidence-based approach illustrates a key part of the strategy we are advocating.

3. Change the context and assess the results

Once a plausible alternative explanation has been developed, companies can make appropriate changes and see if performance improves. Two stories help illustrate this step. Both come from a midmarket private equity firm that was trying to address a problem that had persisted for 10 years: The company’s promotion and retention rates for white women and people of color were far lower than its hiring rates.

The first story involves Elaine, an Asian-American senior associate who wanted to sharpen her financing skills and asked Dave, a partner, if she could assist with that aspect of his next deal. He invited her to lunch, but when they met, he was underwhelmed. Elaine struck him as insufficiently assertive and overly cautious. He decided against putting her on his team—but then he had second thoughts. The partners had been questioning their ability to spot and develop talent, especially in the case of associates who didn’t look like them. Dave thus decided to try an experiment: He invited Elaine to join the team and then made a conscious effort to treat her exactly as he would have treated someone he deemed a superstar. He introduced her to the relevant players in the industry, told the banks she would be leading the financing, and gave her lots of rope but also enough feedback and coaching so that she wouldn’t hang herself. Elaine did not disappoint; indeed, her performance was stellar. While quiet in demeanor, Dave’s new protégée showed an uncanny ability to read the client and come up with creative approaches to the deal’s financing.

A second example involves Ned, a partner who was frustrated that Joan, a recent-MBA hire on his team, didn’t assert herself on management team calls. At first Ned simply assumed that Joan lacked confidence. But then it occurred to him that he might be falling back on gender stereotypes, and he took a closer look at his own behavior. He realized that he wasn’t doing anything to make participation easier for her and was actually doing things that made it harder, like taking up all the airtime on calls. So they talked about it, and Joan admitted that she was afraid of making a mistake and was hyperaware that if she spoke, she needed to say something very smart. Ned realized that he, too, was afraid she would make a mistake or wouldn’t add value to the discussion, which is partly why he took over. But on reflection, he saw that it wouldn’t be the end of the world if she did stumble—he did the same himself now and again. For their next few calls, they went over the agenda beforehand and worked out which parts she would take the lead on; he then gave her feedback after the call. Ned now has a junior colleague to whom he can delegate more; Joan, meanwhile, feels more confident and has learned that she can take risks and recover from mistakes.

4. Promote continual learning

Both Dave and Ned recognized that their tendency to jump to conclusions based on stereotypes was robbing them—and the firm—of vital talent. Moreover, they have seen firsthand how questioning assumptions and proactively changing conditions gives women the opportunity to develop and shine. The lessons from these small-scale experiments are ongoing: Partners at the firm now meet regularly to discuss what they’re learning. They also hold one another accountable for questioning and testing gender-stereotypical assessments as they arise. As a result, old narratives about women’s limitations are beginning to give way to new narratives about how the firm can better support all employees.

The four steps we’ve outlined are consistent with research suggesting that on difficult issues such as gender and race, managers respond more positively when they see themselves as part of the solution rather than simply part of the problem. The solution to women’s lagged advancement is not to fix women or their managers but to fix the conditions that undermine women and reinforce gender stereotypes. Furthermore, by taking an inquisitive, evidence-based approach to understanding behavior, companies can not only address gender disparities but also cultivate a learning orientation and a culture that gives all employees the opportunity to reach their full potential.

Originally published in May–June 2018. Reprint R1803J

Hacking Tech’s Diversity Problem

by Joan C. Williams

WHEN GOOGLE, YAHOO, LINKEDIN, AND Facebook disclosed their woefully low levels of female employment in the summer of 2014, admitting that they had a lot of work to do to improve them, they signaled a shift for the technology industry. It’s remarkable that the sector is finally stepping up to the plate on diversity—and refreshing that its focus is on metrics rather than rhetoric.

Make no mistake: Improving those metrics will be challenging. A key feature of the tech culture—the shared belief that it’s a meritocracy—may work against change. An important study by Emilio J. Castilla and Stephen Benard has shown that when an organization’s core values state that raises and promotions are “based entirely on the performance of the employee”—in other words, when a company sees itself as a meritocracy—women are actually more likely to get smaller bonuses than men with equivalent performance reviews. Subtle biases against women are clearly at work here. Moreover, 40 years of social science have taught us that such biases will be perpetuated unless they’re intentionally interrupted, and people who think they work for meritocracies are less likely to do what it takes to interrupt them.

On the other hand, if tech’s senior leaders are serious about gender diversity, they could be perfectly positioned to lead change. As they so often remind us, they’re not about business as usual. They’re out to change the world, with corporate mottoes like “Don’t be evil” and “Move fast and break things.” One thing I hope they’ll break with is the “diversity industrial complex”: the standard approach of making token hires, offering sensitivity training, setting up mentoring networks, and introducing other incremental changes that focus on altering women’s behavior to, say, make them better negotiators. When an organization lacks diversity, it’s not the employees who need fixing. It’s the business systems.

This article is intended to help tech companies—and others—fix those systems. It describes a new metrics-based approach that pulls from the lean start-up playbook: Collect detailed data about whether gender bias plays a role in daily workplace interactions; identify company-specific ways to measure its effect; create hypotheses about what “interrupters” might move those metrics; and then throw some spaghetti at the wall and see what sticks. Measure what happened, adjust your hypotheses, and do it all over again until you get it right.

What’s a Bias Interrupter?

While much of the social science research is still devoted to “admiring the problem”—demonstrating the same patterns of gender bias over and over—some studies have begun to explore how to interrupt bias effectively. In one, researchers Andreas Leibbrandt and John A. List posted two versions of announcements for administrative assistant jobs in stereotypically masculine businesses—NASCAR, football, and basketball. One version said nothing about salary; the other said “salary negotiable.” Leibbrandt and List wanted to investigate the well-documented phenomenon that women are less likely to negotiate their salaries than men, which contributes to the pay gap between the sexes. Could a simple two-word phrase interrupt that pattern?

It could. In fact, not only did the “salary negotiable” language close the negotiation gap between men and women, it closed the pay gap between the male and female hires by 45%.

Idea in Brief

The Challenge

The technology industry has a well-documented diversity problem. But previous efforts to fix it—through sweeping cultural change initiatives or well-intentioned mentoring programs—have failed.

The Analysis

Biases that hold women back include prove-it-again!, the tightrope, the maternal wall, and the tug-of-war. Forty years of social science research have shown that biases like these will persist unless they are interrupted.

The Solution

Leaders need to design “bias interrupters”—changes to essential talent management systems that stop patterns of bias in their tracks. By redesigning how rewards and assignments are handled, managers can be sure they’re retaining their best and brightest.

This experimental approach is a classic example of a bias interrupter: It changed the basic business system in a way that stopped a pattern of bias in its tracks. And it did so without talking about bias at all (or even raising it). It also highlights three advantages that bias interrupters have over the sweeping cultural change initiatives that researchers who study organizational bias tend to recommend. Such efforts can be effective, but they’re expensive—and often abandoned when a new CEO arrives with different priorities. Recently, for instance, Best Buy’s new CEO eliminated the company’s much-ballyhooed Results Only Work Environment, despite rigorous data documenting its business benefits.

First, bias interrupters are based on objective metrics, whereas cultural initiatives tend to rely on earnest conversations. Second, interrupters are iterative, so they allow companies to try small interventions and then scale them up. Last, interrupters build change into the basic business systems that perpetuate bias, so they are less likely to disappear when a new CEO decides that diversity is not an imperative.

While the evidence of the effectiveness of interrupters is growing in social science literature, the effort to systematically pilot and test them in companies is just beginning. I’ve started to work with several companies, including Twitter and the Silicon Valley law firm Fenwick & West, on a model for building bias interrupters. With Jennifer Berdahl from the University of British Columbia, I’m also forming a working group to explore interrupters with other social scientists. It’s still early days, but here’s the approach I’m using to help companies identify, measure, and address diversity-related bias.

Step #1: Determine Whether There’s a Problem

The first step is to find out whether women in your organization are encountering one or more of the four basic patterns of gender bias. Here’s a quick primer:

Prove-it-again!

Women often have to provide more evidence of competence than men do to be seen as equally capable, a problem documented in scores of studies on double standards, attribution bias, leniency bias, recall bias, and polarized evaluations. About two-thirds of the 127 professional women that I and Erika Hall, now a professor at Emory’s Goizueta Business School, interviewed for the book What Works for Women at Work reported prove-it-again problems. Our interviews additionally suggested that women in tech often get promoted but don’t get the title or salary that typically accompanies the new job, and that women’s technical expertise is dismissed the minute they are no longer in technical roles. “We’re constantly asked ‘if you write any code’ when speaking about technical topics and giving technical presentations, despite just having given a talk on writing code,” note the authors of the widely circulated “Open Letter on Feminism in Tech.”

Tightrope

This is the kind of bias faced by the female salary negotiators. High-status jobs are seen as requiring stereotypically masculine qualities, while women are expected to be modest and self-effacing, so women must walk a tightrope between being seen as too feminine to be effective and too masculine to be likable. Nearly three-fourths of the women we interviewed reported tightrope issues, with twice as many reports of “too feminine” as “too masculine” problems. Classic “too feminine” problems are large loads of “office housework”—which includes fetching documents, planning parties and conferences, and cleaning up messes, literally and figuratively—and assignments to do undervalued tasks. In tech, power and prestige lie with those who “own the code”; even very talented women end up in marketing or project management roles instead. Yet a woman risks being seen as “not a team player” if she turns away work that men are rarely asked to do. (See the sidebar “‘Housework’ vs. ‘Glamour Work.’”)

“Housework” vs. “Glamour Work”

IN MANY COMPANIES, WOMEN ARE expected to do disproportionate amounts of “housework,” which includes both domestic tasks, like planning parties, and undervalued tasks, such as those listed below.

In addition, when women are direct, outspoken, competitive, or assertive—rather than “nice”—they often face a backlash, including what one researcher called “the sexual harassment of uppity women” in a study showing that dominant women actually experience the most harassment. There’s an avalanche of sexual harassment in tech, ranging from “angry e-mails that threaten us to leave the industry, because ‘it doesn’t need any more c***s ruining it’” to “booth babes” and networking events held in strip clubs. This “brogrammer” culture has pushed many women out of the field. In 1985, 37% of computer science degrees were awarded to women; in 2012 only 18% were. In 1991 women held 37% of all computing jobs; today they hold only 26%. Forty-one percent of women leave tech companies after 10 years, as opposed to 17% of men.

Maternal wall

Bias triggered by motherhood has dramatic effects. In one famous study subjects evaluated pairs of equally qualified candidates, one of whom was a mother. The subjects received identical résumés, but the candidate who was a mother varied. The researchers found that mothers were 79% less likely to be hired, half as likely to be promoted, offered an average of $11,000 less in salary, and held to higher performance and punctuality standards. Another study looked at mothers who were considered indisputably competent and committed. Because of their dedication to the job, they were seen as bad mothers and bad people. As a result, they were disliked and held to higher performance standards.

A common take is that the long-hours culture drives mothers out of tech, but often what drives them out is sexism. As one woman told me, “Women. . .29, 30. . .were hitting the glass ceiling that I’ve been hitting for a long time. And if they could [afford to]. . ., they would just start having babies and drop out because they wanted to have kids anyway, and it’s hard to show up every day and fight and fight and fight.” While many women in tech have praised the industry for allowing flexible hours and remote working arrangements, mothers remain suspect. Take the recent flap when Marissa Mayer, the CEO of Yahoo, was late to a meeting. The only reason that story made the news is that it confirmed the stereotype that mothers aren’t suited to be CEOs. Fifty-nine percent of the mothers Hall and I interviewed reported experiencing maternal wall bias.

Tug-of-war

This pattern, reported by 45% of the women interviewed, occurs when gender bias against women fuels conflict among women. Research shows that women who encounter discrimination early in their careers tend to distance themselves from other women, refuse to help them, or even align themselves with men at other women’s expense. Distancing oneself from complaints against sexism becomes an emblem of loyalty. “I’m not a girl at Google; I’m a geek at Google,” was Marissa Mayer’s standard response to questions about what it was like being one of the few female programmers at the company. Today, when asked how we can encourage more women to become engineers, Mayer responds that her focus is getting more men and women to become engineers. The Open Letter protests that its authors have been “paraded around by men in the industry for how nice we’ve been in trying to address the social problems in tech as a way to discredit more vocal, astutely firm feminist voices. We don’t like this, we’ve never liked it, and it needs to stop.”

Organizations need to find out how, if at all, these four patterns affect women’s careers internally. A good place to start is with confidential interviews or focus groups conducted by an expert in the patterns of bias. Obviously, the people in a focus group have to trust one another not to disclose who said what. One organization I’m working with has so few women that they all know one another—and already agree that there’s a problem. The idea that the women in their company already discuss these issues freely with one another often surprises male senior executives—and so do the focus group results.

Step #2: Identify Key Metrics

Your internal research will often bring to light ways to measure the problem, which you can use to identify a baseline and track the results of changes. In one organization in which internal referrals play a major role, women suggested an elegant metric: Ask both men and women if they got their last five opportunities from inside or outside the firm. In this organization and many others, senior men typically staff their teams with people they feel comfortable with—people like themselves. (It’s called “in-group favoritism.”) Assumptions that “men have families to support” and that “mothers do not want stretch assignments” also play a role; examining how assignments are distributed can surface some of these.

If the problem’s office housework, the metric will be different. One organization that identified this as a major issue proposed setting up a list of low-profile tasks (List A) and high-profile ones (List B). The plan was to ask men and women what percentage of their time was spent on tasks from List A versus List B.

With maternal wall bias, it’s key to track how women’s assignments differ before and after maternity leaves. At the Center for WorkLife Law, which I direct, we frequently hear that women returning from maternity leave get fewer or poor-quality assignments. (The result, of course, is that they quit.)

The right metrics will differ from organization to organization, depending on the types of bias uncovered and the strategic goals of the firm. But it does make sense to be systematic. Any firm undertaking this work should think carefully about four processes: how people are hired, how work is assigned, what happens during performance evaluations, and how compensation is determined. In addition, it should look for cultural markers that exclude outsiders. In tech, that’s the oft-celebrated “brogrammer” culture. Companies should go beyond the classic “body counts,” which simply note the number of women but don’t tell you why women didn’t get hired, why they don’t get promoted, or why they leave sooner than you want them to (if they do).

Step #3: Experiment, Measure Success—and Keep Trying

Once you’ve assessed bias and identified key metrics, the next step is to interrupt the bias, see whether the metrics improve, and then—if no improvement occurs—ratchet up to stronger interventions. The ideal interrupter is like the one in the Leibbrandt/List experiment: easy to do and not requiring training on, or even a discussion of, gender bias.

Another good example of a successful interrupter comes from Google. The company’s analytics showed that women were being promoted less often than men because, to be promoted at Google, you needed to nominate yourself. Fewer women did so, presumably because modesty is so associated with femininity that women who advocated for themselves often encountered pushback, just as with negotiation. Google’s response was to include female leaders at workshops on when and how to put yourself forward. This signaled to women that they were expected to self-promote. So they did, and the gender difference among Googlers nominating themselves all but disappeared.

One organization I’ve spoken with is concerned about whether gender bias is affecting performance evaluations. The Center for WorkLife Law proposed reading its performance evaluations to spot patterns of bias. The company’s executives sensibly suggested starting off with a staff meeting explaining that they’re committed to improving the quality of performance evaluations, and introducing the four patterns. Great idea: Accountability causes more people to interrupt automatic bias more often.

What happens if you find bias—how should you present it to the people involved in the relevant processes? Obviously, it’s important to design feedback loops very carefully, so people don’t feel they are on a forced march into political correctness. Just as the metrics and the interrupters will differ from firm to firm, so will the feedback loops. But the best tone is judgment free and evidence based: “I’ll bet you’re not aware that there’s an inconsistency in the way you’re evaluating women and men; here’s a study that explains why this is common.”

Where should companies begin experimenting? Again, by looking at the same core processes they examined in Step 2. Though research on and experiments with interrupters are relatively new, they suggest the following brief template:

Hiring

Develop job-advertisement guidelines that advise steering clear of masculine-gendered words like “competitive,” “assertive,” and “ambitious.” Track whether those guidelines are followed. To the extent possible, give hiring managers blinded résumés, so they can’t tell whether the applicant is a man or a woman. Track whether this practice changes hiring numbers. Agree in advance on standard interview questions, watch for subtle biases, and adjust the list of questions as you learn which ones work well for all candidates. A seemingly harmless question like “Tell me about a personal or professional accomplishment that best shows your strengths” can be problematic. Since women are wary of bragging (the tightrope problem), they’ll often answer this question by telling you how proud they are of their kids (women are allowed to brag about their children); men will give a work-related answer and advance their cause more effectively.

Assignments

The gentlest interrupter is one that documents that men and women are getting different kinds of projects and offers a training on how the four patterns of bias commonly affect assignments. If that doesn’t work, more robust interventions are needed, up to and including a formal assignment system. As Louise Roth points out in her study of high finance, a huge problem is the channeling of women into groups with lower revenue potential. “These firms develop mathematical models for all sorts of other things,” says Roth, “so why not for dividing work evenly?”

Performance evaluations

Having someone who is trained in the literature on gender bias read through all performance evaluations, which Ernst & Young has done for years, can help if your analysis shows that bias is affecting them. Be sure to track whether praise differentially translates into high overall evaluations for men but not women. Check, too, whether similar evaluations translate into greater rewards for men than for women.

Promotion and compensation

Systems that require people to brag will push women out onto the tightrope—disliked but respected if they do, and liked but not respected if they don’t. In fact, any hiring, evaluation, or other process that requires self-promotion should take a hint from the Leibbrandt/List experiment and the Google example. Self-promotion should be cabined into formal contexts in which both men and women are sent the message that everyone is expected to tout his or her accomplishments.

Compensation systems based on objective metrics that are not easy to game offer a strong control on gender bias and give managers insight into who their most valuable players actually are. Roth’s study of bankers confirmed what I’ve also found: Women fare best in jobs where performance is measured by objective metrics. Objectivity often suffers, however, when compensation is set by a powerful group of insiders. Law firm compensation systems, in which pay depends heavily on backroom negotiations over credit for bringing in clients, are a petri dish for bias. In a 2010 study about 30% of women in law firms reported being bullied out of receiving such credit.

The Research

THIS WORK GROWS OUT OF the research I did for What Works for Women at Work: Four Patterns Working Women Need to Know (cowritten with my daughter Rachel Dempsey), which examined whether the kinds of gender bias documented in social psychology labs shows up in real workplaces. My team interviewed 127 professional women, including 63 in science, technology, math, and engineering, and 71 women of color. Our finding: Virtually all the women interviewed (96%) reported experiencing one or more of the patterns documented in experimental studies. Only five women had not, and three of them had founded their own companies.

The promise of bias interrupters is that they allow for institutional learning and build on a critical, consistent finding: Doing anything once will not change organizational culture forever. You need to continually interrupt bias. And you need to be empirical: Keep throwing spaghetti at the wall until some sticks. Tech companies are used to spaghetti flinging, which makes them a perfect fit for an iterative process rather than one grand gesture.

What a company can’t do is establish metrics, document bias, and then do nothing. That’s a recipe for legal liability. But as long as companies that find bias try in good faith to remedy it, interrupters promise to be both more effective, and probably cheaper, than elaborate cultural change initiatives. And they will work a whole lot better than the other standard tools of the diversity industrial complex. Unlike women’s initiatives, which often seek to fix women, and unlike stand-alone bias training, which can make diversity metrics worse, interrupters do something novel. They identify how bias is playing out in real time. And then they short-circuit it.

Originally published in October 2014. Reprint R141oH

Why Men Still Get More Promotions Than Women

by Herminia Ibarra, Nancy M. Carter, and Christine Silva

NATHALIE (ALL NAMES IN THIS article are disguised), a senior marketing manager at a multinational consumer goods company and a contender for chairman in her country, was advised by her boss to raise her profile locally. An excellent intracompany network wouldn’t be enough to land her the new role, he told her; she must also become active in events and associations in her region. Recently matched with a high-level mentor through a companywide program, she had barely completed the lengthy prework assigned for that when she received an invitation to an exclusive executive-training program for high potentials—for which she was asked to fill out more self-assessments and career-planning documents. “I’d been here for 12 years, and nothing happened,” observes Nathalie. “Now I am being mentored to death.”

Amy, a midlevel sales manager for the same firm, struggles with a similar problem: “My mentor’s idea of a development plan is how many external and internal meetings I can get exposure to, what presentations I can go to and deliver, and what meetings I can travel to,” she says. “I just hate these things that add work. I hate to say it, but I am so busy. I have three kids. On top of that, what my current boss really wants me to do is to focus on ‘breakthrough thinking,’ and I agree. I am going to be in a wheelchair by the time I get to be vice president, because they are going to drill me into the ground with all these extra-credit projects.”

With turnover sky-high in the company’s fast-growing Chinese market, Julie, a much-valued finance manager with growth potential, has likewise undergone intensive mentoring—and she worries that she may be getting caught betwixt and between. When she was nominated for a high-potential program, her boss complained that the corporate team was interfering with the mentoring operation he was already running in the region. Julie also took part in a less formal scheme pairing junior and senior finance leaders. “I’d prefer to be involved in the corporate program because it is more high-profile,” says Julie, “but it all adds up to a lot of mentoring.”

Nathalie, Amy, and Julie are not atypical. As companies continue to see their pipelines leak at mid-to-senior levels even though they’ve invested considerable time and resources in mentors and developmental opportunities, they are actively searching for ways to retain their best female talent. In a 2010 World Economic Forum report on corporate practices for gender diversity in 20 countries, 59% of the companies surveyed say they offer internally led mentoring and networking programs, and 28% say they have women-specific programs. But does all this effort translate into actual promotions and appointments for both sexes?

The numbers suggest not. A 2008 Catalyst survey of more than 4,000 full-time-employed men and women—high potentials who graduated from top MBA programs worldwide from 1996 to 2007—shows that the women are paid $4,600 less in their first post-MBA jobs, occupy lower-level management positions, and have significantly less career satisfaction than their male counterparts with the same education. That’s also the case when we take into account factors such as their industry, prior work experience, aspirations, and whether they have children. (For more findings, see Nancy M. Carter and Christine Silva, “Women in Management: Delusions of Progress,” HBR March 2010.) Yet among that same group, more women than men report having mentors. If the women are being mentored so thoroughly, why aren’t they moving into higher management positions?

Idea in Brief

Although women are mentored, they’re not being promoted. A Catalyst study of more than 4,000 high potentials shows that more women than men have mentors—yet women are less likely to advance in their careers. That’s because they’re not actively sponsored the way the men are.

Sponsors go beyond giving feedback and advice; they advocate for their mentees and help them gain visibility in the company. They fight to get their protégés to the next level.

Organizations such as Deutsche Bank, Unilever, Sodexo, and IBM Europe have established sponsorship programs to facilitate the promotion of high-potential women. Programs that get results clarify and communicate goals, match sponsors and mentees on the basis of those goals, coordinate corporate and regional efforts, train sponsors, and hold sponsors accountable.

To better understand what is going on, we conducted in-depth interviews with 40 high-potential men and women (including Nathalie, Amy, and Julie) who were selected by their large multinational company to participate in its high-level mentoring program. We asked about the hurdles they’ve faced as they’ve moved into more-senior roles, as well as what kinds of help and support they’ve received for their transitions. We also analyzed the 2008 survey to uncover any differences in how men and women are mentored and in the effects of their mentoring on advancement. Last, we compared those data with the results of a 2010 survey of the same population, in which we asked participants to report on promotions and lateral moves since 2008.

All mentoring is not created equal, we discovered. There is a special kind of relationship—called sponsorship—in which the mentor goes beyond giving feedback and advice and uses his or her influence with senior executives to advocate for the mentee. Our interviews and surveys alike suggest that high-potential women are overmentored and undersponsored relative to their male peers—and that they are not advancing in their organizations. Furthermore, without sponsorship, women not only are less likely than men to be appointed to top roles but may also be more reluctant to go for them.

Why Mentoring Fails Women

Although more women than men in the 2008 Catalyst survey report having mentors, the women’s mentors have less organizational clout. We find this to be true even after controlling for the fact that women start in lower-level positions post-MBA. That’s a real disadvantage, the study shows, because the more senior the mentor, the faster the mentee’s career advancement. Despite all the effort that has gone into developing the women since 2008, the follow-up survey in 2010 reveals that the men have received 15% more promotions. The two groups have had similar numbers of lateral moves (same-level job assignments in different functions, designed to give high potentials exposure to various parts of the business). But men were receiving promotions after the lateral moves; for the women, the moves were offered in lieu of advancement.

Of course, the ultimate test of the power of mentoring would be to show that its presence during the 2008 survey is a statistically significant predictor of promotion by the time of the 2010 survey. That’s true for the men but not for the women. Though women may be getting support and guidance, mentoring relationships aren’t leading to nearly as many promotions for them as for men.

The survey findings are echoed in our interviews: Men and women alike say they get valuable career advice from their mentors, but it’s mostly men who describe being sponsored. Many women explain how mentoring relationships have helped them understand themselves, their preferred styles of operating, and ways they might need to change as they move up the leadership pipeline. By contrast, men tell stories about how their bosses and informal mentors have helped them plan their moves and take charge in new roles, in addition to endorsing their authority publicly. As one male mentee recounts, in a typical comment:

“My boss said, ‘You are ready for a general management job. You can do it. Now we need to find you a job: What are the tricks we need to figure out? You have to talk to this person and to that one and that one.’ They are all executive committee members. My boss was a network type of a person. . . . Before he left, he put me in touch with the head of supply chain, which is how I managed to get this job.”

Not only do the women report few examples of this kind of endorsement; they also share numerous stories about how they’ve had to fight with their mentors to be viewed as ready for the next role.

Paradoxically, just when women are most likely to need sponsorship—as they shoot for the highest-level jobs—they may be least likely to get it. Women are still perceived as “risky” appointments for such roles by often male-dominated committees. In a study of top-performing CEOs, for instance, the women were nearly twice as likely as the men to have been hired from outside the company (see Morten T. Hansen, Herminia Ibarra, and Urs Peyer, “The Best-Performing CEOs in the World,” HBR January–February 2010). That finding suggests that women are less likely to emerge as winners in their firms’ own CEO tournaments.

Are Women as Likely as Men to Get Mentoring? Yes.

THEY’RE ACTUALLY MORE SO: In the 2008 Catalyst survey, 83% of women and 76% of men say they’ve had at least one mentor at some point in their careers. Indeed, 21% of women say they’ve had four or more mentors, compared with 15% of men.

Does Mentoring Provide the Same Career Benefits to Men and Women? No.

AMONG SURVEY PARTICIPANTS WHO HAD active mentoring relationships in 2008, fully 72% of the men had received one or more promotions by 2010, compared with 65% of the women.

Do Men and Women Have the Same Kinds of Mentors? No.

IN 2008, 78% OF MEN were actively mentored by a CEO or another senior executive, compared with 69% of women.

More women than men had junior-level mentors: 7% of women were mentored by a nonmanager or a first-level manager, compared with 4% of men.

Though both groups had more male than female mentors on balance, 36% of women had female mentors, whereas only 11% of men did.

Do Men and Women Get Their Mentors in the Same Way? Yes.

MOST MEN AND WOMEN—67% of the groups combined—found their mentors on their own, relying on personal networks. Just 18% of women and 16% of men formed their mentoring relationships with the help of formal programs.

Does Having Formal Versus Informal Mentoring Make Any Difference in Terms of Promotions? Yes.

WOMEN WHO HAD FOUND MENTORS through formal programs had received more promotions by 2010 than women who had found mentors on their own (by a ratio of almost three to two).

Among all participants who had found mentors on their own, the men received more promotions than the women (again, by a ratio of almost three to two).

For more on how companies are providing sponsorship, go to www.catalyst.org/publication/413/mentoring-sponsorship.

Sponsorship That Works

Impatient with the speed at which women are reaching the top levels, many leading-edge companies we work with are converging on a new set of strategies to ensure that high-potential women are sponsored for the most-senior posts. Those principles can make all the difference between a sponsorship program that gets results and one that simply looks great on paper.

Clarify and communicate the intent of the program

It’s hard to do a good job of both mentoring and sponsoring within the same program. Often the best mentors—those who provide caring and altruistic advice and counseling—are not the highfliers who have the influence to pull people up through the system. Employees expecting one form of support can be very disappointed when they get the other. And companies hoping to do A can find themselves with a program that instead does B. To prevent such problems, they need to clearly define what they’re trying to accomplish.

Mentors and Sponsors: How They Differ

COMPANIES NEED TO MAKE A sharper distinction between mentoring and sponsorship. Mentors offer “psychosocial” support for personal and professional development, plus career help that includes advice and coaching, as Boston University’s Kathy Kram explains in her pioneering research. Only sponsors actively advocate for advancement.

“Classical mentoring” (ideal but rare) combines psychosocial and career support. Usually, though, workers get one or the other—or if they get both, it’s from different sources.

Analysis of hundreds of studies shows that people derive more satisfaction from mentoring but need sponsorship. Without sponsorship, a person is likely to be overlooked for promotion, regardless of his or her competence and performance—particularly at mid-career and beyond, when competition for promotions increases.

Mentors

- Can sit at any level in the hierarchy

- Provide emotional support, feedback on how to improve, and other advice

- Serve as role models

- Help mentees learn to navigate corporate politics

- Strive to increase mentees’ sense of competence and self-worth

- Focus on mentees’ personal and professional development

Sponsors

- Must be senior managers with influence

- Give protégés exposure to other executives who may help their careers

- Make sure their people are considered for promising opportunities and challenging assignments

- Protect their protégés from negative publicity or damaging contact with senior executives

- Fight to get their people promoted

At Deutsche Bank, for example, internal research revealed that female managing directors who left the firm to work for competitors were not doing so to improve their work/life balance. Rather, they’d been offered bigger jobs externally, ones they weren’t considered for internally. Deutsche Bank responded by creating a sponsorship program aimed at assigning more women to critical posts. It paired mentees with executive committee members to increase the female talent pool’s exposure to the committee and ensure that the women had influential advocates for promotion. Now, one-third of the participants are in larger roles than they were in a year ago, and another third are deemed ready by senior management and HR to take on broader responsibilities.

Select and match sponsors and high-potential women in light of program goals

When the objective of a program is career advancement for high potentials, mentors and sponsors are typically selected on the basis of position power. When the goal is personal development, matches are made to increase the likelihood of frequent contact and good chemistry.

Unilever has established a program with the explicit objective of promoting more high-potential women to the firm’s most-senior levels. The two key criteria for selecting the sponsors, all members of Unilever’s senior ranks, are experience in areas where the high potentials have developmental gaps, and presence at the table when the appointment decisions get made. Given the company’s international scope and matrix organization, this means that many of the women do not live and work in the same location as their sponsors. So some don’t spend much face-to-face time with sponsors, but they do have advocates at promotion time.

Coordinate efforts and involve direct supervisors

Centrally run mentoring programs that sidestep direct bosses can inadvertently communicate that diversity is an HR problem that requires no effort from the front lines.

Coordination of corporate and local efforts is especially important when it comes to senior-level participants in whom companies invest significantly. Effective sponsorship does not stand alone but is one facet of a comprehensive program that includes performance evaluation, training and development, and succession planning—all of which add up to more than the sum of the parts. The Deutsche Bank sponsorship program for female managing directors, for instance, is one piece of a highly tailored initiative that also involves leadership evaluations, external coaches, and leadership workshops.

Train sponsors on the complexities of gender and leadership

Good sponsorship requires a set of skills and sensibilities that most companies’ star executives do not necessarily possess. When you layer on top some of the complexities of sponsor relationships between senior men and junior women, you easily have a recipe for misunderstanding. The strategies and tactics that helped the men progress in their careers may not be appealing or even feasible for the women.

A classic case is the challenge of developing a credible leadership style in a context where most of the successful role models are male. One of the women in our research describes the problem like this: “My mentor advised me that I should pay more attention to my strategic influencing skills. . .but often he suggests I do things that totally contradict my personality.” The behavioral styles that are most valued in traditionally masculine cultures—and most used as indicators of “potential”—are often unappealing or unnatural for high-potential women, whose sense of authenticity can feel violated by the tacit leadership requirements.

A further complexity is the famed “double bind” examined in Alice H. Eagly and Linda L. Carli’s book Through the Labyrinth (Harvard Business Review Press, 2007) and in the 2007 Catalyst research report “The Double-Bind Dilemma for Women in Leadership.” Here’s the problem, in short: The assertive, authoritative, dominant behaviors that people associate with leadership are frequently deemed less attractive in women. Male mentors who have never faced this dilemma themselves may be hard-pressed to provide useful advice. As one of our interview participants describes, even well-intended mentors have trouble helping women navigate the fine line between being “not aggressive enough” or “lacking in presence” and being “too aggressive” or “too controlling.” She explains the challenge of dealing with conflicting expectations from two different bosses:

“My old boss told me, ‘If you want to move up, you have to change your style. You are too brutal, too demanding, too tough, too clear, and not participative enough.’ My new boss is different: He drives performance, values speed. Now I am told, ‘You have to be more demanding.’ I was really working on being more indirect, but now I will try to combine the best of both.”

Male sponsors can be taught to recognize such gender-related dilemmas. Women in Sodexo’s reciprocal-mentoring program, for example, have been promoted at higher rates than other high-potential women at the company, in part because the senior male mentors serve as career sponsors and (thanks to the upward mentoring) learn to manage their unconscious biases.

Hold sponsors accountable

To fully reap the benefits of sponsorship, companies must hold sponsors accountable. At IBM Europe, a sponsorship program designed for senior women below the executive level aims to promote selected participants within one year. Sponsors, all vice presidents or general managers, are charged with making sure that participants are indeed ready within a year. So they work hard to raise the women’s profiles, talk up the candidates to decision makers, and find the high potentials internal projects that will fill in their skills gaps and make them promotable. Failure to obtain a promotion is viewed as a failure of the sponsor, not of the candidate.

Although our data show that formal programs can be quite effective in getting women promoted, a potential pitfall is their fixed duration. Sponsors typically declare victory and move on after their high potentials advance—just when they need help to successfully take charge in their new roles. We know of no programs designed to shore up participants past promotion and through the “first 100 days” in the new position. With that extra bit of attention, sponsors could help deliver not just promotions but strong transitions.

Although the women we interviewed all come from the same company, the trends there mirror those at many other firms we’ve worked with and observed. And the survey responses, gathered from men and women at hundreds of firms, also provide strong evidence for gender difference in mentoring outcomes.

More sponsoring may lead to more and faster promotions for women, but it is not a magic bullet: There is still much to do to close the gap between men’s and women’s advancement. Some improvements—such as supportive bosses and inclusive cultures—are a lot harder to mandate than formal mentoring programs but essential if those programs are to have their intended effects. Clearly, however, the critical first step is to stop overmentoring and start accountable sponsoring for both sexes.

Originally published in September 2010. Reprint R1009F

When No One Retires

by Paul Irving

BEFORE OUR EYES, THE WORLD is undergoing a massive demographic transformation. In many countries, the population is getting old. Very old. Globally, the number of people age 60 and over is projected to double to more than 2 billion by 2050 and those 60 and over will outnumber children under the age of 5. In the United States, about 10,000 people turn 65 each day, and one in five Americans will be 65 or older by 2030. By 2035, Americans of retirement age will eclipse the number of people aged 18 and under for the first time in U.S. history.

The reasons for this age shift are many—medical advances that keep people healthier longer, dropping fertility rates, and so on—but the net result is the same: Populations around the world will look very different in the decades ahead.

Some in the public and private sector are already taking note—and sounding the alarm. In his first term as chairman of the U.S. Federal Reserve, with the Great Recession looming, Ben Bernanke remarked, “In the coming decades, many forces will shape our economy and our society, but in all likelihood no single factor will have as pervasive an effect as the aging of our population.” Back in 2010, Standard & Poor’s predicted that the biggest influence on “the future of national economic health, public finances, and policymaking” will be “the irreversible rate at which the world’s population is aging.”

The world is getting older

Source: United Nations, “World Population Prospects: The 2015 Revision”

This societal shift will undoubtedly change work, too: More and more Americans want to work longer—or have to, given that many aren’t saving adequately for retirement. Soon, the workforce will include people from as many as five generations ranging in age from teenagers to 80-somethings.

Are companies prepared? The short answer is “no.” Aging will affect every aspect of business operations—whether it’s talent recruitment, the structure of compensation and benefits, the development of products and services, how innovation is unlocked, how offices and factories are designed, and even how work is structured—but for some reason, the message just hasn’t gotten through. In general, corporate leaders have yet to invest the time and resources necessary to fully grasp the unprecedented ways that aging will change the rules of the game.

What’s more, those who do think about the impacts of an aging population typically see a looming crisis—not an opportunity. They fail to appreciate the potential that older adults present as workers and consumers. The reality, however, is that increasing longevity contributes to global economic growth. Today’s older adults are generally healthier and more active than those of generations past, and they are changing the nature of retirement as they continue to learn, work, and contribute. In the workplace, they provide emotional stability, complex problem-solving skills, nuanced thinking, and institutional know-how. Their talents complement those of younger workers, and their guidance and support enhance performance and intergenerational collaboration. In encore careers, volunteering, and civic and social settings, their experience and problem-solving abilities contribute to society’s well-being.

Idea in Brief

Before our eyes, the world is undergoing a massive demographic transformation. In many countries, the population is aging rapidly. In the United States, about 10,000 people turn 65 each day, and one in five Americans will be 65 or older by 2030. This societal shift will affect every aspect of business operations, but corporate leaders have not yet grasped the unprecedented ways that an aging workforce will change the rules of the game. Those who do think about the impacts typically see a looming crisis—not an opportunity. This article helps companies develop a “longevity strategy” for fostering a vibrant multigenerational workforce.

In the public sector, policy makers are beginning to take action. Efforts are under way in the United States to reimagine communities to enhance “age friendliness,” develop strategies to improve infrastructure, enhance wellness and disease prevention, and design new ways to invest for retirement as traditional income sources like pensions and defined benefit plans dry up. But such efforts are still early stage, and given the slow pace of governmental change they will likely take years to evolve.

Companies, by contrast, are uniquely positioned to change practices and attitudes now. Transformation won’t be easy, but companies that move past today’s preconceptions about older employees and respond and adapt to changing demographics will realize significant dividends, generating new possibilities for financial return and enhancing the lives of their employees and customers. I spent many years in executive management, corporate law, and board service. Based on this experience, along with research conducted with Arielle Burstein, Kevin Proff, and other members of our staff at the Milken Institute Center for the Future of Aging, I have developed a framework for building a “longevity strategy” that companies can use to create a vibrant multigenerational workforce. Broadly, a longevity strategy should include two key elements: internal-facing activities (hiring, retention, and mining the talents of workers of all ages) and external-facing ones (how your company positions itself and its products and services to customers and stakeholders). In this article, I’ll address the internal activities companies should be engaging in.

But first, let’s examine why leaders seem to be overlooking the opportunities of an aging population.

The Ageism Effect

There’s broad consensus that the global population is changing and growing significantly older. There’s also a prevailing opinion that the impacts on society will largely be negative. A Government Accountability Office report warns that older populations will bring slower growth, lower productivity, and increasing dependency on society. A report from the Congressional Budget Office projects that higher entitlement costs associated with an aging population will drive up expenses relative to revenues, increasing the federal deficit. The World Bank foresees fading potential in economies across the globe, warning in 2018 of “headwinds from ageing populations in both advanced and developing economies, expecting decreased labour supply and productivity growth.” Such predictions serve to further entrench the belief that older workers are an expensive drag on society.

What’s at the heart of this gloomy outlook? Economists often refer to what’s known as the dependency ratio: the number of people not typically in the workforce—those younger than 15 and older than 65—in a population divided by the number of working-age people. This measure assumes that older adults are generally unproductive and can be expected to do little other than consume benefits in their later years. Serious concerns about the so-called “silver tsunami” are justified if this assumption is correct: The prospect of a massive population of sick, disengaged, lonely, needy, and cognitively impaired people is a dark one indeed.

The global aging phenomenon

Note: Northern America consists of Canada and the United States.

Source: United Nations, “World Population Prospects: The 2015 Revision”

This picture, however, is simply not accurate. While some older adults do suffer from disabling physical and cognitive conditions or are otherwise unable to maintain an active lifestyle, far more are able and inclined to stay in the game longer, disproving assumptions about their prospects for work and productivity. The work of Laura Carstensen and her colleagues at the Stanford Center on Longevity shows that typical 60-something workers today are healthy, experienced, and more likely than younger colleagues to be satisfied with their jobs. They have a strong work ethic and loyalty to their employers. They are motivated, knowledgeable, adept at resolving social dilemmas, and care more about meaningful contributions and less about self-advancement. They are more likely than their younger counterparts to build social cohesion and to share information and organizational values.

Yet the flawed perceptions persist, a byproduct of stubborn and pervasive ageism. Positive attributes of older workers are crowded out by negative stereotypes that infect work settings and devalue older adults in a youth-oriented culture. Older adults regularly find themselves on the losing end of hiring decisions, promotions, and even volunteer opportunities. Research from AARP found that approximately two-thirds of workers ages 45 to 74 said they have seen or experienced age discrimination in the workplace. Of those, a remarkable 92% said age discrimination is very, or somewhat, common. Research for the Federal Reserve Bank of San Francisco backs this up. A study involving 40,000 made-up résumés found compelling evidence that older applicants, especially women, suffer consistent age discrimination. A case in point is IBM, which is currently facing allegations of using improper practices to marginalize and terminate older workers.

There’s more: Deloitte’s 2018 Global Human Capital Trends study found that 20% of business and HR leaders surveyed viewed older workers as a competitive disadvantage and an impediment to the progress of younger workers. The report concludes that “there may be a significant hidden problem of age bias in the workforce today.” It also warns that “left unaddressed, perceptions that a company’s culture and employment practices suffer from age bias could damage its brand and social capital.”

The negative cultural overlay about aging is reinforced by media and advertising that often portray older adults in clichéd, patronizing ways. A classic example is Life Alert’s ad from the 1980s for its medical alert necklace, immortalizing the phrase “I’ve fallen, and I can’t get up!” Recent ads by E*TRADE and Postmates have also drawn criticism as ageist. A more subtle, but just as damaging example is the trumpeting of “anti-aging” benefits on beauty products as a marketing tool, suggesting that growing older is, by definition, a negative process.

Some companies are pushing back: In a recent video, T-Mobile’s John Legere took on the topic of ageist stereotypes while promoting a T-Mobile service for adults age 55-plus. He chided competitors for what he called their belittling treatment of older adults in marketing campaigns that emphasize large-size phone buttons and imply that boomers are tech idiots. “Degrading at the highest level,” Legere calls it. “The carriers assume boomers are a bunch of old people stuck in the past who can’t figure out how the internet works. News flash, carriers: Boomers invented the internet.”

Yet for the most part, employers continue to invest far more in young employees and generally do not train workers over 50. In fact, many companies would rather not think about the existence of older workers all. “Today it is socially unacceptable to ignore, ridicule, or stereotype someone based on their gender, race, or sexual orientation,” points out Jo Ann Jenkins, the CEO of AARP. “So why is it still acceptable to do this to people based on their age?”

Over the past decades, companies have recognized the economic and social benefits of women, people of color, and LGBT individuals in the workforce. These priority initiatives must be continued—obviously, we’re not even close to achieving genuine equality in the corporate world; at the same time, the inclusion of older adults in the business diversity matrix is long overdue. Patricia Milligan, senior partner and global leader for Mercer’s Multinational Client Group, observes, “At the most respected multinational companies, the single class not represented from a diversity and inclusion perspective is older workers. LGBT, racial and ethnic diversity, women, people with physical disabilities, veterans—you can find an affinity group in a corporation for everything, except an older worker.”

The U.S. labor force is getting older, too

Source: U.S. Bureau of Labor Statistics

Managing a Multigenerational Workforce

How can companies push past stereotypes and other organizational impediments to tap into a thriving and talented population of older workers? A range of best practices have been emerging, and some companies are making real progress. Each points to specific changes companies should be considering as they develop their own strategies.

Redefine the workweek

To start, you need to reconsider the out-of-date idea that all employees work Monday through Friday, from 9 to 5, in the same office. The notion that everyone retires completely by age 65 should also be jettisoned. Companies instead should invest in opportunities for creative mentorship, part-time work, flex-hour schedules, and sabbatical programs geared to the abilities and inclinations of older workers. Programs that offer preretirement and career transition support, coaching, counseling, and encore career pathways can also make employees more engaged and productive. Many older workers say they are ready to exchange high salaries for flexible schedules and phased retirements. Some companies have already embraced nontraditional work programs for employees, creating a new kind of environment for success. The CVS “Snowbird” program, for example, allows older employees to travel and work seasonally in different CVS pharmacy regions. Home Depot recruits and hires thousands of retired construction workers, making the most of their expertise on the sales floor. The National Institutes of Health, half of whose workforce is over 50, actively recruits at 50-plus job fairs and offers benefits such as flexible schedules, telecommuting, and exercise classes. Steelcase offers workers a phased retirement program with reduced hours. Michelin has rehired retirees to oversee projects, foster community relations, and facilitate employee mentoring. Brooks Brothers consults with older workers on equipment and process design, and restructures assignments to offer enhanced flexibility for its aging workforce.

Reimagine the workplace

Your company should also be prepared to adjust workspaces to improve ergonomics and make environments more age-friendly for older employees. No one should be distracted from their tasks by pain that can be prevented or eased, and even small changes can improve health, safety, and productivity. Xerox, for example, has an ergonomic training program aimed at reducing musculoskeletal disorders in its aging workforce. BMW and Nissan have implemented changes to their manufacturing lines to accommodate older workers, ranging from barbershop-style chairs and better-designed tools to “cobot” (collaborative robot) partners that manage complicated tasks and lift heavier objects. The good news is that programs that improve the lives of older workers can be equally valuable for younger counterparts.

Mind the mix

Lastly, you need to consider and monitor the age mixes in your departments and teams. Many companies will need to manage as many as five generations of workers in the near future, if they aren’t already. Some pernicious biases can make this difficult. For example, research shows that every generation wants meaningful work—but that each believes everyone else is just in it for the money. Companies should emphasize workers’ shared value. “Companies pursuing Millennial-specific employee engagement strategies are wasting time, focus, and money,” Bruce Pfau, the former vice chair of human resources at KPMG, argues. “They would be far better served to focus on factors that lead all employees to join, stay, and perform at their best.”

By tapping ways that workers of different generations can augment and learn from each other, companies set themselves up for success over the long term. Young workers can benefit from the mentorship of older colleagues, and a promising workforce resource lies in intergenerational collaboration, combining the energy and speed of youth with the wisdom and experience of age.

PNC Financial Group uses multigenerational teams to help the company compete more effectively in the financial markets through a better understanding of the target audience for products. Pharma giant Pfizer has experimented with a “senior intern” program to reap the benefits of multigenerational collaboration. In the tech world, Airbnb recruited former hotel mogul Chip Conley to provide experienced management perspective to his younger colleagues. Pairing younger and older workers in all phases of product and service innovation and design can create opportunity for professional growth. And facilitating intergenerational relationships, mentoring, training, and teaming mitigate isolation and help break down walls.

To begin this process, start talking to your employees of all ages. And get them to talk with each other about their goals, interests, needs, and worries. Young and old workers share similar anxieties and hopes about work—and also have differences that need to be better understood companywide. Look for opportunities for engagement between generations and places where older and younger workers can support one another through skill development and mentorship. After all, if everyone needs and wants to work, we’re going to have to learn to work together.

To be clear, all of these changes—from flexible hours to team makeup—will require a recalibration of company processes, some of which are deeply ingrained. Leaders must ask, do our current health insurance, sick leave, caregiving, and vacation policies accommodate people who work reduced hours? Do our employee performance-measurement systems appropriately recognize and reward the strengths of older workers? Currently, most companies focus on individual achievement as opposed to team success. This may inadvertently punish older employees who offer other types of value—like mentorship, forging deep relationships with clients and colleagues, and conflict resolution—that are not as easily captured using traditional assessment tools. Here, too, initiatives aimed at older workers can benefit other workers as well. For instance, research suggests that evaluating team performance also tends to boost the careers of employees from low-income backgrounds.

Turning a Crisis into an Opportunity

I’m admittedly bullish about the positive aspects of working longer and believe that company leaders can harness the opportunity of an aging population to gain competitive advantage. But I’m not oblivious to the challenges a longevity strategy poses. We’re talking about initiating a massive culture change for firms—a change that must come from the top.

But ignoring the realities of the demographic shift under way is no longer an option. CEOs and senior executives will need to put the issue front and center with HR leaders, product developers, marketing managers, investors, and many other stakeholders who may not have it on their radar screens. This will take guts and persistence: Leaders must bravely say, “We reject the assumption that people become less tech-savvy as they get older” and “We will fight the impulse to put only our youngest employees on new initiatives.” To genuinely make headway on this long-range issue, companies will have to make tough, and sometimes unpopular, decisions, especially in a world where short-term results and demands dominate leaders’ agendas. But isn’t that what great leaders do?

The business community has a chance to spearhead a broad movement to change culture, create opportunity, and drive growth. In doing so, companies will improve not only mature lives, but lives of all ages, and the prospects of workers for generations to come. This transformative movement to realize the potential of the 21st century’s changing demography is the next big test for corporate leadership.

Originally published on hbr.org in November 2018. Reprint BG1806

Neurodiversity as a Competitive Advantage

by Robert D. Austin and Gary P. Pisano

MEET JOHN. HE’S A WIZARD at data analytics. His combination of mathematical ability and software development skill is highly unusual. His CV features two master’s degrees, both with honors. An obvious guy for a tech company to scoop up, right?

Until recently, no. Before John ran across a firm that had begun experimenting with alternative approaches to talent, he was unemployed for more than two years. Other companies he had talked with badly needed the skills he possessed. But he couldn’t make it through the hiring process.

If you watched John for a while, you’d start to see why. He seems, well, different. He wears headphones all the time, and when people talk to him, he doesn’t look right at them. He leans over every 10 minutes or so to tighten his shoelaces; he can’t concentrate when they’re loose. When they’re tight, though, John is the department’s most productive employee. He is hardworking and never wants to take breaks. Although his assigned workplace “buddy” has finally persuaded him to do so, he doesn’t enjoy them.

“John” is a composite of people whose privacy we wanted to protect—people with autism spectrum disorder. He is representative of participants in the programs of pioneering companies that have begun seeking out “neurodiverse” talent.

A lot of people are like John. The incidence of autism in the United States is now 1 in 42 among boys and 1 in 189 among girls, according to the Centers for Disease Control and Prevention. And although corporate programs have so far focused primarily on autistic people, it should be possible to extend them to people affected by dyspraxia (a neurologically based physical disorder), dyslexia, ADHD, social anxiety disorders, and other conditions. Many people with these disorders have higher-than-average abilities; research shows that some conditions, including autism and dyslexia, can bestow special skills in pattern recognition, memory, or mathematics. Yet those affected often struggle to fit the profiles sought by prospective employers.

Neurodiverse people frequently need workplace accommodations, such as headphones to prevent auditory overstimulation, to activate or maximally leverage their abilities. Sometimes they exhibit challenging eccentricities. In many cases the accommodations and challenges are manageable and the potential returns are great. But to realize the benefits, most companies would have to adjust their recruitment, selection, and career development policies to reflect a broader definition of talent.

A growing number of prominent companies have reformed their HR processes in order to access neurodiverse talent; among them are SAP, Hewlett Packard Enterprise (HPE), Microsoft, Willis Towers Watson, Ford, and EY. Many others, including Caterpillar, Dell Technologies, Deloitte, IBM, JPMorgan Chase, and UBS, have start-up or exploratory efforts under way. We have had extensive access to the neurodiversity programs at SAP, HPE, and Specialisterne (the Danish consulting company that originated such programs) and have also interacted with people at Microsoft, Willis Towers Watson, and EY.

Although the programs are still in early days—SAP’s, the longest running among major companies, is just four years old—managers say they are already paying off in ways far beyond reputational enhancement. Those ways include productivity gains, quality improvement, boosts in innovative capabilities, and broad increases in employee engagement. Nick Wilson, the managing director of HPE South Pacific—an organization with one of the largest such programs—says that no other initiative in his company delivers benefits at so many levels.

Idea in Brief

The Problem

Many people with neurological conditions such as autism spectrum disorder, dyspraxia, and dyslexia have extraordinary skills, including in pattern recognition, memory, and mathematics. But the neurodiverse population remains largely untapped.

The Cause

Conventional recruitment and career-development methods (for example, job interviews) and the belief that scalable work processes require absolute conformity to standardized approaches screen out neurodiverse people who could be valuable employees.

The Solution

A growing number of companies—among them SAP, Hewlett Packard Enterprise, Microsoft, Willis Towers Watson, and EY—have reformed HR practices to capitalize on the talents of neurodiverse people. In the process, they are becoming better able to fully leverage the skills of all workers.

Perhaps the most surprising benefit is that managers have begun thinking more deeply about leveraging the talents of all employees through greater sensitivity to individual needs. SAP’s program “forces you to get to know the person better, so you know how to manage them,” says Silvio Bessa, the senior vice president of digital business services. “It’s made me a better manager, without a doubt.”

Why Neurodiversity Presents Opportunities

“Neurodiversity is the idea that neurological differences like autism and ADHD are the result of normal, natural variation in the human genome,” John Elder Robison, a scholar in residence and a cochair of the Neurodiversity Working Group at the College of William & Mary, writes in a blog on Psychology Today’s website. Robison, who himself has Asperger’s syndrome, adds, “Indeed, many individuals who embrace the concept of neurodiversity believe that people with differences do not need to be cured; they need help and accommodation instead.” We couldn’t agree more.

Everyone is to some extent differently abled (an expression favored by many neurodiverse people), because we are all born different and raised differently. Our ways of thinking result from both our inherent “machinery” and the experiences that have “programmed” us.

Most managers are familiar with the advantages organizations can gain from diversity in the backgrounds, disciplinary training, gender, culture, and other individual qualities of employees. Benefits from neurodiversity are similar but more direct. Because neurodiverse people are wired differently from “neurotypical” people, they may bring new perspectives to a company’s efforts to create or recognize value. At HPE, neurodiverse software testers observed that one client’s projects always seemed to go into crisis mode before a launch. Intolerant of disorder, they strenuously questioned the company’s apparent acceptance of the chaos. This led the client company to realize that it had indeed become too tolerant of these crises and, with the help of the testers, to successfully redesign the launch process. At SAP, a neurodiverse customer-support analyst spotted an opportunity to let customers help solve a common problem themselves; thousands of them subsequently used the resources he created.

Nevertheless, the neurodiverse population remains a largely untapped talent pool. Unemployment runs as high as 80% (this figure includes people with more-severe disorders, who are not candidates for neurodiversity programs). When they are working, even highly capable neurodiverse people are often underemployed. Program participants told us story after story of how, despite having solid credentials, they had previously had to settle for the kinds of jobs many people leave behind in high school. When SAP began its Autism at Work program, applicants included people with master’s degrees in electrical engineering, biostatistics, economic statistics, and anthropology and bachelor’s degrees in computer science, applied and computational mathematics, electrical engineering, and engineering physics. Some had dual degrees. Many had earned very high grades and graduated with honors or other distinctions. One held a patent.

Not surprisingly, when autistic people with those sorts of credentials do manage to get hired, many turn out to be capable, and some are really great. Over the past two years HPE’s program has placed more than 30 participants in software-testing roles at Australia’s Department of Human Services (DHS). Preliminary results suggest that the organization’s neurodiverse testing teams are 30% more productive than the others.

Inspired by the successes at DHS, the Australian Defense Department is now working with HPE to develop a neurodiversity program in cybersecurity; participants will apply their superior pattern-detection abilities to tasks such as examining logs and other sources of messy data for signs of intrusion or attack. Using assessment methods borrowed from the Israeli Defense Forces (IDF), it has found candidates whose relevant abilities are “off the charts.” (The IDF’s Special Intelligence Unit 9900, which is responsible for analyzing aerial and satellite imagery, has a group staffed primarily with people on the autism spectrum. It has proved that they can spot patterns others do not see.)

The case for neurodiverse hiring is especially compelling given the skills shortages that increasingly afflict technology and other industries. For example, the European Union faces a shortage of 800,000 IT workers by 2020, according to a European Commission study. The biggest deficits are expected to be in strategically important and rapidly expanding areas such as data analytics and IT services implementation, whose tasks are a good match with the abilities of some neurodiverse people.

Why Companies Don’t Tap Neurodiverse Talent

What has kept so many companies from taking on people with the skills they badly need? It comes down to the way they find and recruit talent and decide whom to hire (and promote).

Especially in large companies, HR processes are developed with an eye toward wide application across the organization. But there is a conflict between scalability and the goal of acquiring neurodiverse talent. “SAP focuses on having scalable HR processes; however, if we were to use the same processes for everyone, we would miss people with autism,” says Anka Wittenberg, the company’s chief diversity and inclusion officer.

In addition, the behaviors of many neurodiverse people run counter to common notions of what makes a good employee—solid communication skills, being a team player, emotional intelligence, persuasiveness, salesperson-type personalities, the ability to network, the ability to conform to standard practices without special accommodations, and so on. These criteria systematically screen out neurodiverse people.

But they are not the only way to provide value. In fact, in recent decades the ability to compete on the basis of innovation has become more crucial for many companies. Innovation calls on firms to add variety to the mix—to include people and ideas from “the edges,” as SAP put it in the press release announcing its program. Having people who see things differently and who maybe don’t fit in seamlessly “helps offset our tendency, as a big company, to all look in the same direction,” Bessa says.

You might think that organizations could simply seek more variety in prospective employees while retaining their traditional recruiting, hiring, and development practices. Many have taken that approach: Their managers still work top down from strategies to capabilities needed, translating those into organizational roles, job descriptions, and recruiting checklists. But two big problems cause them to miss neurodiverse talent.

The first involves a practice that is almost universal under the traditional approach: interviewing. Although neurodiverse people may excel in important areas, many don’t interview well. For example, autistic people often don’t make good eye contact, are prone to conversational tangents, and can be overly honest about their weaknesses. Some have confidence problems arising from difficulties they experienced in previous interview situations. Neurodiverse people more broadly are unlikely to earn higher scores in interviews than less-talented neurotypical candidates. SAP and HPE have found that it can take weeks or months to discover how good some program participants are (or, equally important, where their limitations lie). Fortunately, as we’ll see, interviews are not the only way to assess a candidate’s suitability.

The second problem, especially common in large companies, derives from the assumption that scalable processes require absolute conformity to standardized approaches. As mentioned, employees in neurodiversity programs typically need to be allowed to deviate from established practices. This shifts a manager’s orientation from assuring compliance through standardization to adjusting individual work contexts. Most accommodations, such as installing different lighting and providing noise-canceling headphones, are not very expensive. But they do require managers to tailor individual work settings more than they otherwise might.

How Pioneers Are Changing the Talent Management Game

The tech industry has a history of hiring oddballs. The talented nerd who lacks social graces has become a cultural icon, as much a part of the industry mythos as the company that starts in a garage. In his book NeuroTribes, Steve Silberman points out that the incidence of autism is particularly high in places like Silicon Valley (for reasons not completely understood). He and others have hypothesized that many of the industry’s “oddballs” and “nerds” might well have been “on the spectrum,” although undiagnosed. Hiring for neurodiversity, then, could be seen as an extension of the tendencies of a culture that recognizes the value of nerds.

In recent years a few pioneering companies have formalized and professionalized those tendencies. Although their programs vary, they have elements in common, not least because they draw on the body of knowledge developed at Specialisterne. Thorkil Sonne founded the firm in 2004, motivated by the autism diagnosis of his third child. Over the next several years it developed and refined noninterview methods for assessing, training, and managing neurodiverse talent and demonstrated the viability of its model by running a successful for-profit company focused on software testing.

Dissatisfied with the rate at which his own company could create jobs, Sonne established the Specialist People Foundation (recently renamed the Specialisterne Foundation) in 2008 to spread his company’s know-how to others and persuade multinationals to start neurodiversity programs. Most companies that have done so have worked with the foundation to deploy some version of the Specialisterne approach. It has seven major elements:

Team with “social partners” for expertise you lack

Managers in, say, a tech company know a lot about many things but usually are not experts in autism or other categories of neurodiversity. Also, for many good reasons, companies hesitate to extend their activities into employees’ private lives, where neurodiverse people may need extra help.

To fill these gaps, the companies we studied entered into relationships with “social partners”—government or nonprofit organizations committed to helping people with disabilities obtain jobs. SAP has worked with California’s Department of Rehabilitation, Pennsylvania’s Office of Vocational Rehabilitation, the U.S. nonprofits EXPANDability and the Arc, and overseas agencies such as EnAble India, while HPE has worked with Autism SA (South Australia). Such groups help companies navigate local employment regulations that apply to people with disabilities, suggest candidates from lists of neurodiverse people seeking employment, assist in prescreening, help arrange public funding for training, sometimes administer training, and provide the mentorship and ongoing support (especially outside work hours) needed to ensure that neurodiverse employees will succeed. In Germany, recognition of the benefits of moving people off public assistance and into jobs that generate tax revenue has led to publicly funded positions to support the retention of neurodiverse employees. Although estimates of the benefits a government gains by turning such people into tax-paying tech workers vary, they often are on the order of $50,000 per person a year.

Use nontraditional, noninterview-based assessment and training processes

To this end, Specialisterne created “hangouts”—comfortable gatherings, usually lasting half a day, in which neurodiverse job candidates can demonstrate their abilities in casual interactions with company managers. At the end of a hangout, some candidates are selected for two to six weeks of further assessment and training (the duration varies by company). During this time they use Lego Mindstorms robotic construction and programming kits to work on assigned projects—first individually and then in groups, with the projects becoming more like actual work as the process continues. Some companies have additional sessions. SAP, for example, established a “soft skills” module to help candidates who have never worked in a professional environment become familiar with the norms of such a setting. These efforts are typically funded by the government or nonprofits. Trainees are usually paid.

Despite the social difficulties experienced by many neurodiverse people, candidates often display complex collaborative and support behaviors during the project-based assessment period. At HPE, for example, groups were asked to devise a reliable robotic pill-dispensing system. During the presentation of solutions, one candidate froze. “I’m sorry, I can’t do it,” he said. “The words are all jumbled up in my head.” His neurodiverse teammates rushed to his rescue, surrounding and reassuring him, and he was able to finish.

By extending the assessment process, such programs allow time for candidates’ capabilities to surface. There are, of course, other ways to do this. HPE has begun using internships that include similar elements.

Train other workers and managers

Short (some are just half a day), low-key training sessions help existing employees understand what to expect from their new colleagues—for example, that they might need accommodations and might seem different. Managers get somewhat more-extensive training to familiarize them with sources of support for program employees.

Set up a support ecosystem

Companies with neurodiverse programs design and maintain simple support systems for their new employees. SAP defines two “support circles”—one for the workplace, the other for an employee’s personal life. The workplace support circle includes a team manager, a team buddy, a job and life skills coach, a work mentor, and an “HR business partner,” who oversees a group of program participants. Buddies are staff members on the same team who provide assistance with daily tasks, workload management, and prioritization. Job and life skills coaches are usually from social partner organizations. Other social partner roles include vocational rehab counselor and personal counselor. Usually, families of employees also provide support.

HPE takes a different approach. It places new neurodiverse employees in “pods” of about 15 people, where they work alongside neurotypical colleagues in a roughly 4:1 ratio while two managers and a consultant are tasked with addressing neurodiversity-related issues.

Tailor methods for managing careers

Employees hired through these programs need long-term career paths, just as other workers do. This requires serious thought about ongoing assessment and development that will take the special circumstances of neurodiverse employment into account. Fortunately, over time supervisors usually get a good sense of program employees’ talents and limitations. Participants undergo the same performance evaluations that other employees do, but managers work within those processes to set specific goals. Although some goals may relate to participants’ conditions, no allowances are made for unsatisfactory performance. If anything, neurodiverse employees must satisfy more requirements than others, because they must meet program objectives in addition to the performance objectives expected of anyone in their role.

Some participants quickly demonstrate potential to become integrated into the mainstream organization and go further in their careers. HPE’s pods are designed to provide a safe environment in which participants can build skills that will allow them to perform well and eventually to transition out of their pods into more-mainstream jobs.

Scale the program

SAP has announced an intention to make 1% of its workforce neurodiverse by 2020—a number chosen because it roughly corresponds to the percentage of autistic people in the general population. Microsoft, HPE, and others are also working to enlarge their programs, although they have declined to set numerical targets. It’s easiest to expand employment in those areas, such as software testing, business analytics, and cybersecurity, in which tasks are a good fit with neurodiverse talent. SAP, however, has placed its more than 100 program employees in 18 roles. “The original expectation, as I understood it, was that these colleagues would be mostly focused on repetitive work, such as software testing,” one manager told us. “But in practice they have been able to add value in a much broader range of tasks.” Those include product management, which involves coordinating the development of new SAP offerings; HR service associate, which entails organizing and planning HR activities; associate consultant, which requires helping customers apply SAP solutions to business problems; and customer support, which means working with customers on the phone to help them use SAP software. The latter two defy the assumption that people with autism can’t hold jobs that require social skills.

HPE is deploying neurodiverse specialists nine at a time, in pods, to client organizations—in effect, selling packages of the advanced capabilities derived from neurodiversity. The model has intriguing scale possibilities, both because many workers are placed at once and because client demand enlarges the domain of possible placements.

Mainstream the program

The success of neurodiversity programs has prompted some companies to think about how ordinary HR processes may be excluding high-quality talent. SAP is conducting a review to determine how recruiting, hiring, and development could take a broader view. Its stated goal is to make its mainstream talent processes so “neurodiversity friendly” that it can ultimately close its neurodiversity program. Microsoft has similar ambitions.

Companies have experienced a surprising array of benefits from neurodiversity programs. Some are straightforward: Firms have become more successful at finding and hiring good and even great talent in tough-to-fill skills categories. Products, services, and bottom lines have profited from lower defect rates and higher productivity. Both SAP and HPE report examples of neurodiverse employees’ participating on teams that generated significant innovations (one, at SAP, helped develop a technical fix worth an estimated $40 million in savings).

Other benefits are subtler. One executive told us that efforts to make corporate communications more direct, in order to account for the difficulties autistic employees have with nuance, irony, and other fine points of language, have improved communication overall. The perfectionist tendencies of some HPE software-testing pods have caused client organizations to raise their game and stop viewing certain common problems as inevitable. In addition, employee engagement has risen in areas the programs touch: Neurotypical people report that involvement makes their work more meaningful and their morale higher. And early indications suggest that program employees, appreciative of having been given a chance, are very loyal and have low rates of turnover.

Last but not least, the programs confer reputational benefits. The companies that pioneered them have been recognized by the United Nations as exemplars of responsible management and have won global corporate citizenship awards.

Challenges of a Neurodiverse Workforce

To be sure, companies implementing neurodiversity programs have encountered challenges. Although there are plenty of potential candidates, many are hard to identify, because universities—sensitive to issues of discrimination—do not classify students in neurodiversity terms, and potential candidates do not necessarily self-identify. In response, HPE is helping colleges and high schools set up nontraditional “work experience” programs for neurodiverse populations. These involve video gaming, robotic programming, and other activities. Microsoft, too, is working with universities to improve methods of identifying and accessing neurodiverse talent.

Another common difficulty involves the dashed hopes of candidates who are not chosen for placement—an inevitable circumstance that must be handled carefully. At one company, parents whose son did not qualify for a job wrote to the CEO; the program had raised their hopes that he would finally achieve meaningful employment, and they were understandably disappointed. Executives fretted about a potential PR problem. In the end, compassionate discussions between the parents and managers of the program—some of whom had families that had experienced similar issues—calmed the situation.

Issues related to fairness and norms of interaction might arise as well. In one case we encountered, a program participant who had overstimulation difficulties was given his own office while four people in a nearby department were crowded into a similar space, generating complaints. Those subsided after an explanation was offered. We also heard of instances in which the excessive honesty typical of autistic people raised hackles. One concerned a program employee who told a colleague, “You stink at your job.” Coaching by managers and mentors can help address such situations.

Some supervisors reported that the program generated extra work for them. For instance, the perfectionist tendencies of some participants made it difficult for those employees to judge which defects were worth fixing, which were not, and which required them to seek additional direction.

Managing neurodiverse employees’ stress presents another challenge. We heard reports that unexpected and uncontrollable events, such as systems outages that interfered with work routines, caused unusually high levels of anxiety among participants. Many people we interviewed emphasized the need to be sensitive to program employees’ stress. To keep it under control, some participants work only part-time—a limitation that may create problems, especially when deadlines loom.

To handle such situations, organizations need people in place who can spot and address issues before they escalate. Many managers said that with these and other supports, they could perform their jobs in a fairly normal fashion. And contrary to their initial assumptions, SAP managers found they could even supervise program participants remotely, as long as buddies and mentors provided support locally.

A Major Shift in Managing People

Neurodiversity programs induce companies and their leaders to adopt a style of management that emphasizes placing each person in a context that maximizes her or his contributions.

SAP uses a metaphor to communicate this idea across the organization: People are like puzzle pieces, irregularly shaped. Historically, companies have asked employees to trim away their irregularities, because it’s easier to fit people together if they are all perfect rectangles. But that requires employees to leave their differences at home—differences firms need in order to innovate. “The corporate world has mostly missed out on this [benefit],” Anka Wittenberg observes.

This suggests that companies must embrace an alternative philosophy, one that calls on managers to do the hard work of fitting irregular puzzle pieces together—to treat people not as containers of fungible human resources but as unique individual assets. The work for managers will be harder. But the payoff for companies will be considerable: access to more of their employees’ talents along with diverse perspectives that may help them compete more effectively. “Innovation,” Wittenberg notes, “is most likely to come from parts of us that we don’t all share.”

Originally published in May–June 2017. Reprint R1703F

Managing Multicultural Teams

by Jeanne Brett, Kristin Behfar, and Mary C. Kern

WHEN A MAJOR INTERNATIONAL SOFTWARE developer needed to produce a new product quickly, the project manager assembled a team of employees from India and the United States. From the start the team members could not agree on a delivery date for the product. The Americans thought the work could be done in two to three weeks; the Indians predicted it would take two to three months. As time went on, the Indian team members proved reluctant to report setbacks in the production process, which the American team members would find out about only when work was due to be passed to them. Such conflicts, of course, may affect any team, but in this case they arose from cultural differences. As tensions mounted, conflict over delivery dates and feedback became personal, disrupting team members’ communication about even mundane issues. The project manager decided he had to intervene—with the result that both the American and the Indian team members came to rely on him for direction regarding minute operational details that the team should have been able to handle itself. The manager became so bogged down by quotidian issues that the project careened hopelessly off even the most pessimistic schedule—and the team never learned to work together effectively.

Multicultural teams often generate frustrating management dilemmas. Cultural differences can create substantial obstacles to effective teamwork—but these may be subtle and difficult to recognize until significant damage has already been done. As in the case above, which the manager involved told us about, managers may create more problems than they resolve by intervening. The challenge in managing multicultural teams effectively is to recognize underlying cultural causes of conflict, and to intervene in ways that both get the team back on track and empower its members to deal with future challenges themselves.

We interviewed managers and members of multicultural teams from all over the world. These interviews, combined with our deep research on dispute resolution and teamwork, led us to conclude that the wrong kind of managerial intervention may sideline valuable members who should be participating or, worse, create resistance, resulting in poor team performance. We’re not talking here about respecting differing national standards for doing business, such as accounting practices. We’re referring to day-to-day working problems among team members that can keep multicultural teams from realizing the very gains they were set up to harvest, such as knowledge of different product markets, culturally sensitive customer service, and 24-hour work rotations.

The good news is that cultural challenges are manageable if managers and team members choose the right strategy and avoid imposing single-culture-based approaches on multicultural situations.

The differences between direct and indirect communication can cause serious damage to relationships when team projects run into problems. When the American manager quoted above discovered that several flaws in the system would significantly disrupt company operations, she pointed this out in an e-mail to her American boss and the Japanese team members. Her boss appreciated the direct warnings; her Japanese colleagues were embarrassed, because she had violated their norms for uncovering and discussing problems. Their reaction was to provide her with less access to the people and information she needed to monitor progress. They would probably have responded better if she had pointed out the problems indirectly—for example, by asking them what would happen if a certain part of the system was not functioning properly, even though she knew full well that it was malfunctioning and also what the implications were.

As our research indicates is so often true, communication challenges create barriers to effective teamwork by reducing information sharing, creating interpersonal conflict, or both. In Japan, a typical response to direct confrontation is to isolate the norm violator. This American manager was isolated not just socially but also physically. She told us, “They literally put my office in a storage room, where I had desks stacked from floor to ceiling and I was the only person there. So they totally isolated me, which was a pretty loud signal to me that I was not a part of the inside circle and that they would communicate with me only as needed.”

Her direct approach had been intended to solve a problem, and in one sense, it did, because her project was launched problem-free. But her norm violations exacerbated the challenges of working with her Japanese colleagues and limited her ability to uncover any other problems that might have derailed the project later on.

Idea in Brief

If your company does business internationally, you’re probably leading teams with members from diverse cultural backgrounds. Those differences can present serious obstacles. For example, some members’ lack of fluency in the team’s dominant language can lead others to underestimate their competence. When such obstacles arise, your team can stalemate.

To get the team moving again, avoid intervening directly, advise Brett, Behfar, and Kern. Though sometimes necessary, your involvement can prevent team members from solving problems themselves—and learning from that process.

Instead, choose one of three indirect interventions. When possible, encourage team members to adapt by acknowledging cultural gaps and working around them. If your team isn’t able to be open about their differences, consider structural intervention (e.g., reassigning members to reduce interpersonal friction). As a last resort, use an exit strategy (e.g., removing a member from the team).

There’s no one right way to tackle multicultural problems. But understanding four barriers to team success can help you begin evaluating possible responses.

Idea in Practice

Four Barriers

The following cultural differences can cause destructive conflicts in a team:

- Direct versus indirect communication. Some team members use direct, explicit communication while others are indirect, for example, asking questions instead of pointing out problems with a project. When members see such differences as violations of their culture’s communication norms, relationships can suffer.

- Trouble with accents and fluency. Members who aren’t fluent in the team’s dominant language may have difficulty communicating their knowledge. This can prevent the team from using their expertise and create frustration or perceptions of incompetence.

- Differing attitudes toward hierarchy. Team members from hierarchical cultures expect to be treated differently according to their status in the organization. Members from egalitarian cultures do not. Failure of some members to honor those expectations can cause humiliation or loss of stature and credibility.

- Conflicting decision-making norms. Members vary in how quickly they make decisions and in how much analysis they require beforehand. Someone who prefers making decisions quickly may grow frustrated with those who need more time.

Four Interventions

Your team’s unique circumstances can help you determine how to respond to multicultural conflicts. Consider these options:

The Challenges

People tend to assume that challenges on multicultural teams arise from differing styles of communication. But this is only one of the four categories that, according to our research, can create barriers to a team’s ultimate success. These categories are direct versus indirect communication; trouble with accents and fluency; differing attitudes toward hierarchy and authority; and conflicting norms for decision making.

Direct versus indirect communication

Communication in Western cultures is typically direct and explicit. The meaning is on the surface, and a listener doesn’t have to know much about the context or the speaker to interpret it. This is not true in many other cultures, where meaning is embedded in the way the message is presented. For example, Western negotiators get crucial information about the other party’s preferences and priorities by asking direct questions, such as “Do you prefer option A or option B?” In cultures that use indirect communication, negotiators may have to infer preferences and priorities from changes—or the lack of them—in the other party’s settlement proposal. In cross-cultural negotiations, the non-Westerner can understand the direct communications of the Westerner, but the Westerner has difficulty understanding the indirect communications of the non-Westerner.

An American manager who was leading a project to build an interface for a U.S. and Japanese customer-data system explained the problems her team was having this way: “In Japan, they want to talk and discuss. Then we take a break and they talk within the organization. They want to make sure that there’s harmony in the rest of the organization. One of the hardest lessons for me was when I thought they were saying yes but they just meant ‘I’m listening to you.’”

Trouble with accents and fluency

Although the language of international business is English, misunderstandings or deep frustration may occur because of nonnative speakers’ accents, lack of fluency, or problems with translation or usage. These may also influence perceptions of status or competence.

For example, a Latin American member of a multicultural consulting team lamented, “Many times I felt that because of the language difference, I didn’t have the words to say some things that I was thinking. I noticed that when I went to these interviews with the U.S. guy, he would tend to lead the interviews, which was understandable but also disappointing, because we are at the same level. I had very good questions, but he would take the lead.”

When we interviewed an American member of a U.S.-Japanese team that was assessing the potential expansion of a U.S. retail chain into Japan, she described one American teammate this way: “He was not interested in the Japanese consultants’ feedback and felt that because they weren’t as fluent as he was, they weren’t intelligent enough and, therefore, could add no value.” The team member described was responsible for assessing one aspect of the feasibility of expansion into Japan. Without input from the Japanese experts, he risked overestimating opportunities and underestimating challenges.

Nonfluent team members may well be the most expert on the team, but their difficulty communicating knowledge makes it hard for the team to recognize and utilize their expertise. If teammates become frustrated or impatient with a lack of fluency, interpersonal conflicts can arise. Nonnative speakers may become less motivated to contribute, or anxious about their performance evaluations and future career prospects. The organization as a whole pays a greater price: Its investment in a multicultural team fails to pay off.

Some teams, we learned, use language differences to resolve (rather than create) tensions. A team of U.S. and Latin American buyers was negotiating with a team from a Korean supplier. The negotiations took place in Korea, but the discussions were conducted in English. Frequently the Koreans would caucus at the table by speaking Korean. The buyers, frustrated, would respond by appearing to caucus in Spanish—though they discussed only inconsequential current events and sports, in case any of the Koreans spoke Spanish. Members of the team who didn’t speak Spanish pretended to participate, to the great amusement of their teammates. This approach proved effective: It conveyed to the Koreans in an appropriately indirect way that their caucuses in Korean were frustrating and annoying to the other side. As a result, both teams cut back on sidebar conversations.

Differing attitudes toward hierarchy and authority

A challenge inherent in multicultural teamwork is that by design, teams have a rather flat structure. But team members from some cultures, in which people are treated differently according to their status in an organization, are uncomfortable on flat teams. If they defer to higher-status team members, their behavior will be seen as appropriate when most of the team comes from a hierarchical culture; but they may damage their stature and credibility—and even face humiliation—if most of the team comes from an egalitarian culture.

One manager of Mexican heritage, who was working on a credit and underwriting team for a bank, told us, “In Mexican culture, you’re always supposed to be humble. So whether you understand something or not, you’re supposed to put it in the form of a question. You have to keep it open-ended, out of respect. I think that actually worked against me, because the Americans thought I really didn’t know what I was talking about. So it made me feel like they thought I was wavering on my answer.”

When, as a result of differing cultural norms, team members believe they’ve been treated disrespectfully, the whole project can blow up. In another Korean-U.S. negotiation, the American members of a due diligence team were having difficulty getting information from their Korean counterparts, so they complained directly to higher-level Korean management, nearly wrecking the deal. The higher-level managers were offended because hierarchy is strictly adhered to in Korean organizations and culture. It should have been their own lower-level people, not the U.S. team members, who came to them with a problem. And the Korean team members were mortified that their bosses had been involved before they themselves could brief them. The crisis was resolved only when high-level U.S. managers made a trip to Korea, conveying appropriate respect for their Korean counterparts.

Conflicting norms for decision making

Cultures differ enormously when it comes to decision making—particularly, how quickly decisions should be made and how much analysis is required beforehand. Not surprisingly, U.S. managers like to make decisions very quickly and with relatively little analysis by comparison with managers from other countries.

A Brazilian manager at an American company who was negotiating to buy Korean products destined for Latin America told us, “On the first day, we agreed on three points, and on the second day, the U.S.-Spanish side wanted to start with point four. But the Korean side wanted to go back and rediscuss points one through three. My boss almost had an attack.”

What U.S. team members learn from an experience like this is that the American way simply cannot be imposed on other cultures. Managers from other cultures may, for example, decline to share information until they understand the full scope of a project. But they have learned that they can’t simply ignore the desire of their American counterparts to make decisions quickly. What to do? The best solution seems to be to make minor concessions on process—to learn to adjust to and even respect another approach to decision making. For example, American managers have learned to keep their impatient bosses away from team meetings and give them frequent if brief updates. A comparable lesson for managers from other cultures is to be explicit about what they need—saying, for example, “We have to see the big picture before we talk details.”

Four Strategies

The most successful teams and managers we interviewed used four strategies for dealing with these challenges: adaptation (acknowledging cultural gaps openly and working around them), structural intervention (changing the shape of the team), managerial intervention (setting norms early or bringing in a higher-level manager), and exit (removing a team member when other options have failed). There is no one right way to deal with a particular kind of multicultural problem; identifying the type of challenge is only the first step. The more crucial step is assessing the circumstances—or “enabling situational conditions”—under which the team is working. For example, does the project allow any flexibility for change, or do deadlines make that impossible? Are there additional resources available that might be tapped? Is the team permanent or temporary? Does the team’s manager have the autonomy to make a decision about changing the team in some way? Once the situational conditions have been analyzed, the team’s leader can identify an appropriate response (see the table “Identifying the right strategy”).

Identifying the right strategy

The most successful teams and managers we interviewed use four strategies for dealing with problems: adaptation (acknowledging cultural gaps openly and working around them), structural intervention (changing the shape of the team), managerial intervention (setting norms early or bringing in a higher-level manager), and exit (removing a team member when other options have failed). Adaptation is the ideal strategy because the team works effectively to solve its own problem with minimal input from management—and, most important, learns from the experience. The guide below can help you identify the right strategy once you have identified both the problem and the “enabling situational conditions” that apply to the team.

Adaptation

Some teams find ways to work with or around the challenges they face, adapting practices or attitudes without making changes to the group’s membership or assignments. Adaptation works when team members are willing to acknowledge and name their cultural differences and to assume responsibility for figuring out how to live with them. It’s often the best possible approach to a problem, because it typically involves less managerial time than other strategies; and because team members participate in solving the problem themselves, they learn from the process. When team members have this mind-set, they can be creative about protecting their own substantive differences while acceding to the processes of others.

An American software engineer located in Ireland who was working with an Israeli account management team from his own company told us how shocked he was by the Israelis’ in-your-face style: “There were definitely different ways of approaching issues and discussing them. There is something pretty common to the Israeli culture: They like to argue. I tend to try to collaborate more, and it got very stressful for me until I figured out how to kind of merge the cultures.”

The software engineer adapted. He imposed some structure on the Israelis that helped him maintain his own style of being thoroughly prepared; that accommodation enabled him to accept the Israeli style. He also noticed that team members weren’t just confronting him; they confronted one another but were able to work together effectively nevertheless. He realized that the confrontation was not personal but cultural.

In another example, an American member of a postmerger consulting team was frustrated by the hierarchy of the French company his team was working with. He felt that a meeting with certain French managers who were not directly involved in the merger “wouldn’t deliver any value to me or for purposes of the project,” but said that he had come to understand that “it was very important to really involve all the people there” if the integration was ultimately to work.

A U.S. and UK multicultural team tried to use their differing approaches to decision making to reach a higher-quality decision. This approach, called fusion, is getting serious attention from political scientists and from government officials dealing with multicultural populations that want to protect their cultures rather than integrate or assimilate. If the team had relied exclusively on the Americans’ “forge ahead” approach, it might not have recognized the pitfalls that lay ahead and might later have had to back up and start over. Meanwhile, the UK members would have been gritting their teeth and saying “We told you things were moving too fast.” If the team had used the “Let’s think about this” UK approach, it might have wasted a lot of time trying to identify every pitfall, including the most unlikely, while the U.S. members chomped at the bit and muttered about analysis paralysis. The strength of this team was that some of its members were willing to forge ahead and some were willing to work through pitfalls. To accommodate them all, the team did both—moving not quite as fast as the U.S. members would have on their own and not quite as thoroughly as the UK members would have.

Structural intervention

A structural intervention is a deliberate reorganization or reassignment designed to reduce interpersonal friction or to remove a source of conflict for one or more groups. This approach can be extremely effective when obvious subgroups demarcate the team (for example, headquarters versus national subsidiaries) or if team members are proud, defensive, threatened, or clinging to negative stereotypes of one another.

A member of an investment research team scattered across continental Europe, the UK, and the U.S. described for us how his manager resolved conflicts stemming from status differences and language tensions among the team’s three “tribes.” The manager started by having the team meet face-to-face twice a year, not to discuss mundane day-to-day problems (of which there were many) but to identify a set of values that the team would use to direct and evaluate its progress. At the first meeting, he realized that when he started to speak, everyone else “shut down,” waiting to hear what he had to say. So he hired a consultant to run future meetings. The consultant didn’t represent a hierarchical threat and was therefore able to get lots of participation from team members.

Another structural intervention might be to create smaller working groups of mixed cultures or mixed corporate identities in order to get at information that is not forthcoming from the team as a whole. The manager of the team that was evaluating retail opportunities in Japan used this approach. When she realized that the female Japanese consultants would not participate if the group got large, or if their male superior was present, she broke the team up into smaller groups to try to solve problems. She used this technique repeatedly and made a point of changing the subgroups’ membership each time so that team members got to know and respect everyone else on the team.

The subgrouping technique involves risks, however. It buffers people who are not working well together or not participating in the larger group for one reason or another. Sooner or later the team will have to assemble the pieces that the subgroups have come up with, so this approach relies on another structural intervention: Someone must become a mediator in order to see that the various pieces fit together.

Managerial intervention

When a manager behaves like an arbitrator or a judge, making a final decision without team involvement, neither the manager nor the team gains much insight into why the team has stalemated. But it is possible for team members to use managerial intervention effectively to sort out problems.

When an American refinery-safety expert with significant experience throughout East Asia got stymied during a project in China, she called in her company’s higher-level managers in Beijing to talk to the higher-level managers to whom the Chinese refinery’s managers reported. Unlike the Western team members who breached etiquette by approaching the superiors of their Korean counterparts, the safety expert made sure to respect hierarchies in both organizations.

“Trying to resolve the issues,” she told us, “the local management at the Chinese refinery would end up having conferences with our Beijing office and also with the upper management within the refinery. Eventually they understood that we weren’t trying to insult them or their culture or to tell them they were bad in any way. We were trying to help. They eventually understood that there were significant fire and safety issues. But we actually had to go up some levels of management to get those resolved.”

Managerial intervention to set norms early in a team’s life can really help the team start out with effective processes. In one instance reported to us, a multicultural software development team’s lingua franca was English, but some members, though they spoke grammatically correct English, had a very pronounced accent. In setting the ground rules for the team, the manager addressed the challenge directly, telling the members that they had been chosen for their task expertise, not their fluency in English, and that the team was going to have to work around language problems. As the project moved to the customer-services training stage, the manager advised the team members to acknowledge their accents up front. She said they should tell customers, “I realize I have an accent. If you don’t understand what I’m saying, just stop me and ask questions.”

Exit

Possibly because many of the teams we studied were project based, we found that leaving the team was an infrequent strategy for managing challenges. In short-term situations, unhappy team members often just waited out the project. When teams were permanent, producing products or services, the exit of one or more members was a strategy of last resort, but it was used—either voluntarily or after a formal request from management. Exit was likely when emotions were running high and too much face had been lost on both sides to salvage the situation.

An American member of a multicultural consulting team described the conflict between two senior consultants, one a Greek woman and the other a Polish man, over how to approach problems: “The woman from Greece would say, ‘Here’s the way I think we should do it.’ It would be something that she was in control of. The guy from Poland would say, ‘I think we should actually do it this way instead.’ The woman would kind of turn red in the face, upset, and say, ‘I just don’t think that’s the right way of doing it.’ It would definitely switch from just professional differences to personal differences.

“The woman from Greece ended up leaving the firm. That was a direct result of probably all the different issues going on between these people. It really just wasn’t a good fit. I’ve found that oftentimes when you’re in consulting, you have to adapt to the culture, obviously, but you have to adapt just as much to the style of whoever is leading the project.”

Though multicultural teams face challenges that are not directly attributable to cultural differences, such differences underlay whatever problem needed to be addressed in many of the teams we studied. Furthermore, while serious in their own right when they have a negative effect on team functioning, cultural challenges may also unmask fundamental managerial problems. Managers who intervene early and set norms; teams and managers who structure social interaction and work to engage everyone on the team; and teams that can see problems as stemming from culture, not personality, approach challenges with good humor and creativity. Managers who have to intervene when the team has reached a stalemate may be able to get the team moving again, but they seldom empower it to help itself the next time a stalemate occurs.

When frustrated team members take some time to think through challenges and possible solutions themselves, it can make a huge difference. Take, for example, this story about a financial-services call center. The members of the call-center team were all fluent Spanish-speakers, but some were North Americans and some were Latin Americans. Team performance, measured by calls answered per hour, was lagging. One Latin American was taking twice as long with her calls as the rest of the team. She was handling callers’ questions appropriately, but she was also engaging in chitchat. When her teammates confronted her for being a free rider (they resented having to make up for her low call rate), she immediately acknowledged the problem, admitting that she did not know how to end the call politely—chitchat being normal in her culture. They rallied to help her: Using their technology, they would break into any of her calls that went overtime, excusing themselves to the customer, offering to take over the call, and saying that this employee was urgently needed to help out on a different call. The team’s solution worked in the short run, and the employee got better at ending her calls in the long run.

In another case, the Indian manager of a multicultural team coordinating a companywide IT project found himself frustrated when he and a teammate from Singapore met with two Japanese members of the coordinating team to try to get the Japan section to deliver its part of the project. The Japanese members seemed to be saying yes, but in the Indian manager’s view, their follow-through was insufficient. He considered and rejected the idea of going up the hierarchy to the Japanese team members’ boss, and decided instead to try to build consensus with the whole Japanese IT team, not just the two members on the coordinating team. He and his Singapore teammate put together an eBusiness road show, took it to Japan, invited the whole IT team to view it at a lunch meeting, and walked through success stories about other parts of the organization that had aligned with the company’s larger business priorities. It was rather subtle, he told us, but it worked. The Japanese IT team wanted to be spotlighted in future eBusiness road shows. In the end, the whole team worked well together—and no higher-level manager had to get involved.

Originally published in November 2006. Reprint R0611D

About the Contributors

ROBERT D. AUSTIN is a professor of information systems at Ivey Business School and a coauthor of The Adventures of an IT Leader (Harvard Business Review Press, 2016).

KRISTIN BEHFAR is an associate professor at the Darden School of Business at the University of Virginia.

JEANNE BRETT is the DeWitt W. Buchanan, Jr., Distinguished Professor of Dispute Resolution and Organizations and the director of the Dispute Resolution Research Center at Northwestern University’s Kellogg School of Management in Evanston, Illinois.

CATHY BROWN is a policy and research manager at Divinity Council Australia. Cathy has an undergraduate degree in Communications and a Master’s in Social Inquiry from the University of Technology in Sydney with her thesis exploring issues for gay and lesbian seniors as they age.

NANCY M. CARTER is the senior vice president of research at Catalyst, a New York–based nonprofit that works with businesses to expand opportunities for women. She is also a visiting scholar at Insead.

FRANK DOBBIN is a professor of sociology at Harvard University.

ROBIN J. ELY is the Diane Doerge Wilson Professor of Business Administration at Harvard Business School and the faculty chair of the HBS Gender Initiative.

SYLVIA ANN HEWLETT is the founder and CEO of the Center for Talent Innovation and the founder of Hewlett Consulting Partners LLC.

HERMINIA IBARRA is a professor of organizational behavior and the Cora Chaired Professor of Leadership and Learning at Insead. She is the author of Act Like a Leader, Think Like a Leader (Harvard Business Review Press, 2015).

PAUL IRVING is chairman of the Milken Institute Center for the Future of Aging, the chairman of the board of Encore.org, and a distinguished scholar in residence at the University of Southern California, Davis School of Gerontology.

ALEXANDRA KALEV is an associate professor of sociology at Tel Aviv University.

MARY C. KERN is an associate professor at the Zicklin School of Business at Baruch College in New York.

JANE O’LEARY holds a PhD in Management and is a research director of Diversity Council Australia. Jane’s research has appeared in the Journal of Organizational Behavior and International Journal of Human Resource Management.

CAROLYN BUCK LUCE is the executive in residence at the Center for Talent Innovation and senior managing director at Hewlett Consulting Partners. She is an adjunct professor at Columbia’s Graduate School of International and Public Affairs and was previously the Global Pharmaceutical Sector Leader and Ernst & Young LLP.

GARY P. PISANO is the Harry E. Figgie Professor of Business Administration and the senior associate dean of faculty at Harvard Business School. He is the author of Creative Construction: The DNA of Sustained Innovation (Public Affairs, 2019).

CHRISTINE SILVA is a director of research at Catalyst.

DAVID A. THOMAS is the president of Morehouse College.

CATHERINE H. TINSLEY is the Raffini Family Professor of Management at Georgetown University’s McDonough School of Business and the faculty director of the Georgetown University Women’s Leadership Institute.

RAYMOND TRAU holds a PhD in Management and is a lecturer (equivalent to assistant professor) at RMIT University in Melbourne, Australia. Raymond’s research has appeared in outlets such as Journal of Applied Psychology, Human Resource Management, and British Journal of Management.

CORNEL WEST is Professor of the Practice of Public Philosophy at Harvard University and professor, Emeritus, at Princeton University.

JOAN C. WILLIAMS is a Distinguished Professor of Law and the founding director of the Center for WorkLife Law at University of California Hastings College of the Law.

MAXINE WILLIAMS is Facebook’s global director of diversity.

Index

accents, 164, 166, 167, 168–169, 176

access-and-legitimacy paradigm, 3, 11–14, 16

Access Capital International, 12–14

accountability theory, 39

action learning, 83, 94

adaptation, to cultural differences, 166, 171, 172, 173–174

ADHD, 150, 151

affirmative action, 6, 16, 58, 64, 88

African-American Forum, 95

African Americans

assets brought by, 3

burden of care for female, 91

career advancement and, 50

college recruitment and, 37

diversity management and, 2

in financial industry, 29

in management positions, 43

mentoring programs and, 37, 58–62, 72

See also minority professionals; people of color

age-friendly strategies, 139, 145

ageism, 140–143

aging population, 137–147

Airbnb, 146

antidiscrimination laws, 96

Ascend Foundation, 47, 48, 49

Asian Americans, 3, 4, 32, 33, 36, 38, 39, 40, 47–49

assignments, 75, 105, 120, 122

assimilation, 3, 4, 5, 7, 11, 16

Austin, Robert D., 149–162

authority, 170

autism spectrum disorder, 149–155 See also neurodiversity

Bank of America, 29, 43

behavioral styles, 134–135

Behfar, Kristin, 163–179

Bernanke, Ben, 137

Best Buy, 115

bias

determining problem of, 116–119

diversity managers and, 43

diversity training and, 31–32

elimination of, 30–32, 36, 37

experience of, 51–52

gender, 50, 113–136

hidden, 81, 87–89, 93

identifying key metrics on, 119–120

impact of, 54

interrupters, 114–116, 120–123

in performance reviews, 30, 33–34, 53, 54, 121, 122

racial, 45–51

research on, 47, 50–51

BMW, 145

Booz Allen Hamilton, 93

Bourdieu, Pierre, 84

Brett, Jeanne, 163–179

brogrammer culture, 120

Brooks Brothers, 144

Brown, Cathy, 181–187

bureaucratic organizations, 7, 19

career trajectories

fast-track, 60, 62, 63, 64, 66, 70, 76

of minorities, 57–69, 75–77

for neurodiverse employees, 158

of white professionals, 50, 58, 60–63, 67–69

of women, 125–136

care responsibilities, 82–83, 86, 91–92, 98–99, 106

Carter, Nancy M., 125–136

Center for Talent Innovation, 81, 95

Center for WorkLife Law, 120, 121

Center for the Future of Aging, 140

class action lawsuits, 29

Coca-Cola, 37

cognitive dissonance, 35–36

cognitive diversity, 55. See also neurodiversity

college recruitment programs, 35–36, 37, 40–41

color-blind, gender-blind ideal, 7, 11

coming out in workplace, 181–187

communication styles, 164–165, 166, 168

community service, 79–96

company mission, 18–19, 26, 93

compensation, 20, 83, 92, 120, 122–123, 126, 138

competence, 64–66, 116, 132, 165, 168

competitive advantage

aging population and, 137–147

diversity and, 12

neurodiversity as, 149–162

compulsory training, 31–32

confidence, 64–65, 69, 97, 99, 101–103, 105–108

confidence intervals, 53

confirmation bias, 107

contact, 31, 37–38

continual learning, 111

cross-functional teams, 54–55

cross-race mentoring relationships, 61, 70–73

cross-training, 38, 40

cultural backgrounds, 5, 15, 23, 94, 165

cultural capital, 80, 83–85, 86, 89–90, 94–96

cultural competencies, 13, 23–24

cultural differences

acknowledgment of, 16–17

in attitude toward hierarchy, 166, 170

in communication styles, 164–165, 166, 168

in decision-making norms, 166, 170–171

interventions for, 165, 166–167, 171–177

language issues, 166, 168–169

management of, 13

in multicultural teams, 163–166, 168–171

role of, 12

CVS “Snowbird” program, 144

data-driven decision making, 46, 52–55

decision-making norms, 166, 170–171

Deloitte, 42–43, 150

Delta Manufacturing, 25

Delta Sigma Theta, 82, 90

demographic transformation, 137–147

dependency ratio, 140–141

Deutsche Bank, 127, 133–134

Dewey & Levin, 15–16, 17, 21

differentiation, 3, 4, 16

direct communication, 164–165, 166, 168

discrimination

identity-group, 25

lawsuits, 29

racial, 8–11, 29, 45–46

sex, 29

See also bias

discrimination-and-fairness paradigm, 3, 6–11, 16

diversity

approaches to, 3–27

assumptions about, 2

benefits of, 1–2

class-based, 20

command-and-control approach to, 30–31

embracing, 83

financial incentives for, 92

holistic view of, 2–3

leadership and, 17–18, 21–27

LGBTIQ+ workers, 181–187

management of, 2

neurodiversity, 149–162

paradigm shift toward, 17–27

as priority, 57

in tech industry, 113–124

work styles and, 21–23

diversity industrial complex, 114, 124

diversity managers, 41, 42–43

diversity programs

reasons for failure of, 29–43

results from, 1

successful, 40–41

diversity task forces, 39, 41, 42, 43

diversity training, 30–32, 40–41

Dobbin, Frank, 29–43

dominance, 5, 24–26

double bind, 134–135

dyslexia, 150, 151

dyspraxia, 150, 151

E*Trade, 142

Eisenhower, Dwight, 37

Ellison, Ralph Waldo, 95

Ely, Robin J., 1–27, 97–112

employees

background cultural experience of, 23–24

coming out in workplace, 181–187

empowerment of, 18, 20

expectations for, 18

exploitation of, 14

incorporating diverse perspectives of, 15–17

neurodiverse, 149–162

older, 137–147

young, 145, 146

engagement, 35–37, 38, 40, 145, 150, 160

English language, 5, 16, 167, 168–169, 176

equal employment opportunities, 57, 58

Equal Employment Opportunity Commission, 6, 34

equality, 10, 29, 100

equal treatment, 7–8, 10

ergonomics, 145

exit strategy, for cultural differences, 165, 167, 171, 172, 173, 177

exploitation, 14

extended families, 80–81, 82–83, 86, 91–92

Facebook, 43, 54, 55, 113

failures, reactions to, 104, 105–106

fairness, 6–11, 34, 116

faith-based work, 87–88

family responsibilities, 82–83, 86, 91–92, 98–99, 106

fast-track opportunities, 62, 63, 64, 66, 70, 76

feedback, 106–111, 127, 132, 163

female executives

challenges faced by, 81–82

opportunities for minority, 88, 96

outside lives of, 79–96

See also women

Fenwick & West, 115

financial incentives, for diversity, 92

financial industry, 29–30

First Interstate Bank, 19–20

flexible schedules, 81, 82, 91, 118, 144, 146

fundamental attribution error, 107

fusion, 174

gender bias

promotions and, 50, 125–136

in tech industry, 113–124

gender stereotypes, 97–112

General Electric, 81, 95

Getting into the Skin program, 93

glass ceiling, 47, 48–49, 118

global executives, 82, 86–87

Global Human Capital Trends study, 142

Goldman Sachs, 49, 83, 94

Google, 43, 113, 123, 119, 121

grievance procedures, 30, 34–35, 40, 48

Hewlett Packard Enterprise (HPE), 150, 151, 152, 153, 156–160

hidden bias, 81, 87–89, 93

Hidden Brain Drain, 81

hierarchy, 5, 164, 166, 170, 174, 178

hiring decisions

bias in, 45–46, 47, 50–51

gender neutral, 121–122

neurodiverse candidates and, 156–157

hiring tests, 30, 32–33, 40

Hispanics

assets brought by, 3

career advancement and, 32, 47, 50

college recruitment and, 37

diversity management and, 2

in financial industry, 29

mentoring programs and, 37

See also minority professionals; people of color

Home Depot, 144

Ibarra, Herminia, 125–136

IBM, 127, 135, 142, 150

identity groups, 2, 11, 15, 17, 21, 23–24, 25

inclusion, 92–93

indirect communication, 135, 164–165, 166, 168

in-group favoritism, 120

innovation, 146, 154, 162

insider information, 3

integration paradigm, 3, 5, 15–17

investment banks, 11–14, 29, 33

Irving, Paul, 137–147

Iversen Dunham, 8–11, 21–23

job advertisements, 121–122

job interviews, 33, 46, 151, 154, 155, 156–157

junior staff, relationships with, 74

Kalev, Alexandra, 29–43

Kern, Mary C., 163–179

language fluency, 165, 166, 168–169, 176

lawsuits, 29, 30

leadership

attitude toward diversity of, 17–18, 21–27

changes in, 2

LGBTIQ+ issues and, 185–186

minority executives and, 79–96

off-the-job development of, 80–96

style, 21–23, 25–26, 134–135

valuing of, 79

learning-and-effectiveness paradigm, 4–5, 15–17, 21–27

learning opportunities, 18

legal profession, 49

legitimacy, 11–14, 88

Lehman Brothers, 83, 92, 102

LGBTIQ+ (lesbian, gay, bisexual, transgender, intersex, and queer) people, 143, 181–187

Life Alert ad, 142

longevity strategy, 139–147

managerial interventions, for cultural differences, 164, 167, 171, 172, 173, 176–177

managers

diversity, 41, 42–43

diversity programs and, 35–43

diversity training for, 32

hiring tests and, 32–33

mentoring by, 36–37

mandatory training, 32, 38, 40, 43

marginalization, impact of, 51–52

market segmentation, 12

Mastiff, 21–23, 25–26

maternity leave, 100, 120

men

confidence and, 101

gender stereotypes and, 97–112

mentoring and, 128–131

negotiation skills of, 101

risk taking and, 101–104

mentoring

challenges, 61, 69–75

classical, 132

coordination of, 133–134

cross-race issues, 61, 70–73

developmental, 69–70

effectiveness of, 36–37, 41

environment for success and, 75–77

instructional, 69

men and, 128–131

minorities, 57–77

network management and, 73–75

relationships with, 71

sponsorship, 74, 127–136

women and, 125–136

mentors

characteristics of, 132

identification and, 71

networks of, 94–95

relationships with, 62–63, 65–66, 68

role modeling by, 71, 73

role of, 57–58, 69–70

mere exposure effect, 107

meritocracy, 113

Merrill Lynch, 29, 43

meta-analysis, 101, 102–103

Microsoft, 150, 151, 159, 160

minorities

environment for success for, 75–77

mentoring, 57–77

recruitment of, 57

See also people of color

minority professionals

burden of care for female, 91

career trajectories of, 57–69, 75–77

challenges faced by, 81–82

community experiences of, 83–85

community work of, 83–96

cultural capital of, 83–85, 86, 89–90, 94–96

family responsibilities of, 82–83

leadership development and, 79–96

mentoring for, 94–95

opportunities for, 96

outside lives of, 79–96

recruitment of, 92–93

retention of, 83, 95

mission, 18–19

mistakes, reactions to, 105–106

Morgan Stanley, 29

motherhood, 118–119, 120

multiculturalism, 11

multicultural teams, 163–179

assessing circumstances for, 171–172

attitudes toward hierarchy and authority in, 166, 170

challenges faced by, 164–165, 168–171, 177–179

cultural differences in, 163–166, 168–171

decision-making norms and, 166, 170–171

interventions for, 165, 166–167, 171–177

language issues on, 168–169

subgroups on, 175–176

multigenerational workforce, 137–147

National Institutes of Health, 144

Native Americans, 3, 48

negative incentives, 31

negative stereotypes, 54, 65, 70, 141–142, 175

negotiation

salary, 114, 116–117

skills, 101, 104, 106

networks

management of, 61, 68, 73–75, 94

women and, 104–106, 130

neurodiversity, 149–162

niche markets, 2, 3, 12, 14

Nissan, 145

office housework, 117, 120

off-the-job leadership development, 80–96

older workers, 137–147

O’Leary, Jane, 181–187

openness, 18, 23–24

organizational culture, 18, 22–23, 123

organizational effectiveness, diversity and, 1–2

organizational structure, 19

organizational trust, 5, 26–27

paradigm shift

company examples of, 19–27

preconditions for making, 17–19

peer relationships, 74

peer resentment, of mentoring relationships, 71–72

people analytics, 46, 52–55

people of color

assets brought by, 3

career advancement and, 47–50, 57–69

college recruitment programs and, 35–36, 37, 41

diversity management and, 2

expectations for, 18

experiences of bias of, 51–52

opportunities for, 12

performance ratings and, 34

self-perception of, 50–51

See also minorities; minority professionals

people with disabilities, jobs for, 156

performance evaluations

bias in, 30, 33–34, 53, 54, 121, 122

for neurodiverse employees, 158

objective, 54

for women, 107–108

personal growth, 18, 60, 63–64, 80

personality traits, 107

personal lives, of minority professionals, 79–96

Pfizer, 146

phased retirements, 144

Pisano, Gary P., 149–162

Pitney Bowes, 82, 90

PNC Financial Group, 146

Postmates, 142

prejudice, 6, 32, 72, 172

professional growth, 63–67

promotions

gender bias and, 122–123, 125–136

race and, 47–49

protective hesitation, 72

qualitative analysis, 53–55

quantitative analysis, 53–55

racial bias, 37–38, 45–46, 47–51

racial discrimination, 8–11, 29, 45–46

recruitment, 6, 35–37, 57, 92–93

Red Ventures, 50–51, 53

religious organizations, 79, 80, 81, 86, 87–88

retention, 6, 83, 95, 99, 140, 156

retirement age, 137–147

risk taking, 101–104, 106, 111

role modeling, 71, 73

safe harbors, 92

salary negotiations, 114, 116–117

sample size (n), 46, 53

SAP, 150–154, 156–160, 161, 162

self-assessments, 50–51, 53–54, 74, 125

self-managed teams, 30, 38, 40

self-perception, 50–51

sex differences, 97–112

sex discrimination, 29

sexism, 118–119

sexual harassment, 118

sexual identity, 181–187

Silicon Valley, 30, 47, 48–49, 155

Silva, Christine, 125–136

silver tsunami, 140–141

skills shortages, 153

Smith Barney, 29

social accountability, 30, 39, 42–43

social anxiety disorders, 150

social partners, 156

socioeconomic class, 20

soft skills, 157

Specialisterne, 155, 156–157

Specialist People Foundation, 155

sponsors, 57–77, 127–136

sponsorship, 74, 127–136

Steelcase, 144

stereotypes

gender, 97–112

negative, 54, 65, 70

older workers and, 140–143

Stouffer, Samuel, 37–38

structural interventions, for cultural differences, 165, 167, 171, 172, 175–176

style compliance issues, 87–88

subgroups, 167, 172, 175–176

subordination, 24–26

support systems, for neurodiverse employees, 157–158

talent management, 155–160

teams

cross-functional, 54–55

multicultural, 163–179

self-managed, 30, 38, 40

tech industry

bias in, 47–50

culture of, 113, 120

diversity issues in, 30, 113–124

neurodiversity in, 155–160

women in, 113–124

telecommuting, 81, 82, 91, 144

Thomas, David A., 1–27, 57–77

Thomas, R. Roosevelt, Jr., 31–32

Time Warner, 81–82, 91–93, 96

Tinsley, Catherine H., 97–112

T-Mobile, 142

Torinno Food Company, 23–24

training, 156–157

Trau, Raymond, 181–187

trust, 5, 26–27, 51, 61, 65, 73, 80

Twitter, 115

two-tournament system, 59–69, 76

underrepresented groups, 45–46, 47, 50, 53

Unilever, 81, 93, 127, 133

United States Army, 7, 37–38

U.S. labor force, 143

voluntary training, 32, 40

volunteer work, 79–96

white professionals, career trajectories of, 50, 58, 60–63, 67–69

Williams, Joan C., 113–124

Williams, Maxine, 45–55

women

assets brought by, 3

backlash against assertive, 118

challenges faced by, 81–82

college recruitment programs and, 35–36, 37, 40

confidence and, 101, 105–108

conflicts among, 119

differential conditions faced by, 104–108

diversity management and, 2

double bind for, 134–135

expectations for, 18

in financial industry, 29

gender stereotypes and, 97–112

lack of feedback for, 106–108

in management positions, 43

mentoring and, 125–136

motherhood bias and, 118–119, 120

negotiation skills of, 101

office housework and, 117, 120

opportunities for, 12, 96

outside lives of, 79–96

performance ratings and, 34

risk taking and, 101–104, 106

in tech industry, 113–124

women of color

leadership development and, 79–96

opportunities for, 96

workers

coming out in workplace, 181–187

neurodiverse, 149–162

See also employees

workforce, aging of, 137–147

work/life balance, 98–99, 133

workplace

accommodations, 150, 155

creating inclusive, 186–187

reimagining, 145

workplace diversity. See diversity

workplace relationships, 24

work styles, 21–23

workweek, 144

Xerox, 145

young workers, 139, 141, 142, 143, 145, 146

7 Myths About Coming Out at Work

by Raymond Trau, Jane O’Leary, and Cathy Brown

MORE AND MORE BIG BUSINESSES are providing workplace protections for LGBTIQ+ (lesbian, gay, bisexual, transgender, intersex, and queer) people.[1] It’s becoming clear that when workers can bring their authentic selves to work, they are more productive and engaged. Research shows that coming out increases job satisfaction, intention to stay, and emotional support from coworkers, whereas staying “in the closet” has costs—both for the individual and the company.

And yet, many people are still reluctant to come out at work. In our study we surveyed 1,614 LGBTIQ+ Australian workers and held focus groups with 60 participants across various industries. We found that 68% of respondents were not out to everyone at work. This number decreases to 46% in the U.S., according to a Human Rights Campaign report, and 35% in the UK, according to Stonewall, the LGBT rights organization headquartered in London.

We know that when LGBTIQ+ people work in a safe environment they are more willing to come out. But while workplace policies and practices are critical, the decision to come out at work is a complex and personal one. It involves other factors, like when, how, and whom to come out to.

Our research considers this and digs below the surface to examine the experience of LGBTIQ+ people at work. We challenge myths that are drawn from common assumptions about coming out and offer suggestions to organizations that want to help their workers feel safe being themselves.

Myth #1: Coming out at work is not a big deal—after all, it’s the 21st century!

Though the LGBTIQ+ community has seen big wins in the past few years—same-sex marriage is now legal in 26 countries, and around 20 have passed some kind of legislation recognizing transgender rights—coming out is still dangerous in many areas of the world and can be deadly for trans and gender-diverse people. Even in countries that are economically developed and progressive, like Australia, homosexuality has only been decriminalized since 1997, and marriage equality was just legalized in December of last year. The LGBTIQ+ rights movement is still very much in progress, and this factors into some workplace cultures and how comfortable people may feel about coming out.

Myth #2: Coming out is similar for all LGBTIQ+ people

The LGBTIQ+ community and their workplace experiences are diverse. In Australia, there has been a gradual transformation in gay and lesbian rights over the past 40 years that has also brought greater support for and protections of gay and lesbian people at work. However, trans and gender-diverse workers have historically been overlooked. They are often less willing to come out at work due to fears of discrimination and social exclusion. Our research finds that 32% of trans and gender-diverse people fear they would lose their jobs if they came out at work, as opposed to just 6% of LGB (lesbian, gay, and bisexual) people. Not surprisingly then, 49% of trans and gender-diverse workers try hard to conceal their identity from colleagues, compared to only 13% of LGB workers.

Myth #3: LGBTIQ+ workers have complete control over whether they do or don’t come out at work

For some LGBTIQ+ workers, living authentically at work remains an aspiration. While almost three-quarters of our respondents indicated coming out is important to them, only one-third are out to everyone at work, suggesting that not everyone who wants to be out feels comfortable being out. For others, decisions about when and how to come out are often beyond their control. Some individuals are outed against their will, while others are forced to come out because of workplace policies. One transgender respondent wrote, “Give me a choice to NOT disclose—the reason HR knows I am a trans man is because it was policy for HR to process police checks when I started at my current workplace.”

In fact, research shows that transgender people going through the transition process often have to come out to coworkers, causing great anxiety and distress. For some transgender people, living authentically means keeping their gender history private, particularly if they affirmed their gender identity when they were very young. For those who transition later in life, privacy is elusive. As one participant told us, “We are out merely by existing.”

Myth #4: Coming out has nothing to do with work

Our research reveals that people who are able to come out at work are happier. Compared to workers who are out to some people or no one at all, those who are completely out at work are significantly more satisfied with their jobs (29% versus 16%), enthusiastic about their jobs (40% versus 26%), and proud of their work (51% versus 38%). Other research by Alexandra Sedlovskaya (at Harvard University) and colleagues finds that having a double life—being out in private life but not at work—increases social stress and depression.

Because workplaces are where people often share their personal experiences, coming out—and feeling safe enough to do so—can be about something as simple as participating in a conversation without having to have your guard up or editing what you say. For an LGBTIQ+ person, telling a story about their weekend could be an indirect way of signaling their identity.

Heterosexual and cisgender workers typically don’t face the same dilemma because they are part of a majority group when it comes to sexual orientation and gender identity. They have the privilege of being seen and identified as who they really are just by being themselves. LGBTIQ+ people often must choose to come out if they want to be seen as their true selves at work. If an LGBTIQ+ person feels that they can’t come out or chooses not to, others might assume that they are a member of the majority group. One gay male respondent reported, “I am more masculine and fit a certain jock/rugby stereotype and so people assume that I am straight, and I often don’t correct them.”

Myth #5: Coming out at work happens just once

Coming out is actually a repetitive process. It occurs not just once, but on multiple occasions. For instance, a bisexual woman may come out to her immediate manager when she is first starting a job. But later, when she feels she’s gotten to know her coworkers, other managers, or clients, she might decide to come out to them too.

Among our respondents who indicated that they openly talk about their LGBTIQ+ identity at work, only 17% said they openly talk about their identity to clients. Some are concerned that being out might jeopardize client relationships and negatively impact the company as a whole. One respondent reported, “During the marriage equality vote, my organization had a big client—we are talking about a multi-million-dollar client—who said, ‘If you publicly support marriage equality, you will lose our business.’” Other respondents indicated that being out at work meant risking their lives: “[With] every new client, I’m scared that it might be my last time walking the earth as I enter their house.”

Myth #6: There is only one way to come out or not come out

There is a range of ways LGBTIQ+ people can signal their identities—or hide them. For instance, 47% of our respondents said they display objects like photographs, magazines, or symbols to reveal their identity at work. In contrast, 21% of our respondents said they avoid revealing their identity by keeping quiet when coworkers talk about their romantic lives, and 23% said they avoid behaving in ways that may conform to stereotypes associated with their identity group. Others who conform to heterosexual or cisgender stereotypes say they can “fly under the radar” altogether.

Myth #7: People are scared to come out just because of career risks

Coming out is a constant cost/benefit analysis and requires weighing different risks. A lack of support from coworkers and supervisors, and past experiences of discrimination, often prevent LGBTIQ+ workers from coming out. But our research also shows that respondents are more concerned about social exclusion than career risks. While about 19% of respondents who are not out at work said they worry their careers would be ruined if they were, 70% are concerned that coming out would make their colleagues uncomfortable around them.

The importance of a supportive social environment in a person’s coming-out decision cannot be overstated. So what can organizations do to develop a workplace culture in which living authentically is an everyday reality for LGBTIQ+ workers?

Leadership Makes the Difference

Our research reveals that respondents whose leaders publicly support LGBTIQ+ issues are 50% more likely to be out to everyone at work. We recommend leaders who want to create an LGBTIQ+ inclusive culture:

- Develop a working partnership with leaders who have a different sexual orientation or gender identity than your own. This will help you learn, challenge your assumptions, and champion change.

- Make LGBTIQ+ inclusion visible in your organization. You can show support by displaying rainbow flags or other inclusive symbols, asking HR to create a diversity group where LGBTIQ+ people can connect and share their experiences, or developing a network of staff allies.

- Learn about all members of the LGBTIQ+ community. This means not just LGB people, but also people who are trans or gender diverse, who have an intersex variation, or who are pansexual.

- Check your assumptions to see if they hinder LGBTIQ+ inclusion. For instance: Everyone is straight; everyone prefers binary pronouns; coming out is a purely personal issue, not a workplace issue; this person must be LGBTIQ+ because of how they look, sound, dress, or behave; it’s okay to “out” someone.

- Avoid noninclusive or presumptuous language, like “that’s so gay” or asking women about their husbands and men about their wives, or assigning someone a gender pronoun. If you notice someone talking like this, take them aside and speak to them about it. When you do so, that person will be less likely to do it again and more likely to change their views on what is appropriate workplace behavior.

Organizations Must Also Step Up

Finally, we should point out that creating an LGBTIQ+ inclusive culture is not just about enlightened and supportive leaders. Organizational policies and strategies that recognize the specific needs—and sometimes just the existence—of LGBTIQ+ people are also key to establishing an inclusive environment.

We recommend that organizations:

- Include sexual orientation, gender identity, and intersex status in diversity and inclusion policies; have transition policies and supports in place for staff who are trans or gender diverse; and make sure parental leave policies recognize and include LGBTIQ+ people.

- Review workplace forms to ensure that they are inclusive and that they have an option for people who don’t identify as either male or female.

- Designate some bathrooms as gender neutral, and introduce gender-neutral dress codes if your company has dress codes.

LGBTIQ+ people can be themselves and have a real choice about coming out at work when their employers and coworkers are supportive. Being aware of common assumptions and the challenges LGBTIQ+ people face is the first step toward building a work environment that is inclusive and safe for everyone.

Originally published on hbr.org in October 2018. Reprint H04LX6

1. “LGBTIQ+” refers to lesbian, gay, bisexual, transgender/gender diverse, intersex, and queer. The “+” indicates that LGBTIQ doesn’t include a range of other terms that people identify with or use to describe themselves.

On

Change Management

HARVARD BUSINESS REVIEW PRESS

Boston, Massachusetts

Find more digital content or join the discussion on www.hbr.org.

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No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior permission of the publisher. Requests for permission should be directed to permissions@hbsp.harvard.edu, or mailed to Permissions, Harvard Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163.

Library of Congress Cataloging-in-Publication Data

HBR’s 10 must reads on change management.

p. cm.

Includes index.

ISBN 978-1-4221-5800-5 (pbk. : alk. paper)   1. Organizational change

2. Leadership   I. Harvard business review   II. Title: HBR’s ten must reads on change managementI    II. Title: Harvard business review’s 10 must reads on change management.

HD58.8.H394 2010

658.4'06—dc22

2010031616

eISBN: 9781422172063

Contents

Leading Change: Why Transformation Efforts Fail

John P. Kotter

Change Through Persuasion

David A. Garvin and Michael A. Roberto

Leading Change When Business Is Good: An Interview with Samuel J. Palmisano

Paul Hemp and Thomas A. Stewart

Radical Change, the Quiet Way

Debra E. Meyerson

Tipping Point Leadership

W. Chan Kim and Renée Mauborgne

A Survival Guide for Leaders

Ronald A. Heifetz and Marty Linsky

The Real Reason People Won’t Change

Robert Kegan and Lisa Laskow Lahey

Cracking the Code of Change

Michael Beer and Nitin Nohria

The Hard Side of Change Management

Harold L. Sirkin, Perry Keenan, and Alan Jackson

Why Change Programs Don’t Produce Change

Michael Beer, Russell A. Eisenstat, and Bert Spector

About the Contributors

Index

Leading Change

Why Transformation Efforts Fail. by John P. Kotter

OVER THE PAST DECADE, I have watched more than 100 companies try to remake themselves into significantly better competitors. They have included large organizations (Ford) and small ones (Landmark Communications), companies based in the United States (General Motors) and elsewhere (British Airways), corporations that were on their knees (Eastern Airlines), and companies that were earning good money (Bristol-Myers Squibb). These efforts have gone under many banners: total quality management, reengineering, rightsizing, restructuring, cultural change, and turnaround. But, in almost every case, the basic goal has been the same: to make fundamental changes in how business is conducted in order to help cope with a new, more challenging market environment.

A few of these corporate change efforts have been very successful. A few have been utter failures. Most fall somewhere in between, with a distinct tilt toward the lower end of the scale. The lessons that can be drawn are interesting and will probably be relevant to even more organizations in the increasingly competitive business environment of the coming decade.

The most general lesson to be learned from the more successful cases is that the change process goes through a series of phases that, in total, usually require a considerable length of time. Skipping steps creates only the illusion of speed and never produces a satisfying result. A second very general lesson is that critical mistakes in any of the phases can have a devastating impact, slowing momentum and negating hard-won gains. Perhaps because we have relatively little experience in renewing organizations, even very capable people often make at least one big error.

Eight steps to transforming your organization

Idea in Brief

Most major change initiatives—whether intended to boost quality, improve culture, or reverse a corporate death spiral—generate only lukewarm results. Many fail miserably.

Why? Kotter maintains that too many managers don’t realize transformation is a process, not an event. It advances through stages that build on each other. And it takes years. Pressured to accelerate the process, managers skip stages. But shortcuts never work.

Equally troubling, even highly capable managers make critical mistakes—such as declaring victory too soon. Result? Loss of momentum, reversal of hard-won gains, and devastation of the entire transformation effort.

By understanding the stages of change—and the pitfalls unique to each stage—you boost your chances of a successful transformation. The payoff? Your organization flexes with tectonic shifts in competitors, markets, and technologies—leaving rivals far behind.

Error 1: Not Establishing a Great Enough Sense of Urgency

Most successful change efforts begin when some individuals or some groups start to look hard at a company’s competitive situation, market position, technological trends, and financial performance. They focus on the potential revenue drop when an important patent expires, the five-year trend in declining margins in a core business, or an emerging market that everyone seems to be ignoring. They then find ways to communicate this information broadly and dramatically, especially with respect to crises, potential crises, or great opportunities that are very timely. This first step is essential because just getting a transformation program started requires the aggressive cooperation of many individuals. Without motivation, people won’t help, and the effort goes nowhere.

Compared with other steps in the change process, phase one can sound easy. It is not. Well over 50% of the companies I have watched fail in this first phase. What are the reasons for that failure? Sometimes executives underestimate how hard it can be to drive people out of their comfort zones. Sometimes they grossly overestimate how successful they have already been in increasing urgency. Sometimes they lack patience: “Enough with the preliminaries; let’s get on with it.” In many cases, executives become paralyzed by the downside possibilities. They worry that employees with seniority will become defensive, that morale will drop, that events will spin out of control, that short-term business results will be jeopardized, that the stock will sink, and that they will be blamed for creating a crisis.

Idea in Practice

To give your transformation effort the best chance of succeeding, take the right actions at each stage—and avoid common pitfalls

A paralyzed senior management often comes from having too many managers and not enough leaders. Management’s mandate is to minimize risk and to keep the current system operating. Change, by definition, requires creating a new system, which in turn always demands leadership. Phase one in a renewal process typically goes nowhere until enough real leaders are promoted or hired into senior-level jobs.

Transformations often begin, and begin well, when an organization has a new head who is a good leader and who sees the need for a major change. If the renewal target is the entire company, the CEO is key. If change is needed in a division, the division general manager is key. When these individuals are not new leaders, great leaders, or change champions, phase one can be a huge challenge.

Bad business results are both a blessing and a curse in the first phase. On the positive side, losing money does catch people’s attention. But it also gives less maneuvering room. With good business results, the opposite is true: Convincing people of the need for change is much harder, but you have more resources to help make changes.

But whether the starting point is good performance or bad, in the more successful cases I have witnessed, an individual or a group always facilitates a frank discussion of potentially unpleasant facts about new competition, shrinking margins, decreasing market share, flat earnings, a lack of revenue growth, or other relevant indices of a declining competitive position. Because there seems to be an almost universal human tendency to shoot the bearer of bad news, especially if the head of the organization is not a change champion, executives in these companies often rely on outsiders to bring unwanted information. Wall Street analysts, customers, and consultants can all be helpful in this regard. The purpose of all this activity, in the words of one former CEO of a large European company, is “to make the status quo seem more dangerous than launching into the unknown.”

In a few of the most successful cases, a group has manufactured a crisis. One CEO deliberately engineered the largest accounting loss in the company’s history, creating huge pressures from Wall Street in the process. One division president commissioned first-ever customer satisfaction surveys, knowing full well that the results would be terrible. He then made these findings public. On the surface, such moves can look unduly risky. But there is also risk in playing it too safe: When the urgency rate is not pumped up enough, the transformation process cannot succeed, and the long-term future of the organization is put in jeopardy.

When is the urgency rate high enough? From what I have seen, the answer is when about 75% of a company’s management is honestly convinced that business as usual is totally unacceptable. Anything less can produce very serious problems later on in the process.

Error 2: Not Creating a Powerful Enough Guiding Coalition

Major renewal programs often start with just one or two people. In cases of successful transformation efforts, the leadership coalition grows and grows over time. But whenever some minimum mass is not achieved early in the effort, nothing much worthwhile happens.

It is often said that major change is impossible unless the head of the organization is an active supporter. What I am talking about goes far beyond that. In successful transformations, the chairman or president or division general manager, plus another five or 15 or 50 people, come together and develop a shared commitment to excellent performance through renewal. In my experience, this group never includes all of the company’s most senior executives because some people just won’t buy in, at least not at first. But in the most successful cases, the coalition is always pretty powerful—in terms of titles, information and expertise, reputations, and relationships.

In both small and large organizations, a successful guiding team may consist of only three to five people during the first year of a renewal effort. But in big companies, the coalition needs to grow to the 20 to 50 range before much progress can be made in phase three and beyond. Senior managers always form the core of the group. But sometimes you find board members, a representative from a key customer, or even a powerful union leader.

Because the guiding coalition includes members who are not part of senior management, it tends to operate outside of the normal hierarchy by definition. This can be awkward, but it is clearly necessary. If the existing hierarchy were working well, there would be no need for a major transformation. But since the current system is not working, reform generally demands activity outside of formal boundaries, expectations, and protocol.

A high sense of urgency within the managerial ranks helps enormously in putting a guiding coalition together. But more is usually required. Someone needs to get these people together, help them develop a shared assessment of their company’s problems and opportunities, and create a minimum level of trust and communication. Off-site retreats, for two or three days, are one popular vehicle for accomplishing this task. I have seen many groups of five to 35 executives attend a series of these retreats over a period of months.

Companies that fail in phase two usually underestimate the difficulties of producing change and thus the importance of a powerful guiding coalition. Sometimes they have no history of teamwork at the top and therefore undervalue the importance of this type of coalition. Sometimes they expect the team to be led by a staff executive from human resources, quality, or strategic planning instead of a key line manager. No matter how capable or dedicated the staff head, groups without strong line leadership never achieve the power that is required.

Efforts that don’t have a powerful enough guiding coalition can make apparent progress for a while. But, sooner or later, the opposition gathers itself together and stops the change.

Error 3: Lacking a Vision

In every successful transformation effort that I have seen, the guiding coalition develops a picture of the future that is relatively easy to communicate and appeals to customers, stockholders, and employees. A vision always goes beyond the numbers that are typically found in five-year plans. A vision says something that helps clarify the direction in which an organization needs to move. Sometimes the first draft comes mostly from a single individual. It is usually a bit blurry, at least initially. But after the coalition works at it for three or five or even 12 months, something much better emerges through their tough analytical thinking and a little dreaming. Eventually, a strategy for achieving that vision is also developed.

In one midsize European company, the first pass at a vision contained two-thirds of the basic ideas that were in the final product. The concept of global reach was in the initial version from the beginning. So was the idea of becoming preeminent in certain businesses. But one central idea in the final version—getting out of low value-added activities—came only after a series of discussions over a period of several months.

Without a sensible vision, a transformation effort can easily dissolve into a list of confusing and incompatible projects that can take the organization in the wrong direction or nowhere at all. Without a sound vision, the reengineering project in the accounting department, the new 360-degree performance appraisal from the human resources department, the plant’s quality program, the cultural change project in the sales force will not add up in a meaningful way.

In failed transformations, you often find plenty of plans, directives, and programs but no vision. In one case, a company gave out four-inch-thick notebooks describing its change effort. In mind-numbing detail, the books spelled out procedures, goals, methods, and deadlines. But nowhere was there a clear and compelling statement of where all this was leading. Not surprisingly, most of the employees with whom I talked were either confused or alienated. The big, thick books did not rally them together or inspire change. In fact, they probably had just the opposite effect.

In a few of the less successful cases that I have seen, management had a sense of direction, but it was too complicated or blurry to be useful. Recently, I asked an executive in a midsize company to describe his vision and received in return a barely comprehensible 30-minute lecture. Buried in his answer were the basic elements of a sound vision. But they were buried—deeply.

A useful rule of thumb: If you can’t communicate the vision to someone in five minutes or less and get a reaction that signifies both understanding and interest, you are not yet done with this phase of the transformation process.

Error 4: Undercommunicating the Vision by a Factor of Ten

I’ve seen three patterns with respect to communication, all very common. In the first, a group actually does develop a pretty good transformation vision and then proceeds to communicate it by holding a single meeting or sending out a single communication. Having used about 0.0001% of the yearly intracompany communication, the group is startled when few people seem to understand the new approach. In the second pattern, the head of the organization spends a considerable amount of time making speeches to employee groups, but most people still don’t get it (not surprising, since vision captures only 0.0005% of the total yearly communication). In the third pattern, much more effort goes into newsletters and speeches, but some very visible senior executives still behave in ways that are antithetical to the vision. The net result is that cynicism among the troops goes up, while belief in the communication goes down.

Transformation is impossible unless hundreds or thousands of people are willing to help, often to the point of making short-term sacrifices. Employees will not make sacrifices, even if they are unhappy with the status quo, unless they believe that useful change is possible. Without credible communication, and a lot of it, the hearts and minds of the troops are never captured.

This fourth phase is particularly challenging if the short-term sacrifices include job losses. Gaining understanding and support is tough when downsizing is a part of the vision. For this reason, successful visions usually include new growth possibilities and the commitment to treat fairly anyone who is laid off.

Executives who communicate well incorporate messages into their hour-by-hour activities. In a routine discussion about a business problem, they talk about how proposed solutions fit (or don’t fit) into the bigger picture. In a regular performance appraisal, they talk about how the employee’s behavior helps or undermines the vision. In a review of a division’s quarterly performance, they talk not only about the numbers but also about how the division’s executives are contributing to the transformation. In a routine Q&A with employees at a company facility, they tie their answers back to renewal goals.

In more successful transformation efforts, executives use all existing communication channels to broadcast the vision. They turn boring, unread company newsletters into lively articles about the vision. They take ritualistic, tedious quarterly management meetings and turn them into exciting discussions of the transformation. They throw out much of the company’s generic management education and replace it with courses that focus on business problems and the new vision. The guiding principle is simple: Use every possible channel, especially those that are being wasted on nonessential information.

Perhaps even more important, most of the executives I have known in successful cases of major change learn to “walk the talk.” They consciously attempt to become a living symbol of the new corporate culture. This is often not easy. A 60-year-old plant manager who has spent precious little time over 40 years thinking about customers will not suddenly behave in a customer-oriented way. But I have witnessed just such a person change, and change a great deal. In that case, a high level of urgency helped. The fact that the man was a part of the guiding coalition and the vision-creation team also helped. So did all the communication, which kept reminding him of the desired behavior, and all the feedback from his peers and subordinates, which helped him see when he was not engaging in that behavior.

Communication comes in both words and deeds, and the latter are often the most powerful form. Nothing undermines change more than behavior by important individuals that is inconsistent with their words.

Error 5: Not Removing Obstacles to the New Vision

Successful transformations begin to involve large numbers of people as the process progresses. Employees are emboldened to try new approaches, to develop new ideas, and to provide leadership. The only constraint is that the actions fit within the broad parameters of the overall vision. The more people involved, the better the outcome.

To some degree, a guiding coalition empowers others to take action simply by successfully communicating the new direction. But communication is never sufficient by itself. Renewal also requires the removal of obstacles. Too often, an employee understands the new vision and wants to help make it happen, but an elephant appears to be blocking the path. In some cases, the elephant is in the person’s head, and the challenge is to convince the individual that no external obstacle exists. But in most cases, the blockers are very real.

Sometimes the obstacle is the organizational structure: Narrow job categories can seriously undermine efforts to increase productivity or make it very difficult even to think about customers. Sometimes compensation or performance-appraisal systems make people choose between the new vision and their own self-interest. Perhaps worst of all are bosses who refuse to change and who make demands that are inconsistent with the overall effort.

One company began its transformation process with much publicity and actually made good progress through the fourth phase. Then the change effort ground to a halt because the officer in charge of the company’s largest division was allowed to undermine most of the new initiatives. He paid lip service to the process but did not change his behavior or encourage his managers to change. He did not reward the unconventional ideas called for in the vision. He allowed human resource systems to remain intact even when they were clearly inconsistent with the new ideals. I think the officer’s motives were complex. To some degree, he did not believe the company needed major change. To some degree, he felt personally threatened by all the change. To some degree, he was afraid that he could not produce both change and the expected operating profit. But despite the fact that they backed the renewal effort, the other officers did virtually nothing to stop the one blocker. Again, the reasons were complex. The company had no history of confronting problems like this. Some people were afraid of the officer. The CEO was concerned that he might lose a talented executive. The net result was disastrous. Lower-level managers concluded that senior management had lied to them about their commitment to renewal, cynicism grew, and the whole effort collapsed.

In the first half of a transformation, no organization has the momentum, power, or time to get rid of all obstacles. But the big ones must be confronted and removed. If the blocker is a person, it is important that he or she be treated fairly and in a way that is consistent with the new vision. Action is essential, both to empower others and to maintain the credibility of the change effort as a whole.

Error 6: Not Systematically Planning for, and Creating, Short-Term Wins

Real transformation takes time, and a renewal effort risks losing momentum if there are no short-term goals to meet and celebrate. Most people won’t go on the long march unless they see compelling evidence in 12 to 24 months that the journey is producing expected results. Without short-term wins, too many people give up or actively join the ranks of those people who have been resisting change.

One to two years into a successful transformation effort, you find quality beginning to go up on certain indices or the decline in net income stopping. You find some successful new product introductions or an upward shift in market share. You find an impressive productivity improvement or a statistically higher customer satisfaction rating. But whatever the case, the win is unambiguous. The result is not just a judgment call that can be discounted by those opposing change.

Creating short-term wins is different from hoping for short-term wins. The latter is passive, the former active. In a successful transformation, managers actively look for ways to obtain clear performance improvements, establish goals in the yearly planning system, achieve the objectives, and reward the people involved with recognition, promotions, and even money. For example, the guiding coalition at a U.S. manufacturing company produced a highly visible and successful new product introduction about 20 months after the start of its renewal effort. The new product was selected about six months into the effort because it met multiple criteria: It could be designed and launched in a relatively short period, it could be handled by a small team of people who were devoted to the new vision, it had upside potential, and the new product-development team could operate outside the established departmental structure without practical problems. Little was left to chance, and the win boosted the credibility of the renewal process.

Managers often complain about being forced to produce short-term wins, but I’ve found that pressure can be a useful element in a change effort. When it becomes clear to people that major change will take a long time, urgency levels can drop. Commitments to produce short-term wins help keep the urgency level up and force detailed analytical thinking that can clarify or revise visions.

Error 7: Declaring Victory Too Soon

After a few years of hard work, managers may be tempted to declare victory with the first clear performance improvement. While celebrating a win is fine, declaring the war won can be catastrophic. Until changes sink deeply into a company’s culture, a process that can take five to ten years, new approaches are fragile and subject to regression.

In the recent past, I have watched a dozen change efforts operate under the reengineering theme. In all but two cases, victory was declared and the expensive consultants were paid and thanked when the first major project was completed after two to three years. Within two more years, the useful changes that had been introduced slowly disappeared. In two of the ten cases, it’s hard to find any trace of the reengineering work today.

Over the past 20 years, I’ve seen the same sort of thing happen to huge quality projects, organizational development efforts, and more. Typically, the problems start early in the process: The urgency level is not intense enough, the guiding coalition is not powerful enough, and the vision is not clear enough. But it is the premature victory celebration that kills momentum. And then the powerful forces associated with tradition take over.

Ironically, it is often a combination of change initiators and change resistors that creates the premature victory celebration. In their enthusiasm over a clear sign of progress, the initiators go overboard. They are then joined by resistors, who are quick to spot any opportunity to stop change. After the celebration is over, the resistors point to the victory as a sign that the war has been won and the troops should be sent home. Weary troops allow themselves to be convinced that they won. Once home, the foot soldiers are reluctant to climb back on the ships. Soon thereafter, change comes to a halt, and tradition creeps back in.

Instead of declaring victory, leaders of successful efforts use the credibility afforded by short-term wins to tackle even bigger problems. They go after systems and structures that are not consistent with the transformation vision and have not been confronted before. They pay great attention to who is promoted, who is hired, and how people are developed. They include new reengineering projects that are even bigger in scope than the initial ones. They understand that renewal efforts take not months but years. In fact, in one of the most successful transformations that I have ever seen, we quantified the amount of change that occurred each year over a seven-year period. On a scale of one (low) to ten (high), year one received a two, year two a four, year three a three, year four a seven, year five an eight, year six a four, and year seven a two. The peak came in year five, fully 36 months after the first set of visible wins.

Error 8: Not Anchoring Changes in the Corporation’s Culture

In the final analysis, change sticks when it becomes “the way we do things around here,” when it seeps into the bloodstream of the corporate body. Until new behaviors are rooted in social norms and shared values, they are subject to degradation as soon as the pressure for change is removed.

Two factors are particularly important in institutionalizing change in corporate culture. The first is a conscious attempt to show people how the new approaches, behaviors, and attitudes have helped improve performance. When people are left on their own to make the connections, they sometimes create very inaccurate links. For example, because results improved while charismatic Harry was boss, the troops link his mostly idiosyncratic style with those results instead of seeing how their own improved customer service and productivity were instrumental. Helping people see the right connections requires communication. Indeed, one company was relentless, and it paid off enormously. Time was spent at every major management meeting to discuss why performance was increasing. The company newspaper ran article after article showing how changes had boosted earnings.

The second factor is taking sufficient time to make sure that the next generation of top management really does personify the new approach. If the requirements for promotion don’t change, renewal rarely lasts. One bad succession decision at the top of an organization can undermine a decade of hard work. Poor succession decisions are possible when boards of directors are not an integral part of the renewal effort. In at least three instances I have seen, the champion for change was the retiring executive, and although his successor was not a resistor, he was not a change champion. Because the boards did not understand the transformations in any detail, they could not see that their choices were not good fits. The retiring executive in one case tried unsuccessfully to talk his board into a less seasoned candidate who better personified the transformation. In the other two cases, the CEOs did not resist the boards’ choices, because they felt the transformation could not be undone by their successors. They were wrong. Within two years, signs of renewal began to disappear at both companies.

_____________________

There are still more mistakes that people make, but these eight are the big ones. I realize that in a short article everything is made to sound a bit too simplistic. In reality, even successful change efforts are messy and full of surprises. But just as a relatively simple vision is needed to guide people through a major change, so a vision of the change process can reduce the error rate. And fewer errors can spell the difference between success and failure.

Originally published March 1995. Reprint R0701J

Change Through Persuasion

by David A. Garvin and Michael A. Roberto

FACED WITH THE NEED for massive change, most managers respond predictably. They revamp the organization’s strategy, then round up the usual set of suspects—people, pay, and processes—shifting around staff, realigning incentives, and rooting out inefficiencies. They then wait patiently for performance to improve, only to be bitterly disappointed. For some reason, the right things still don’t happen.

Why is change so hard? First of all, most people are reluctant to alter their habits. What worked in the past is good enough; in the absence of a dire threat, employees will keep doing what they’ve always done. And when an organization has had a succession of leaders, resistance to change is even stronger. A legacy of disappointment and distrust creates an environment in which employees automatically condemn the next turnaround champion to failure, assuming that he or she is “just like all the others.” Calls for sacrifice and self-discipline are met with cynicism, skepticism, and knee-jerk resistance.

Our research into organizational transformation has involved settings as diverse as multinational corporations, government agencies, nonprofits, and high-performing teams like mountaineering expeditions and firefighting crews. We’ve found that for change to stick, leaders must design and run an effective persuasion campaign—one that begins weeks or months before the actual turnaround plan is set in concrete. Managers must perform significant work up front to ensure that employees will actually listen to tough messages, question old assumptions, and consider new ways of working. This means taking a series of deliberate but subtle steps to recast employees’ prevailing views and create a new context for action. Such a shaping process must be actively managed during the first few months of a turnaround, when uncertainty is high and setbacks are inevitable. Otherwise, there is little hope for sustained improvement.

Like a political campaign, a persuasion campaign is largely one of differentiation from the past. To the typical change-averse employee, all restructuring plans look alike. The trick for turnaround leaders is to show employees precisely how their plans differ from their predecessors’. They must convince people that the organization is truly on its deathbed—or, at the very least, that radical changes are required if it is to survive and thrive. (This is a particularly difficult challenge when years of persistent problems have been accompanied by few changes in the status quo.) Turnaround leaders must also gain trust by demonstrating through word and deed that they are the right leaders for the job and must convince employees that theirs is the correct plan for moving forward.

Accomplishing all this calls for a four-part communications strategy. Prior to announcing a policy or issuing a set of instructions, leaders need to set the stage for acceptance. At the time of delivery, they must create the frame through which information and messages are interpreted. As time passes, they must manage the mood so that employees’ emotional states support implementation and follow-through. And at critical intervals, they must provide reinforcement to ensure that the desired changes take hold without backsliding.

In this article, we describe this process in more detail, drawing on the example of the turnaround of Beth Israel Deaconess Medical Center (BIDMC) in Boston. Paul Levy, who became CEO in early 2002, managed to bring the failing hospital back from the brink of ruin. We had ringside seats during the first six months of the turnaround. Levy agreed to hold videotaped interviews with us every two to four weeks during that period as we prepared a case study describing his efforts. He also gave us access to his daily calendar, as well as to assorted e-mail correspondence and internal memorandums and reports. From this wealth of data, we were able to track the change process as it unfolded, without the usual biases and distortions that come from 20/20 hindsight. The story of how Levy tilled the soil for change provides lessons for any CEO in a turnaround situation.

Idea in Brief

When a company is teetering on the brink of ruin, most turnaround leaders revamp strategy, shift around staff, and root out inefficiencies. Then they wait patiently for the payoff—only to suffer bitter disappointment as the expected improvements fail to materialize.

How to make change stick? Conduct a four-stage persuasion campaign: 1) Prepare your organization’s cultural “soil” months before setting your turnaround plan in concrete—by convincing employees that your company can survive only through radical change. 2) Present your plan—explaining in detail its purpose and expected impact. 3) After executing the plan, manage employees’ emotions by acknowledging the pain of change—while keeping people focused on the hard work ahead. 4) As the turnaround starts generating results, reinforce desired behavioral changes to prevent backsliding.

Using this four-part process, the CEO of Beth Israel Deaconess Medical Center (BIDMC) brought the failing hospital back from near-certain death. Hemorrhaging $58 million in losses in 2001, BIDMC reported a $37.4 million net gain from operations in 2004. Revenues rose, while costs shrank. Morale soared—as reflected by a drop in nursing turnover from between 15% and 16% in 2002 to just 3% by 2004.

Setting the Stage

Paul Levy was an unlikely candidate to run BIDMC. He was not a doctor and had never managed a hospital, though he had previously served as the executive dean for administration at Harvard Medical School. His claim to fame was his role as the architect of the Boston Harbor Cleanup, a multibillion-dollar pollution-control project that he had led several years earlier. (Based on this experience, Levy identified a common yet insidiously destructive organizational dynamic that causes dedicated teams to operate in counterproductive ways, which he described in “The Nut Island Effect: When Good Teams Go Wrong,” March 2001.) Six years after completing the Boston Harbor project, Levy approached the BIDMC board and applied for the job of cleaning up the troubled hospital.

Idea in Practice

Use these steps to persuade your workforce to embrace and execute needed change:

Set the Stage for Acceptance

Develop a bold message that provides compelling reasons to do things differently.

Example: On his first day as Beth Israel Deaconess Medical Center’s CEO, Paul Levy publicized the possibility that BIDMC would be sold to a for-profit institution. He delivered an all-hands-on-deck e-mail to the staff citing the hospital’s achievements while confirming that the threat of sale was real. The e-mail also signaled actions he would take, including layoffs, and described his open management style (hallway chats, lunches with staff). In addition, Levy circulated a third-party, warts-and-all report on BIDMC’s plight on the hospital’s intranet—so staff could no longer claim ignorance.

Frame the Turnaround Plan

Present your turnaround plan in a way that helps people interpret your ideas correctly.

Example: Levy augmented his several-hundred-page plan with an e-mail that evoked BIDMC’s mission and uncompromising values and reaffirmed the importance of remaining an academic medical center. He provided further details about the plan, emphasizing needed tough measures based on the third-party report. He also explained past plans’ deficiencies, contrasting earlier efforts’ top-down methods with his plan’s collaborative approach. Employees thus felt the plan belonged to them.

Manage the Mood

Strike the right notes of optimism and realism to make employees feel cared for while also keeping them focused on your plan’s execution.

Example: Levy acknowledged the pain of layoffs, then urged employees to look forward to “[setting] an example for what a unique academic medical center like ours means for this region.” He also issued progress updates while reminding people that BIDMC still needed to control costs. As financial performance picked up, he lavishly praised the staff.

Prevent Backsliding

Provide opportunities for employees to practice desired behaviors repeatedly. If necessary, publicly criticize disruptive, divisive behaviors.

Example: Levy had established meeting rules requiring staff to state their objections to decisions and to “disagree without being disagreeable.” When one medical chief e-mailed Levy complaining about a decision made during a meeting—and copied the other chiefs and board chairman—Levy took action. He responded with an e-mail to the same audience, publicly reprimanding the chief for his tone, lack of civility, and failure to follow the rule about speaking up during meetings.

Despite his lack of hospital management experience, Levy was appealing to the board. The Boston Harbor Cleanup was a difficult, highly visible change effort that required deft political and managerial skills. Levy had stood firm in the face of tough negotiations and often-heated public resistance and had instilled accountability in city and state agencies. He was also a known quantity to the board, having served on a BIDMC steering committee formed by the board chairman in 2001.

Levy saw the prospective job as one of public service. BIDMC was the product of a difficult 1996 merger between two hospitals—Beth Israel and Deaconess—each of which had distinguished reputations, several best-in-the-world departments and specializations, and deeply devoted staffs. The problems began after the merger. A misguided focus on clinical practice rather than backroom integration, a failure to cut costs, and the repeated inability to execute plans and adapt to changing conditions in the health care marketplace all contributed to BIDMC’s dismal performance.

By the time the board settled on Levy, affairs at BIDMC had reached the nadir. The hospital was losing $50 million a year. Relations between the administration and medical staff were strained, as were those between management and the board of directors. Employees felt demoralized, having witnessed the rapid decline in their institution’s once-legendary status and the disappointing failure of its past leaders. A critical study was conducted by the Hunter Group, a leading health-care consulting firm. The report, detailing the dire conditions at the hospital and the changes needed to turn things around, had been completed but not yet released. Meanwhile, the state attorney general, who was responsible for overseeing charitable trusts, had put pressure on the board to sell the failing BIDMC to a for-profit institution.

Like many CEOs recruited to fix a difficult situation, Levy’s first task was to gain a mandate for the changes ahead. He also recognized that crucial negotiations were best conducted before he took the job, when his leverage was greatest, rather than after taking the reins. In particular, he moved to secure the cooperation of the hospital board by flatly stating his conditions for employment. He told the directors, for example, that should they hire him, they could no longer interfere in day-to-day management decisions. In his second and third meetings with the board’s search committee, Levy laid out his timetable and intentions. He insisted that the board decide on his appointment quickly so that he could be on the job before the release of the Hunter report. He told the committee that he intended to push for a smaller, more effective group of directors. Though the conditions were somewhat unusual, the board was convinced that Levy had the experience to lead a successful turnaround, and they accepted his terms. Levy went to work on January 7, 2002.

The next task was to set the stage with the hospital staff. Levy was convinced that the employees, hungry for a turnaround, would do their best to cooperate with him if he could emulate and embody the core values of the hospital culture, rather than impose his personal values. He chose to act as the managerial equivalent of a good doctor—that is, as one who, in dealing with a very ill patient, delivers both the bad news and the chances of success honestly and imparts a realistic sense of hope, without sugar coating.

The four phases of a persuasion campaign

A typical turnaround process consists of two stark phases: plan development, followed by an implementation that may or may not be welcomed by the organization. For the turnaround plan to be widely accepted and adopted, however, the CEO must develop a separate persuasion campaign, the goal of which is to create a continuously receptive environment for change. The campaign begins well before the CEO’s first day on the job—or, if the CEO is long established, well before formal development work begins—and continues long after the final plan is announced.

Like any leader facing a turnaround, Levy also knew he had to develop a bold message that provided compelling reasons to do things differently and then cast that message in capital letters to signal the arrival of a new order. To give his message teeth, he linked it to an implicit threat. Taking his cue from his private discussions with the state attorney general, whom he had persuaded to keep the hospital open for the time being, Levy chose to publicize the very real possibility the hospital would be sold. While he realized he risked frightening the staff and the patients with this bad news, he believed that a strong wake-up call was necessary to get employees to face up to the situation.

During his first morning on the job, Levy delivered an all-hands-on-deck e-mail to the staff. The memo contained four broad messages. It opened with the good news, pointing out that the organization had much to be proud of (“This is a wonderful institution, representing the very best in academic medicine: exemplary patient care, extraordinary research, and fine teaching”). Second, Levy noted that the threat of sale was real (“This is our last chance”). Third, he signaled the kinds of actions employees could expect him to take (“There will be a reduction in staff”). And finally, he described the open management style he would adopt. He would manage by walking around—lunching with staff in the cafeteria, having impromptu conversations in the hallways, talking with employees at every opportunity to discover their concerns. He would communicate directly with employees through e-mail rather than through intermediaries. He also noted that the Hunter report would be posted on the hospital intranet, where all employees would have the opportunity to review its recommendations and submit comments for the final turnaround plan. The direct, open tone of the e-mail memo signaled exactly how Levy’s management style would differ from that of his predecessors.

In the afternoon, he disclosed BIDMC’s situation in interviews with the Boston Globe and the Boston Herald, the city’s two major newspapers. He told reporters the same thing he had told the hospital’s employees: that, in the absence of a turnaround, the hospital would be sold to a for-profit chain and would therefore lose its status as a Harvard teaching hospital. Staving off a sale would require tough measures, including the laying off of anywhere from 500 to 700 employees. Levy insisted that there would be no nursing layoffs, in keeping with the hospital’s core values of high-quality patient care. The newspaper reports, together with the memo circulated that morning, served to immediately reset employee expectations while dramatically increasing staff cooperation and willingness to accept whatever new initiatives might prove necessary to the hospital’s survival.

Two days later, the critical Hunter report came out and was circulated via the hospital’s intranet. Because the report had been produced by an objective third party, employees were open to its unvarnished, warts-and-all view of the hospital’s current predicament. The facts were stark, and the staff could no longer claim ignorance. Levy received, and personally responded to, more than 300 e-mail suggestions for improvement in response to the report, many of which he later included in the turnaround plan.

Creating the Frame

Once the stage has been set for acceptance, effective leaders need to help employees interpret proposals for change. Complex plans can be interpreted in any number of ways; not all of them ensure acceptance and favorable outcomes. Skilled leaders therefore use “frames” to provide context and shape perspective for new proposals and plans. By framing the issues, leaders help people digest ideas in particular ways. A frame can take many forms: It can be a company-wide presentation that prepares employees before an unexpected change, for example, or a radio interview that provides context following an unsettling layoff.

Levy used one particularly effective framing device to help employees interpret a preliminary draft of the turnaround plan. This device took the form of a detailed e-mail memo accompanying the dense, several-hundred-page plan. The memo explained, in considerable detail, the plan’s purpose and expected impact.

The first section of the memo sought to mollify critics and reduce the fears of doctors and nurses. Its tone was positive and uplifting; it discussed BIDMC’s mission, strategy, and uncompromising values, emphasizing the hospital’s “warm, caring environment.” This section of the letter also reaffirmed the importance of remaining an academic medical center, as well as reminding employees of their shared mission and ideals. The second part of the letter told employees what to expect, providing further details about the turnaround plan. It emphasized that tough measures and goals would be required but noted that the specific recommendations were based, for the most part, on the advice in the Hunter report, which employees had already reviewed. The message to employees was, “You’ve already seen and endorsed the Hunter report. There are no future surprises.”

The third part of the letter anticipated and responded to prospective concerns; this had the effect of circumventing objections. This section explicitly diagnosed past plans and explained their deficiencies, which were largely due to their having been imposed top-down, with little employee ownership, buy-in, or discussion. Levy then offered a direct interpretation of what had gone wrong. Past plans, he said, had underestimated the size of the financial problem, set unrealistic expectations for new revenue growth, and failed to test implementation proposals. This section of the letter also drove home the need for change at a deeper, more visceral level than employees had experienced in the past. It emphasized that this plan was a far more collective effort than past proposals had been, because it incorporated many employee suggestions.

By framing the turnaround proposal this way, Levy accomplished two things. First, he was able to convince employees that the plan belonged to them. Second, the letter served as the basis for an ongoing communication platform. Levy reiterated its points at every opportunity—not only with employees but also in public meetings and in discussions with the press.

Managing the Mood

Turnarounds are depressing events, especially when they involve restructuring and downsizing. Relationships are disrupted, friends move on, and jobs disappear. In such settings, managing the mood of the organization becomes an essential leadership skill. Leaders must pay close attention to employees’ emotions—the ebb and flow of their feelings and moods—and work hard to preserve a receptive climate for change. Often, this requires a delicate balancing act between presenting good and bad news in just the right proportion. Employees need to feel that their sacrifices have not been in vain and that their accomplishments have been recognized and rewarded. At the same time, they must be reminded that complacency is not an option. The communication challenge is daunting. One must strike the right notes of optimism and realism and carefully calibrate the timing, tone, and positioning of every message.

Paul Levy’s challenge was threefold: to give remaining employees time to grieve and recover from layoffs and other difficult measures; to make them feel that he cared for and supported them; and to ensure that the turnaround plan proceeded apace. The process depended on mutual trust and employees’ desire to succeed. “I had to calibrate the push and pull of congratulations and pressure, but I also depended on the staff’s underlying value system and sense of mission,” he said. “They were highly motivated, caring individuals who had stuck with the place through five years of hell. They wanted to do good.”

The first step was to acknowledge employees’ feelings of depression while helping them look to the future. Immediately after the first round of layoffs, people were feeling listless and dejected; Levy knew that releasing the final version of the turnaround plan too soon after the layoffs could be seen as cold. In an e-mail he sent to all employees a few days later, Levy explicitly empathized with employees’ feelings (“This week is a sad one . . . it is hard for those of us remaining . . . offices are emptier than usual”). He then urged employees to look forward and concluded on a strongly optimistic note (“. . . our target is not just survival: It is to thrive and set an example for what a unique academic medical center like ours means for this region”). His upbeat words were reinforced by a piece of good luck that weekend when the underdog New England Patriots won their first Super Bowl championship in dramatic fashion in the last 90 seconds of the game. When Levy returned to work the following Monday, employees were saying, “If the Patriots can do it, we can, too.”

Dysfunctional Routines

Six Ways to Stop Change in Its Tracks

Just as people are creatures of habit, organizations thrive on routines. Management teams, for example, routinely cut budgets after performance deviates from plan. Routines—predictable, virtually automatic behaviors—are unstated, self-reinforcing, and remarkably resilient. Because they lead to more efficient cognitive processing, they are, for the most part, functional and highly desirable.

A culture of “no”

In organizations dominated by cynics and critics, there is always a good reason not to do something. Piling on criticism is an easy way to avoid taking risks and claim false superiority. Lou Gerstner gets credit for naming this routine, which he found on his arrival at IBM, but it is common in many organizations. Another CEO described her team’s response to new initiatives by likening it to a skeet shoot: “Someone would yell, ‘Pull!’ there would be a deafening blast, and the idea would be in pieces on the ground.” This routine has two sources: a culture that overvalues criticism and analysis, and complex decision-making processes requiring multiple approvals, in which anybody can say “no” but nobody can say “yes.” It is especially likely in organizations that are divided into large subunits or segments, led by local leaders with great power who are often unwilling to comply with directives from above.

The dog and pony show must go on

Some organizations put so much weight on process that they confuse ends and means, form and content. How you present a proposal becomes more important than what you propose. Managers construct presentations carefully and devote large amounts of time to obtaining sign-offs. The result is death by PowerPoint. Despite the appearance of progress, there’s little real headway.

The grass is always greener

To avoid facing challenges in their core business, some managers look to new products, new services, and new lines of business. At times, such diversification is healthy. But all too often these efforts are merely an avoidance tactic that keeps tough problems at arm’s length.

Dysfunctional routines, by contrast, are barriers to action and change. Some are outdated behaviors that were appropriate once but are now unhelpful. Others manifest themselves in knee-jerk reactions, passivity, unproductive foot-dragging, and, sometimes, active resistance.

Dysfunctional routines are persistent, but they are not unchangeable. Novelty—the perception that current circumstances are truly different from those that previously prevailed—is one of the most potent forces for dislodging routines. To overcome them, leaders must clearly signal that the context has changed. They must work directly with employees to recognize and publicly examine dysfunctional routines and substitute desired behaviors.

After the meeting ends, debate begins

This routine is often hard to spot because so much of it takes place under cover. Cordial, apparently cooperative meetings are followed by resistance. Sometimes, resisters are covert; often, they end-run established forums entirely and take their concerns directly to the top. The result? Politics triumphs over substance, staff meetings become empty rituals, and meddling becomes the norm.

Ready, aim, aim. . .

Here, the problem is the organization’s inability to settle on a definitive course of action. Staff members generate a continual stream of proposals and reports; managers repeatedly tinker with each one, fine tuning their choices without ever making a final decision. Often called “analysis paralysis,” this pattern is common in perfectionist cultures where mistakes are career threatening and people who rock the boat drown.

This too shall pass

In organizations where prior leaders repeatedly proclaimed a state of crisis but then made few substantive changes, employees tend to be jaded. In such situations, they develop a heads-down, bunker mentality and a reluctance to respond to management directives. Most believe that the wisest course of action is to ignore new initiatives, work around them, or wait things out.

The next task was to keep employees focused on the continuing hard work ahead. On April 12, two months into the restructuring process, Levy sent out a “Frequently Asked Questions” e-mail giving a generally favorable view of progress to date. At the same time, he spoke plainly about the need to control costs and reminded employees that merit pay increases would remain on hold. This was hardly the rosy picture that most employees were hoping for, of course. But Levy believed sufficient time had passed that employees could accommodate a more realistic and tough tone on his part.

A month later, everything changed. Operational improvements that were put in place during the first phase of the turnaround had begun to take hold. Financial performance was well ahead of budget, with the best results since the merger. In another e-mail, Levy praised employees lavishly. He also convened a series of open question-and-answer forums, where employees heard more details about the hospital’s tangible progress and received kudos for their accomplishments.

Reinforcing Good Habits

Without a doubt, the toughest challenge faced by leaders during a turnaround is to avoid backsliding into dysfunctional routines—habitual patterns of negative behavior by individuals and groups that are triggered automatically and unconsciously by familiar circumstances or stimuli. (For more on how such disruptive patterns work, see the sidebar “Dysfunctional Routines: Six Ways to Stop Change in Its Tracks.”) Employees need help maintaining new behaviors, especially when their old ways of working are deeply ingrained and destructive. Effective change leaders provide opportunities for employees to practice desired behaviors repeatedly, while personally modeling new ways of working and providing coaching and support.

In our studies of successful turnarounds, we’ve found that effective leaders explicitly reinforce organizational values on a constant basis, using actions to back up their words. Their goal is to change behavior, not just ways of thinking. For example, a leader can talk about values such as openness, tolerance, civility, teamwork, delegation, and direct communication in meetings and e-mails. But the message takes hold only if he or she also signals a dislike of disruptive, divisive behaviors by pointedly—and, if necessary, publicly—criticizing them.

At Beth Israel Deaconess Medical Center, the chiefs of medicine, surgery, orthopedics, and other key functions presented Levy with special behavioral challenges, particularly because he was not a doctor. Each medical chief was in essence a “mini-dean,” the head of a largely self-contained department with its own faculty, staff, and resources. As academic researchers, they were rewarded primarily for individual achievement. They had limited experience solving business or management problems.

In dealing with the chiefs, Levy chose an approach that blended with a strong dose of discipline with real-time, public reinforcement. He developed guidelines for behavior and insisted that everyone in the hospital measure up to them. In one of his earliest meetings with the chiefs, Levy presented a simple set of “meeting rules,” including such chestnuts as “state your objections” and “disagree without being disagreeable,” and led a discussion about them, demonstrating the desired behaviors through his own leadership of the meeting. The purpose of these rules was to introduce new standards of interpersonal behavior and, in the process, to combat several dysfunctional routines.

One serious test of Levy’s ability to reinforce these norms came a month and a half after he was named CEO. After a staff meeting at which all the department chairs were present, one chief—who had remained silent—sent an e-mail to Levy complaining about a decision made during the meeting. The e-mail copied the other chiefs as well as the chairman of the board. Many CEOs would choose to criticize such behavior privately. But Levy responded in an e-mail to the same audience, publicly denouncing the chief for his tone, his lack of civility, and his failure to speak up earlier in the process, as required by the new meeting rules. It was as close to a public hanging as anyone could get. Several of the chiefs privately expressed their support to Levy; they too had been offended by their peer’s presumptuousness. More broadly, the open criticism served to powerfully reinforce new norms while curbing disruptive behavior.

Even as they must set expectations and reinforce behaviors, effective change leaders also recognize that many employees simply do not know how to make decisions as a group or work cooperatively. By delegating critical decisions and responsibilities, a leader can provide employees with ample opportunities to practice new ways of working; in such cases, employees’ performance should be evaluated as much on their adherence to the new standards and processes as on their substantive choices. In this spirit, Levy chose to think of himself primarily as a kind of appeals court judge. When employees came to him seeking his intervention on an issue or situation, he explained, he would “review the process used by the ‘lower court’ to determine if it followed the rules. If so, the decision stands.” He did not review cases de novo and substitute his judgment for that of the individual department or unit. He insisted that employees work through difficult issues themselves, even when they were not so inclined, rather than rely on him to tell them what to do. At other times, he intervened personally and coached employees when they lacked basic skills. When two members of his staff disagreed on a proposed course of action, Levy triggered an open, emotional debate, then worked with the participants and their bosses behind the scenes to resolve the differences. At the next staff meeting, he praised the participants’ willingness to disagree publicly, reemphasizing that vigorous debate was healthy and desirable and that confrontation was not to be avoided. In this way, employees gained experience in working through their problems on their own.

Performance, of course, is the ultimate measure of a successful turnaround. On that score, BIDMC has done exceedingly well since Levy took the helm. The original restructuring plan called for a three-year improvement process, moving from a $58 million loss in 2001 to breakeven in 2004. At the end of the 2004 fiscal year, performance was far ahead of plan, with the hospital reporting a $37.4 million net gain from operations. Revenues were up, while costs were sharply reduced. Decision making was now crisper and more responsive, even though there was little change in the hospital’s senior staff or medical leadership. Morale, not surprisingly, was up as well. To take just one indicator, annual nursing turnover, which was 15% to 16% when Levy became CEO, had dropped to 3% by mid-2004. Pleased with the hospital’s performance, the board signed Levy to a new three-year contract.

Heads, Hearts, and Hands

It’s clear that the key to Paul Levy’s success at Beth Israel Deaconess Medical Center is that he understood the importance of making sure the cultural soil had been made ready before planting the seeds of change. In a receptive environment, employees not only understand why change is necessary; they’re also emotionally committed to making it happen, and they faithfully execute the required steps.

On a cognitive level, employees in receptive environments are better able to let go of competing, unsubstantiated views of the nature and extent of the problems facing their organizations. They hold the same, objective views of the causes of poor performance. They acknowledge the seriousness of current financial, operational, and marketplace difficulties. And they take responsibility for their own contributions to those problems. Such a shared, fact-based diagnosis is crucial for moving forward.

On an emotional level, employees in receptive environments identify with the organization and its values and are committed to its continued existence. They believe that the organization stands for something more than profitability, market share, or stock performance and is therefore worth saving. Equally important, they trust the leader, believing that he or she shares their values and will fight to preserve them. Leaders earn considerable latitude from employees—and their proposals usually get the benefit of the doubt—when their hearts are thought to be in the right place.

Workers in such environments also have physical, hands-on experience with the new behaviors expected of them. They have seen the coming changes up close and understand what they are getting into. In such an atmosphere where it’s acceptable for employees to wrestle with decisions on their own and practice unfamiliar ways of working, a leader can successfully allay irrational fears and undercut the myths that so often accompany major change efforts.

There is a powerful lesson in all this for leaders. To create a receptive environment, persuasion is the ultimate tool. Persuasion promotes understanding; understanding breeds acceptance; acceptance leads to action. Without persuasion, even the best of turnaround plans will fail to take root.

Originally published in February 2005. Reprint R0502F

Leading Change When Business Is Good

An Interview with Samuel J. Palmisano. by Paul Hemp and Thomas A. Stewart

IN JULY 2003, International Business Machines Corporation conducted a 72-hour experiment whose outcome was as uncertain as anything going on in its research labs. Six months into a top-to-bottom review of its management organization, IBM held a three-day discussion via the corporate intranet about the company’s values. The forum, dubbed ValuesJam, joined thousands of employees in a debate about the very nature of the computer giant and what it stood for.

Over the three days, an estimated 50,000 of IBM’s employees—including CEO Sam Palmisano—checked out the discussion, posting nearly 10,000 comments about the proposed values. The jam had clearly struck a chord.

But it was a disturbingly dissonant one. Some comments were merely cynical. One had the subject line: “The only value in IBM today is the stock price.” Another read, “Company values (ya right).” Others, though, addressed fundamental management issues. “I feel we talk a lot about trust and taking risks. But at the same time, we have endless audits, mistakes are punished and not seen as a welcome part of learning, and managers (and others) are consistently checked,” wrote one employee. “There appears to be a great reluctance among our junior executive community to challenge the views of our senior execs,” said another. “Many times I have heard expressions like, ‘Would you tell Sam that his strategy is wrong!!?’” Twenty-four hours into the exercise, at least one senior executive wanted to pull the plug.

But Palmisano wouldn’t hear of it. And then the mood began to shift. After a day marked by critics letting off steam, the countercritics began to weigh in. While acknowledging the company’s shortcomings, they argued that much of IBM’s culture and values was worth preserving. “Shortly after joining IBM 18 years ago,” wrote one, “I was asked to serve on a jury. When I approached the bench and answered [the lawyers’] questions, I was surprised when the judge said, ‘You guys can pick whoever else you want, but I want this IBMer on that jury.’ I have never felt so much pride. His statement said it all: integrity, excellence, and quality.” Comments like these became more frequent, criticism became more constructive, and the ValuesJam conversation stabilized.

The question of what was worth preserving and what needed to be changed was at the heart of ValuesJam. In 1914—when the company was making tabulating machines, scales for weighing meat, and cheese slicers—president Thomas Watson, Sr., decreed three corporate principles, called the Basic Beliefs: “respect for the individual,” “the best customer service,” and “the pursuit of excellence.” They would inform IBM’s culture, and help drive its success, for more than half a century.

By 2002, when Palmisano took over as CEO, much had happened to Big Blue. In the early 1990s, the company had suffered the worst reversal in its history and then, under Lou Gerstner, had fought its way back, transformed from a mainframe maker into a robust provider of integrated hardware, networking, and software solutions. Palmisano felt that the Basic Beliefs could still serve the company—but now as the foundation for a new set of corporate values that could energize employees even more than its near-death experience had. Looking for a modern-day equivalent, Palmisano first queried 300 of his senior executives, then quickly opened up the discussion, through a survey of over a thousand employees, to get a sense of how people at all levels, functions, and locations would articulate IBM’s values and their aspirations for the company. Out of this research grew the propositions that were debated in ValuesJam.

Idea in Brief

It’s easy to fire up employees’ passion for change when your business is about to go up in flames. Lou Gerstner knew this when he seized IBM’s helm in 1993 and saved the faltering giant by transforming it from a mainframe maker into a provider of integrated solutions.

But how do you maintain people’s commitment to change when business is good? You know your company must constantly adapt if it wants to maintain its competitive edge. Yet without an obvious threat on the horizon, your employees may grow complacent.

How to build a workforce of relentless change agents? Replace command-and-control with values-based management: Instead of galvanizing people through fear of failure, energize them through hope and aspiration. Inspire them to pursue a common purpose based on values they help to define. Ask them what’s blocking them from living those values—and launch change initiatives to remove obstacles.

As enduring companies like IBM have discovered, values-based management enables your people to respond quickly, flexibly, and creatively to a never-ending stream of strategic challenges.

After—and even during—the jam, company analysts pored over the postings, mining the million-word text for key themes. Finally, a small team that included Palmisano came up with a revised set of corporate values. The CEO announced the new values to employees in an intranet broadcast in November 2003: “dedication to every client’s success,” “innovation that matters—for our company and for the world,” “trust and personal responsibility in all relationships.” Earthshaking? No, but imbued with legitimacy and packed with meaning and implications for IBM.

To prove that the new values were more than window dressing, Palmisano immediately made some changes. He called on the director of a major business unit—e-business hosting services for the U.S. industrial sector—and charged her with identifying gaps between the values and company practices. He bluntly told his 15 direct reports that they had better follow suit. Another online jam was held in October 2004 (this one informally dubbed a “logjam”) in which employees were asked to identify organizational barriers to innovation and revenue growth.

Idea in Practice

To create your values-based management system:

Gather Employees’ Input on Values

Assess the strategic challenges facing your company. Propose values you believe will help your firm meet those challenges. Collect employees’ feedback on your ideas.

Example: IBM CEO Sam Palmisano knew that the IT industry was reintegrating: Customers wanted packages of computer products and services from single firms. Despite its far-flung, diverse 320,000-strong workforce, the company had to offer customized solutions at a single price. To achieve the required cooperation, IBM needed a shared set of values to guide people’s decision making.

Using feedback from top managers and employees, Palmisano’s team developed three working value statements—“Commitment to the customer,” “Excellence through innovation,” and “Integrity that earns trust.” IBM posted these on its intranet and invited employees to debate them. Over three days, 50,000 debated the merits of the value statements.

Analyze Employees’ Input

Examine employees’ input for themes.

Example: Many IBMers criticized the “integrity that earns trust” statement as vague, outdated, and inwardly focused. They wanted more specific guidance on how to behave with each other and with external stakeholders.

Revise Your Values

Based on the themes in employees’ input, create a revised set of values. Gather employees’ input again.

Example: Palmisano’s team revised the earlier value statements to read: “Dedication to every client’s success,” “Innovation that matters—for our company and for the world,” and “Trust and personal responsibility in all relationships.” The team published the revised statements on the intranet and once more invited feedback.

Identify Obstacles to Living the Values

Examine employees’ responses to identify what’s preventing your company from living its agreed-upon values.

Example: IBMers praised the revised value statements—often in highly emotional language—but wondered whether IBM was willing and able to live those values. They understood the need to reintegrate the company but lamented obstacles—such as frustrating financial controls—that prevented them from serving customers quickly.

Launch Change Initiatives to Remove Obstacles

Initiate change programs that enable people to live the values.

Example: IBM allocated $5,000 a year to individual managers to use, no questions asked, in order to generate business, develop client relationships, or respond to fellow IBMers’ emergency needs. A pilot program run with 700 client-facing teams showed that they spent the money intelligently. The program was expanded to all 22,000 IBM first-line managers. The initiative demonstrated to employees that IBM lives by its values.

Although Palmisano, by his own account, is building on a strategy laid down by Gerstner, the leadership styles of the two men are very different. Under Gerstner, there was little expansive talk about IBM’s heritage. He was an outsider, a former CEO of RJR Nabisco and an ex-McKinsey consultant, who was faced with the daunting task of righting a sinking ship. In fact, he famously observed, shortly after taking over, that “the last thing IBM needs right now is a vision.” Palmisano, by contrast, is a true-blue IBMer, who started at the company in 1973 as a salesman in Baltimore. Like many of his generation who felt such acute shame when IBM was brought to its knees in the early 1990s, he clearly has a visceral attachment to the firm—and to the hope that it may someday regain its former greatness. At the same time, the erstwhile salesman is, in the words of a colleague, “a results-driven, make-it-rain, close-the-deal sort of guy”: not the first person you’d expect to hold forth on a subjective topic like “trust.”

In this edited conversation with HBR senior editor Paul Hemp and HBR’s editor, Thomas A. Stewart, Palmisano talks about the strategic importance of values to IBM. He begins by explaining why—and how—hard financial metrics and soft corporate values can coexist.

Corporate values generally are feel-good statements that have almost no effect on a company’s operations. What made—what makes—you think they can be more than this?

Look at the portrait of Tom Watson, Sr., in our lobby. You’ve never seen such a stern man. The eyes in the painting stare right through you. This was not a soft individual. He was a capitalist. He wanted IBM to make money, lots of it. But he was perceptive enough to build the company in a way that would ensure its prosperity long after he left the scene. His three Basic Beliefs successfully steered this company through persistent change and repeated reinvention for more than 50 years.

An organic system, which is what a company is, needs to adapt. And we think values—that’s what we call them today at IBM, but you can call them “beliefs” or “principles” or “precepts” or even “DNA”—are what enable you to do that. They let you change everything, from your products to your strategies to your business model, but remain true to your essence, your basic mission and identity.

Unfortunately, over the decades, Watson’s Basic Beliefs became distorted and took on a life of their own. “Respect for the individual” became entitlement: not fair work for all, not a chance to speak out, but a guaranteed job and culture-dictated promotions. “The pursuit of excellence” became arrogance: We stopped listening to our markets, to our customers, to each other. We were so successful for so long that we could never see another point of view. And when the market shifted, we almost went out of business. We had to cut a workforce of more than 400,000 people in half. Over the course of several years, we wiped out the equivalent of a medium-sized northeastern city—say, Providence, Rhode Island.

If you lived through this, as I did, it was easy to see how the company’s values had become part of the problem. But I believe values can once again help guide us through major change and meet some of the formidable challenges we face.

For instance, I feel that a strong value system is crucial to bringing together and motivating a workforce as large and diverse as ours has become. We have nearly one-third of a million employees serving clients in 170 countries. Forty percent of those people don’t report daily to an IBM site; they work on the client’s premises, from home, or they’re mobile. And, perhaps most significant, given IBM’s tradition of hiring and training young people for a lifetime of work, half of today’s employees have been with the company for fewer than five years because of recent acquisitions and our relatively new practice of hiring seasoned professionals. In a modest hiring year, we now add 20,000 to 25,000 people.

In effect, gradually repopulating Providence, Rhode Island!

Exactly. So how do you channel this diverse and constantly changing array of talent and experience into a common purpose? How do you get people to passionately pursue that purpose?

You could employ all kinds of traditional, top-down management processes. But they wouldn’t work at IBM—or, I would argue, at an increasing number of twenty-first-century companies. You just can’t impose command-and-control mechanisms on a large, highly professional workforce. I’m not only talking about our scientists, engineers, and consultants. More than 200,000 of our employees have college degrees. The CEO can’t say to them, “Get in line and follow me.” Or “I’ve decided what your values are.” They’re too smart for that. And as you know, smarter people tend to be, well, a little more challenging; you might even say cynical.

But even if our people did accept this kind of traditional, hierarchical management system, our clients wouldn’t. As we learned at IBM over the years, a top-down system can create a smothering bureaucracy that doesn’t allow for the speed, the flexibility, the innovation that clients expect today.

So you’re saying that values are about how employees behave when management isn’t there, which it can’t be—which it shouldn’t be—given IBM’s size and the need for people to make decisions quickly. You’re basically talking about using values to manage.

Yes. A values-based management system. Let me cast the issue in a slightly different light. When you think about it, there’s no optimal way to organize IBM. We traditionally were viewed as a large, successful, “well-managed” company. That was a compliment. But in today’s fast-changing environment, it’s a problem. You can easily end up with a bureaucracy of people overanalyzing problems and slowing down the decision-making process.

Think of our organizational matrix. Remember, we operate in 170 countries. To keep it simple, let’s say we have 60 or 70 major product lines. We have more than a dozen customer segments. Well, if you mapped out the entire 3-D matrix, you’d get more than 100,000 cells—cells in which you have to close out P&Ls every day, make decisions, allocate resources, make trade-offs. You’ll drive people crazy trying to centrally manage every one of those intersections.

So if there’s no way to optimize IBM through organizational structure or by management dictate, you have to empower people while ensuring that they’re making the right calls the right way. And by “right,” I’m not talking about ethics and legal compliance alone; those are table stakes. I’m talking about decisions that support and give life to IBM’s strategy and brand, decisions that shape a culture. That’s why values, for us, aren’t soft. They’re the basis of what we do, our mission as a company. They’re a touchstone for decentralized decision making. It used to be a rule of thumb that “people don’t do what you expect; they do what you inspect.” My point is that it’s just not possible to inspect everyone anymore. But you also can’t just let go of the reins and let people do what they want without guidance or context. You’ve got to create a management system that empowers people and provides a basis for decision making that is consistent with who we are at IBM.

How do the new values help further IBM’s strategy?

In two main ways. Back some 12 years ago, three-fifths of our business was in computer hardware and roughly two-fifths was in software and services. Today, those numbers are more than reversed. Well, if three-fifths of your business is manufacturing, management is basically supervisory: “You do this. You do that.” But that no longer works when your business is primarily based on knowledge. And your business model also changes dramatically.

For one thing, people—rather than products—become your brand. Just as our products have had to be consistent with the IBM brand promise, now more than ever, so do our people. One way to ensure that is to inform their behavior with a globally consistent set of values.

Second, the IT industry has continued to shift toward reintegration. We all know the story of how the industry fragmented in the 1980s and 1990s, with separate companies selling the processors, the storage devices, and the software that make up a computer system—almost killing IBM, the original vertically integrated computer company. Now customers are demanding a package of computer products and services from a single company, a company that can offer them an integrated solution to their business problems. This is a big opportunity for IBM. We probably have a wider array of computer products and services and know-how than anyone. But it’s also a challenge. How can we get our people in far-flung business units with different financial targets and incentives working together in teams that can offer at a single price a comprehensive and customized solution—one that doesn’t show the organizational seams?

Companies usually face the issue of workforce integration after a huge merger. We needed to integrate our existing workforce as a strategic response to the reintegration of the industry. It won’t surprise you that I didn’t think the answer lay in a new organizational structure or in more management oversight. What you need to foster this sort of cooperation is a common set of guidelines about how we make decisions, day in and day out. In other words, values.

And what happens when the strategy changes?

Ah, that’s why the right set of values is so important. There’s always going to be another strategy on the horizon as the market changes, as technologies come and go. So we wanted values that would foster an organization able to quickly execute a new strategy. At the same time, we wanted values that, like Watson’s Basic Beliefs, would be enduring, that would guide the company through economic cycles and geopolitical shifts, that would transcend changes in products, technologies, employees, and leaders.

How did IBM distill new values from its past traditions and current employee feedback?

The last time IBM examined its values was nearly a century ago. Watson was an entrepreneur, leading what was, in today’s lingo, a start-up. So in 1914, he simply said, “Here are our beliefs. Learn them. Live them.” That was appropriate for his day, and there’s no question it worked. But 90 years later, we couldn’t have someone in headquarters sitting up in bed in the middle of the night and saying, “Here are our new values!” We couldn’t be casual about tinkering with the DNA of a company like IBM. We had to come up with a way to get the employees to create the value system, to determine the company’s principles. Watson’s Basic Beliefs, however distorted they might have become over the years, had to be the starting point.

After getting input from IBM’s top 300 executives and conducting focus groups with more than a thousand employees—a statistically representative cross-section—we came up with three perfectly sound values. [For a detailed description of how IBM got from the Basic Beliefs to its new set of values, see the sidebar “Continuity and Change.”] But I knew we’d eventually throw out the statements to everyone in the company to debate. That’s where ValuesJam came in—this live, companywide conversation on our intranet.

What was your own experience during the jam? Did you have the feeling you’d opened Pandora’s box?

I logged in from China. I was pretty jet-lagged and couldn’t sleep, so I jumped in with postings on a lot of stuff, particularly around client issues. [For a selection of Palmisano’s postings during the Values-Jam, see the sidebar “Sam Joins the Fray.”] And yes, the electronic argument was hot and contentious and messy. But you had to get comfortable with that. Understand, we had done three or four big online jams before this, so we had some idea of how lively they can be. Even so, none of those could have prepared us for the emotions unleashed by this topic.

You had to put your ego aside—not easy for a CEO to do—and realize that this was the best thing that could have happened. You could say, “Oh my God, I’ve unleashed this incredible negative energy.” Or you could say, “Oh my God, I now have this incredible mandate to drive even more change in the company.”

When Lou Gerstner came here in 1993, there was clearly a burning platform. In fact, the whole place was in flames. There was even talk of breaking up the company. And he responded brilliantly. Here’s this outsider who managed to marshal the collective urgency of tens of thousands of people like me to save this company and turn it around: without a doubt one of the greatest saves in business history. But the trick then wasn’t creating a sense of urgency—we had that. Maybe you needed to shake people out of being shell-shocked. But most IBMers were willing to do whatever it took to save the company, not to mention their own jobs. And there was a lot of pride at stake. Lou’s task was mostly to convince people that he was making the right changes.

Once things got better, though, there was another kind of danger: that we would slip back into complacency. As our financial results improved dramatically and we began outperforming our competitors, people—already weary from nearly a decade of change—would say, “Well, why do I have to do things differently now? The leadership may be different, but the strategy is fundamentally sound. Why do I have to change?” This is, by the way, a problem that everyone running a successful company wrestles with.

So the challenge shifted. Instead of galvanizing people through fear of failure, you have to galvanize them through hope and aspiration. You lay out the opportunity to become a great company again—the greatest in the world, which is what IBM used to be. And you hope people feel the same need, the urgency you do, to get there. Well, I think IBMers today do feel that urgency. Maybe the jam’s greatest contribution was to make that fact unambiguously clear to all of us, very visibly, in public.

Continuity and Change

IBM’S NEW VALUES GREW OUT OF A LONG TRADITION. In 1914, Thomas Watson, Sr., the founder of the modern International Business Machines Corporation, laid out three principles known as the Basic Beliefs:

• Respect for the individual

• The best customer service

• The pursuit of excellence

Although these beliefs played a significant role in driving IBM’s success over most of the twentieth century, they eventually were subsumed—and, in effect, redefined—by a sense of entitlement and arrogance within the organization. That, according to CEO Sam Palmisano, contributed to the company’s failure to respond to market changes in the early 1990s and to its near demise.

In February 2003, just under a year after taking over as CEO, at a meeting of IBM’s top 300 managers, Palmisano raised the idea of reinventing the company’s values as a way to manage and reintegrate the sprawling and diverse enterprise. He put forth four concepts, three of them drawn from Watson’s Basic Beliefs, as possible bases for the new values:

• Respect

• Customer

• Excellence

• Innovation

These were “test marketed” through surveys and focus groups with more than 1,000 IBM employees. The notion of “respect” was thrown out because of its connotations of the past. It was also decided that statements rather than just words would be more compelling.

Out of this process grew the three proposed values discussed during the July 2003 online forum, ValuesJam:

• Commitment to the customer

• Excellence through innovation

• Integrity that earns trust

Using a specially tailored “jamalyzer” tool—based on IBM’s e-classifier software, but turbocharged with additional capabilities designed to process constantly changing content—IBM analysts crunched the million-plus words posted during the ValuesJam. Some themes emerged. For example, many people said that a silo mentality pitted the business units against one another, to the detriment of IBM as a whole. Several people characterized this as a trust issue. But the proposed value “integrity that earns trust” was criticized as being too vague. Some thought it was just another way of saying “respect for the individual,” one of the original Basic Beliefs that many now viewed as outdated. And the notion of trust was seen as being too inwardly focused—management trusting its employees—and not prescriptive enough in terms of how employees should behave with each other or with parties outside the company.

Drawing on this analysis, the results of pre- and post-jam surveys, and a full reading of the raw transcripts, a small team, with input from Palmisano, arrived at a revised set of new corporate values:

• Dedication to every client’s success

• Innovation that matters—for our company and for the world

• Trust and personal responsibility in all relationships

These were published on the company intranet in November 2003.

What were the chief points of debate—or contention?

There was actually remarkable agreement on what we all value. The debate, as it turned out, wasn’t over the values themselves so much. The debate was about whether IBM today is willing and able to live them.

For instance, people seemed to understand the need to reintegrate the company, but there were complaints—legitimate complaints—about things that are getting in the way. People would describe extremely frustrating situations. They’d say something like: “I’m in Tokyo, prototyping software for a client, and I need a software engineer based in Austin right now to help in a blade server configuration. But I can’t just say, ‘Please come to Tokyo and help.’ I need to get a charge code first so I can pay his department for his time!”

There’s a collective impatience that we’ve been tapping into to drive the change needed to make IBM everything that all of us aspire for it to be. I’m convinced that we wouldn’t have gotten to this point if we hadn’t found a way to engage the entire IBM population in a genuine, candid conversation.

Sam Joins the Fray

IBM CEO SAM PALMISANO was in China on business during ValuesJam, and he logged on from there. Following are some of his comments (typos included) on a number of topics raised by employees during the online forum:

YES, values matter!!!!! (6 reply)

Samuel J. Palmisano 29 Jul 2003 20:00 GMT

Good discussion about the need for values/principles/belifes, etc. people can be very cynical and sarcastic about this kind of topic, but I appreciate the thoughtful constructive comments I’m seeing. Personaly, I believe “values” should embrace a company’s broader role in the world —with customers, society, culture, etc. - as well as how its people work together.. I hope this Jam elevates IBMs ambitions about its mission in the 21st century.. WE have a unique opprtunity for IBM to set the pace for ALL companies, not just the techs.

doing the right thing for customers . . . (21 reply)

Samuel J. Palmisano 29 Jul 2003 20:07 GMT

Early in my career when I was in the field in Baltimore, one of our systems failed for a health care customer. The customer went to manual processes, but said they would start losing patients within hours if the system couldnt be fixed. The branch mgr called one of our competitors and orderd another system. so two teams of IBMERS worked side by side.. one to fix the system, the others to bring up the new one. the mgr never asked Hq what to do.. it was a great lesson in how far this company will go to help a customer in time of need. btw, we fixed the system in time.

integrity/trust in ALL our relationships matter!!!! (44 reply)

Samuel J. Palmisano 29 Jul 2003 20:12 GMT

very interesting discussion . . . one thing I’m noticing, and it was in the broadcast feedback too: not too many of you are talking about integrity and trust when it comes to our OTHER relationships that are key to IBMs success—customers, communities where we live, owners of the company etc. any thoghts on why thats so? maybe we’re too inwardly focused?

a world without IBM???? (35 reply)

Samuel J. Palmisano 29 Jul 2003 20:20 GMT

No IBM? the industry would stop growing because no one would invent anything that ran for more than THREE MINUTES.. no IBM means no grownups . . . no IBM means no truly global company that brings economic growth, respect progress to societies everywhere . . . no iBM means no place to work for hundreds of thousands of people who want more than a job, they want to ,MAKE A DIFFERENCE in the world.

suggestion for Sam (9 reply)

Samuel J. Palmisano 29 Jul 2003 20:25 GMT

steve, you make good points about how/when we win . . . we can blow up more burecracy if we all behave like mature adutls and take into account ALL OF THE INTERESTS of IBm FIRST.. customers, employees, shareholders, doing whats right for the LONG TERM intersts of the company. mgrs have an importrant role to play in encouraing this kind of behavior . . . you have my support.

By the way, having a global, universally accessible intranet like ours certainly helps, but the technology isn’t the point. I think we would’ve found a way to have this companywide dialogue if the Web didn’t exist. [For an explanation of how the jam worked, see the sidebar “Managing ValuesJam.”]

What happened after the jam?

Well, we got a mountain of employee comments. The team analyzed all of it, and it was clear that the proposed value statements needed to change to reflect some of the nuances and emotion people expressed. So, drawing on this analysis, along with other employee feedback, a small team settled on IBM’s new corporate values.

The first value is “dedication to every client’s success.” At one level, that’s pretty straightforward: Bring together all of IBM’s capability—in the laboratory, in the field, in the back office, wherever—to help solve difficult problems clients can’t solve themselves. But this is also a lot more than the familiar claim of unstinting customer service. “Client success” isn’t just “the customer is always right.” It means maintaining a long-term relationship where what happens after the deal is more important than what happens before it’s signed. It means a persistent focus on outcomes. It means having skin in the game of your client’s success, up to and including how your contracts are structured and what triggers your getting paid.

The second is “innovation that matters—for our company and for the world.” When employees talked about IBM making a difference in the world, they included more than our work of inventing and building great products. They talked about how their work touches people and society, how we can help save lives—say, through our cutting-edge work with the Mayo Clinic or by helping governments fight terrorism with our data technology. This kind of innovation is a major reason we are able to attract great scientists. They can do cool stuff and maybe make more money in Silicon Valley—for a while, anyway—but they can do work that actually changes business and society at IBM. And it’s also about what I mentioned before: a continually experimental attitude toward IBM itself. Over most of our 90 years, with the exception of that one period when we became arrogant and complacent, this company never stopped questioning assumptions, trying out different models, testing the limits—whether in technology or business or in progressive workforce policies. Employees reminded us that those things are innovations that matter at least as much as new products.

The third value is “trust and personal responsibility in all relationships.” There’s a lot in that statement, too. Interestingly, the feedback from employees on this value has focused on relationships among people at IBM. But we’re also talking about the company’s relationships with suppliers, with investors, with governments, with communities.

We published the values in their final form—along with some elaboration on them and some direct employee postings from the jam—in November 2003. Over the next ten days, more than 200,000 people downloaded the online document. The responses just flooded in, both in the form of postings on the intranet and in more than a thousand e-mails sent directly to me, telling us in often sharp language just where IBM’s operations fell short of, or clashed with, these ideals. Some of the comments were painful to read. But, again, they exhibited something every leader should welcome: People here aren’t complacent about the company’s future. And the comments were, by and large, extremely thoughtful.

Managing ValuesJam

IBM HAD EXPERIMENTED before with jam sessions—relatively unstructured employee discussions around broad topics—both on the corporate intranet and in face-to-face off-site brainstorming sessions. But the 72-hour Values-Jam, held in July 2003, was the most ambitious, focusing as it did on the very nature and future of IBM.

One thing was clear: You wouldn’t be able to orchestrate a forum like this, the verbal equivalent of an improvisational jam session among jazz musicians. In the words of CEO Sam Palmisano, “It just took off.” But, much like a musical jam, the dialogue was informed by a number of themes:

Forum 1. Company Values

Do company values exist? If so, what is involved in establishing them? Most companies today have values statements. But what would a company look and act like that truly lived its beliefs? Is it important for IBM to agree on a set of lasting values that drive everything it does?

Forum 2. A First Draft

What values are essential to what IBM needs to become? Consider this list: 1. Commitment to the customer. 2. Excellence through innovation. 3. Integrity that earns trust. How might these values change the way we act or the decisions we make? Is there some important aspect or nuance that is missing?

Forum 3. A Company’s Impact

If our company disappeared tonight, how different would the world be tomorrow? Is there something about our company that makes a unique contribution to the world?

Forum 4. The Gold Standard

When is IBM at its best? When have you been proudest to be an IBMer? What happened, and what was uniquely meaningful about it? And what do we need to do—or change—to be the gold standard going forward?

What did you do with this feedback?

We collected and collated it. Then I printed all of it out—the stack of paper was about three feet high—and took it home to read over one weekend. On Monday morning, I walked into our executive committee meeting and threw it on the table. I said, “You guys ought to read every one of these comments, because if you think we’ve got this place plumbed correctly, think again.”

Don’t get me wrong. The passion in these e-mails was positive as well as negative. People would say, literally, “I’m weeping. These values describe the company I joined, the company I believe in. We can truly make this place great again. But we’ve got all these things in our way. . . .” The raw emotion of some of the e-mails was really something.

Now, if you’ve unleashed all this frustration and energy, if you’ve invited people to feel hope about something they really care about, you’d better be prepared to do something in response. So, in the months since we finalized the values, we’ve announced some initiatives that begin to close the gaps.

One I have dubbed our “$100 million bet on trust.” We kept hearing about situations like our colleague in Tokyo who needed help from the engineer in Austin, cases in which employees were unable to respond quickly to client needs because of financial control processes that required several levels of management approval. The money would usually be approved, but too late. So we allocated managers up to $5,000 annually they could spend, no questions asked, to respond to extraordinary situations that would help generate business or develop client relationships or to respond to an IBMer’s emergency need. We ran a pilot for a few months with our 700 client-facing teams, and they spent the money intelligently. There were lots of examples of teams winning deals and delighting clients with a small amount of “walk around money” to spend at their discretion. So, based on the success of that pilot, we expanded the program to all 22,000 IBM first-line managers.

You can do the math: $5,000 times 22,000 managers is a big number. I’m sure there were people in the company who said, “We need to get this under control.” But they’re not the CEO. Yes, you need financial controls. Yes, not every dollar spent from this Managers’ Value Fund will yield some tangible return. But I’m confident that allowing line managers to take some reasonable risks, and trusting them with those decisions, will pay off over time. The program also makes a point: that we live by our values.

The value of “trust and personal responsibility in all relationships”—including those with IBM’s shareholders—led to another initiative: a change in the way we grant top executive stock options. After getting a lot of outside experts to study this (and concluding that the complicated algorithms they recommended were wonderful, if you wanted to hire the outsiders as permanent consultants, but terrible if you wanted a simple formula that aligned executive behavior with shareholder interests), we settled on a straightforward idea. Senior executives will benefit from their options only after shareholders have realized at least 10% growth in their investments—that is, the strike price is 10% higher than the market price on the day the options are issued. Look at it this way: IBM’s market value would have to increase by $17 billion from that date before any of the execs realize a penny of benefit. We think we are the first large company to take such a radical step—and it grew out of our values.

Let me give you one more example. It may not sound like a big deal, but for us, it was radical. We overhauled the way we set prices. We heard time and again from employees about how difficult it was to put together a client-friendly, cross-IBM solution, one involving a variety of products and services at a single, all-inclusive price. We couldn’t do it. Every brand unit had its own P&L, and all the people who determine prices had been organized by brand. Remember those 100,000 cells in our 3-D matrix? Our people were pulling their cross-IBM bids apart, running them through our financial-accounting system as separate bids for individual products and services. This was nuts, because it’s our ability to offer everything—hardware, software, services, and financing—that gives us a real advantage. When we bid on each of the parts separately, we go head-to-head against rivals by product: EMC in storage, say, or Accenture in services. This was tearing out the very heart of our strategy of integration, not to mention our unique kind of business-plus-technology innovation.

Let me give you a humorous (if somewhat discouraging) illustration. Every senior executive has responsibility for at least one major client—we call them “partnership accounts.” Our former CFO John Joyce, who now heads IBM’s services business, put together a deal for his account that involved some hardware, some software, and some services. He was told he couldn’t price it as an integrated solution. And he’s the CFO! So we figured out a way to set a single price for each integrated offering.

This sounds like a great business move. But what does it have to do with values? Wouldn’t you ultimately have decided you had to do that in any case?

To be honest, we’d been debating the pricing issue at the executive level for a long time. But we hadn’t done anything about it. The values initiative forced us to confront the issue, and it gave us the impetus to make the change. You know, there are always ingrained operations and habits of mind in any organization—I don’t care whether it’s a business or a university or a government. Well, the values and the jam were great inertia-busting vehicles. A small business in this place is $15 billion, and a big one is $40 billion. So you have senior vice presidents running Fortune 500–sized companies who aren’t necessarily looking for bright ideas from the CEO or some task force every day. But when you hear from so many of our people on the front lines, you can’t just ignore it. They’re crying out: “We say we value ‘client success,’ and we want to grow our business. This one thing is getting in the way of both!” You’ve got to pay attention—if not to me, then to them.

So we took the pricers—the people who set the prices for client bids—and we said to them, “You work for IBM. When there’s a cross-IBM bid with multiple products, you price it on the IBM income statement, not on the income statements of each product.” Needless to say, this involved a series of very difficult meetings with senior executives. There was a huge debate among the finance people about all the reasons why we couldn’t do it: “It will be too much work to reallocate all the costs and revenue of a project back to individual profit centers.” And they’re right: It isn’t easy, especially when we now have to certify everything. But the CFO was with me on this: After all, he’d seen the problem firsthand! And we made the change, so that now when we make a truly cross-IBM bid, we can optimize it for the client and for us.

This brings us back to the tension between soft values and hard financial metrics. In the long run, they shouldn’t conflict. But along the way, they’re going to be jabbing at each other. After all, people still have to make their numbers.

Certainly, there’s no getting around that in a commercial enterprise. But I think values inject balance in the company’s culture and management system: balance between the short-term transaction and the long-term relationship, balance between the interests of shareholders, employees, and clients. In every case, you have to make a call. Values help you make those decisions, not on an ad hoc basis, but in a way that is consistent with your culture and brand, with who you are as a company.

Look at how we compensate our managing directors, who are responsible for our largest client relationships. We decided to take half their comp and calculate it not on an annual basis but on a rolling three-year basis. We ask clients to score the managing director’s performance at the end of a project or engagement, which might last longer than a single year, and that plays a big part in his bonus. So a big piece of his compensation is based on a combination of the project’s profitability—whether the manager made his annual numbers—and on the client’s satisfaction over a longer-term horizon. The managing director can’t trade off one for the other.

So we’ve tried to keep balance in the system, to make sure that things aren’t completely oriented toward short-term financials. But you’re absolutely right: There are times when people will argue, “Well, jeez, you guys are pushing us in both directions.” It’s a valid debate. I think, though, that the best place to have that debate is at the lowest level of your organization, because that’s where these decisions are being made and having an impact. Thousands of these interactions go on every day that none of us at the top will ever, or should ever, know about. But you hope that the values are providing a counterweight to the drive for short-term profitability in all those interactions. In the long term, I think, whether or not you have a values-driven culture is what makes you a winner or a loser.

You’ve had the new values in place for just about a year now. They’ve already created strong emotions and high expectations. What’s the prognosis?

We’re just starting down the road on what is probably a ten- to 15-year process. I was back in Asia not long ago, and I did one of these town hall–style meetings with IBM employees and talked about the values. Probably two-thirds of the people clearly knew about them, had read about them. But a third of the people—you could look at their faces and see it—hadn’t even heard of the values. Or at least the values hadn’t resonated with them yet. So we have work to do. Not just in getting everyone to memorize three pithy statements. We need to do a heck of a lot to close the gaps between our stated values and the reality of IBM today. That’s the point of it all.

I know that not everyone on my executive team is as enthusiastic about the values initiative as I am—though they’d never admit it! But people on the senior team who lived through IBM’s near-death experience will do anything not to go back to that. The blow to everyone’s pride when IBM became the laughingstock of the business world was almost too much to bear. I have zero resistance from the senior team to initiatives that can save us from a return to that. And our values work is one of the most important of those initiatives.

Then look at the employee response to ValuesJam. There is an unmistakable yearning for this to be a great company. I mean, why have people joined IBM over the years? There are a lot of places to make money, if that’s what drives you. Why come here?

I believe it’s because they want to be part of a progressive company that makes a difference in the world. They want to be in the kind of company that supports research that wins Nobel Prizes, that changes the way people think about business itself, that is willing to take firm positions on unpopular issues based on principle.

You know, back in the 1950s, Watson, Jr., wrote the governors of southern states that IBM would not adhere to separate-but-equal laws, and then the company codified an equal-opportunity policy years before it was mandated by law. I’ve got to believe that a company that conceives of itself that way, and that seriously manages itself accordingly, has strong appeal to a lot of people. We can’t offer them the promise of instant wealth, which they may get at a startup, or a job for life, as in the old days. But we can offer them something worth believing in and working toward.

If we get most people in this company excited about that, they’re going to pull the rest of the company with them. If they become dedicated to these values and what we’re trying to accomplish, I can go to sleep at night confident of our future.

Originally published in December 2004. Reprint R0412C

Radical Change, the Quiet Way

by Debra E. Meyerson

AT ONE POINT OR ANOTHER, many managers experience a spang of conscience—a yearning to confront the basic or hidden assumptions, interests, practices, or values within an organization that they feel are stodgy, unfair, even downright wrong. A vice president wishes that more people of color would be promoted. A partner at a consulting firm thinks new MBAs are being so overworked that their families are hurting. A senior manager suspects his company, with some extra cost, could be kinder to the environment. Yet many people who want to drive changes like these face an uncomfortable dilemma. If they speak out too loudly, resentment builds toward them; if they play by the rules and remain silent, resentment builds inside them. Is there any way, then, to rock the boat without falling out of it?

Over the past 15 years, I have studied hundreds of professionals who spend the better part of their work lives trying to answer this question. Each one of the people I’ve studied differs from the organizational status quo in some way—in values, race, gender, or sexual preference, perhaps (see the sidebar “How the Research Was Done”). They all see things a bit differently from the “norm.” But despite feeling at odds with aspects of the prevailing culture, they genuinely like their jobs and want to continue to succeed in them, to effectively use their differences as the impetus for constructive change. They believe that direct, angry confrontation will get them nowhere, but they don’t sit by and allow frustration to fester. Rather, they work quietly to challenge prevailing wisdom and gently provoke their organizational cultures to adapt. I call such change agents tempered radicals because they work to effect significant changes in moderate ways.

How the Research Was Done

THIS ARTICLE IS BASED ON a multipart research effort that I began in 1986 with Maureen Scully, a professor of management at the Center for Gender in Organizations at Simmons Graduate School of Management in Boston. We had observed a number of people in our own occupation—academia—who, for various reasons, felt at odds with the prevailing culture of their institutions. Initially, we set out to understand how these individuals sustained their sense of self amid pressure to conform and how they managed to uphold their values without jeopardizing their careers. Eventually, this research broadened to include interviews with individuals in a variety of organizations and occupations: business people, doctors, nurses, lawyers, architects, administrators, and engineers at various levels of seniority in their organizations.

Since 1986, I have observed and interviewed dozens of tempered radicals in many occupations and conducted focused research with 236 men and women, ranging from mid-level professionals to CEOs. The sample was diverse, including people of different races, nationalities, ages, religions, and sexual orientations, and people who hold a wide range of values and change agendas. Most of these people worked in one of three publicly traded corporations—a financial services organization, a high-growth computer components corporation, and a company that makes and sells consumer products. In this portion of the research, I set out to learn more about the challenges tempered radicals face and discover their strategies for surviving, thriving, and fomenting change. The sum of this research resulted in the spectrum of strategies described in this article.

In so doing, they exercise a form of leadership within organizations that is more localized, more diffuse, more modest, and less visible than traditional forms—yet no less significant. In fact, top executives seeking to institute cultural or organizational change—who are, perhaps, moving tradition-bound organizations down new roads or who are concerned about reaping the full potential of marginalized employees—might do well to seek out these tempered radicals, who may be hidden deep within their own organizations. Because such individuals are both dedicated to their companies and masters at changing organizations at the grassroots level, they can prove extremely valuable in helping top managers to identify fundamental causes of discord, recognize alternative perspectives, and adapt to changing needs and circumstances. In addition, tempered radicals, given support from above and a modicum of room to experiment, can prove to be excellent leaders. (For more on management’s role in fostering tempered radicals, see the sidebar “Tempered Radicals as Everyday Leaders.”)

Idea in Brief

How do you rock your corporate boat—without falling out? You know your firm needs constructive change, but here’s your dilemma: If you push your agenda too hard, resentment builds against you. If you remain silent, resentment builds inside you.

What’s a manager to do? Become a tempered radical—an informal leader who quietly challenges prevailing wisdom and provokes cultural transformation. These radicals bear no banners and sound no trumpets. Their seemingly innocuous changes barely inspire notice. But like steady drops of water, they gradually erode granite.

Tempered radicals embody contrasts. Their commitments are firm, but their means flexible. They yearn for rapid change, but trust in patience. They often work alone, yet unite others. Rather than pressing their agendas, they start conversations. And instead of battling powerful foes, they seek powerful friends. The overall effect? Evolutionary—but relentless—change.

Since the actions of tempered radicals are not, by design, dramatic, their leadership may be difficult to recognize. How, then, do people who run organizations, who want to nurture this diffuse source of cultural adaptation, find and develop these latent leaders? One way is to appreciate the variety of modes in which tempered radicals operate, learn from them, and support their efforts.

To navigate between their personal beliefs and the surrounding cultures, tempered radicals draw principally on a spectrum of incremental approaches, including four I describe here. I call these disruptive self-expression, verbal jujitsu, variable-term opportunism, and strategic alliance building. Disruptive self-expression, in which an individual simply acts in a way that feels personally right but that others notice, is the most inconspicuous way to initiate change. Verbal jujitsu turns an insensitive statement, action, or behavior back on itself. Variable-term opportunists spot, create, and capitalize on short- and long-term opportunities for change. And with the help of strategic alliances, an individual can push through change with more force.

Idea in Practice

Tempered radicals use these tactics:

Disruptive Self-Expression

Demonstrate your values through your language, dress, office décor, or behavior. People notice and talk—often becoming brave enough to try the change themselves. The more people talk, the greater the impact.

Example: Stressed-out manager John Ziwak began arriving at work earlier so he could leave by 6:00 p.m. to be with family. He also refused evening business calls. As his stress eased, his performance improved. Initially skeptical, colleagues soon accommodated, finding more efficient ways of working and achieving balance in their own lives.

Verbal Jujitsu

Redirect negative statements or actions into positive change.

Example: Sales manager Brad Williams noticed that the new marketing director’s peers ignored her during meetings. When one of them co-opted a thought she had already expressed, Williams said: “I’m glad George picked up on Sue’s concerns. Sue, did George correctly capture what you were thinking?” No one ignored Sue again.

Variable-Term Opportunism

Be ready to capitalize on unexpected opportunities for short-term change, as well as orchestrate deliberate, longer term change.

Example: Senior executive Jane Adams joined a company with a dog-eat-dog culture. To insinuate her collaborative style, she shared power with direct reports, encouraged them to also delegate, praised them publicly, and invited them to give high-visibility presentations. Her division gained repute as an exceptional training ground for building experience, responsibility, and confidence.

Strategic Alliance Building

Gain clout by working with allies. Enhance your legitimacy and implement change more quickly and directly than you could alone. Don’t make “opponents” enemies—they’re often your best source of support and resources.

Example: Paul Wielgus started a revolution in his bureaucratic global spirits company—by persuading the opposition to join him. Others derided the training department Wielgus formed to boost employee creativity, and an auditor scrutinized the department for unnecessary expense. Rather than getting defensive, Paul treated the auditor as an equal and sold him on the program’s value. The training spread, inspiring employees and enhancing productivity throughout the company.

Each of these approaches can be used in many ways, with plenty of room for creativity and wit. Self-expression can be done with a whisper; an employee who seeks more racial diversity in the ranks might wear her dashiki to company parties. Or it can be done with a roar; that same employee might wear her dashiki to the office every day. Similarly, a person seeking stricter environmental policies might build an alliance by enlisting the help of one person, the more powerful the better. Or he might post his stance on the company intranet and actively seek a host of supporters. Taken together, the approaches form a continuum of choices from which tempered radicals draw at different times and in various circumstances.

But before looking at the approaches in detail, it’s worth reconsidering, for a moment, the ways in which cultural change happens in the workplace.

How Organizations Change

Research has shown that organizations change primarily in two ways: through drastic action and through evolutionary adaptation. In the former case, change is discontinuous and often forced on the organization or mandated by top management in the wake of major technological innovations, by a scarcity or abundance of critical resources, or by sudden changes in the regulatory, legal, competitive, or political landscape. Under such circumstances, change may happen quickly and often involves significant pain. Evolutionary change, by contrast, is gentle, incremental, decentralized, and over time produces a broad and lasting shift with less upheaval.

Tempered Radicals as Everyday Leaders

IN THE COURSE OF THEIR DAILY actions and interactions, tempered radicals teach important lessons and inspire change. In so doing, they exercise a form of leadership within organizations that is less visible than traditional forms—but just as important.

The trick for organizations is to locate and nurture this subtle form of leadership. Consider how Barry Coswell, a conservative, yet open-minded lawyer who headed up the securities division of a large, distinguished financial services firm, identified, protected, and promoted a tempered radical within his organization. Dana, a left-of-center, first-year attorney, came to his office on her first day of work after having been fingerprinted—a standard practice in the securities industry. The procedure had made Dana nervous: What would happen when her new employer discovered that she had done jail time for participating in a 1960s-era civil rights protest? Dana quickly understood that her only hope of survival was to be honest about her background and principles. Despite the difference in their political proclivities, she decided to give Barry the benefit of the doubt. She marched into his office and confessed to having gone to jail for sitting in front of a bus.

“I appreciate your honesty,” Barry laughed, “but unless you’ve broken a securities law, you’re probably okay.” In return for her small confidence, Barry shared stories of his own about growing up in a poor county and about his life in the military. The story swapping allowed them to put aside ideological disagreements and to develop a deep respect for each other. Barry sensed a budding leader in Dana. Here was a woman who operated on the strength of her convictions and was honest about it but was capable of discussing her beliefs without self-righteousness. She didn’t pound tables. She was a good conversationalist. She listened attentively. And she was able to elicit surprising confessions from him.

Barry began to accord Dana a level of protection, and he encouraged her to speak her mind, take risks, and most important, challenge his assumptions. In one instance, Dana spoke up to defend a female junior lawyer who was being evaluated harshly and, Dana believed, inequitably. Dana observed that different standards were being applied to male and female lawyers, but her colleagues dismissed her “liberal” concerns. Barry cast a glance at Dana, then said to the staff, “Let’s look at this and see if we are being too quick to judge.” After the meeting, Barry and Dana held a conversation about double standards and the pervasiveness of bias. In time, Barry initiated a policy to seek out minority legal counsel, both in-house and at outside legal firms. And Dana became a senior vice president.

In Barry’s ability to recognize, mentor, and promote Dana there is a key lesson for executives who are anxious to foster leadership in their organizations. It suggests that leadership development may not rest with expensive external programs or even with the best intentions of the human resources department. Rather it may rest with the open-minded recognition that those who appear to rock the boat may turn out to be the most effective of captains.

The power of evolutionary approaches to promote cultural change is the subject of frequent discussion. For instance, in “We Don’t Need Another Hero” (HBR, September 2001), Joseph L. Badaracco, Jr., asserts that the most effective moral leaders often operate beneath the radar, achieving their reforms without widespread notice. Likewise, tempered radicals gently and continually push against prevailing norms, making a difference in small but steady ways and setting examples from which others can learn. The changes they inspire are so incremental that they barely merit notice—which is exactly why they work so well. Like drops of water, these approaches are innocuous enough in themselves. But over time and in accumulation, they can erode granite.

Consider, for example, how a single individual slowly—but radically—altered the face of his organization. Peter Grant[1] was a black senior executive who held some 18 positions as he moved up the ladder at a large West Coast bank. When he first joined the company as a manager, he was one of only a handful of people of color on the professional staff. Peter had a private, long-term goal: to bring more women and racial minorities into the fold and help them succeed. Throughout his 30-year career running the company’s local banks, regional offices, and corporate operations, one of his chief responsibilities was to hire new talent. Each time he had the opportunity, Peter attempted to hire a highly qualified member of a minority. But he did more than that—every time he hired someone, he asked that person to do the same. He explained to the new recruits the importance of hiring women and people of color and why it was their obligation to do likewise.

Whenever minority employees felt frustrated by bias, Peter would act as a supportive mentor. If they threatened to quit, he would talk them out of it. “I know how you feel, but think about the bigger picture here,” he’d say. “If you leave, nothing here will change.” His example inspired viral behavior in others. Many stayed and hired other minorities; those who didn’t carried a commitment to hire minorities into their new companies. By the time Peter retired, more than 3,500 talented minority and female employees had joined the bank.

Peter was the most tempered, yet the most effective, of radicals. For many years, he endured racial slurs and demeaning remarks from colleagues. He waited longer than his peers for promotions; each time he did move up he was told the job was too big for him and he was lucky to have gotten it. “I worked my rear end off to make them comfortable with me,” he said, late in his career. “It wasn’t luck.” He was often angry, but lashing out would have been the path of least emotional resistance. So without attacking the system, advancing a bold vision, or wielding great power, Peter chipped away at the organization’s demographic base using the full menu of change strategies described below.

Disruptive Self-Expression

At the most tempered end of the change continuum is the kind of self-expression that quietly disrupts others’ expectations. Whether waged as a deliberate act of protest or merely as a personal demonstration of one’s values, disruptive self-expression in language, dress, office decor, or behavior can slowly change the atmosphere at work. Once people take notice of the expression, they begin to talk about it. Eventually, they may feel brave enough to try the same thing themselves. The more people who talk about the transgressive act or repeat it, the greater the cultural impact.

Consider the case of John Ziwak, a manager in the business development group of a high-growth computer components company. As a hardworking business school graduate who’d landed a plum job, John had every intention of working 80-hour weeks on the fast track to the top. Within a few years, he married a woman who also held a demanding job; soon, he became the father of two. John found his life torn between the competing responsibilities of home and work. To balance the two, John shifted his work hours—coming into the office earlier in the morning so that he could leave by 6 pm. He rarely scheduled late-afternoon meetings and generally refused to take calls at home in the evening between 6:30 and 9. As a result, his family life improved, and he felt much less stress, which in turn improved his performance at work.

At first, John’s schedule raised eyebrows; availability was, after all, an unspoken key indicator of commitment to the company. “If John is unwilling to stay past 6,” his boss wondered, “is he really committed to his job? Why should I promote him when others are willing and able to work all the time?” But John always met his performance expectations, and his boss didn’t want to lose him. Over time, John’s colleagues adjusted to his schedule. No one set up conference calls or meetings involving him after 5. One by one, other employees began adopting John’s “6 o’ clock rule”; calls at home, particularly during dinner hour, took place only when absolutely necessary. Although the 6 o’ clock rule was never formalized, it nonetheless became par for the course in John’s department. Some of John’s colleagues continued to work late, but they all appreciated these changes in work practice and easily accommodated them. Most people in the department felt more, not less, productive during the day as they adapted their work habits to get things done more efficiently—for example, running meetings on schedule and monitoring interruptions in their day. According to John’s boss, the employees appreciated the newfound balance in their lives, and productivity in the department did not suffer in the least.

Tempered radicals know that even the smallest forms of disruptive self-expression can be exquisitely powerful. The story of Dr. Frances Conley offers a case in point. By 1987, Dr. Conley had already established herself as a leading researcher and neurosurgeon at Stanford Medical School and the Palo Alto Veteran’s Administration hospital. But as one of very few women in the profession, she struggled daily to maintain her feminine identity in a macho profession and her integrity amid gender discrimination. She had to keep her cool when, for example, in the middle of directing a team of residents through complicated brain surgery, a male colleague would stride into the operating room to say, “Move over, honey.” “Not only did that undermine my authority and expertise with the team,” Dr. Conley recalled later, “but it was unwarranted—and even dangerous. That kind of thing would happen all the time.”

Despite the frustration and anger she felt, Dr. Conley at that time had no intention of making a huge issue of her gender. She didn’t want the fact that she was a woman to compromise her position, or vice versa. So she expressed herself in all sorts of subtle ways, including in what she wore. Along with her green surgical scrubs, she donned white lace ankle socks—an unequivocal expression of her femininity. In itself, wearing lace ankle socks could hardly be considered a Gandhian act of civil disobedience. The socks merely said, “I can be a neurosurgeon and be feminine.” But they spoke loudly enough in the stolid masculinity of the surgical environment, and, along with other small actions on her part, they sparked conversation in the hospital. Nurses and female residents frequently commented on Dr. Conley’s style. “She is as demanding as any man and is not afraid to take them on,” they would say, in admiration. “But she is also a woman and not ashamed of it.”

Ellen Thomas made a comparable statement with her hair. As a young African-American consultant in a technical services business, she navigated constantly between organizational pressures to fit in and her personal desire to challenge norms that made it difficult for her to be herself. So from the beginning of her employment, Ellen expressed herself by wearing her hair in neat cornrow braids. For Ellen, the way she wore her hair was not just about style; it was a symbol of her racial identity.

Once, before making an important client presentation, a senior colleague advised Ellen to unbraid her hair “to appear more professional.” Ellen was miffed, but she didn’t respond. Instead, she simply did not comply. Once the presentation was over and the client had been signed, she pulled her colleague aside. “I want you to know why I wear my hair this way,” she said calmly. “I’m a black woman, and I happen to like the style. And as you just saw,” she smiled, “my hairstyle has nothing to do with my ability to do my job.”

Does leaving work at 6 PM or wearing lacy socks or cornrows force immediate change in the culture? Of course not; such acts are too modest. But disruptive self-expression does do two important things. First, it reinforces the tempered radical’s sense of the importance of his or her convictions. These acts are self-affirming. Second, it pushes the status quo door slightly ajar by introducing an alternative modus operandi. Whether they are subtle, unspoken, and recognizable by only a few or vocal, visible, and noteworthy to many, such acts, in aggregation, can provoke real reform.

Verbal Jujitsu

Like most martial arts, jujitsu involves taking a force coming at you and redirecting it to change the situation. Employees who practice verbal jujitsu react to undesirable, demeaning statements or actions by turning them into opportunities for change that others will notice.

One form of verbal jujitsu involves calling attention to the opposition’s own rhetoric. I recall a story told by a man named Tom Novak, an openly gay executive who worked in the San Francisco offices of a large financial services institution. As Tom and his colleagues began seating themselves around a table for a meeting in a senior executive’s large office, the conversation briefly turned to the topic of the upcoming Gay Freedom Day parade and to so-called gay lifestyles in general. Joe, a colleague, said loudly, “I can appreciate that some people choose a gay lifestyle. I just don’t understand why they have to flaunt it in people’s faces.”

A Spectrum of Tempered Change Strategies

THE TEMPERED RADICAL’S SPECTRUM of strategies is anchored on the left by disruptive self-expression: subtle acts of private, individual style. A slightly more public form of expression, verbal jujitsu, turns the opposition’s negative expression or behavior into opportunities for change. Further along the spectrum, the tempered radical uses variable-term opportunism to recognize and act on short- and long-term chances to motivate others. And through strategic alliance building, the individual works directly with others to bring about more extensive change. The more conversations an individual’s action inspires and the more people it engages, the stronger the impetus toward change becomes.

In reality, people don’t apply the strategies in the spectrum sequentially or even necessarily separately. Rather, these tools blur and overlap. Tempered radicals remain flexible in their approach, “heating up” or “cooling off” each as conditions warrant.

Stung, Tom was tempted to keep his mouth shut and absorb the injury, but that would have left him resentful and angry. He could have openly condemned Joe’s bias, but that would have made him look defensive and self-righteous. Instead, he countered Joe with an altered version of Joe’s own argument, saying calmly, “I know what you mean, Joe. I’m just wondering about that big picture of your wife on your desk. There’s nothing wrong with being straight, but it seems that you are the one announcing your sexuality.” Suddenly embarrassed, Joe responded with a simple, “Touché.”

Managers can use verbal jujitsu to prevent talented employees, and their valuable contributions, from becoming inadvertently marginalized. That’s what happened in the following story. Brad Williams was a sales manager at a high-technology company. During a meeting one day, Brad noticed that Sue, the new marketing director, had tried to interject a few comments, but everything she said was routinely ignored. Brad waited for the right moment to correct the situation. Later on in the meeting, Sue’s colleague George raised similar concerns about distributing the new business’s products outside the country. The intelligent remark stopped all conversation. During the pause, Brad jumped in: “That’s an important idea,” he said. “I’m glad George picked up on Sue’s concerns. Sue, did George correctly capture what you were thinking?”

With this simple move, Brad accomplished a number of things. First, by indirectly showing how Sue had been silenced and her idea co-opted, he voiced an unspoken fact. Second, by raising Sue’s visibility, he changed the power dynamic in the room. Third, his action taught his colleagues a lesson about the way they listened—and didn’t. Sue said that after that incident she was no longer passed over in staff meetings.

In practicing verbal jujitsu, both Tom and Brad displayed considerable self-control and emotional intelligence. They listened to and studied the situation at hand, carefully calibrating their responses to disarm without harming. In addition, they identified the underlying issues (sexual bias, the silencing of newcomers) without sounding accusatory and relieved unconscious tensions by voicing them. In so doing, they initiated small but meaningful changes in their colleagues’ assumptions and behavior.

Variable-Term Opportunism

Like jazz musicians, who build completely new musical experiences from old standards as they go along, tempered radicals must be creatively open to opportunity. In the short-term, that means being prepared to capitalize on serendipitous circumstances; in the longterm, it often means something more proactive. The first story that follows illustrates the former case; the second is an example of the latter.

Tempered radicals like Chris Morgan know that rich opportunities for reform can often appear suddenly, like a $20 bill found on a sidewalk. An investment manager in the audit department of a New York conglomerate, Chris made a habit of doing whatever he could to reduce waste. To save paper, for example, he would single-space his documents and put them in a smaller font before pressing the “Print” button, and he would use both sides of the paper. One day, Chris noticed that the company cafeteria packaged its sandwiches in Styrofoam boxes that people opened and immediately tossed. He pulled the cafeteria manager aside. “Mary,” he said with a big smile, “those turkey-on-focaccia sandwiches look delicious today! I was wondering, though . . . would it be possible to wrap sandwiches only when people asked you to?” By making this very small change, Chris pointed out, the cafeteria would save substantially on packaging costs.

Chris gently rocked the boat by taking the following steps. First, he picked low-hanging fruit, focusing on something that could be done easily and without causing a lot of stir. Next, he attacked the problem not by criticizing Mary’s judgment but by enrolling her in his agenda (praising her tempting sandwiches, then making a gentle suggestion). Third, he illuminated the advantages of the proposed change by pointing out the benefits to the cafeteria. And he started a conversation that, through Mary, spread to the rest of the cafeteria staff. Finally, he inspired others to action: Eventually, the cafeteria staff identified and eliminated 12 other wasteful practices.

Add up enough conversations and inspire enough people and, sooner or later, you get real change. A senior executive named Jane Adams offers a case in point. Jane was hired in 1995 to run a 100-person, mostly male software-development division in an extremely fast-growing, pre-IPO technology company. The CEO of the company was an autocrat who expected his employees to emulate his dog-eat-dog management style. Although Jane was new to the job and wanted very much to fit in and succeed, turf wars and command-and-control tactics were anathema to her. Her style was more collaborative; she believed in sharing power. Jane knew that she could not attack the company’s culture by arguing with the CEO; rather, she took charge of her own division and ran it her own way. To that end, she took every opportunity to share power with subordinates. She instructed each of her direct reports to delegate responsibility as much as possible. Each time she heard about someone taking initiative in making a decision, she would praise that person openly before his or her manager. She encouraged people to take calculated risks and to challenge her.

When asked to give high-visibility presentations to the company’s executive staff, she passed the opportunities to those who had worked directly on the project. At first, senior executives raised their eyebrows, but Jane assured them that the presenter would deliver. Thus, her subordinates gained experience and won credit that, had they worked for someone else, they would likely never have received.

Occasionally, people would tell Jane that they noticed a refreshing contrast between her approach and the company’s prevailing one. “Thanks, I’m glad you noticed,” she would say with a quiet smile. Within a year, she saw that several of her own direct reports began themselves to lead in a more collaborative manner. Soon, employees from other divisions, hearing that Jane’s was one of the best to work for, began requesting transfers. More important, Jane’s group became known as one of the best training grounds and Jane as one of the best teachers and mentors of new talent. Nowhere else did people get the experience, responsibility, and confidence that she cultivated in her employees.

For Chris Morgan, opportunity was short-term and serendipitous. For Jane Adams, opportunity was more long-term, something to be mined methodically. In both cases, though, remaining alert to such variable-term opportunities and being ready to capitalize on them were essential.

Strategic Alliance Building

So far, we have seen how tempered radicals, more or less working alone, can effect change. What happens when these individuals work with allies? Clearly, they gain a sense of legitimacy, access to resources and contacts, technical and task assistance, emotional support, and advice. But they gain much more—the power to move issues to the forefront more quickly and directly than they might by working alone.

When one enlists the help of like-minded, similarly tempered coworkers, the strategic alliance gains clout. That’s what happened when a group of senior women at a large professional services firm worked with a group of men sympathetic to their cause. The firm’s executive management asked the four-woman group to find out why it was so hard for the company to keep female consultants on staff. In the course of their investigation, the women discussed the demanding culture of the firm: a 70-hour work week was the norm, and most consultants spent most of their time on the road, visiting clients. The only people who escaped this demanding schedule were part-time consultants, nearly all of whom happened to be women with families. These part-timers were evaluated according to the same performance criteria—including the expectation of long hours—as full-time workers. Though many of the part-timers were talented contributors, they consistently failed to meet the time criterion and so left the company. To correct the problem, the senior women first gained the ear of several executive men who, they knew, regretted missing time with their own families. The men agreed that this was a problem and that the company could not continue to bleed valuable talent. They signed on to help address the issue and, in a matter of months, the evaluation system was adjusted to make success possible for all workers, regardless of their hours.

Tempered radicals don’t allow preconceived notions about “the opposition” to get in their way. Indeed, they understand that those who represent the majority perspective are vitally important to gaining support for their cause. Paul Wielgus quietly started a revolution at his company by effectively persuading the opposition to join him. In 1991, Allied Domecq, the global spirits company whose brands include Courvoisier and Beefeater, hired Paul as a marketing director in its brewing and wholesaling division. Originally founded in 1961 as the result of a merger of three British brewing and pub-owning companies, the company had inherited a bureaucratic culture. Tony Hales, the CEO, recognized the need for dramatic change inside the organization and appreciated Paul’s talent and fresh perspective. He therefore allowed Paul to quit his marketing job, report directly to the CEO, and found a nine-person learning and training department that ran programs to help participants shake off stodgy thinking and boost their creativity. Yet despite the department’s blessing from on high and a two-year record of success, some managers thought of it as fluff. In fact, when David, a senior executive from the internal audit department, was asked to review cases of unnecessary expense, he called Paul on the carpet.

Paul’s strategy was to treat David not as a threat but as an equal, even a friend. Instead of being defensive during the meeting, Paul used the opportunity to sell his program. He explained that the trainers worked first with individuals to help unearth their personal values, then worked with them in teams to develop new sets of group values that they all believed in. Next, the trainers aligned these personal and departmental values with those of the company as a whole. “You wouldn’t believe the changes, David,” he said, enthusiastically. “People come out of these workshops feeling so much more excited about their work. They find more meaning and purpose in it, and as a consequence are happier and much more productive. They call in sick less often, they come to work earlier in the morning, and the ideas they produce are much stronger.” Once David understood the value of Paul’s program, the two began to talk about holding the training program in the internal audit department itself.

Paul’s refusal to be frightened by the system, his belief in the importance of his work, his search for creative and collaborative solutions, his lack of defensiveness with an adversary, and his ability to connect with the auditor paved the way for further change at Allied Domecq. Eventually, the working relationship the two men had formed allowed the internal audit department to transform its image as a policing unit into something more positive. The new Audit Services department came to be known as a partner, rather than an enforcer, in the organization as a whole. And as head of the newly renamed department, David became a strong supporter of Paul’s work.

Tempered radicals understand that people who represent the majority perspective can be important allies in more subtle ways as well. In navigating the course between their desire to undo the status quo and the organizational requirements to uphold it, tempered radicals benefit from the advice of insiders who know just how hard to push. When a feminist who wants to change the way her company treats women befriends a conservative Republican man, she knows he can warn her of political minefields. When a Latino manager wants his company to put a Spanish-language version of a manual up on the company’s intranet, he knows that the white, monolingual executive who runs operations may turn out to be an excellent advocate.

Of course, tempered radicals know that not everyone is an ally, but they also know it’s pointless to see those who represent the status quo as enemies. The senior women found fault with an inequitable evaluation system, not with their male colleagues. Paul won David’s help by giving him the benefit of the doubt from the very beginning of their relationship. Indeed, tempered radicals constantly consider all possible courses of action: “Under what conditions, for what issues, and in what circumstances does it make sense to join forces with others?”; “How can I best use this alliance to support my efforts?”

_____________________

Clearly, there is no one right way to effect change. What works for one individual under one set of circumstances may not work for others under different conditions. The examples above illustrate how tempered radicals use a spectrum of quiet approaches to change their organizations. Some actions are small, private, and muted; some are larger and more public. Their influence spreads as they recruit others and spawn conversations. Top managers can learn a lot from these people about the mechanics of evolutionary change.

Tempered radicals bear no banners; they sound no trumpets. Their ends are sweeping, but their means are mundane. They are firm in their commitments, yet flexible in the ways they fulfill them. Their actions may be small but can spread like a virus. They yearn for rapid change but trust in patience. They often work individually yet pull people together. Instead of stridently pressing their agendas, they start conversations. Rather than battling powerful foes, they seek powerful friends. And in the face of setbacks, they keep going. To do all this, tempered radicals understand revolutionary change for what it is—a phenomenon that can occur suddenly but more often than not requires time, commitment, and the patience to endure.

Originally published in October 2001. Reprint 7923

Notes

1. With the exception of those in the VA hospital and Allied Domecq cases, all the names used through this article are fictitious.

Tipping Point Leadership

by W. Chan Kim and Renée Mauborgne

IN FEBRUARY 1994, William Bratton was appointed police commissioner of New York City. The odds were against him. The New York Police Department, with a $2 billion budget and a workforce of 35,000 police officers, was notoriously difficult to manage. Turf wars over jurisdiction and funding were rife. Officers were underpaid relative to their counterparts in neighboring communities, and promotion seemed to bear little relationship to performance. Crime had gotten so far out of control that the press referred to the Big Apple as the Rotten Apple. Indeed, many social scientists had concluded, after three decades of increases, that New York City crime was impervious to police intervention. The best the police could do was react to crimes once they were committed.

Yet in less than two years, and without an increase in his budget, Bill Bratton turned New York into the safest large city in the nation. Between 1994 and 1996, felony crime fell 39%; murders, 50%; and theft, 35%. Gallup polls reported that public confidence in the NYPD jumped from 37% to 73%, even as internal surveys showed job satisfaction in the police department reaching an all-time high. Not surprisingly, Bratton’s popularity soared, and in 1996, he was featured on the cover of Time. Perhaps most impressive, the changes have outlasted their instigator, implying a fundamental shift in the department’s organizational culture and strategy. Crime rates have continued to fall: Statistics released in December 2002 revealed that New York’s overall crime rate is the lowest among the 25 largest cities in the United States.

The NYPD turnaround would be impressive enough for any police chief. For Bratton, though, it is only the latest of no fewer than five successful turnarounds in a 20-year career in policing. In the hope that Bratton can repeat his New York and Boston successes, Los Angeles has recruited him to take on the challenge of turning around the LAPD. (For a summary of his achievements, see the table “Bratton in action.”)

So what makes Bill Bratton tick? As management researchers, we have long been fascinated by what triggers high performance or suddenly brings an ailing organization back to life. In an effort to find the common elements underlying such leaps in performance, we have built a database of more than 125 business and nonbusiness organizations. Bratton first caught our attention in the early 1990s, when we heard about his turnaround of the New York Transit Police. Bratton was special for us because in all of his turnarounds, he succeeded in record time despite facing all four of the hurdles that managers consistently claim block high performance: an organization wedded to the status quo, limited resources, a demotivated staff, and opposition from powerful vested interests. If Bratton could succeed against these odds, other leaders, we reasoned, could learn a lot from him.

Over the years, through our professional and personal networks and the rich public information available on the police sector, we have systematically compared the strategic, managerial, and performance records of Bratton’s turnarounds. We have followed up by interviewing the key players, including Bratton himself, as well as many other people who for professional—or sometimes personal—reasons tracked the events.

Our research led us to conclude that all of Bratton’s turnarounds are textbook examples of what we call tipping point leadership. The theory of tipping points, which has its roots in epidemiology, is well known; it hinges on the insight that in any organization, once the beliefs and energies of a critical mass of people are engaged, conversion to a new idea will spread like an epidemic, bringing about fundamental change very quickly. The theory suggests that such a movement can be unleashed only by agents who make unforgettable and unarguable calls for change, who concentrate their resources on what really matters, who mobilize the commitment of the organization’s key players, and who succeed in silencing the most vocal naysayers. Bratton did all of these things in all of his turnarounds.

Idea in Brief

How can you overcome the hurdles facing any organization struggling to change: addiction to the status quo, limited resources, demotivated employees, and opposition from powerful vested interests?

Take lessons from police chief Bill Bratton, who’s pulled the trick off five times. Most dramatically, he transformed the U.S.’s most dangerous city—New York—into its safest. Bratton used tipping point leadership to make unarguable calls for change, concentrate resources on what really mattered, mobilize key players’ commitment, and silence naysayers.

Not every executive has Bratton’s personality, but most have his potential—if they follow his success formula.

Most managers only dream of pulling off the kind of performance leaps Bratton delivered. Even Jack Welch needed some ten years and tens of millions of dollars of restructuring and training to turn GE into the powerhouse it is today. Few CEOs have the time and money that Welch had, and most—even those attempting relatively mild change—are soon daunted by the scale of the hurdles they face. Yet we have found that the dream can indeed become a reality. For what makes Bratton’s turnarounds especially exciting to us is that his approach to overcoming the hurdles standing in the way of high performance has been remarkably consistent. His successes, therefore, are not just a matter of personality but also of method, which suggests that they can be replicated. Tipping point leadership is learnable.

In the following pages, we’ll lay out the approach that has enabled Bratton to overcome the forces of inertia and reach the tipping point. We’ll show first how Bratton overcame the cognitive hurdles that block companies from recognizing the need for radical change. Then we’ll describe how he successfully managed around the public sector’s endemic constraints on resources, which he even turned to his advantage. In the third section, we’ll explain how Bratton overcame the motivational hurdles that had discouraged and demoralized even the most eager police officers. Finally, we’ll describe how Bratton neatly closed off potentially fatal resistance from vocal and powerful opponents. (For a graphic summary of the ideas expressed in this article, see the figure “Tipping point leadership at a glance.”)

Idea in Practice

Four Steps to the Tipping Point

1. Break through the cognitive hurdle.

To make a compelling case for change, don’t just point at the numbers and demand better ones. Your abstract message won’t stick. Instead, make key managers experience your organization’s problems.

Example: New Yorkers once viewed subways as the most dangerous places in their city. But the New York Transit Police’s senior staff pooh-poohed public fears—because none had ever ridden subways. To shatter their complacency, Bratton required all NYTP officers—himself included—to commute by subway. Seeing the jammed turnstiles, youth gangs, and derelicts, they grasped the need for change—and embraced responsibility for it.

2. Sidestep the resource hurdle.

Rather than trimming your ambitions (dooming your company to mediocrity) or fighting for more resources (draining attention from the underlying problems), concentrate current resources on areas most needing change.

Example: Since the majority of subway crimes occurred at only a few stations, Bratton focused manpower there—instead of putting a cop on every subway line, entrance, and exit.

3. Jump the motivational hurdle.

To turn a mere strategy into a movement, people must recognize what needs to be done and yearn to do it themselves. But don’t try reforming your whole organization; that’s cumbersome and expensive. Instead, motivate key influencers—persuasive people with multiple connections. Like bowling kingpins hit straight on, they topple all the other pins. Most organizations have several key influencers who share common problems and concerns—making it easy to identify and motivate them.

Example: Bratton put the NYPD’s key influencers— precinct commanders—under a spotlight during semiweekly crime strategy review meetings, where peers and superiors grilled commanders about precinct performance. Results? A culture of performance, accountability, and learning that commanders replicated down the ranks.

Also make challenges attainable. Bratton exhorted staff to make NYC’s streets safe “block by block, precinct by precinct, and borough by borough.”

4. Knock over the political hurdle.

Even when organizations reach their tipping points, powerful vested interests resist change. Identify and silence key naysayers early by putting a respected senior insider on your top team.

Example: At the NYPD, Bratton appointed 20-year veteran cop John Timoney as his number two. Timoney knew the key players and how they played the political game. Early on, he identified likely saboteurs and resisters among top staff—prompting a changing of the guard.

Also, silence opposition with indisputable facts. When Bratton proved his proposed crime-reporting system required less than 18 minutes a day, time-crunched precinct commanders adopted it.

Break Through the Cognitive Hurdle

In many turnarounds, the hardest battle is simply getting people to agree on the causes of current problems and the need for change. Most CEOs try to make the case for change simply by pointing to the numbers and insisting that the company achieve better ones. But messages communicated through numbers seldom stick. To the line managers—the very people the CEO needs to win over—the case for change seems abstract and remote. Those whose units are doing well feel that the criticism is not directed at them, that the problem is top management’s. Managers of poorly performing units feel that they have been put on notice—and people worried about job security are more likely to be scanning the job market than trying to solve the company’s problems.

Bratton in action

The New York Police Department was not Bill Bratton’s first turnaround. The table describes his biggest challenges and achievements during his 20 years as a policy reformer.

For all these reasons, tipping point leaders like Bratton do not rely on numbers to break through the organization’s cognitive hurdles. Instead, they put their key managers face-to-face with the operational problems so that the managers cannot evade reality. Poor performance becomes something they witness rather than hear about. Communicating in this way means that the message—performance is poor and needs to be fixed—sticks with people, which is essential if they are to be convinced not only that a turnaround is necessary but that it is something they can achieve.

When Bratton first went to New York to head the transit police in April 1990, he discovered that none of the senior staff officers rode the subway. They commuted to work and traveled around in cars provided by the city. Comfortably removed from the facts of underground life—and reassured by statistics showing that only 3% of the city’s major crimes were committed in the subway—the senior managers had little sensitivity to riders’ widespread concern about safety. In order to shatter the staff’s complacency, Bratton began requiring that all transit police officials—beginning with himself—ride the subway to work, to meetings, and at night. It was many staff officers’ first occasion in years to share the ordinary citizen’s subway experience and see the situation their subordinates were up against: jammed turnstiles, aggressive beggars, gangs of youths jumping turnstiles and jostling people on the platforms, winos and homeless people sprawled on benches. It was clear that even if few major crimes took place in the subway, the whole place reeked of fear and disorder. With that ugly reality staring them in the face, the transit force’s senior managers could no longer deny the need for a change in their policing methods.

Bratton uses a similar approach to help sensitize his superiors to his problems. For instance, when he was running the police division of the Massachusetts Bay Transit Authority (MBTA), which runs the Boston-area subway and buses, the transit authority’s board decided to purchase small squad cars that would be cheaper to buy and run. Instead of fighting the decision, Bratton invited the MBTA’s general manager for a tour of the district. He picked him up in a small car just like the ones that were to be ordered. He jammed the seats forward to let the general manager feel how little legroom a six-foot cop would have, then drove him over every pothole he could find. Bratton also put on his belt, cuffs, and gun for the trip so the general manager could see how little space there was for the tools of the officer’s trade. After just two hours, the general manager wanted out. He said he didn’t know how Bratton could stand being in such a cramped car for so long on his own—let alone if there were a criminal in the backseat. Bratton got the larger cars he wanted.

Tipping point leadership at a glance

Leaders like Bill Bratton use a four-step process to bring about rapid, dramatic, and lasting change with limited resources. The cognitive and resource hurdles shown here represent the obstacles that organizations face in reorienting and formulating strategy. The motivational and political hurdles prevent a strategy’s rapid execution. Tipping all four hurdles leads to rapid strategy reorientation and execution. Overcoming these hurdles is, of course, a continuous process because the innovation of today soon becomes the conventional norm of tomorrow.

Bratton reinforces direct experiences by insisting that his officers meet the communities they are protecting. The feedback is often revealing. In the late 1970s, Boston’s Police District 4, which included Symphony Hall, the Christian Science Mother Church, and other cultural institutions, was experiencing a surge in crime. The public was increasingly intimidated; residents were selling and leaving, pushing the community into a downward spiral. The Boston police performance statistics, however, did not reflect this reality. District 4 police, it seemed, were doing a splendid job of rapidly clearing 911 calls and tracking down perpetrators of serious crimes. To solve this paradox, Bratton had the unit organize community meetings in schoolrooms and civic centers so that citizens could voice their concerns to district sergeants and detectives. Obvious as the logic of this practice sounds, it was the first time in Boston’s police history that anyone had attempted such an initiative—mainly because the practice up to that time had argued for detachment between police and the community in order to decrease the chances of police corruption.

The limitations of that practice quickly emerged. The meetings began with a show-and-tell by the officers: This is what we are working on and why. But afterward, when citizens were invited to discuss the issues that concerned them, a huge perception gap came to light. While the police officers took pride in solving serious offenses like grand larceny and murder, few citizens felt in any danger from these crimes. They were more troubled by constant minor irritants: prostitutes, panhandlers, broken-down cars left on the streets, drunks in the gutters, filth on the sidewalks. The town meetings quickly led to a complete overhaul of the police priorities for District 4. Bratton has used community meetings like this in every turnaround since.

Bratton’s internal communications strategy also plays an important role in breaking through the cognitive hurdles. Traditionally, internal police communication is largely based on memos, staff bulletins, and other documents. Bratton knows that few police officers have the time or inclination to do more than throw these documents into the wastebasket. Officers rely instead on rumor and media stories for insights into what headquarters is up to. So Bratton typically calls on the help of expert communication outsiders. In New York, for instance, he recruited John Miller, an investigative television reporter known for his gutsy and innovative style, as his communication czar. Miller arranged for Bratton to communicate through video messages that were played at roll calls, which had the effect of bringing Bratton—and his opinions—closer to the people he had to win over. At the same time, Miller’s journalistic savvy made it easier for the NYPD to ensure that press interviews and stories echoed the strong internal messages Bratton was sending.

Sidestep the Resource Hurdle

Once people in an organization accept the need for change and more or less agree on what needs to be done, leaders are often faced with the stark reality of limited resources. Do they have the money for the necessary changes? Most reformist CEOs do one of two things at this point. They trim their ambitions, dooming the company to mediocrity at best and demoralizing the workforce all over again, or they fight for more resources from their bankers and shareholders, a process that can take time and divert attention from the underlying problems.

That trap is completely avoidable. Leaders like Bratton know how to reach the organization’s tipping point without extra resources. They can achieve a great deal with the resources they have. What they do is concentrate their resources on the places that are most in need of change and that have the biggest possible payoffs. This idea, in fact, is at the heart of Bratton’s famous (and once hotly debated) philosophy of zero-tolerance policing.

Having won people over to the idea of change, Bratton must persuade them to take a cold look at what precisely is wrong with their operating practices. It is at this point that he turns to the numbers, which he is adept at using to force through major changes. Take the case of the New York narcotics unit. Bratton’s predecessors had treated it as secondary in importance, partly because they assumed that responding to 911 calls was the top priority. As a result, less than 5% of the NYPD’s manpower was dedicated to fighting narcotics crimes.

At an initial meeting with the NYPD’s chiefs, Bratton’s deputy commissioner of crime strategy, Jack Maple, asked people around the table for their estimates of the percentage of crimes attributable to narcotics use. Most said 50%; others, 70%; the lowest estimate was 30%. On that basis, a narcotics unit consisting of less than 5% of the police force was grossly understaffed, Maple pointed out. What’s more, it turned out that the narcotics squad largely worked Monday through Friday, even though drugs were sold in large quantities—and drug-related crimes persistently occurred—on the weekends. Why the weekday schedule? Because it had always been done that way; it was an unquestioned modus operandi. Once these facts were presented, Bratton’s call for a major reallocation of staff and resources within the NYPD was quickly accepted.

The strategy canvas of transit:

How Bratton refocused resources

In comparing strategies across companies, we like to use a tool we call the strategy canvas, which highlights differences in strategies and resource allocation. The strategy canvas shown here compares the strategy and allocation of resources of the New York Transit Police before and after Bill Bratton’s appointment as chief. The vertical axis shows the relative level of resource allocation. The horizontal axis shows the various elements of strategy in which the investments were made. Although a dramatic shift in resource allocation occurred and performance rose dramatically, overall investment of resources remained more or less constant. Bratton did this by de-emphasizing or virtually eliminating some traditional features of transit police work while increasing emphasis on others or creating new ones. For example, he was able to reduce the time police officers spent processing suspects by introducing mobile processing centers known as “bust buses.”

A careful examination of the facts can also reveal where changes in key policies can reduce the need for resources, as Bratton demonstrated during his tenure as chief of New York’s transit police. His predecessors had lobbied hard for the money to increase the number of subway cops, arguing that the only way to stop muggers was to have officers ride every subway line and patrol each of the system’s 700 exits and entrances. Bratton, by contrast, believed that subway crime could be resolved not by throwing more resources at the problem but by better targeting those resources. To prove the point, he had members of his staff analyze where subway crimes were being committed. They found that the vast majority occurred at only a few stations and on a couple of lines, which suggested that a targeted strategy would work well. At the same time, he shifted more of the force out of uniform and into plain clothes at the hot spots. Criminals soon realized that an absence of uniforms did not necessarily mean an absence of cops.

Distribution of officers was not the only problem. Bratton’s analysis revealed that an inordinate amount of police time was wasted in processing arrests. It took an officer up to 16 hours per arrest to book the suspect and file papers on the incident. What’s more, the officers so hated the bureaucratic process that they avoided making arrests in minor cases. Bratton realized that he could dramatically increase his available policing resources—not to mention the officers’ motivation—if he could somehow improvise around this problem. His solution was to park “bust buses”—old buses converted into arrest-processing centers—around the corner from targeted subway stations. Processing time was cut from 16 hours to just one. Innovations like that enabled Bratton to dramatically reduce subway crime—even without an increase in the number of officers on duty at any given time. (The figure “The strategy canvas of transit: How Bratton refocused resources” illustrates how radically Bratton refocused the transit police’s resources.)

Bratton’s drive for data-driven policing solutions led to the creation of the famous Compstat crime database. The database, used to identify hot spots for intense police intervention, captures weekly crime and arrest activity—including times, locations, and associated enforcement activities—at the precinct, borough, and city levels. The Compstat reports allowed Bratton and the entire police department to easily discern established and emerging hot spots for efficient resource targeting and retargeting.

In addition to refocusing the resources he already controls, Bratton has proved adept at trading resources he doesn’t need for those he does. The chiefs of public-sector organizations are reluctant to advertise excess resources, let alone lend them to other agencies, because acknowledged excess resources tend to get reallocated. So over time, some organizations end up well endowed with resources they don’t need—even if they are short of others. When Bratton took over as chief of the transit police, for example, his general counsel and policy adviser, Dean Esserman, now police chief of Providence, Rhode Island, discovered that the transit unit had more unmarked cars than it needed but was starved of office space. The New York Division of Parole, on the other hand, was short of cars but had excess office space. Esserman and Bratton offered the obvious trade. It was gratefully accepted by the parole division, and transit officials were delighted to get the first floor of a prime downtown building. The deal stoked Bratton’s credibility within the organization, which would make it easier for him to introduce more fundamental changes later, and it marked him, to his political bosses, as a man who could solve problems.

Jump the Motivational Hurdle

Alerting employees to the need for change and identifying how it can be achieved with limited resources are necessary for reaching an organization’s tipping point. But if a new strategy is to become a movement, employees must not only recognize what needs to be done, they must also want to do it. Many CEOs recognize the importance of getting people motivated to make changes, but they make the mistake of trying to reform incentives throughout the whole organization. That process takes a long time to implement and can prove very expensive, given the wide variety of motivational needs in any large company.

One way Bratton solves the motivation problem is by singling out the key influencers—people inside or outside the organization with disproportionate power due to their connections with the organization, their ability to persuade, or their ability to block access to resources. Bratton recognizes that these influencers act like kingpins in bowling: When you hit them just right, all the pins topple over. Getting the key influencers motivated frees an organization from having to motivate everyone, yet everyone in the end is touched and changed. And because most organizations have relatively small numbers of key influencers, and those people tend to share common problems and concerns, it is relatively easy for CEOs to identify and motivate them.

Bratton’s approach to motivating his key influencers is to put them under a spotlight. Perhaps his most significant reform of the NYPD’s operating practices was instituting a semiweekly strategy review meeting that brought the top brass together with the city’s 76 precinct commanders. Bratton had identified the commanders as key influential people in the NYPD, because each one directly managed 200 to 400 officers. Attendance was mandatory for all senior staff, including three-star chiefs, deputy commissioners, and borough chiefs. Bratton was there as often as possible.

At the meetings, which took place in an auditorium at the police command center, a selected precinct commander was called before a panel of the senior staff (the selected officer was given only two days’ notice, in order to keep all the commanders on their toes). The commander in the spotlight was questioned by both the panel and other commanders about the precinct’s performance. He or she was responsible for explaining projected maps and charts that showed, based on the Compstat data, the precinct’s patterns of crimes and when and where the police responded. The commander would be required to provide a detailed explanation if police activity did not mirror crime spikes and would also be asked how officers were addressing the precinct’s issues and why performance was improving or deteriorating. The meetings allowed Bratton and his senior staff to carefully monitor and assess how well commanders were motivating and managing their people and how well they were focusing on strategic hot spots.

The meetings changed the NYPD’s culture in several ways. By making results and responsibilities clear to everyone, the meetings helped to introduce a culture of performance. Indeed, a photo of the commander who was about to be grilled appeared on the front page of the handout that each meeting participant received, emphasizing that the commander was accountable for the precinct’s results. An incompetent commander could no longer cover up his failings by blaming his precinct’s results on the shortcomings of neighboring precincts, because his neighbors were in the room and could respond. By the same token, the meetings gave high achievers a chance to be recognized both for making improvements in their own precincts and for helping other commanders. The meetings also allowed police leaders to compare notes on their experiences; before Bratton’s arrival, precinct commanders hardly ever got together as a group. Over time, this management style filtered down through the ranks, as the precinct commanders tried out their own versions of Bratton’s meetings. With the spotlight shining brightly on their performance, the commanders were highly motivated to get all the officers under their control marching to the new strategy.

The great challenges in applying this kind of motivational device, of course, are ensuring that people feel it is based on fair processes and seeing to it that they can draw lessons from both good and bad results. Doing so increases the organization’s collective strength and everyone’s chance of winning. Bratton addresses the issue of fair process by engaging all key influencers in the procedures, setting clear performance expectations, and explaining why these strategy meetings, for example, are essential for fast execution of policy. He addresses the issue of learning by insisting that the team of top brass play an active role in meetings and by being an active moderator himself. Precinct commanders can talk about their achievements or failures without feeling that they are showing off or being shown up. Successful commanders aren’t seen as bragging, because it’s clear to everyone that they were asked by Bratton’s top team to show, in detail, how they achieved their successes. And for commanders on the receiving end, the sting of having to be taught a lesson by a colleague is mitigated, at least, by their not having to suffer the indignity of asking for it. Bratton’s popularity soared when he created a humorous video satirizing the grilling that precinct commanders were given; it showed the cops that he understood just how much he was asking of them.

Bratton also uses another motivational lever: framing the reform challenge itself. Framing the challenge is one of the most subtle and sensitive tasks of the tipping point leader; unless people believe that results are attainable, a turnaround is unlikely to succeed. On the face of it, Bratton’s goal in New York was so ambitious as to be scarcely believable. Who would believe that the city could be made one of the safest in the country? And who would want to invest time and energy in chasing such an impossible dream?

To make the challenge seem manageable, Bratton framed it as a series of specific goals that officers at different levels could relate to. As he put it, the challenge the NYPD faced was to make the streets of New York safe “block by block, precinct by precinct, and borough by borough.” Thus framed, the task was both all encompassing and doable. For the cops on the street, the challenge was making their beats or blocks safe—no more. For the commanders, the challenge was making their precincts safe—no more. Borough heads also had a concrete goal within their capabilities: making their boroughs safe—no more. No matter what their positions, officers couldn’t say that what was being asked of them was too tough. Nor could they claim that achieving it was out of their hands. In this way, responsibility for the turnaround shifted from Bratton to each of the thousands of police officers on the force.

Knock Over the Political Hurdle

Organizational politics is an inescapable reality in public and corporate life, a lesson Bratton learned the hard way. In 1980, at age 34 one of the youngest lieutenants in Boston’s police department, he had proudly put up a plaque in his office that said: “Youth and skill will win out every time over age and treachery.” Within just a few months, having been shunted into a dead-end position due to a mixture of office politics and his own brashness, Bratton took the sign down. He never again forgot the importance of understanding the plotting, intrigue, and politics involved in pushing through change. Even if an organization has reached the tipping point, powerful vested interests will resist the impending reforms. The more likely change becomes, the more fiercely and vocally these negative influencers—both internal and external—will fight to protect their positions, and their resistance can seriously damage, even derail, the reform process.

Bratton anticipates these dangers by identifying and silencing powerful naysayers early on. To that end, he always ensures that he has a respected senior insider on the top team. At the NYPD, for instance, Bratton appointed John Timoney, now Miami’s police commissioner, as his number two. Timoney was a cop’s cop, respected and feared for his dedication to the NYPD and for the more than 60 decorations he had received. Twenty years in the ranks had taught him who all the key players were and how they played the political game. One of the first tasks Timoney carried out was to report to Bratton on the likely attitudes of the top staff toward Bratton’s concept of zero-tolerance policing, identifying those who would fight or silently sabotage the new initiatives. This led to a dramatic changing of the guard.

Of course, not all naysayers should face the ultimate sanction—there might not be enough people left to man the barricades. In many cases, therefore, Bratton silences opposition by example and indisputable fact. For instance, when first asked to compile detailed crime maps and information packages for the strategy review meetings, most precinct commanders complained that the task would take too long and waste valuable police time that could be better spent fighting crime. Anticipating this argument, deputy commissioner Jack Maple set up a reporting system that covered the city’s most crime-ridden areas. Operating the system required no more than 18 minutes a day, which worked out, as he told the precinct commanders, to less than 1% of the average precinct’s workload. Try to argue with that.

Often the most serious opposition to reform comes from outside. In the public sector, as in business, an organization’s change of strategy has an impact on other organizations—partners and competitors alike. The change is likely to be resisted by those players if they are happy with the status quo and powerful enough to protest the changes. Bratton’s strategy for dealing with such opponents is to isolate them by building a broad coalition with the other independent powers in his realm. In New York, for example, one of the most serious threats to his reforms came from the city’s courts, which were concerned that zero-tolerance policing would result in an enormous number of small-crimes cases clogging the court schedule.

To get past the opposition of the courts, Bratton solicited the support of no less a personage than the mayor, Rudolph Giuliani, who had considerable influence over the district attorneys, the courts, and the city jail on Rikers Island. Bratton’s team demonstrated to the mayor that the court system had the capacity to handle minor “quality of life” crimes, even though doing so would presumably not be palatable for them.

The mayor decided to intervene. While conceding to the courts that a crackdown campaign would cause a short-term spike in court work, he also made clear that he and the NYPD believed it would eventually lead to a workload reduction for the courts. Working together in this way, Bratton and the mayor were able to maneuver the courts into processing quality-of-life crimes. Seeing that the mayor was aligned with Bratton, the courts appealed to the city’s legislators, advocating legislation to exempt them from handling minor-crime cases on the grounds that such cases would clog the system and entail significant costs to the city. Bratton and the mayor, who were holding weekly strategy meetings, added another ally to their coalition by placing their case before the press, in particular the New York Times. Through a series of press conferences and articles and at every interview opportunity, the issue of zero tolerance was put at the front and center of public debate with a clear, simple message: If the courts did not help crack down on quality-of-life crimes, the city’s crime rates would not improve. It was a matter not of saving dollars but of saving the city.

Bratton’s alliance with the mayor’s office and the city’s leading media institution successfully isolated the courts. The courts could hardly be seen as publicly opposing an initiative that would not only make New York a more attractive place to live but would ultimately reduce the number of cases brought before them. With the mayor speaking aggressively in the press about the need to pursue quality-of-life crimes and the city’s most respected—and liberal—newspaper giving credence to the policy, the costs of fighting Bratton’s strategy were daunting. Thanks to this savvy politicking, one of Bratton’s biggest battles was won, and the legislation was not enacted. The courts would handle quality-of-life crimes. In due course, the crime rates did indeed come tumbling down.

_____________________

Of course, Bill Bratton, like any leader, must share the credit for his successes. Turning around an organization as large and as wedded to the status quo as the NYPD requires a collective effort. But the tipping point would not have been reached without him—or another leader like him. And while we recognize that not every executive has the personality to be a Bill Bratton, there are many who have that potential once they know the formula for success. It is that formula that we have tried to present, and we urge managers who wish to turn their companies around, but have limited time and resources, to take note. By addressing the hurdles to tipping point change described in these pages, they will stand a chance of achieving the same kind of results for their shareholders as Bratton has delivered to the citizens of New York.

Originally published in April 2003. Reprint R0304D

A Survival Guide for Leaders

by Ronald A. Heifetz and Marty Linsky

THINK OF THE MANY top executives in recent years who, sometimes after long periods of considerable success, have crashed and burned. Or think of individuals you have known in less prominent positions, perhaps people spearheading significant change initiatives in their organizations, who have suddenly found themselves out of a job. Think about yourself: In exercising leadership, have you ever been removed or pushed aside?

Let’s face it, to lead is to live dangerously. While leadership is often depicted as an exciting and glamorous endeavor, one in which you inspire others to follow you through good times and bad, such a portrayal ignores leadership’s dark side: the inevitable attempts to take you out of the game.

Those attempts are sometimes justified. People in top positions must often pay the price for a flawed strategy or a series of bad decisions. But frequently, something more is at work. We’re not talking here about conventional office politics; we’re talking about the high-stake risks you face whenever you try to lead an organization through difficult but necessary change. The risks during such times are especially high because change that truly transforms an organization, be it a multibillion-dollar company or a ten-person sales team, demands that people give up things they hold dear: daily habits, loyalties, ways of thinking. In return for these sacrifices, they may be offered nothing more than the possibility of a better future.

We refer to this kind of wrenching organizational transformation as “adaptive change,” something very different from the “technical change” that occupies people in positions of authority on a regular basis. Technical problems, while often challenging, can be solved applying existing know-how and the organization’s current problem-solving processes. Adaptive problems resist these kinds of solutions because they require individuals throughout the organization to alter their ways; as the people themselves are the problem, the solution lies with them. (See the sidebar “Adaptive Versus Technical Change: Whose Problem Is It?”) Responding to an adaptive challenge with a technical fix may have some short-term appeal. But to make real progress, sooner or later those who lead must ask themselves and the people in the organization to face a set of deeper issues—and to accept a solution that may require turning part or all of the organization upside down.

It is at this point that danger lurks. And most people who lead in such a situation—swept up in the action, championing a cause they believe in—are caught unawares. Over and over again, we have seen courageous souls blissfully ignorant of an approaching threat until it was too late to respond.

The hazard can take numerous forms. You may be attacked directly in an attempt to shift the debate to your character and style and avoid discussion of your initiative. You may be marginalized, forced into the position of becoming so identified with one issue that your broad authority is undermined. You may be seduced by your supporters and, fearful of losing their approval and affection, fail to demand they make the sacrifices needed for the initiative to succeed. You may be diverted from your goal by people overwhelming you with the day-to-day details of carrying it out, keeping you busy and preoccupied.

Each one of these thwarting tactics—whether done consciously or not—grows out of people’s aversion to the organizational disequilibrium created by your initiative. By attempting to undercut you, people strive to restore order, maintain what is familiar to them, and protect themselves from the pains of adaptive change. They want to be comfortable again, and you’re in the way.

Idea in Brief

It’s exciting—even glamorous—to lead others through good times and bad. But leadership also has its dark side: the inevitable attempts to take you out of the game when you’re steering your organization through difficult change.

Leading change requires asking people to confront painful issues and give up habits and beliefs they hold dear. Result? Some people try to eliminate change’s visible agent—you. Whether they attack you personally, undermine your authority, or seduce you into seeing things their way, their goal is the same: to derail you, easing their pain and restoring familiar order.

How to resist attempts to remove you—and continue to propel change forward? Manage your hostile environment—your organization and its people—and your own vulnerabilities.

So how do you protect yourself? Over a combined 50 years of teaching and consulting, we have asked ourselves that question time and again—usually while watching top-notch and well-intentioned folks get taken out of the game. On occasion, the question has become painfully personal; we as individuals have been knocked off course or out of the action more than once in our own leadership efforts. So we are offering what we hope are some pragmatic answers that grow out of these observations and experiences. We should note that while our advice clearly applies to senior executives, it also applies to people trying to lead change initiatives from positions of little or no formal organizational authority.

This “survival guide” has two main parts. The first looks outward, offering tactical advice about relating to your organization and the people in it. It is designed to protect you from those trying to push you aside before you complete your initiative. The second looks inward, focusing on your own human needs and vulnerabilities. It is designed to keep you from bringing yourself down.

A Hostile Environment

Leading major organizational change often involves radically reconfiguring a complex network of people, tasks, and institutions that have achieved a kind of modus vivendi, no matter how dysfunctional it appears to you. When the status quo is upset, people feel a sense of profound loss and dashed expectations. They may go through a period of feeling incompetent or disloyal. It’s no wonder they resist the change or try to eliminate its visible agent. We offer here a number of techniques—relatively straightforward in concept but difficult to execute—for minimizing these external threats.

Idea in Practice

Managing Your Environment

To minimize threats to eliminate you:

Operate in and above the fray.

Observe what’s happening to your initiative, as it’s happening. Frequently move back and forth from the dance floor to the balcony, asking, “What’s really going on here?” “Who’s defending old habits?”

Court the uncommitted.

The uncommitted but wary are crucial to your success. Show your intentions are serious, for example, by dismissing individuals who can’t make required changes. And practice what you preach.

Example: The editor of the St. Petersburg Times wanted to create a harder-hitting newspaper. He knew that reporters—no longer sparing interviewees from warranted criticism—faced intense public pressure. He subjected himself to the same by insisting a story about his drunk-driving arrest appear on the paper’s front page.

Cook the conflict.

Keep the heat high enough to motivate, but low enough to prevent explosions. Raise the temperature to make people confront hidden conflicts and other tough issues. Then lower the heat to reduce destructive turmoil. Slow the pace of change. Deliver humor, breaks, and images of a brighter future.

Place the work where it belongs.

Resist resolving conflicts yourself—people will blame you for whatever turmoil results. Mobilize others to solve problems.

Example: When a star Chicago Bulls basketball player sat out a play, miffed because he wasn’t tapped to take the game’s final shot, the coach let the team handle the insubordination. An emotional conversation led by a team veteran reunited the players, who took the NBA series to a seventh game.

Managing Yourself

To avoid self-destructing during difficult change:

Restrain your desire for control and need for importance

Order for its own sake prevents organizations from handling contentious issues. And an inflated self-image fosters unhealthy dependence on you.

Example: Ken Olson, head of once-mighty Digital Equipment Corporation, encouraged such dependence that colleagues rarely challenged him. When he shunned the PC market (believing few people wanted PCs), top managers went along—initiating DEC’s downfall.

Anchor yourself.

• Use a safe place (e.g., a friend’s kitchen table) or routine (a daily walk) to repair psychological damage and recalibrate your moral compass.

• Acquire a confidant (not an ally from your organization) who supports you—not necessarily your initiative.

• Read attacks as reactions to your professional role, not to you personally. You’ll remain calmer and keep people engaged.

Operate in and above the fray

The ability to maintain perspective in the midst of action is critical to lowering resistance. Any military officer knows the importance of maintaining the capacity for reflection, especially in the “fog of war.” Great athletes must simultaneously play the game and observe it as a whole. We call this skill “getting off the dance floor and going to the balcony,” an image that captures the mental activity of stepping back from the action and asking, “What’s really going on here?”

Leadership is an improvisational art. You may be guided by an overarching vision, clear values, and a strategic plan, but what you actually do from moment to moment cannot be scripted. You must respond as events unfold. To use our metaphor, you have to move back and forth from the balcony to the dance floor, over and over again throughout the days, weeks, months, and years. While today’s plan may make sense now, tomorrow you’ll discover the unanticipated effects of today’s actions and have to adjust accordingly. Sustaining good leadership, then, requires first and foremost the capacity to see what is happening to you and your initiative as it is happening and to understand how today’s turns in the road will affect tomorrow’s plans.

But taking a balcony perspective is extremely tough to do when you’re fiercely engaged down below, being pushed and pulled by the events and people around you—and doing some pushing and pulling of your own. Even if you are able to break away, the practice of stepping back and seeing the big picture is complicated by several factors. For example, when you get some distance, you still must accurately interpret what you see and hear. This is easier said than done. In an attempt to avoid difficult change, people will naturally, even unconsciously, defend their habits and ways of thinking. As you seek input from a broad range of people, you’ll constantly need to be aware of these hidden agendas. You’ll also need to observe your own actions; seeing yourself objectively as you look down from the balcony is perhaps the hardest task of all.

Fortunately, you can learn to be both an observer and a participant at the same time. When you are sitting in a meeting, practice by watching what is happening while it is happening—even as you are part of what is happening. Observe the relationships and see how people’s attention to one another can vary: supporting, thwarting, or listening. Watch people’s body language. When you make a point, resist the instinct to stay perched on the edge of your seat, ready to defend what you said. A technique as simple as pushing your chair a few inches away from the table after you speak may provide the literal as well as metaphorical distance you need to become an observer.

Court the uncommitted

It’s tempting to go it alone when leading a change initiative. There’s no one to dilute your ideas or share the glory, and it’s often just plain exciting. It’s also foolish. You need to recruit partners, people who can help protect you from attacks and who can point out potentially fatal flaws in your strategy or initiative. Moreover, you are far less vulnerable when you are out on the point with a bunch of folks rather than alone. You also need to keep the opposition close. Knowing what your opponents are thinking can help you challenge them more effectively and thwart their attempts to upset your agenda—or allow you to borrow ideas that will improve your initiative. Have coffee once a week with the person most dedicated to seeing you fail.

Adaptive Versus Technical Change: Whose Problem Is It?

THE IMPORTANCE—AND DIFFICULTY—of distinguishing between adaptive and technical change can be illustrated with an analogy. When your car has problems, you go to a mechanic. Most of the time, the mechanic can fix the car. But if your car troubles stem from the way a family member drives, the problems are likely to recur. Treating the problems as purely technical ones—taking the car to the mechanic time and again to get it back on the road—masks the real issues. Maybe you need to get your mother to stop drinking and driving, get your grandfather to give up his driver’s license, or get your teenager to be more cautious. Whatever the underlying problems, the mechanic can’t solve them. Instead, changes in the family need to occur, and that won’t be easy. People will resist the moves, even denying that such problems exist. That’s because even those not directly affected by an adaptive change typically experience discomfort when someone upsets a group’s or an organization’s equilibrium.

Such resistance to adaptive change certainly happens in business. Indeed, it’s the classic error: Companies treat adaptive challenges as if they were technical problems. For example, executives attempt to improve the bottom line by cutting costs across the board. Not only does this avoid the need to make tough choices about which areas should be trimmed, it also masks the fact that the company’s real challenge lies in redesigning its strategy.

Treating adaptive challenges as technical ones permits executives to do what they have excelled at throughout their careers: solve other people’s problems. And it allows others in the organization to enjoy the primordial peace of mind that comes from knowing that their commanding officer has a plan to maintain order and stability. After all, the executive doesn’t have to instigate—and the people don’t have to undergo—uncomfortable change. Most people would agree that, despite the selective pain of a cost-cutting exercise, it is less traumatic than reinventing a company.

But while relationships with allies and opponents are essential, the people who will determine your success are often those in the middle, the uncommitted who nonetheless are wary of your plans. They have no substantive stake in your initiative, but they do have a stake in the comfort, stability, and security of the status quo. They’ve seen change agents come and go, and they know that your initiative will disrupt their lives and make their futures uncertain. You want to be sure that this general uneasiness doesn’t evolve into a move to push you aside.

These people will need to see that your intentions are serious—for example, that you are willing to let go of those who can’t make the changes your initiative requires. But people must also see that you understand the loss you are asking them to accept. You need to name the loss, be it a change in time-honored work routines or an overhaul of the company’s core values, and explicitly acknowledge the resulting pain. You might do this through a series of simple statements, but it often requires something more tangible and public—recall Franklin Roosevelt’s radio “fireside chats” during the Great Depression—to convince people that you truly understand.

Beyond a willingness to accept casualties and acknowledge people’s losses, two very personal types of action can defuse potential resistance to you and your initiatives. The first is practicing what you preach. In 1972, Gene Patterson took over as editor of the St. Petersburg Times. His mandate was to take the respected regional newspaper to a higher level, enhancing its reputation for fine writing while becoming a fearless and hard-hitting news source. This would require major changes not only in the way the community viewed the newspaper but also in the way Times reporters thought about themselves and their roles. Because prominent organizations and individuals would no longer be spared warranted criticism, reporters would sometimes be angrily rebuked by the subjects of articles.

Several years after Patterson arrived, he attended a party at the home of the paper’s foreign editor. Driving home, he pulled up to a red light and scraped the car next to him. The police officer called to the scene charged Patterson with driving under the influence. Patterson phoned Bob Haiman, a veteran Times newsman who had just been appointed executive editor, and insisted that a story on his arrest be run. As Haiman recalls, he tried to talk Patterson out of it, arguing that DUI arrests that didn’t involve injuries were rarely reported, even when prominent figures were involved. Patterson was adamant, however, and insisted that the story appear on page one.

Patterson, still viewed as somewhat of an outsider at the paper, knew that if he wanted his employees to follow the highest journalistic standards, he would have to display those standards, even when it hurt. Few leaders are called upon to disgrace themselves on the front page of a newspaper. But adopting the behavior you expect from others—whether it be taking a pay cut in tough times or spending a day working next to employees on a reconfigured production line—can be crucial in getting buy-in from people who might try to undermine your initiative.

The second thing you can do to neutralize potential opposition is to acknowledge your own responsibility for whatever problems the organization currently faces. If you have been with the company for some time, whether in a position of senior authority or not, you’ve likely contributed in some way to the current mess. Even if you are new, you need to identify areas of your own behavior that could stifle the change you hope to make.

In our teaching, training, and consulting, we often ask people to write or talk about a leadership challenge they currently face. Over the years, we have read and heard literally thousands of such challenges. Typically, in the first version of the story, the author is nowhere to be found. The underlying message: “If only other people would shape up, I could make progress here.” But by too readily pointing your finger at others, you risk making yourself a target. Remember, you are asking people to move to a place where they are frightened to go. If at the same time you’re blaming them for having to go there, they will undoubtedly turn against you.

In the early 1990s, Leslie Wexner, founder and CEO of the Limited, realized the need for major changes at the company, including a significant reduction in the workforce. But his consultant told him that something else had to change: long-standing habits that were at the heart of his self-image. In particular, he had to stop treating the company as if it were his family. The indulgent father had to become the chief personnel officer, putting the right people in the right jobs and holding them accountable for their work. “I was an athlete trained to be a baseball player,” Wexner recalled during a recent speech at Harvard’s Kennedy School. “And one day, someone tapped me on the shoulder and said, ‘Football.’ And I said, ‘No, I’m a baseball player. ‘And he said, ‘Football.’ And I said, ‘I don’t know how to play football. I’m not 6′4″, and I don’t weigh 300 pounds.’ But if no one values baseball anymore, the baseball player will be out of business. So I looked into the mirror and said, ‘Schlemiel, nobody wants to watch baseball. Make the transformation to football.’” His personal makeover—shedding the role of forgiving father to those widely viewed as not holding their own—helped sway other employees to back a corporate makeover. And his willingness to change helped protect him from attack during the company’s long—and generally successful—turnaround period.

Cook the conflict

Managing conflict is one of the greatest challenges a leader of organizational change faces. The conflict may involve resistance to change, or it may involve clashing viewpoints about how the change should be carried out. Often, it will be latent rather than palpable. That’s because most organizations are allergic to conflict, seeing it primarily as a source of danger, which it certainly can be. But conflict is a necessary part of the change process and, if handled properly, can serve as the engine of progress.

Thus, a key imperative for a leader trying to achieve significant change is to manage people’s passionate differences in a way that diminishes their destructive potential and constructively harnesses their energy. Two techniques can help you achieve this. First, create a secure place where the conflicts can freely bubble up. Second, control the temperature to ensure that the conflict doesn’t boil over—and burn you in the process.

The vessel in which a conflict is simmered—in which clashing points of view mix, lose some of their sharpness, and ideally blend into consensus—will look and feel quite different in different contexts. It may be a protected physical space, perhaps an off-site location where an outside facilitator helps a group work through its differences. It may be a clear set of rules and processes that give minority voices confidence that they will be heard without having to disrupt the proceedings to gain attention. It may be the shared language and history of an organization that binds people together through trying times. Whatever its form, it is a place or a means to contain the roiling forces unleashed by the threat of major change.

But a vessel can withstand only so much strain before it blows. A huge challenge you face as a leader is keeping your employees’ stress at a productive level. The success of the change effort—as well as your own authority and even survival—requires you to monitor your organization’s tolerance for heat and then regulate the temperature accordingly.

You first need to raise the heat enough that people sit up, pay attention, and deal with the real threats and challenges facing them. After all, without some distress, there’s no incentive to change. You can constructively raise the temperature by focusing people’s attention on the hard issues, by forcing them to take responsibility for tackling and solving those issues, and by bringing conflicts occurring behind closed doors out into the open.

But you have to lower the temperature when necessary to reduce what can be counterproductive turmoil. You can turn down the heat by slowing the pace of change or by tackling some relatively straightforward technical aspect of the problem, thereby reducing people’s anxiety levels and allowing them to get warmed up for bigger challenges. You can provide structure to the problem-solving process, creating work groups with specific assignments, setting time parameters, establishing rules for decision making, and outlining reporting relationships. You can use humor or find an excuse for a break or a party to temporarily ease tensions. You can speak to people’s fears and, more critically, to their hopes for a more promising future. By showing people how the future might look, you come to embody hope rather than fear, and you reduce the likelihood of becoming a lightning rod for the conflict.

The aim of both these tactics is to keep the heat high enough to motivate people but low enough to prevent a disastrous explosion—what we call a “productive range of distress.” Remember, though, that most employees will reflexively want you to turn down the heat; their complaints may in fact indicate that the environment is just right for hard work to get done.

We’ve already mentioned a classic example of managing the distress of fundamental change: Franklin Roosevelt during the first few years of his presidency. When he took office in 1933, the chaos, tension, and anxiety brought on by the Depression ran extremely high. Demagogues stoked class, ethnic, and racial conflict that threatened to tear the nation apart. Individuals feared an uncertain future. So Roosevelt first did what he could to reduce the sense of disorder to a tolerable level. He took decisive and authoritative action—he pushed an extraordinary number of bills through Congress during his fabled first 100 days—and thereby gave Americans a sense of direction and safety, reassuring them that they were in capable hands. In his fireside chats, he spoke to people’s anxiety and anger and laid out a positive vision for the future that made the stress of the current crisis bearable and seem a worthwhile price to pay for progress.

But he knew the problems facing the nation couldn’t be solved from the White House. He needed to mobilize citizens and get them to dream up, try out, fight over, and ultimately own the sometimes painful solutions that would transform the country and move it forward. To do that, he needed to maintain a certain level of fermentation and distress. So, for example, he orchestrated conflicts over public priorities and programs among the large cast of creative people he brought into the government. By giving the same assignment to two different administrators and refusing to clearly define their roles, he got them to generate new and competing ideas. Roosevelt displayed both the acuity to recognize when the tension in the nation had risen too high and the emotional strength to take the heat and permit considerable anxiety to persist.

Place the work where it belongs

Because major change requires people across an entire organization to adapt, you as a leader need to resist the reflex reaction of providing people with the answers. Instead, force yourself to transfer, as Roosevelt did, much of the work and problem solving to others. If you don’t, real and sustainable change won’t occur. In addition, it’s risky on a personal level to continue to hold on to the work that should be done by others.

As a successful executive, you have gained credibility and authority by demonstrating your capacity to solve other people’s problems. This ability can be a virtue, until you find yourself faced with a situation in which you cannot deliver solutions. When this happens, all of your habits, pride, and sense of competence get thrown out of kilter because you must mobilize the work of others rather than find the way yourself. By trying to solve an adaptive challenge for people, at best you will reconfigure it as a technical problem and create some short-term relief. But the issue will not have gone away.

In the 1994 National Basketball Association Eastern Conference semifinals, the Chicago Bulls lost to the New York Knicks in the first two games of the best-of-seven series. Chicago was out to prove that it was more than just a one-man team, that it could win without Michael Jordan, who had retired at the end of the previous season.

In the third game, the score was tied at 102 with less than two seconds left. Chicago had the ball and a time-out to plan a final shot. Coach Phil Jackson called for Scottie Pippen, the Bulls’ star since Jordan had retired, to make the inbound pass to Toni Kukoc for the final shot. As play was about to resume, Jackson noticed Pippen sitting at the far end of the bench. Jackson asked him whether he was in or out. “I’m out,” said Pippen, miffed that he was not tapped to take the final shot. With only four players on the floor, Jackson quickly called another time-out and substituted an excellent passer, the reserve Pete Myers, for Pippen. Myers tossed a perfect pass to Kukoc, who spun around and sank a miraculous shot to win the game.

The Bulls made their way back to the locker room, their euphoria deflated by Pippen’s extraordinary act of insubordination. Jackson recalls that as he entered a silent room, he was uncertain about what to do. Should he punish Pippen? Make him apologize? Pretend the whole thing never happened? All eyes were on him. The coach looked around, meeting the gaze of each player, and said, “What happened has hurt us. Now you have to work this out.”

Jackson knew that if he took action to resolve the immediate crisis, he would have made Pippen’s behavior a matter between coach and player. But he understood that a deeper issue was at the heart of the incident: Who were the Chicago Bulls without Michael Jordan? It wasn’t about who was going to succeed Jordan, because no one was; it was about whether the players could jell as a team where no one person dominated and every player was willing to do whatever it took to help. The issue rested with the players, not him, and only they could resolve it. It did not matter what they decided at that moment; what mattered was that they, not Jackson, did the deciding. What followed was a discussion led by an emotional Bill Cartwright, a team veteran. According to Jackson, the conversation brought the team closer together. The Bulls took the series to a seventh game before succumbing to the Knicks.

Jackson gave the work of addressing both the Pippen and the Jordan issues back to the team for another reason: If he had taken ownership of the problem, he would have become the issue, at least for the moment. In his case, his position as coach probably wouldn’t have been threatened. But in other situations, taking responsibility for resolving a conflict within the organization poses risks. You are likely to find yourself resented by the faction that you decide against and held responsible by nearly everyone for the turmoil your decision generates. In the eyes of many, the only way to neutralize the threat is to get rid of you.

Despite that risk, most executives can’t resist the temptation to solve fundamental organizational problems by themselves. People expect you to get right in there and fix things, to take a stand and resolve the problem. After all, that is what top managers are paid to do. When you fulfill those expectations, people will call you admirable and courageous—even a “leader”—and that is flattering. But challenging your employees’ expectations requires greater courage and leadership.

The Dangers Within

We have described a handful of leadership tactics you can use to interact with the people around you, particularly those who might undermine your initiatives. Those tactics can help advance your initiatives and, just as important, ensure that you remain in a position where you can bring them to fruition. But from our own observations and painful personal experiences, we know that one of the surest ways for an organization to bring you down is simply to let you precipitate your own demise.

In the heat of leadership, with the adrenaline pumping, it is easy to convince yourself that you are not subject to the normal human frailties that can defeat ordinary mortals. You begin to act as if you are indestructible. But the intellectual, physical, and emotional challenges of leadership are fierce. So, in addition to getting on the balcony, you need to regularly step into the inner chamber of your being and assess the tolls those challenges are taking. If you don’t, your seemingly indestructible self can self-destruct. This, by the way, is an ideal outcome for your foes—and even friends who oppose your initiative—because no one has to feel responsible for your downfall.

Manage your hungers

We all have hungers, expressions of our normal human needs. But sometimes those hungers disrupt our capacity to act wisely or purposefully. Whether inherited or products of our upbringing, some of these hungers may be so strong that they render us constantly vulnerable. More typically, a stressful situation or setting can exaggerate a normal level of need, amplifying our desires and overwhelming our usual self-discipline. Two of the most common and dangerous hungers are the desire for control and the desire for importance.

Everyone wants to have some measure of control over his or her life. Yet some people’s need for control is disproportionately high. They might have grown up in a household that was either tightly structured or unusually chaotic; in either case, the situation drove them to become masters at taming chaos not only in their own lives but also in their organizations.

That need for control can be a source of vulnerability. Initially, of course, the ability to turn disorder into order may be seen as an attribute. In an organization facing turmoil, you may seem like a godsend if you are able (and desperately want) to step in and take charge. By lowering the distress to a tolerable level, you keep the kettle from boiling over.

But in your desire for order, you can mistake the means for the end. Rather than ensuring that the distress level in an organization remains high enough to mobilize progress on the issues, you focus on maintaining order as an end in itself. Forcing people to make the difficult trade-offs required by fundamental change threatens a return to the disorder you loathe. Your ability to bring the situation under control also suits the people in the organization, who naturally prefer calm to chaos. Unfortunately, this desire for control makes you vulnerable to, and an agent of, the organization’s wish to avoid working through contentious issues. While this may ensure your survival in the short term, ultimately you may find yourself accused, justifiably, of failing to deal with the tough challenges when there was still time to do so.

Most people also have some need to feel important and affirmed by others. The danger here is that you will let this affirmation give you an inflated view of yourself and your cause. A grandiose sense of self-importance often leads to self-deception. In particular, you tend to forget the creative role that doubt—which reveals parts of reality that you wouldn’t otherwise see—plays in getting your organization to improve. The absence of doubt leads you to see only that which confirms your own competence, which will virtually guarantee disastrous missteps.

Another harmful side effect of an inflated sense of self-importance is that you will encourage people in the organization to become dependent on you. The higher the level of distress, the greater their hopes and expectations that you will provide deliverance. This relieves them of any responsibility for moving the organization forward. But their dependence can be detrimental not only to the group but to you personally. Dependence can quickly turn to contempt as your constituents discover your human shortcomings.

Two well-known stories from the computer industry illustrate the perils of dependency—and how to avoid them. Ken Olsen, the founder of Digital Equipment Corporation, built the company into a 120,000-person operation that, at its peak, was the chief rival of IBM. A generous man, he treated his employees extraordinarily well and experimented with personnel policies designed to increase the creativity, teamwork, and satisfaction of his workforce. This, in tandem with the company’s success over the years, led the company’s top management to turn to him as the sole decision maker on all key issues. His decision to shun the personal computer market because of his belief that few people would ever want to own a PC, which seemed reasonable at the time, is generally viewed as the beginning of the end for the company. But that isn’t the point; everyone in business makes bad decisions. The point is, Olsen had fostered such an atmosphere of dependence that his decisions were rarely challenged by colleagues—at least not until it was too late.

Contrast that decision with Bill Gates’s decision some years later to keep Microsoft out of the Internet business. It didn’t take long for him to reverse his stand and launch a corporate overhaul that had Microsoft’s delivery of Internet services as its centerpiece. After watching the rapidly changing computer industry and listening carefully to colleagues, Gates changed his mind with no permanent damage to his sense of pride and an enhanced reputation due to his nimble change of course.

Anchor yourself

To survive the turbulent seas of a change initiative, you need to find ways to steady and stabilize yourself. First, you must establish a safe harbor where each day you can reflect on the previous day’s journey, repair the psychological damage you have incurred, renew your stores of emotional resources, and recalibrate your moral compass. Your haven might be a physical place, such as the kitchen table of a friend’s house, or a regular routine, such as a daily walk through the neighborhood. Whatever the sanctuary, you need to use and protect it. Unfortunately, seeking such respite is often seen as a luxury, making it one of the first things to go when life gets stressful and you become pressed for time.

Second, you need a confidant, someone you can talk to about what’s in your heart and on your mind without fear of being judged or betrayed. Once the undigested mess is on the table, you can begin to separate, with your confidant’s honest input, what is worthwhile from what is simply venting. The confidant, typically not a coworker, can also pump you up when you’re down and pull you back to earth when you start taking praise too seriously. But don’t confuse confidants with allies: Instead of supporting your current initiative, a confidant simply supports you. A common mistake is to seek a confidant among trusted allies, whose personal loyalty may evaporate when a new issue more important to them than you begins to emerge and take center stage.

Perhaps most important, you need to distinguish between your personal self, which can serve as an anchor in stormy weather, and your professional role, which never will. It is easy to mix up the two. And other people only increase the confusion: Colleagues, subordinates, and even bosses often act as if the role you play is the real you. But that is not the case, no matter how much of yourself—your passions, your values, your talents—you genuinely and laudably pour into your professional role. Ask anyone who has experienced the rude awakening that comes when they leave a position of authority and suddenly find that their phone calls aren’t returned as quickly as they used to be.

That harsh lesson holds another important truth that is easily forgotten: When people attack someone in a position of authority, more often than not they are attacking the role, not the person. Even when attacks on you are highly personal, you need to read them primarily as reactions to how you, in your role, are affecting people’s lives. Understanding the criticism for what it is prevents it from undermining your stability and sense of self-worth. And that’s important because when you feel the sting of an attack, you are likely to become defensive and lash out at your critics, which can precipitate your downfall.

We hasten to add that criticism may contain legitimate points about how you are performing your role. For example, you may have been tactless in raising an issue with your organization, or you may have turned the heat up too quickly on a change initiative. But, at its heart, the criticism is usually about the issue, not you. Through the guise of attacking you personally, people often are simply trying to neutralize the threat they perceive in your point of view. Does anyone ever attack you when you hand out big checks or deliver good news? People attack your personality, style, or judgment when they don’t like the message.

When you take “personal” attacks personally, you unwittingly conspire in one of the common ways you can be taken out of action—you make yourself the issue. Contrast the manner in which presidential candidates Gary Hart and Bill Clinton handled charges of philandering. Hart angrily counterattacked, criticizing the scruples of the reporters who had shadowed him. This defensive personal response kept the focus on his behavior. Clinton, on national television, essentially admitted he had strayed, acknowledging his piece of the mess. His strategic handling of the situation allowed him to return the campaign’s focus to policy issues. Though both attacks were extremely personal, only Clinton understood that they were basically attacks on positions he represented and the role he was seeking to play.

Do not underestimate the difficulty of distinguishing self from role and responding coolly to what feels like a personal attack—particularly when the criticism comes, as it will, from people you care about. But disciplining yourself to do so can provide you with an anchor that will keep you from running aground and give you the stability to remain calm, focused, and persistent in engaging people with the tough issues.

Why Lead?

We will have failed if this “survival manual” for avoiding the perils of leadership causes you to become cynical or callous in your leadership effort or to shun the challenges of leadership altogether. We haven’t touched on the thrill of inspiring people to come up with creative solutions that can transform an organization for the better. We hope we have shown that the essence of leadership lies in the capacity to deliver disturbing news and raise difficult questions in a way that moves people to take up the message rather than kill the messenger. But we haven’t talked about the reasons that someone might want to take these risks.

Of course, many people who strive for high-authority positions are attracted to power. But in the end, that isn’t enough to make the high stakes of the game worthwhile. We would argue that, when they look deep within themselves, people grapple with the challenges of leadership in order to make a positive difference in the lives of others.

When corporate presidents and vice presidents reach their late fifties, they often look back on careers devoted to winning in the marketplace. They may have succeeded remarkably, yet some people have difficulty making sense of their lives in light of what they have given up. For too many, their accomplishments seem empty. They question whether they should have been more aggressive in questioning corporate purposes or creating more ambitious visions for their companies.

Our underlying assumption in this article is that you can lead and stay alive—not just register a pulse, but really be alive. But the classic protective devices of a person in authority tend to insulate them from those qualities that foster an acute experience of living. Cynicism, often dressed up as realism, undermines creativity and daring. Arrogance, often posing as authoritative knowledge, snuffs out curiosity and the eagerness to question. Callousness, sometimes portrayed as the thick skin of experience, shuts out compassion for others.

The hard truth is that it is not possible to know the rewards and joys of leadership without experiencing the pain as well. But staying in the game and bearing that pain is worth it, not only for the positive changes you can make in the lives of others but also for the meaning it gives your own.

Originally published in June 2002. Reprint R0206C

The Real Reason People Won’t Change

by Robert Kegan and Lisa Laskow Lahey

EVERY MANAGER IS FAMILIAR with the employee who just won’t change. Sometimes it’s easy to see why—the employee fears a shift in power, the need to learn new skills, the stress of having to join a new team. In other cases, such resistance is far more puzzling. An employee has the skills and smarts to make a change with ease, has shown a deep commitment to the company, genuinely supports the change—and yet, inexplicably, does nothing.

What’s going on? As organizational psychologists, we have seen this dynamic literally hundreds of times, and our research and analysis have recently led us to a surprising yet deceptively simple conclusion. Resistance to change does not reflect opposition, nor is it merely a result of inertia. Instead, even as they hold a sincere commitment to change, many people are unwittingly applying productive energy toward a hidden competing commitment. The resulting dynamic equilibrium stalls the effort in what looks like resistance but is in fact a kind of personal immunity to change.

When you, as a manager, uncover an employee’s competing commitment, behavior that has seemed irrational and ineffective suddenly becomes stunningly sensible and masterful—but unfortunately, on behalf of a goal that conflicts with what you and even the employee are trying to achieve. You find out that the project leader who’s dragging his feet has an unrecognized competing commitment to avoid the even tougher assignment—one he fears he can’t handle—that might come his way next if he delivers too successfully on the task at hand. Or you find that the person who won’t collaborate despite a passionate and sincere commitment to teamwork is equally dedicated to avoiding the conflict that naturally attends any ambitious team activity.

In these pages, we’ll look at competing commitments in detail and take you through a process to help your employees overcome their immunity to change. The process may sound straightforward, but it is by no means quick or easy. On the contrary, it challenges the very psychological foundations upon which people function. It asks people to call into question beliefs they’ve long held close, perhaps since childhood. And it requires people to admit to painful, even embarrassing, feelings that they would not ordinarily disclose to others or even to themselves. Indeed, some people will opt not to disrupt their immunity to change, choosing instead to continue their fruitless struggle against their competing commitments.

As a manager, you must guide people through this exercise with understanding and sensitivity. If your employees are to engage in honest introspection and candid disclosure, they must understand that their revelations won’t be used against them. The goal of this exploration is solely to help them become more effective, not to find flaws in their work or character. As you support your employees in unearthing and challenging their innermost assumptions, you may at times feel you’re playing the role of a psychologist. But in a sense, managers are psychologists. After all, helping people overcome their limitations to become more successful at work is at the very heart of effective management.

We’ll describe this delicate process in detail, but first let’s look at some examples of competing commitments in action.

Shoveling Sand Against the Tide

Competing commitments cause valued employees to behave in ways that seem inexplicable and irremediable, and this is enormously frustrating to managers. Take the case of John, a talented manager at a software company. (Like all examples in this article, John’s experiences are real, although we have altered identifying features. In some cases, we’ve constructed composite examples.) John was a big believer in open communication and valued close working relationships, yet his caustic sense of humor consistently kept colleagues at a distance. And though he wanted to move up in the organization, his personal style was holding him back. Repeatedly, John was counseled on his behavior, and he readily agreed that he needed to change the way he interacted with others in the organization. But time after time, he reverted to his old patterns. Why, his boss wondered, did John continue to undermine his own advancement?

Idea in Brief

Tearing out your managerial hair over employees who just won’t change—especially the ones who are clearly smart, skilled, and deeply committed to your company and your plans for improvement?

Before you throw up your hands in frustration, listen to recent psychological research: These otherwise valued employees aren’t purposefully subversive or resistant. Instead, they may be unwittingly caught in a competing commitment —a subconscious, hidden goal that conflicts with their stated commitments. For example: A project leader dragging his feet has an unrecognized competing commitment to avoid tougher assignments that may come his way if he delivers too successfully on the current project.

Competing commitments make people personally immune to change. Worse, they can undermine your best employees’—and your company’s—success.

If the thought of tackling these hidden commitments strikes you as a psychological quagmire, you’re not alone. However, you can help employees uncover and move beyond their competing commitments—without having to “put them on the couch.” But take care: You’ll be challenging employees’ deepest psychological foundations and questioning their longest-held beliefs.

Why bother, you ask? Consider the rewards: You help talented employees become much more effective and make far more significant contributions to your company. And, you discover what’s really going on when people who seem genuinely committed to change dig in their heels.

Idea in Practice

Use these steps to break through an employee’s immunity to change:

Diagnose the Competing Commitment

Take two to three hours to explore these questions with the employee:

“What would you like to see changed at work, so you could be more effective, or so work would be more satisfying?” Responses are usually complaints—e.g., Tom, a manager, grumbled, “My subordinates keep me out of the loop.”

“What commitment does your complaint imply?” Complaints indicate what people care about most—e.g., Tom revealed, “I believe in open, candid communication.”

“What are you doing, or not doing, to keep your commitment from being more fully realized?” Tom admitted, “When people bring bad news, I tend to shoot the messenger.”

“Imagine doing the opposite of the undermining behavior. Do you feel any discomfort, worry, or vague fear?” Tom imagined listening calmly and openly to bad news and concluded, “I’m afraid I’ll hear about a problem I can’t fix.”

“By engaging in this undermining behavior, what worrisome outcome are you committed to preventing?” The answer is the competing commitment—what causes them to dig in their heels against change. Tom conceded, “I’m committed to not learning about problems I can’t fix.”

Identify the Big Assumption

This is the worldview that colors everything we see and that generates our competing commitment.

People often form big assumptions early in life and then seldom, if ever, examine them. They’re woven into the very fabric of our lives. But only by bringing them into the light can people finally challenge their deepest beliefs and recognize why they’re engaging in seemingly contradictory behavior.

To identify the big assumption, guide an employee through this exercise:

Create a sentence stem that inverts the competing commitment, then “fill in the blank.” Tom turned his competing commitment to not hearing about problems he couldn’t fix into this big assumption: “I assume that if I did hear about problems I can’t fix, people would discover I’m not qualified to do the job.”

Test—and Consider Replacing—the Big Assumption

By analyzing the circumstances leading up to and reinforcing their big assumptions, employees empower themselves to test those assumptions. They can now carefully and safely experiment with behaving differently than they usually do.

After running several such tests, employees may feel ready to reevaluate the big assumption itself—and possibly even replace it with a new worldview that more accurately reflects their abilities.

At the very least, they’ll eventually find more effective ways to support their competing commitment without sabotaging other commitments. They achieve ever-greater accomplishments—and your organization benefits by finally gaining greater access to their talents.

As it happened, John was a person of color working as part of an otherwise all-white executive team. When he went through an exercise designed to help him unearth his competing commitments, he made a surprising discovery about himself. Underneath it all, John believed that if he became too well integrated with the team, it would threaten his sense of loyalty to his own racial group. Moving too close to the mainstream made him feel very uncomfortable, as if he were becoming “one of them” and betraying his family and friends. So when people gathered around his ideas and suggestions, he’d tear down their support with sarcasm, inevitably (and effectively) returning himself to the margins, where he was more at ease. In short, while John was genuinely committed to working well with his colleagues, he had an equally powerful competing commitment to keeping his distance.

Consider, too, a manager we’ll call Helen, a rising star at a large manufacturing company. Helen had been assigned responsibility for speeding up production of the company’s most popular product, yet she was spinning her wheels. When her boss, Andrew, realized that an important deadline was only two months away and she hadn’t filed a single progress report, he called her into a meeting to discuss the project. Helen agreed that she was far behind schedule, acknowledging that she had been stalling in pulling together the team. But at the same time she showed a genuine commitment to making the project a success. The two developed a detailed plan for changing direction, and Andrew assumed the problem was resolved. But three weeks after the meeting, Helen still hadn’t launched the team.

Getting Groups to Change

ALTHOUGH COMPETING COMMITMENTS and big assumptions tend to be deeply personal, groups are just as susceptible as individuals to the dynamics of immunity to change. Face-to-face teams, departments, and even companies as a whole can fall prey to inner contradictions that “protect” them from significant changes they may genuinely strive for. The leadership team of a video production company, for instance, enjoyed a highly collaborative, largely flat organizational structure. A year before we met the group, team members had undertaken a planning process that led them to a commitment of which they were unanimously in favor: In order to ensure that the company would grow in the way the team wished, each of the principals would take responsibility for aggressively overseeing a distinct market segment.

The members of the leadership team told us they came out of this process with a great deal of momentum. They knew which markets to target, they had formed some concrete plans for moving forward, and they had clearly assigned accountability for each market. Yet a year later, the group had to admit it had accomplished very little, despite the enthusiasm. There were lots of rational explanations: “We were unrealistic; we thought we could do new things and still have time to keep meeting our present obligations.” “We didn’t pursue new clients aggressively enough.” “We tried new things but gave up too quickly if they didn’t immediately pay off.”

Efforts to overcome these barriers—to pursue clients more aggressively, for instance—didn’t work because they didn’t get to the cause of the unproductive behavior. But by seeing the team’s explanations as a potential window into the bigger competing commitment, we were able to help the group better understand its predicament. We asked, “Can you identify even the vaguest fear or worry about what might happen if you did more aggressively pursue the new markets? Or if you reduced some of your present activity on behalf of building the new business?” Before long, a different discourse began to emerge, and the other half of a striking groupwide contradiction came into view: The principals were worried that pursuing the plan would drive them apart functionally and emotionally.

“We now realize we are also committed to preserving the noncompetitive, intellectually rewarding, and cocreative spirit of our corporate enterprise,” they concluded. On behalf of this commitment, the team members had to commend themselves on how “noncompetitively” and “cocreatively” they were finding ways to undermine the strategic plans they still believed were the best route to the company’s future success. The team’s big assumptions? “We assumed that pursuing the target-market strategy, with each of us taking aggressive responsibility for a given segment, would create the ‘silos’ we have long happily avoided and would leave us more isolated from one another. We also assumed the strategy would make us more competitively disposed toward one another.” Whether or not the assumptions were true, they would have continued to block the group’s efforts until they were brought to light. In fact, as the group came to discover, there were a variety of moves that would allow the leadership team to preserve a genuinely collaborative collegiality while pursuing the new corporate strategy.

Why was Helen unable to change her behavior? After intense self-examination in a workshop with several of her colleagues, she came to an unexpected conclusion: Although she truly wanted the project to succeed, she had an accompanying, unacknowledged commitment to maintaining a subordinate position in relation to Andrew. At a deep level, Helen was concerned that if she succeeded in her new role—one she was excited about and eager to undertake—she would become more a peer than a subordinate. She was uncertain whether Andrew was prepared for the turn their relationship would take. Worse, a promotion would mean that she, not Andrew, would be ultimately accountable for the results of her work—and Helen feared she wouldn’t be up to the task.

These stories shed some light on the nature of immunity to change. The inconsistencies between John’s and Helen’s stated goals and their actions reflect neither hypocrisy nor unspoken reluctance to change but the paralyzing effect of competing commitments. Any manager who seeks to help John communicate more effectively or Helen move her project forward, without understanding that each is also struggling unconsciously toward an opposing agenda, is shoveling sand against the tide.

Diagnosing Immunity to Change

Competing commitments aren’t distressing only to the boss; they’re frustrating to employees as well. People with the most sincere intentions often unwittingly create for themselves Sisyphean tasks. And they are almost always tremendously relieved when they discover just why they feel as if they are rolling a boulder up a hill only to have it roll back down again. Even though uncovering a competing commitment can open up a host of new concerns, the discovery offers hope for finally accomplishing the primary, stated commitment.

A diagnostic test for immunity to change

The most important steps in diagnosing immunity to change are uncovering employees’ competing commitments and unearthing their big assumptions. To do so, we ask a series of questions and record key responses in a simple grid. Below we’ve listed the responses for six people who went through this exercise, including the examples described in the text. The grid paints a picture of the change-immunity system, making sense of a previously puzzling dynamic.

Based on the past 15 years of working with hundreds of managers in a variety of companies, we’ve developed a three-stage process to help organizations figure out what’s getting in the way of change. First, managers guide employees through a set of questions designed to uncover competing commitments. Next, employees examine these commitments to determine the underlying assumptions at their core. And finally, employees start the process of changing their behavior.

We’ll walk through the process fairly quickly below, but it’s important to note that each step will take time. Just uncovering the competing commitment will require at least two or three hours, because people need to reflect on each question and the implications of their answers. The process of challenging competing commitments and making real progress toward overcoming immunity to change unfolds over a longer period—weeks or even months. But just getting the commitments on the table can have a noticeable effect on the decisions people make and the actions they take.

Uncovering Competing Commitments

Overcoming immunity to change starts with uncovering competing commitments. In our work, we’ve found that even though people keep their competing commitments well hidden, you can draw them out by asking a series of questions—as long as the employees believe that personal and potentially embarrassing disclosures won’t be used inappropriately. It can be very powerful to guide people through this diagnostic exercise in a group—typically with several volunteers making their own discoveries public—so people can see that others, even the company’s star performers, have competing commitments and inner contradictions of their own.

The first question we ask is, What would you like to see changed at work, so that you could be more effective or so that work would be more satisfying? Responses to this question are nearly always couched in a complaint—a form of communication that most managers bemoan because of its negative, unproductive tone. But complaints can be immensely useful. People complain only about the things they care about, and they complain the loudest about the things they care about most. With little effort, people can turn their familiar, uninspiring gripes into something that’s more likely to energize and motivate them—a commitment, genuinely their own.

To get there, you need to ask a second question: What commitments does your complaint imply? A project leader we worked with, we’ll call him Tom, had grumbled, “My subordinates keep me out of the loop on important developments in my project.” This complaint yielded the statement, “I believe in open and candid communication.” A line manager we’ll call Mary lamented people’s unwillingness to speak up at meetings; her complaint implied a commitment to shared decision making.

While undoubtedly sincere in voicing such commitments, people can nearly always identify some way in which they are in part responsible for preventing them from being fulfilled. Thus, the third question is: What are you doing, or not doing, that is keeping your commitment from being more fully realized? Invariably, in our experience, people can identify these undermining behaviors in just a couple of seconds. For example, Tom admitted: “When people bring me bad news, I tend to shoot the messenger.” And Mary acknowledged that she didn’t delegate much and that she sometimes didn’t release all the information people needed in order to make good decisions.

In both cases, there may well have been other circumstances contributing to the shortfalls, but clearly both Tom and Mary were engaging in behavior that was affecting the people around them. Most people recognize this about themselves right away and are quick to say, “I need to stop doing that.” Indeed, Tom had repeatedly vowed to listen more openly to potential problems that would slow his projects. However, the purpose of this exercise is not to make these behaviors disappear—at least not now. The purpose is to understand why people behave in ways that undermine their own success.

The next step, then, is to invite people to consider the consequences of forgoing the behavior. We do this by asking a fourth question: If you imagine doing the opposite of the undermining behavior, do you detect in yourself any discomfort, worry, or vague fear? Tom imagined himself listening calmly and openly to some bad news about a project and concluded, “I’m afraid I’ll hear about a problem that I can’t fix, something that I can’t do anything about.” And Mary? She considered allowing people more latitude and realized that, quite frankly, she feared people wouldn’t make good decisions and she would be forced to carry out a strategy she thought would lead to an inferior result.

The final step is to transform that passive fear into a statement that reflects an active commitment to preventing certain outcomes. We ask, By engaging in this undermining behavior, what worrisome outcome are you committed to preventing? The resulting answer is the competing commitment, which lies at the very heart of a person’s immunity to change. Tom admitted, “I am committed to not learning about problems I can’t fix.” By intimidating his staff, he prevented them from delivering bad news, protecting himself from the fear that he was not in control of the project. Mary, too, was protecting herself—in her case, against the consequences of bad decisions. “I am committed to making sure my group does not make decisions that I don’t like.”

Such revelations can feel embarrassing. While primary commitments nearly always reflect noble goals that people would be happy to shout from the rooftops, competing commitments are very personal, reflecting vulnerabilities that people fear will undermine how they are regarded both by others and themselves. Little wonder people keep them hidden and hasten to cover them up again once they’re on the table.

But competing commitments should not be seen as weaknesses. They represent some version of self-protection, a perfectly natural and reasonable human impulse. The question is, if competing commitments are a form of self-protection, what are people protecting themselves from? The answers usually lie in what we call their big assumptions—deeply rooted beliefs about themselves and the world around them. These assumptions put an order to the world and at the same time suggest ways in which the world can go out of order. Competing commitments arise from these assumptions, driving behaviors unwittingly designed to keep the picture intact.

Examining the Big Assumption

People rarely realize they hold big assumptions because, quite simply, they accept them as reality. Often formed long ago and seldom, if ever, critically examined, big assumptions are woven into the very fabric of people’s existence. (For more on the grip that big assumptions hold on people, see the sidebar “Big Assumptions: How Our Perceptions Shape Our Reality.”) But with a little help, most people can call them up fairly easily, especially once they’ve identified their competing commitments. To do this, we first ask people to create the beginning of a sentence by inverting the competing commitment, and then we ask them to fill in the blank. For Tom (“I am committed to not hearing about problems I can’t fix”), the big assumption turned out to be, “I assume that if I did hear about problems I can’t fix, people would discover I’m not qualified to do my job.” Mary’s big assumption was that her teammates weren’t as smart or experienced as she and that she’d be wasting her time and others’ if she didn’t maintain control. Returning to our earlier story, John’s big assumption might be, “I assume that if I develop unambivalent relationships with my white coworkers, I will sacrifice my racial identity and alienate my own community.”

This is a difficult process, and it doesn’t happen all at once, because admitting to big assumptions makes people uncomfortable. The process can put names to very personal feelings people are reluctant to disclose, such as deep-seated fears or insecurities, highly discouraging or simplistic views of human nature, or perceptions of their own superior abilities or intellect. Unquestioning acceptance of a big assumption anchors and sustains an immune system: A competing commitment makes all the sense in the world, and the person continues to engage in behaviors that support it, albeit unconsciously, to the detriment of his or her “official,” stated commitment. Only by bringing big assumptions to light can people finally challenge their assumptions and recognize why they are engaging in seemingly contradictory behavior.

Big Assumptions: How Our Perceptions Shape Our Reality

BIG ASSUMPTIONS REFLECT the very human manner in which we invent or shape a picture of the world and then take our inventions for reality. This is easiest to see in children. The delight we take in their charming distortions is a kind of celebration that they are actively making sense of the world, even if a bit eccentrically. As one story goes, two youngsters had been learning about Hindu culture and were taken with a representation of the universe in which the world sits atop a giant elephant, and the elephant sits atop an even more giant turtle. “I wonder what the turtle sits on,” says one of the children. “I think from then on,” says the other, “it’s turtles all the way down.”

But deep within our amusement may lurk a note of condescension, an implication that this is what distinguishes children from grown-ups. Their meaning-making is subject to youthful distortions, we assume. Ours represents an accurate map of reality.

But does it? Are we really finished discovering, once we have reached adulthood, that our maps don’t match the territory? The answer is clearly no. In our 20 years of longitudinal and cross-sectional research, we’ve discovered that adults must grow into and out of several qualitatively different views of the world if they are to master the challenges of their life experiences (see Robert Kegan, In Over Our Heads, Harvard University Press, 1994).

A woman we met from Australia told us about her experience living in the United States for a year. “Not only do you drive on the wrong side of the street over here,” she said, “your steering wheels are on the wrong side, too. I would routinely pile into the right side of the car to drive off, only to discover I needed to get out and walk over to the other side.

“One day,” she continued, “I was thinking about six different things, and I got into the right side of the car, took out my keys, and was prepared to drive off. I looked up and thought to myself, ‘My God, here in the violent and lawless United States, they are even stealing steering wheels!’”

Of course, the countervailing evidence was just an arm’s length to her left, but—and this is the main point—why should she look? Our big assumptions create a disarming and deluding sense of certainty. If we know where a steering wheel belongs, we are unlikely to look for it some place else. If we know what our company, department, boss, or subordinate can and can’t do, why should we look for countervailing data—even if it is just an arm’s length away?

Questioning the Big Assumption

Once people have identified their competing commitments and the big assumptions that sustain them, most are prepared to take some immediate action to overcome their immunity. But the first part of the process involves observation, not action, which can be frustrating for high achievers accustomed to leaping into motion to solve problems. Let’s take a look at the steps in more detail.

Step 1: Notice and record current behavior

Employees must first take notice of what does and doesn’t happen as a consequence of holding big assumptions to be true. We specifically ask people not to try to make any changes in their thinking or behavior at this time but just to become more aware of their actions in relation to their big assumptions. This gives people the opportunity to develop a better appreciation for how and in what contexts big assumptions influence their lives. John, for example, who had assumed that working well with his white colleagues would estrange him from his ethnic group, saw that he had missed an opportunity to get involved in an exciting, high-profile initiative because he had mocked the idea when it first came up in a meeting.

Step 2: Look for contrary evidence

Next, employees must look actively for experiences that might cast doubt on the validity of their big assumptions. Because big assumptions are held as fact, they actually inform what people see, leading them to systematically (but unconsciously) attend to certain data and avoid or ignore other data. By asking people to search specifically for experiences that would cause them to question their assumptions, we help them see that they have filtering out certain types of information—information that could weaken the grip of the big assumptions.

When John looked around him, he considered for the first time that an African-American manager in another department had strong working relationships with her mostly white colleagues, yet seemed not to have compromised her personal identity. He also had to admit that when he had been thrown onto an urgent task force the year before, he had worked many hours alongside his white colleagues and found the experience satisfying; he had felt of his usual ambivalence.

Step 3: Explore the history

In this step, we people to become the “biographers” of their assumptions: How and when did the assumptions first take hold? How long have they been around? What have been some of their critical turning points?

Typically, this step leads people to earlier life experiences, almost always to times before their current jobs and relationships with current coworkers. This reflection usually makes people dissatisfied with the foundations of their big assumptions, especially when they see that these have accompanied them to their current positions and have been coloring their experiences for many years. Recently, a CEO expressed astonishment as she realized she’d been applying the same self-protective stance in her work that she’d developed during a difficult divorce years before. Just as commonly, as was the case for John, people trace their big assumptions to early experiences with parents, siblings, or friends. Understanding the circumstances that influenced the formation of the assumptions can free people to consider whether these beliefs apply to their present selves.

Step 4: Test the assumption

This step entails creating and running a modest test of the big assumption. This is the first time we ask people to consider making changes in their behavior. Each employee should come up with a scenario and run it by a partner who serves as a sounding board. (Left to their own devices, people tend to create tests that are either too risky or so tentative that they don’t actually challenge the assumption and in fact reaf-firm its validity.) After conferring with a partner, John, for instance, volunteered to join a short-term committee looking at his department’s process for evaluating new product ideas. Because the team would dissolve after a month, he would be able to extricate himself fairly quickly if he grew too uncomfortable with the relationships. But the experience would force him to spend a significant amount of time with several of his white colleagues during that month and would provide him an opportunity to test his sense of the real costs of being a full team member.

Step 5: Evaluate the results

In the last step, employees evaluate the test results, evaluate the test itself, design and run new tests, and eventually question the big assumptions. For John, this meant signing up for other initiatives and making initial social overtures to white coworkers. At the same time, by engaging in volunteer efforts within his community outside of work, he made sure that his ties to his racial group were not compromised.

It is worth noting that revealing a big assumption doesn’t necessarily mean it will be exposed as false. But even if a big assumption does contain an element of truth, an individual can often find more effective ways to operate once he or she has had a chance to challenge the assumption and its hold on his or her behavior. Indeed, John found a way to support the essence of his competing commitment—to maintain his bond with his racial group—while minimizing behavior that sabotaged his other stated commitments.

Uncovering Your Own Immunity

As you go through this process with your employees, remember that managers are every bit as susceptible to change immunity as employees are, and your competing commitments and big assumptions can have a significant impact on the people around you. Returning once more to Helen’s story: When we went through this exercise with her boss, Andrew, it turned out that he was harboring some contradictions of his own. While he was committed to the success of his subordinates, Andrew at some level assumed that he alone could meet his high standards, and as a result he was laboring under a competing commitment to maintain absolute control over his projects. He was unintentionally communicating this lack of confidence to his subordinates—including Helen—in subtle ways. In the end, Andrew’s and Helen’s competing commitments were, without their knowledge, mutually reinforcing, keeping Helen dependent on Andrew and allowing Andrew to control her projects.

Helen and Andrew are still working through this process, but they’ve already gained invaluable insight into their behavior and the ways they are impeding their own progress. This may seem like a small step, but bringing these issues to the surface and confronting them head-on is challenging and painful—yet tremendously effective. It allows managers to see, at last, what’s really going on when people who are genuinely committed to change nonetheless dig in their heels. It’s not about identifying unproductive behavior and systematically making plans to correct it, as if treating symptoms would cure a disease. It’s not about coaxing or cajoling or even giving poor performance reviews. It’s about understanding the complexities of people’s behavior, guiding them through a productive process to bring their competing commitments to the surface, and helping them cope with the inner conflict that is preventing them from achieving their goals.

Originally published in November 2001. Reprint R0110E

Cracking the Code of Change

by Michael Beer and Nitin Nohria

THE NEW ECONOMY HAS ushered in great business opportunities—and great turmoil. Not since the Industrial Revolution have the stakes of dealing with change been so high. Most traditional organizations have accepted, in theory at least, that they must either change or die. And even Internet companies such as eBay, Amazon.com, and America Online recognize that they need to manage the changes associated with rapid entrepreneurial growth. Despite some individual successes, however, change remains difficult to pull off, and few companies manage the process as well as they would like. Most of their initiatives—installing new technology, downsizing, restructuring, or trying to change corporate culture—have had low success rates. The brutal fact is that about 70% of all change initiatives fail.

In our experience, the reason for most of those failures is that in their rush to change their organizations, managers end up immersing themselves in an alphabet soup of initiatives. They lose focus and become mesmerized by all the advice available in print and online about why companies should change, what they should try to accomplish, and how they should do it. This proliferation of recommendations often leads to muddle when change is attempted. The result is that most change efforts exert a heavy toll, both human and economic. To improve the odds of success, and to reduce the human carnage, it is imperative that executives understand the nature and process of corporate change much better. But even that is not enough. Leaders need to crack the code of change.

For more than 40 years now, we’ve been studying the nature of corporate change. And although every business’s change initiative is unique, our research suggests there are two archetypes, or theories, of change. These archetypes are based on very different and often unconscious assumptions by senior executives—and the consultants and academics who advise them—about why and how changes should be made. Theory E is change based on economic value. Theory O is change based on organizational capability. Both are valid models; each theory of change achieves some of management’s goals, either explicitly or implicitly. But each theory also has its costs—often unexpected ones.

Theory E change strategies are the ones that make all the headlines. In this “hard” approach to change, shareholder value is the only legitimate measure of corporate success. Change usually involves heavy use of economic incentives, drastic layoffs, downsizing, and restructuring. E change strategies are more common than O change strategies among companies in the United States, where financial markets push corporate boards for rapid turnarounds. For instance, when William A. Anders was brought in as CEO of General Dynamics in 1991, his goal was to maximize economic value—how-ever painful the remedies might be. Over the next three years, Anders reduced the workforce by 71,000 people—44,000 through the divestiture of seven businesses and 27,000 through layoffs and attrition. Anders employed common E strategies.

Managers who subscribe to Theory O believe that if they were to focus exclusively on the price of their stock, they might harm their organizations. In this “soft” approach to change, the goal is to develop corporate culture and human capability through individual and organizational learning—the process of changing, obtaining feedback, reflecting, and making further changes. U.S. companies that adopt O strategies, as Hewlett-Packard did when its performance flagged in the 1980s, typically have strong, long-held, commitment-based psychological contracts with their employees.

Idea in Brief

Here’s the brutal fact: 70% of all change initiatives fail. Why? Managers flounder in an alphabet soup of change methods, drowning in conflicting advice. Change efforts exact a heavy toll—human and economic—as companies flail from one change method to another.

To effect successful change, first grasp the two basic theories of change:

1. Theory E change emphasizes economic value—as measured only by shareholder returns. This “hard” approach boosts returns through economic incentives, drastic layoffs, and restructuring. “Chainsaw Al” Dunlop’s firing 11,000 Scott Paper employees and selling several businesses—tripling shareholder value to $9 billion—is a stunning example.

2. Theory O change—a “softer” approach—focuses on developing corporate culture and human capability, patiently building trust and emotional commitment to the company through teamwork and communication.

Then, carefully and simultaneously balance these very different approaches. It’s not easy. Employees distrust leaders who alternate between nurturing and cutthroat behavior. But, done well, you’ll boost profits and productivity, and achieve sustainable competitive advantage.

Managers at these companies are likely to see the risks in breaking those contracts. Because they place a high value on employee commitment, Asian and European businesses are also more likely to adopt an O strategy to change.

Few companies subscribe to just one theory. Most companies we have studied have used a mix of both. But all too often, managers try to apply theories E and O in tandem without resolving the inherent tensions between them. This impulse to combine the strategies is directionally correct, but theories E and O are so different that it’s hard to manage them simultaneously—employees distrust leaders who alternate between nurturing and cutthroat corporate behavior. Our research suggests, however, that there is a way to resolve the tension so that businesses can satisfy their shareholders while building viable institutions. Companies that effectively combine hard and soft approaches to change can reap big payoffs in profitability and productivity. Those companies are more likely to achieve a sustainable competitive advantage. They can also reduce the anxiety that grips whole societies in the face of corporate restructuring.

Idea in Practice

The UK grocery chain, ASDA, teetered on bankruptcy in 1991. Here’s how CEO Archie Norman combined change Theories E and O with spectacular results: a culture of trust and openness—and an eightfold increase in shareholder value.

In this article, we will explore how one company successfully resolved the tensions between E and O strategies. But before we do that, we need to look at just how different the two theories are.

A Tale of Two Theories

To understand how sharply theories E and O differ, we can compare them along several key dimensions of corporate change: goals, leadership, focus, process, reward system, and use of consultants. (For a side-by-side comparison, see the table “Comparing theories of change.”) We’ll look at two companies in similar businesses that adopted almost pure forms of each archetype. Scott Paper successfully used Theory E to enhance shareholder value, while Champion International used Theory O to achieve a complete cultural transformation that increased its productivity and employee commitment. But as we will soon observe, both paper producers also discovered the limitations of sticking with only one theory of change. Let’s compare the two companies’ initiatives.

Goals

When Al Dunlap assumed leadership of Scott Paper in May 1994, he immediately fired 11,000 employees and sold off several businesses. His determination to restructure the beleaguered company was almost monomaniacal. As he said in one of his speeches: “Shareholders are the number one constituency. Show me an annual report that lists six or seven constituencies, and I’ll show you a mismanaged company.” From a shareholder’s perspective, the results of Dunlap’s actions were stunning. In just 20 months, he managed to triple shareholder returns as Scott Paper’s market value rose from about $3 billion in 1994 to about $9 billion by the end of 1995. The financial community applauded his efforts and hailed Scott Paper’s approach to change as a model for improving shareholder returns.

Champion’s reform effort couldn’t have been more different. CEO Andrew Sigler acknowledged that enhanced economic value was an appropriate target for management, but he believed that goal would be best achieved by transforming the behaviors of management, unions, and workers alike. In 1981, Sigler and other managers launched a long-term effort to restructure corporate culture around a new vision called the Champion Way, a set of values and principles designed to build up the competencies of the workforce. By improving the organization’s capabilities in areas such as teamwork and communication, Sigler believed he could best increase employee productivity and thereby improve the bottom line.

Leadership

Leaders who subscribe to Theory E manage change the old-fashioned way: from the top down. They set goals with little involvement from their management teams and certainly without input from lower levels or unions. Dunlap was clearly the commander in chief at Scott Paper. The executives who survived his purges, for example, had to agree with his philosophy that shareholder value was now the company’s primary objective. Nothing made clear Dunlap’s leadership style better than the nickname he gloried in: “Chainsaw Al.”

By contrast, participation (a Theory O trait) was the hallmark of change at Champion. Every effort was made to get all its employees emotionally committed to improving the company’s performance. Teams drafted value statements, and even the industry’s unions were brought into the dialogue. Employees were encouraged to identify and solve problems themselves. Change at Champion sprouted from the bottom up.

Focus

In E-type change, leaders typically focus immediately on streamlining the “hardware” of the organization—the structures and systems. These are the elements that can most easily be changed from the top down, yielding swift financial results. For instance, Dunlap quickly decided to outsource many of Scott Paper’s corporate functions—benefits and payroll administration, almost all of its management information systems, some of its technology research, medical services, telemarketing, and security functions. An executive manager of a global merger explained the E rationale: “I have a [profit] goal of $176 million this year, and there’s no time to involve others or develop organizational capability.”

By contrast, Theory O’s initial focus is on building up the “software” of an organization—the culture, behavior, and attitudes of employees. Throughout a decade of reforms, no employees were laid off at Champion. Rather, managers and employees were encouraged to collectively reexamine their work practices and behaviors with a goal of increasing productivity and quality. Managers were replaced if they did not conform to the new philosophy, but the overall firing freeze helped to create a culture of trust and commitment. Structural change followed once the culture changed. Indeed, by the mid-1990s, Champion had completely reorganized all its corporate functions. Once a hierarchical, functionally organized company, Champion adopted a matrix structure that empowered employee teams to focus more on customers.

Comparing theories of change

Our research has shown that all corporate transformations can be compared along the six dimensions shown here. The table outlines the differences between the E and O archetypes and illustrates what an integrated approach might look like.

Process

Theory E is predicated on the view that no battle can be won without a clear, comprehensive, common plan of action that encourages internal coordination and inspires confidence among customers, suppliers, and investors. The plan lets leaders quickly motivate and mobilize their businesses; it compels them to take tough, decisive actions they presumably haven’t taken in the past. The changes at Scott Paper unfolded like a military battle plan. Managers were instructed to achieve specific targets by specific dates. If they didn’t adhere to Dunlap’s tightly choreographed marching orders, they risked being fired.

Meanwhile, the changes at Champion were more evolutionary and emergent than planned and programmatic. When the company’s decade-long reform began in 1981, there was no master blueprint. The idea was that innovative work processes, values, and culture changes in one plant would be adapted and used by other plants on their way through the corporate system. No single person, not even Sigler, was seen as the driver of change. Instead, local leaders took responsibility. Top management simply encouraged experimentation from the ground up, spread new ideas to other workers, and transferred managers of innovative units to lagging ones.

Reward System

The rewards for managers in E-type change programs are primarily financial. Employee compensation, for example, is linked with financial incentives, mainly stock options. Dunlap’s own compensation package—which ultimately netted him more than $100 million—was tightly linked to shareholders’ interests. Proponents of this system argue that financial incentives guarantee that employees’ interests match stockholders’ interests. Financial rewards also help top executives feel compensated for a difficult job—one in which they are often reviled by their onetime colleagues and the larger community.

The O-style compensation systems at Champion reinforced the goals of culture change, but they didn’t drive those goals. A skills-based pay system and a corporatewide gains-sharing plan were installed to draw union workers and management into a community of purpose. Financial incentives were used only as a supplement to those systems and not to push particular reforms. While Champion did offer a companywide bonus to achieve business goals in two separate years, this came late in the change process and played a minor role in actually fulfilling those goals.

Use of Consultants

Theory E change strategies often rely heavily on external consultants. A SWAT team of Ivy League–educated MBAs, armed with an arsenal of state-of-the-art ideas, is brought in to find new ways to look at the business and manage it. The consultants can help CEOs get a fix on urgent issues and priorities. They also offer much-needed political and psychological support for CEOs who are under fire from financial markets. At Scott Paper, Dunlap engaged consultants to identify many of the painful cost-savings initiatives that he subsequently implemented.

Theory O change programs rely far less on consultants. The handful of consultants who were introduced at Champion helped managers and workers make their own business analyses and craft their own solutions. And while the consultants had their own ideas, they did not recommend any corporate program, dictate any solutions, or whip anyone into line. They simply led a process of discovery and learning that was intended to change the corporate culture in a way that could not be foreseen at the outset.

In their purest forms, both change theories clearly have their limitations. CEOs who must make difficult E-style choices understandably distance themselves from their employees to ease their own pain and guilt. Once removed from their people, these CEOs begin to see their employees as part of the problem. As time goes on, these leaders become less and less inclined to adopt O-style change strategies. They fail to invest in building the company’s human resources, which inevitably hollows out the company and saps its capacity for sustained performance. At Scott Paper, for example, Dunlap trebled shareholder returns but failed to build the capabilities needed for sustained competitive advantage—commitment, coordination, communication, and creativity. In 1995, Dunlap sold Scott Paper to its longtime competitor Kimberly-Clark.

CEOs who embrace Theory O find that their loyalty and commitment to their employees can prevent them from making tough decisions. The temptation is to postpone the bitter medicine in the hopes that rising productivity will improve the business situation. But productivity gains aren’t enough when fundamental structural change is required. That reality is underscored by today’s global financial system, which makes corporate performance instantly transparent to large institutional shareholders whose fund managers are under enormous pressure to show good results. Consider Champion. By 1997, it had become one of the leaders in its industry based on most performance measures. Still, newly instated CEO Richard Olsen was forced to admit a tough reality: Champion shareholders had not seen a significant increase in the economic value of the company in more than a decade. Indeed, when Champion was sold recently to Finland-based UPM-Kymmene, it was acquired for a mere 1.5 times its original share value.

Managing the Contradictions

Clearly, if the objective is to build a company that can adapt, survive, and prosper over the years, Theory E strategies must somehow be combined with Theory O strategies. But unless they’re carefully handled, melding E and O is likely to bring the worst of both theories and the benefits of neither. Indeed, the corporate changes we’ve studied that arbitrarily and haphazardly mixed E and O techniques proved destabilizing to the organizations in which they were imposed. Managers in those companies would certainly have been better off to pick either pure E or pure O strategies—with all their costs. At least one set of stakeholders would have benefited.

The obvious way to combine E and O is to sequence them. Some companies, notably General Electric, have done this quite successfully. At GE, CEO Jack Welch began his sequenced change by imposing an E-type restructuring. He demanded that all GE businesses be first or second in their industries. Any unit that failed that test would be fixed, sold off, or closed. Welch followed that up with a massive downsizing of the GE bureaucracy. Between 1981 and 1985, total employment at the corporation dropped from 412,000 to 299,000. Sixty percent of the corporate staff, mostly in planning and finance, was laid off. In this phase, GE people began to call Welch “Neutron Jack,” after the fabled bomb that was designed to destroy people but leave buildings intact. Once he had wrung out the redundancies, however, Welch adopted an O strategy. In 1985, he started a series of organizational initiatives to change GE culture. He declared that the company had to become “boundaryless,” and unit leaders across the corporation had to submit to being challenged by their subordinates in open forum. Feedback and open communication eventually eroded the hierarchy. Soon Welch applied the new order to GE’s global businesses.

Unfortunately for companies like Champion, sequenced change is far easier if you begin, as Welch did, with Theory E. Indeed, it is highly unlikely that E would successfully follow O because of the sense of betrayal that would involve. It is hard to imagine how a draconian program of layoffs and downsizing can leave intact the psychological contract and culture a company has so patiently built up over the years. But whatever the order, one sure problem with sequencing is that it can take a very long time; at GE it has taken almost two decades. A sequenced change may also require two CEOs, carefully chosen for their contrasting styles and philosophies, which may create its own set of problems. Most turnaround managers don’t survive restructuring—partly because of their own inflexibility and partly because they can’t live down the distrust that their ruthlessness has earned them. In most cases, even the best-intentioned effort to rebuild trust and commitment rarely overcomes a bloody past. Welch is the exception that proves the rule.

So what should you do? How can you achieve rapid improvements in economic value while simultaneously developing an open, trusting corporate culture? Paradoxical as those goals may appear, our research shows that it is possible to apply theories E and O together. It requires great will, skill—and wisdom. But precisely because it is more difficult than mere sequencing, the simultaneous use of O and E strategies is more likely to be a source of sustainable competitive advantage.

One company that exemplifies the reconciliation of the hard and soft approaches is ASDA, the UK grocery chain that CEO Archie Norman took over in December 1991, when the retailer was nearly bankrupt. Norman laid off employees, flattened the organization, and sold off losing businesses—acts that usually spawn distrust among employees and distance executives from their people. Yet during Norman’s eight-year tenure as CEO, ASDA also became famous for its atmosphere of trust and openness. It has been described by executives at Wal-Mart—itself famous for its corporate culture—as being “more like Wal-Mart than we are.” Let’s look at how ASDA resolved the conflicts of E and O along the six main dimensions of change.

Explicitly confront the tension between E and O goals

With his opening speech to ASDA’s executive team—none of whom he had met—Norman indicated clearly that he intended to apply both E and O strategies in his change effort. It is doubtful that any of his listeners fully understood him at the time, but it was important that he had no conflicts about recognizing the paradox between the two strategies for change. He said as much in his maiden speech: “Our number one objective is to secure value for our shareholders and secure the trading future of the business. I am not coming in with any magical solutions. I intend to spend the next few weeks listening and forming ideas for our precise direction. . . . We need a culture built around common ideas and goals that include listening, learning, and speed of response, from the stores upwards. [But] there will be management reorganization. My objective is to establish a clear focus on the stores, shorten lines of communication, and build one team.” If there is a contradiction between building a high-involvement organization and restructuring to enhance shareholder value, Norman embraced it.

Set direction from the top and engage people below

From day one, Norman set strategy without expecting any participation from below. He said ASDA would adopt an everyday-low-pricing strategy, and Norman unilaterally determined that change would begin by having two experimental store formats up and running within six months. He decided to shift power from the headquarters to the stores, declaring: “I want everyone to be close to the stores. We must love the stores to death; that is our business.” But even from the start, there was an O quality to Norman’s leadership style. As he put it in his first speech: “First, I am forthright, and I like to argue. Second, I want to discuss issues as colleagues. I am looking for your advice and your disagreement.” Norman encouraged dialogue with employees and customers through colleague and customer circles. He set up a “Tell Archie” program so that people could voice their concerns and ideas.

Making way for opposite leadership styles was also an essential ingredient to Norman’s—and ASDA’s—success. This was most clear in Norman’s willingness to hire Allan Leighton shortly after he took over. Leighton eventually became deputy chief executive. Norman and Leighton shared the same E and O values, but they had completely different personalities and styles. Norman, cool and reserved, impressed people with the power of his mind—his intelligence and business acumen. Leighton, who is warmer and more people oriented, worked on employees’ emotions with the power of his personality. As one employee told us, “People respect Archie, but they love Allan.” Norman was the first to credit Leighton with having helped to create emotional commitment to the new ASDA. While it might be possible for a single individual to embrace opposite leadership styles, accepting an equal partner with a very different personality makes it easier to capitalize on those styles. Leighton certainly helped Norman reach out to the organization. Together they held quarterly meetings with store managers to hear their ideas, and they supplemented those meetings with impromptu talks.

Focus simultaneously on the hard and soft sides of the organization

Norman’s immediate actions followed both the E goal of increasing economic value and the O goal of transforming culture. On the E side, Norman focused on structure. He removed layers of hierarchy at the top of the organization, fired the financial officer who had been part of ASDA’s disastrous policies, and decreed a wage freeze for everyone—management and workers alike. But from the start, the O strategy was an equal part of Norman’s plan. He bought time for all this change by warning the markets that financial recovery would take three years. Norman later said that he spent 75% of his early months at ASDA as the company’s human resource director, making the organization less hierarchical, more egalitarian, and more transparent. Both Norman and Leighton were keenly aware that they had to win hearts and minds. As Norman put it to workers: “We need to make ASDA a great place for everyone to work.”

Plan for spontaneity

Training programs, total-quality programs, and top-driven culture change programs played little part in ASDA’s transformation. From the start, the ASDA change effort was set up to encourage experimentation and evolution. To promote learning, for example, ASDA set up an experimental store that was later expanded to three stores. It was declared a risk-free zone, meaning there would be no penalties for failure. A cross-functional task force “renewed,” or redesigned, ASDA’s entire retail proposition, its organization, and its managerial structure. Store managers were encouraged to experiment with store layout, employee roles, ranges of products offered, and so on. The experiments produced significant innovations in all aspects of store operations. ASDA’s managers learned, for example, that they couldn’t renew a store unless that store’s management team was ready for new ideas. This led to an innovation called the Driving Test, which assessed whether store managers’ skills in leading the change process were aligned with the intended changes. The test perfectly illustrates how E and O can come together: it bubbled up O-style from the bottom of the company, yet it bound managers in an E-type contract. Managers who failed the test were replaced.

Let incentives reinforce change, not drive it

Any synthesis of E and O must recognize that compensation is a double-edged sword. Money can focus and motivate managers, but it can also hamper teamwork, commitment, and learning. The way to resolve this dilemma is to apply Theory E incentives in an O way. Employees’ high involvement is encouraged to develop their commitment to change, and variable pay is used to reward that commitment. ASDA’s senior executives were compensated with stock options that were tied to the company’s value. These helped attract key executives to ASDA. Unlike most E-strategy companies, however, ASDA had a stock-ownership plan for all employees. In addition, store-level employees got variable pay based on both corporate performance and their stores’ records. In the end, compensation represented a fair exchange of value between the company and its individual employees. But Norman believed that compensation had not played a major role in motivating change at the company.

Use consultants as expert resources who empower employees

Consultants can provide specialized knowledge and technical skills that the company doesn’t have, particularly in the early stages of organizational change. Management’s task is figuring out how to use those resources without abdicating leadership of the change effort. ASDA followed the middle ground between Theory E and Theory O. It made limited use of four consulting firms in the early stages of its transformation. The consulting firms always worked alongside management and supported its leadership of change. However, their engagement was intentionally cut short by Norman to prevent ASDA and its managers from becoming dependent on the consultants. For example, an expert in store organization was hired to support the task force assigned to renew ASDA’s first few experimental stores, but later stores were renewed without his involvement.

By embracing the paradox inherent in simultaneously employing E and O change theories, Norman and Leighton transformed ASDA to the advantage of its shareholders and employees. The organization went through personnel changes, unit sell-offs, and hierarchical upheaval. Yet these potentially destructive actions did not prevent ASDA’s employees from committing to change and the new corporate culture because Norman and Leighton had won employees’ trust by constantly listening, debating, and being willing to learn. Candid about their intentions from the outset, they balanced the tension between the two change theories.

By 1999, the company had multiplied shareholder value eightfold. The organizational capabilities built by Norman and Leighton also gave ASDA the sustainable competitive advantage that Dunlap had been unable to build at Scott Paper and that Sigler had been unable to build at Champion. While Dunlap was forced to sell a demoralized and ineffective organization to Kimberly-Clark, and while a languishing Champion was sold to UPM-Kymmene, Norman and Leighton in June 1999 found a friendly and culturally compatible suitor in Wal-Mart, which was willing to pay a substantial premium for the organizational capabilities that ASDA had so painstakingly developed.

Change Theories in the New Economy

HISTORICALLY, THE STUDY of change has been restricted to mature, large companies that needed to reverse their competitive declines. But the arguments we have advanced in this article also apply to entrepreneurial companies that need to manage rapid growth. Here, too, we believe that the most successful strategy for change will be one that combines theories E and O.

Just as there are two ways of changing, so there are two kinds of entrepreneurs. One group subscribes to an ideology akin to Theory E. Their primary goal is to prepare for a cash-out, such as an IPO or an acquisition by an established player. Maximizing market value before the cash-out is their sole and abiding purpose. These entrepreneurs emphasize shaping the firm’s strategy, structure, and systems to build a quick, strong market presence. Mercurial leaders who drive the company using a strong top-down style are typically at the helm of such companies. They lure others to join them using high-powered incentives such as stock options. The goal is to get rich quick.

Other entrepreneurs, however, are driven by an ideology more akin to Theory O—the building of an institution. Accumulating wealth is important, but it is secondary to creating a company that is based on a deeply held set of values and that has a strong culture. These entrepreneurs are likely to subscribe to an egalitarian style that invites everyone’s participation. They look to attract others who share their passion about the cause—though they certainly provide generous stock options as well. The goal in this case is to make a difference, not just to make money.

Many people fault entrepreneurs who are driven by a Theory E view of the world. But we can think of other entrepreneurs who have destroyed businesses because they were overly wrapped up in the Theory O pursuit of a higher ideal and didn’t pay attention to the pragmatics of the market. Steve Jobs’s venture, Next, comes to mind. Both types of entrepreneurs have to find some way of tapping the qualities of theories E and O, just as large companies do.

In the end, the integration of theories E and O created major change—and major payoffs—for ASDA. Such payoffs are possible for other organizations that want to develop a sustained advantage in today’s economy. But that advantage can come only from a constant willingness and ability to develop organizations for the long term combined with a constant monitoring of shareholder value—E dancing with O, in an unending minuet.

Originally published in May 2000. Reprint R00301

The Hard Side of Change Management

by Harold L. Sirkin, Perry Keenan, and Alan Jackson

WHEN FRENCH NOVELIST JEAN-BAPTISTE Alphonse Karr wrote “Plus ça change, plus c’est la même chose,” he could have been penning an epigram about change management. For over three decades, academics, managers, and consultants, realizing that transforming organizations is difficult, have dissected the subject. They’ve sung the praises of leaders who communicate vision and walk the talk in order to make change efforts succeed. They’ve sanctified the importance of changing organizational culture and employees’ attitudes. They’ve teased out the tensions between top-down transformation efforts and participatory approaches to change. And they’ve exhorted companies to launch campaigns that appeal to people’s hearts and minds. Still, studies show that in most organizations, two out of three transformation initiatives fail. The more things change, the more they stay the same.

Managing change is tough, but part of the problem is that there is little agreement on what factors most influence transformation initiatives. Ask five executives to name the one factor critical for the success of these programs, and you’ll probably get five different answers. That’s because each manager looks at an initiative from his or her viewpoint and, based on personal experience, focuses on different success factors. The experts, too, offer different perspectives. A recent search on Amazon.com for books on “change and management” turned up 6,153 titles, each with a distinct take on the topic. Those ideas have a lot to offer, but taken together, they force companies to tackle many priorities simultaneously, which spreads resources and skills thin. Moreover, executives use different approaches in different parts of the organization, which compounds the turmoil that usually accompanies change.

In recent years, many change management gurus have focused on soft issues, such as culture, leadership, and motivation. Such elements are important for success, but managing these aspects alone isn’t sufficient to implement transformation projects. Soft factors don’t directly influence the outcomes of many change programs. For instance, visionary leadership is often vital for transformation projects, but not always. The same can be said about communication with employees. Moreover, it isn’t easy to change attitudes or relationships; they’re deeply ingrained in organizations and people. And although changes in, say, culture or motivation levels can be indirectly gauged through surveys and interviews, it’s tough to get reliable data on soft factors.

What’s missing, we believe, is a focus on the not-so-fashionable aspects of change management: the hard factors. These factors bear three distinct characteristics. First, companies are able to measure them in direct or indirect ways. Second, companies can easily communicate their importance, both within and outside organizations. Third, and perhaps most important, businesses are capable of influencing those elements quickly. Some of the hard factors that affect a transformation initiative are the time necessary to complete it, the number of people required to execute it, and the financial results that intended actions are expected to achieve. Our research shows that change projects fail to get off the ground when companies neglect the hard factors. That doesn’t mean that executives can ignore the soft elements; that would be a grave mistake. However, if companies don’t pay attention to the hard issues first, transformation programs will break down before the soft elements come into play.

Idea in Brief

Two out of every three transformation programs fail. Why? Companies overemphasize the soft side of change: leadership style, corporate culture, employee motivation. Though these elements are critical for success, change projects can’t get off the ground unless companies address harder elements first.

The essential hard elements? Think of them as DICE:

• Duration: time between milestone reviews—the shorter, the better

• Integrity: project teams’ skill

• Commitment: senior executives’ and line managers’ dedication to the program

• Effort: the extra work employees must do to adopt new processes—the less, the better

By assessing each DICE element before you launch a major change initiative, you can identify potential problem areas and make the necessary adjustments (such as reconfiguring a project team’s composition or reallocating resources) to ensure the program’s success. You can also use DICE after launching a project—to make midcourse corrections if the initiative veers off track.

DICE helps companies lay the foundation for successful change. Using the DICE assessment technique, one global beverage company executed a multiproject organization-wide change program that generated hundreds of millions of dollars, breathed new life into its once-stagnant brands, and cracked open new markets.

That’s a lesson we learned when we identified the common denominators of change. In 1992, we started with the contrarian hypothesis that organizations handle transformations in remarkably similar ways. We researched projects in a number of industries and countries to identify those common elements. Our initial 225-company study revealed a consistent correlation between the outcomes (success or failure) of change programs and four hard factors: project duration, particularly the time between project reviews; performance integrity, or the capabilities of project teams; the commitment of both senior executives and the staff whom the change will affect the most; and the additional effort that employees must make to cope with the change. We called these variables the DICE factors because we could load them in favor of projects’ success.

Idea in Practice

Conducting a DICE Assessment

Your project has the greatest chance of success if the following hard elements are in place:

Duration

A long project reviewed frequently stands a far better chance of succeeding than a short project reviewed infrequently. Problems can be identified at the first sign of trouble, allowing for prompt corrective actions. Review complex projects every two weeks; more straightforward initiatives, every six to eight weeks.

Integrity

A change program’s success hinges on a high-integrity, high-quality project team. To identify team candidates with the right portfolio of skills, solicit names from key colleagues, including top performers in functions other than your own. Recruit people who have problem-solving skills, are results oriented, and are methodical but tolerate ambiguity. Look also for organizational savvy, willingness to accept responsibility for decisions, and a disdain for the limelight.

Commitment

If employees don’t see company leaders supporting a change initiative, they won’t change. Visibly endorse the initiative—no amount of public support is too much. When you feel you’re “talking up” a change effort at least three times more than you need to, you’ve hit it right.

Also continually communicate why the change is needed and what it means for employees. Ensure that all messages about the change are consistent and clear. Reach out to managers and employees through one-on-one conversations to win them over.

Effort

If adopting a change burdens employees with too much additional effort, they’ll resist. Calculate how much work employees will have to do beyond their existing responsibilities to implement the change. Ensure that no one’s workload increases more than 10%. If necessary, remove nonessential regular work from employees with key roles in the transformation project. Use temporary workers or outsource some processes to accommodate additional workload.

Using the DICE Framework

Conducting a DICE assessment fosters successful change by sparking valuable senior leadership debate about project strategy It also improves change effectiveness by enabling companies to manage large portfolios of projects.

Example: A manufacturing company planned 40 projects as part of a profitability-improvement program. After conducting a DICE assessment for each project, leaders and project owners identified the five most important projects and asked, “How can we ensure these projects’ success?” They moved people around on teams, reconfigured some projects, and identified initiatives senior managers should pay more attention to—setting up their most crucial projects for resounding success.

We completed our study in 1994, and in the 11 years since then, the Boston Consulting Group has used those four factors to predict the outcomes, and guide the execution, of more than 1,000 change management initiatives worldwide. Not only has the correlation held, but no other factors (or combination of factors) have predicted outcomes as well.

The Four Key Factors

If you think about it, the different ways in which organizations combine the four factors create a continuum—from projects that are set up to succeed to those that are set up to fail. At one extreme, a short project led by a skilled, motivated, and cohesive team, championed by top management and implemented in a department that is receptive to the change and has to put in very little additional effort, is bound to succeed. At the other extreme, a long, drawn-out project executed by an inexpert, unenthusiastic, and disjointed team, without any top-level sponsors and targeted at a function that dislikes the change and has to do a lot of extra work, will fail. Businesses can easily identify change programs at either end of the spectrum, but most initiatives occupy the middle ground where the likelihood of success or failure is difficult to assess. Executives must study the four DICE factors carefully to figure out if their change programs will fly—or die.

The Four Factors

THESE FACTORS determine the outcome of any transformation initiative.

D. The duration of time until the change program is completed if it has a short life span; if not short, the amount of time between reviews of milestones.

I. The project team’s performance integrity; that is, its ability to complete the initiative on time. That depends on members’ skills and traits relative to the project’s requirements.

C. The commitment to change that top management (C_1) and employees affected by the change (C_2) display.

E. The effort over and above the usual work that the change initiative demands of employees.

Duration

Companies make the mistake of worrying mostly about the time it will take to implement change programs. They assume that the longer an initiative carries on, the more likely it is to fail—the early impetus will peter out, windows of opportunity will close, objectives will be forgotten, key supporters will leave or lose their enthusiasm, and problems will accumulate. However, contrary to popular perception, our studies show that a long project that is reviewed frequently is more likely to succeed than a short project that isn’t reviewed frequently. Thus, the time between reviews is more critical for success than a project’s life span.

Companies should formally review transformation projects at least bimonthly since, in our experience, the probability that change initiatives will run into trouble rises exponentially when the time between reviews exceeds eight weeks. Whether reviews should be scheduled even more frequently depends on how long executives feel the project can carry on without going off track. Complex projects should be reviewed fortnightly; more familiar or straightforward initiatives can be assessed every six to eight weeks.

Scheduling milestones and assessing their impact are the best way by which executives can review the execution of projects, identify gaps, and spot new risks. The most effective milestones are those that describe major actions or achievements rather than day-to-day activities. They must enable senior executives and project sponsors to confirm that the project has made progress since the last review took place. Good milestones encompass a number of tasks that teams must complete. For example, describing a particular milestone as “Consultations with Stakeholders Completed” is more effective than “Consult Stakeholders” because it represents an achievement and shows that the project has made headway. Moreover, it suggests that several activities were completed—identifying stakeholders, assessing their needs, and talking to them about the project. When a milestone looks as though it won’t be reached on time, the project team must try to understand why, take corrective actions, and learn from the experience to prevent problems from recurring.

Review of such a milestone—what we refer to as a “learning milestone”—isn’t an impromptu assessment of the Monday-morning kind. It should be a formal occasion during which senior-management sponsors and the project team evaluate the latter’s performance on all the dimensions that have a bearing on success and failure. The team must provide a concise report of its progress, and members and sponsors must check if the team is on track to complete, or has finished all the tasks to deliver, the milestone. They should also determine whether achieving the milestone has had the desired effect on the company; discuss the problems the team faced in reaching the milestone; and determine how that accomplishment will affect the next phase of the project. Sponsors and team members must have the power to address weaknesses. When necessary, they should alter processes, agree to push for more or different resources, or suggest a new direction. At these meetings, senior executives must pay special attention to the dynamics within teams, changes in the organization’s perceptions about the initiative, and communications from the top.

Integrity

By performance integrity, we mean the extent to which companies can rely on teams of managers, supervisors, and staff to execute change projects successfully. In a perfect world, every team would be flawless, but no business has enough great people to ensure that. Besides, senior executives are often reluctant to allow star performers to join change efforts because regular work can suffer. But since the success of change programs depends on the quality of teams, companies must free up the best staff while making sure that day-to-day operations don’t falter. In companies that have succeeded in implementing change programs, we find that employees go the extra mile to ensure their day-to-day work gets done.

Since project teams handle a wide range of activities, resources, pressures, external stimuli, and unforeseen obstacles, they must be cohesive and well led. It’s not enough for senior executives to ask people at the watercooler if a project team is doing well; they must clarify members’ roles, commitments, and accountability. They must choose the team leader and, most important, work out the team’s composition.

Smart executive sponsors, we find, are very inclusive when picking teams. They identify talent by soliciting names from key colleagues, including human resource managers; by circulating criteria they have drawn up; and by looking for top performers in all functions. While they accept volunteers, they take care not to choose only supporters of the change initiative. Senior executives personally interview people so that they can construct the right portfolio of skills, knowledge, and social networks. They also decide if potential team members should commit all their time to the project; if not, they must ask them to allocate specific days or times of the day to the initiative. Top management makes public the parameters on which it will judge the team’s performance and how that evaluation fits into the company’s regular appraisal process. Once the project gets under way, sponsors must measure the cohesion of teams by administering confidential surveys to solicit members’ opinions.

Executives often make the mistake of assuming that because someone is a good, well-liked manager, he or she will also make a decent team leader. That sounds reasonable, but effective managers of the status quo aren’t necessarily good at changing organizations. Usually, good team leaders have problem-solving skills, are results oriented, are methodical in their approach but tolerate ambiguity, are organizationally savvy, are willing to accept responsibility for decisions, and while being highly motivated, don’t crave the limelight. A CEO who successfully led two major transformation projects in the past ten years used these six criteria to quiz senior executives about the caliber of nominees for project teams. The top management team rejected one in three candidates, on average, before finalizing the teams.

Commitment

Companies must boost the commitment of two different groups of people if they want change projects to take root: They must get visible backing from the most influential executives (what we call C_1), who are not necessarily those with the top titles. And they must take into account the enthusiasm—or often, lack thereof—of the people who must deal with the new systems, processes, or ways of working (C_2).

Top-level commitment is vital to engendering commitment from those at the coal face. If employees don’t see that the company’s leadership is backing a project, they’re unlikely to change. No amount of top-level support is too much. In 1999, when we were working with the CEO of a consumer products company, he told us that he was doing much more than necessary to display his support for a nettlesome project. When we talked to line managers, they said that the CEO had extended very little backing for the project. They felt that if he wanted the project to succeed, he would have to support it more visibly! A rule of thumb: When you feel that you are talking up a change initiative at least three times more than you need to, your managers will feel that you are backing the transformation.

Sometimes, senior executives are reluctant to back initiatives. That’s understandable; they’re often bringing about changes that may negatively affect employees’ jobs and lives. However, if senior executives do not communicate the need for change, and what it means for employees, they endanger their projects’ success. In one financial services firm, top management’s commitment to a program that would improve cycle times, reduce errors, and slash costs was low because it entailed layoffs. Senior executives found it gut-wrenching to talk about layoffs in an organization that had prided itself on being a place where good people could find lifetime employment. However, the CEO realized that he needed to tackle the thorny issues around the layoffs to get the project implemented on schedule. He tapped a senior company veteran to organize a series of speeches and meetings in order to provide consistent explanations for the layoffs, the timing, the consequences for job security, and so on. He also appointed a well-respected general manager to lead the change program. Those actions reassured employees that the organization would tackle the layoffs in a professional and humane fashion.

Companies often underestimate the role that managers and staff play in transformation efforts. By communicating with them too late or inconsistently, senior executives end up alienating the people who are most affected by the changes. It’s surprising how often something senior executives believe is a good thing is seen by staff as a bad thing, or a message that senior executives think is perfectly clear is misunderstood. That usually happens when senior executives articulate subtly different versions of critical messages. For instance, in one company that applied the DICE framework, scores for a project showed a low degree of staff commitment. It turned out that these employees had become confused, even distrustful, because one senior manager had said, “Layoffs will not occur,” while another had said, “They are not expected to occur.”

Organizations also underestimate their ability to build staff support. A simple effort to reach out to employees can turn them into champions of new ideas. For example, in the 1990s, a major American energy producer was unable to get the support of mid-level managers, supervisors, and workers for a productivity improvement program. After trying several times, the company’s senior executives decided to hold a series of one-on-one conversations with mid-level managers in a last-ditch effort to win them over. The conversations focused on the program’s objectives, its impact on employees, and why the organization might not be able to survive without the changes. Partly because of the straight talk, the initiative gained some momentum. This allowed a project team to demonstrate a series of quick wins, which gave the initiative a new lease on life.

Effort

When companies launch transformation efforts, they frequently don’t realize, or know how to deal with the fact, that employees are already busy with their day-to-day responsibilities. According to staffing tables, people in many businesses work 80-plus-hour weeks. If, on top of existing responsibilities, line managers and staff have to deal with changes to their work or to the systems they use, they will resist.

Project teams must calculate how much work employees will have to do beyond their existing responsibilities to change over to new processes. Ideally, no one’s workload should increase more than 10%. Go beyond that, and the initiative will probably run into trouble. Resources will become overstretched and compromise either the change program or normal operations. Employee morale will fall, and conflict may arise between teams and line staff. To minimize the dangers, project managers should use a simple metric like the percentage increase in effort the employees who must cope with the new ways feel they must contribute. They should also check if the additional effort they have demanded comes on top of heavy workloads and if employees are likely to resist the project because it will demand more of their scarce time.

Companies must decide whether to take away some of the regular work of employees who will play key roles in the transformation project. Companies can start by ridding these employees of discretionary or nonessential responsibilities. In addition, firms should review all the other projects in the operating plan and assess which ones are critical for the change effort. At one company, the project steering committee delayed or restructured 120 out of 250 subprojects so that some line managers could focus on top-priority projects. Another way to relieve pressure is for the company to bring in temporary workers, like retired managers, to carry out routine activities or to outsource current processes until the changeover is complete. Handing off routine work or delaying projects is costly and time-consuming, so companies need to think through such issues before kicking off transformation efforts.

Calculating DICE Scores

COMPANIES CAN DETERMINE if their change programs will succeed by asking executives to calculate scores for each of the four factors of the DICE framework—duration, integrity, commitment, and effort. They must grade each factor on a scale from 1 to 4 (using fractions, if necessary); the lower the score, the better. Thus, a score of 1 suggests that the factor is highly likely to contribute to the program’s success, and a score of 4 means that it is highly unlikely to contribute to success. We find that the following questions and scoring guidelines allow executives to rate transformation initiatives effectively:

Duration [D]

Ask: Do formal project reviews occur regularly? If the project will take more than two months to complete, what is the average time between reviews?

Score: If the time between project reviews is less than two months, you should give the project 1 point. If the time is between two and four months, you should award the project 2 points; between four and eight months, 3 points; and if reviews are more than eight months apart, give the project 4 points.

Integrity of Performance [I]

Ask: Is the team leader capable? How strong are team members’ skills and motivations? Do they have sufficient time to spend on the change initiative?

Score: If the project team is led by a highly capable leader who is respected by peers, if the members have the skills and motivation to complete the project in the stipulated time frame, and if the company has assigned at least 50% of the team members’ time to the project, you can give the project 1 point. If the team is lacking on all those dimensions, you should award the project 4 points. If the team’s capabilities are somewhere in between, assign the project 2 or 3 points.

Senior Management Commitment [C_1]

Ask: Do senior executives regularly communicate the reason for the change and the importance of its success? Is the message convincing? Is the message consistent, both across the top management team and over time? Has top management devoted enough resources to the change program?

Score: If senior management has, through actions and words, clearly communicated the need for change, you must give the project 1 point. If senior executives appear to be neutral, it gets 2 or 3 points. If managers perceive senior executives to be reluctant to support the change, award the project 4 points.

Local-Level Commitment [C_2]

Ask: Do the employees most affected by the change understand the reason for it and believe it’s worthwhile? Are they enthusiastic and supportive or worried and obstructive?

Score: If employees are eager to take on the change initiative, you can give the project 1 point, and if they are just willing, 2 points. If they’re reluctant or strongly reluctant, you should award the project 3 or 4 points.

Effort [E]

Ask: What is the percentage of increased effort that employees must make to implement the change effort? Does the incremental effort come on top of a heavy workload? Have people strongly resisted the increased demands on them?

Score: If the project requires less than 10% extra work by employees, you can give it 1 point. If it’s 10% to 20% extra, it should get 2 points. If it’s 20% to 40%, it must be 3 points. And if it’s more than 40% additional work, you should give the project 4 points.

Executives can combine the four elements into a project score. When we conducted a regression analysis of our database of change efforts, we found that the combination that correlates most closely with actual outcomes doubles the weight given to team performance (I) and senior management commitment (C_1). That translates into the following formula:

DICE Score = D + (2 x I) + (2 x C_1) + C_2 + E

In the 1-to-4 scoring system, the formula generates overall scores that range from 7 to 28. Companies can compare a project’s score with those of past projects and their outcomes to assess if the project is slated for success or failure. Our data show a clear distribution of scores:

Scores between 7 and 14: The project is very likely to succeed. We call this the Win Zone.

Scores higher than 14 but lower than 17: Risks to the project’s success are rising, particularly as the score approaches 17. This is the Worry Zone.

Scores over 17: The project is extremely risky. If a project scores over 17 and under 19 points, the risks to success are very high. Beyond 19, the project is unlikely to succeed. That’s why we call this the Woe Zone.

We have changed the boundaries of the zones over time. For instance, the Worry Zone was between 14 and 21 points at first, and the Woe Zone from 21 to 28 points. But we found that companies prefer to be alerted to trouble as soon as outcomes become unpredictable (17 to 20 points). We therefore compressed the Worry Zone and expanded the Woe Zone.

Creating the Framework

As we came to understand the four factors better, we created a framework that would help executives evaluate their transformation initiatives and shine a spotlight on interventions that would improve their chances of success. We developed a scoring system based on the variables that affect each factor. Executives can assign scores to the DICE factors and combine them to arrive at a project score. (See the sidebar “Calculating DICE Scores.”)

Although the assessments are subjective, the system gives companies an objective framework for making those decisions. Moreover, the scoring mechanism ensures that executives are evaluating projects and making trade-offs more consistently across projects.

A company can compare its DICE score on the day it kicks off a project with the scores of previous projects, as well as their outcomes, to check if the initiative has been set up for success. When we calculated the scores of the 225 change projects in our database and compared them with the outcomes, the analysis was compelling. Projects clearly fell into three categories, or zones: Win, which means that any project with a score in that range is statistically likely to succeed; worry, which suggests that the project’s outcome is hard to predict; and woe, which implies that the project is totally unpredictable or fated for mediocrity or failure. (See the figure “DICE scores predict project outcomes.”)

Companies can track how change projects are faring by calculating scores over time or before and after they have made changes to a project’s structure. The four factors offer a litmus test that executives can use to assess the probability of success for a given project or set of projects. Consider the case of a large Australian bank that in 1994 wanted to restructure its back-office operations. Senior executives agreed on the rationale for the change but differed on whether the bank could achieve its objectives, since the transformation required major changes in processes and organizational structures. Bringing the team and the senior executives together long enough to sort out their differences proved impossible; people were just too busy. That’s when the project team decided to analyze the initiative using the DICE framework.

DICE scores predict project outcomes

When we plotted the DICE scores of 225 change management initiatives on the horizontal axis, and the outcomes of those projects on the vertical axis, we found three sets of correlations. Projects with DICE scores between 7 and 14 were usually successful; those with scores over 14 and under 17 were unpredictable; and projects with scores over 17 were usually unsuccessful. We named the three zones Win, Worry, and Woe, respectively. (Each number plotted on the graph represents the number of projects, out of the 225 projects, having a particular DICE score.)

Doing so condensed what could have been a free-flowing two-day debate into a sharp two-hour discussion. The focus on just four elements generated a clear picture of the project’s strengths and weaknesses. For instance, managers learned that the restructuring would take eight months to implement but that it had poorly defined milestones and reviews. Although the project team was capable and senior management showed reasonable commitment to the effort, there was room for improvement in both areas. The back-office workforce was hostile to the proposed changes since more than 20% of these people would lose their jobs. Managers and employees agreed that the back-office staff would need to muster 10% to 20% more effort on top of its existing commitments during the implementation. On the DICE scale, the project was deep in the Woe Zone.

However, the assessment also led managers to take steps to increase the possibility of success before they started the project. The bank decided to split the project time line into two—one short-term and one long-term. Doing so allowed the bank to schedule review points more frequently and to maximize team members’ ability to learn from experience before the transformation grew in complexity. To improve staff commitment, the bank decided to devote more time to explaining why the change was necessary and how the institution would support the staff during the implementation. The bank also took a closer look at the people who would be involved in the project and changed some of the team leaders when it realized that they lacked the necessary skills. Finally, senior managers made a concerted effort to show their backing for the initiative by holding a traveling road show to explain the project to people at all levels of the organization. Taken together, the bank’s actions and plans shifted the project into the Win Zone. Fourteen months later, the bank completed the project—on time and below budget.

Applying the DICE Framework

The simplicity of the DICE framework often proves to be its biggest problem; executives seem to desire more complex answers. By overlooking the obvious, however, they often end up making compromises that don’t work. Smart companies try to ensure that they don’t fall into that trap by using the DICE framework in one of three ways.

Track Projects

Some companies train managers in how to use the DICE framework before they start transformation programs. Executives use spreadsheet-based versions of the tool to calculate the DICE scores of the various components of the program and to compare them with past scores. Over time, every score must be balanced against the trajectory of scores and, as we shall see next, the portfolio of scores.

Senior executives often use DICE assessments as early warning indicators that transformation initiatives are in trouble. That’s how Amgen, the $10.6 billion biotechnology company, used the DICE framework. In 2001, the company realigned its operations around some key processes, broadened its offerings, relaunched some mature products, allied with some firms and acquired others, and launched several innovations. To avoid implementation problems, Amgen’s top management team used the DICE framework to gauge how effectively it had allocated people, senior management time, and other resources. As soon as projects reported troubling scores, designated executives paid attention to them. They reviewed the projects more often, reconfigured the teams, and allocated more resources to them. In one area of the change project, Amgen used DICE to track 300 initiatives and reconfigured 200 of them.

Both big and small organizations can put the tool to good use. Take the case of a hospital that kicked off six change projects in the late 1990s. Each initiative involved a lot of investment, had significant clinical implications, or both. The hospital’s general manager felt that some projects were going well but was concerned about others. He wasn’t able to attribute his concerns to anything other than a bad feeling. However, when the general manager used the DICE framework, he was able to confirm his suspicions. After a 45-minute discussion with project managers and other key people, he established that three projects were in the Win Zone but two were in the Woe Zone and one was in the Worry Zone.

The strongest projects, the general manager found, consumed more than their fair share of resources. Senior hospital staff sensed that those projects would succeed and spent more time promoting them, attending meetings about them, and making sure they had sufficient resources. By contrast, no one enjoyed attending meetings on projects that were performing poorly. So the general manager stopped attending meetings for the projects that were on track; he attended only sessions that related to the three underperforming ones. He pulled some managers from the projects that were progressing smoothly and moved them to the riskier efforts. He added more milestones to the struggling enterprises, delayed their completion, and pushed hard for improvement. Those steps helped ensure that all six projects met their objectives.

Manage portfolios of projects

When companies launch large transformation programs, they kick off many projects to attain their objectives. But if executives don’t manage the portfolio properly, those tasks end up competing for attention and resources. For instance, senior executives may choose the best employees for projects they have sponsored or lavish attention on pet projects rather than on those that need attention. By deploying our framework before they start transformation initiatives, companies can identify problem projects in portfolios, focus execution expertise and senior management attention where it is most needed, and defuse political issues.

Take, for example, the case of an Australasian manufacturing company that had planned a set of 40 projects as part of a program to improve profitability. Since some had greater financial implications than others, the company’s general manager called for a meeting with all the project owners and senior managers. The group went through each project, debating its DICE score and identifying the problem areas. After listing all the scores and issues, the general manager walked to a whiteboard and circled the five most important projects. “I’m prepared to accept that some projects will start off in the Worry Zone, though I won’t accept anything outside the middle of this zone for more than a few weeks. For the top five, we’re not going to start until these are well within the Win Zone. What do we have to do to achieve that?” he asked.

The group began thinking and acting right away. It moved people around on teams, reconfigured some projects, and identified those that senior managers should pay more attention to—all of which helped raise DICE scores before implementation began. The most important projects were set up for resounding success while most of the remaining ones managed to get into the Win Zone. The group left some projects in the Worry Zone, but it agreed to track them closely to ensure that their scores improved. In our experience, that’s the right thing to do. When companies are trying to overhaul themselves, they shouldn’t have all their projects in the Win Zone; if they do, they are not ambitious enough. Transformations should entail fundamental changes that stretch an organization.

Force conversation

When different executives calculate DICE scores for the same project, the results can vary widely. The difference in scores is particularly important in terms of the dialogue it triggers. It provokes participants and engages them in debate over questions like “Why do we see the project in these different ways?” and “What can we agree to do to ensure that the project will succeed?” That’s critical, because even people within the same organization lack a common framework for discussing problems with change initiatives. Prejudices, differences in perspectives, and a reluctance or inability to speak up can block effective debates. By using the DICE framework, companies can create a common language and force the right discussions.

Sometimes, companies hold workshops to review floundering projects. At those two- to four-hour sessions, groups of eight to 15 senior and middle managers, along with the project team and the project sponsors, hold a candid dialogue. The debate usually moves beyond the project’s scores to the underlying causes of problems and possible remedies. The workshops bring diverse opinions to light, which often can be combined into innovative solutions. Consider, for example, the manner in which DICE workshops helped a telecommunications service provider that had planned a major transformation effort. Consisting of five strategic initiatives and 50 subprojects that needed to be up and running quickly, the program confronted some serious obstacles. The projects’ goals, time lines, and revenue objectives were unclear. There were delays in approving business cases, a dearth of rigor and focus in planning and identifying milestones, and a shortage of resources. There were leadership issues, too. For example, executive-level shortcomings had resulted in poor coordination of projects and a misjudgment of risks.

To put the transformation program on track, the telecom company incorporated DICE into project managers’ tool kits. The Project Management Office arranged a series of workshops to analyze issues and decide future steps. One workshop, for example, was devoted to three new product development projects, two of which had landed in the Woe Zone and one in the Worry Zone. Participants traced the problems to tension between managers and technology experts, underfunding, lack of manpower, and poor definition of the projects’ scopes. They eventually agreed on three remedial actions: holding a conflict-resolution meeting between the directors in charge of technology and those responsible for the core business; making sure senior leadership paid immediate attention to the resource issues; and bringing together the project team and the line-of-business head to formalize project objectives. With the project sponsor committed to those actions, the three projects had improved their DICE scores and thus their chances of success at the time this article went to press.

Conversations about DICE scores are particularly useful for large-scale transformations that cut across business units, functions, and locations. In such change efforts, it is critical to find the right balance between centralized oversight, which ensures that everyone in the organization takes the effort seriously and understands the goals, and the autonomy that various initiatives need. Teams must have the flexibility and incentive to produce customized solutions for their markets, functions, and competitive environments. The balance is difficult to achieve without an explicit consideration of the DICE variables.

Take the case of a leading global beverage company that needed to increase operational efficiency and focus on the most promising brands and markets. The company also sought to make key processes such as consumer demand development and customer fulfillment more innovative. The CEO’s goals were ambitious and required investing significant resources across the company. Top management faced enormous challenges in structuring the effort and in spawning projects that focused on the right issues. Executives knew that this was a multiyear effort, yet without tight schedules and oversight of individual projects, there was a risk that projects would take far too long to be completed and the results would taper off.

To mitigate the risks, senior managers decided to analyze each project at several levels of the organization. Using the DICE framework, they reviewed each effort every month until they felt confident that it was on track. After that, reviews occurred when projects met major milestones. No more than two months elapsed between reviews, even in the later stages of the program. The time between reviews at the project-team level was even shorter: Team leaders reviewed progress biweekly throughout the transformation. Some of the best people joined the effort full time. The human resources department took an active role in recruiting team members, thereby creating a virtuous cycle in which the best people began to seek involvement in various initiatives. During the course of the transformation, the company promoted several team members to line- and functional leadership positions because of their performance.

The company’s change program resulted in hundreds of millions of dollars of value creation. Its once-stagnant brands began to grow, it cracked open new markets such as China, and sales and promotion activities were aligned with the fastest-growing channels. There were many moments during the process when inertia in the organization threatened to derail the change efforts. However, senior management’s belief in focusing on the four key variables helped move the company to a higher trajectory of performance.

_____________________

By providing a common language for change, the DICE framework allows companies to tap into the insight and experience of their employees. A great deal has been said about middle managers who want to block change. We find that most middle managers are prepared to support change efforts even if doing so involves additional work and uncertainty and puts their jobs at risk. However, they resist change because they don’t have sufficient input in shaping those initiatives. Too often, they lack the tools, the language, and the forums in which to express legitimate concerns about the design and implementation of change projects. That’s where a standard, quantitative, and simple framework comes in. By enabling frank conversations at all levels within organizations, the DICE framework helps people do the right thing by change.

Originally published in October 2005. Reprint R0510G

Why Change Programs Don’t Produce Change

by Michael Beer, Russell A. Eisenstat, and Bert Spector

IN THE MID-1980S, THE NEW CEO of a major international bank—call it U.S. Financial—announced a companywide change effort. Deregulation was posing serious competitive challenges—challenges to which the bank’s traditional hierarchical organization was ill-suited to respond. The only solution was to change fundamentally how the company operated. And the place to begin was at the top.

The CEO held a retreat with his top 15 executives where they painstakingly reviewed the bank’s purpose and culture. He published a mission statement and hired a new vice president for human resources from a company well-known for its excellence in managing people. And in a quick succession of moves, he established companywide programs to push change down through the organization: a new organizational structure, a performance appraisal system, a pay-for-performance compensation plan, training programs to turn managers into “change agents,” and quarterly attitude surveys to chart the progress of the change effort.

As much as these steps sound like a textbook case in organizational transformation, there was one big problem: two years after the CEO launched the change program, virtually nothing in the way of actual changes in organizational behavior had occurred. What had gone wrong?

The answer is “everything.” Every one of the assumptions the CEO made—about who should lead the change effort, what needed changing, and how to go about doing it—was wrong.

U.S. Financial’s story reflects a common problem. Faced with changing markets and increased competition, more and more companies are struggling to reestablish their dominance, regain market share, and in some cases, ensure their survival. Many have come to understand that the key to competitive success is to transform the way they function. They are reducing reliance on managerial authority, formal rules and procedures, and narrow divisions of work. And they are creating teams, sharing information, and delegating responsibility and accountability far down the hierarchy. In effect, companies are moving from the hierarchical and bureaucratic model of organization that has characterized corporations since World War II to what we call the task-driven organization where what has to be done governs who works with whom and who leads.

But while senior managers understand the necessity of change to cope with new competitive realities, they often misunderstand what it takes to bring it about. They tend to share two assumptions with the CEO of U.S. Financial: that promulgating companywide programs—mission statements, “corporate culture” programs, training courses, quality circles, and new pay-for-performance systems—will transform organizations, and that employee behavior is changed by altering a company’s formal structure and systems.

In a four-year study of organizational change at six large corporations (see the sidebar, “Tracking Corporate Change”; the names are fictitious), we found that exactly the opposite is true: the greatest obstacle to revitalization is the idea that it comes about through companywide change programs, particularly when a corporate staff group such as human resources sponsors them. We call this “the fallacy of programmatic change.” Just as important, formal organization structure and systems cannot lead a corporate renewal process.

While in some companies, wave after wave of programs rolled across the landscape with little positive impact, in others, more successful transformations did take place. They usually started at the periphery of the corporation in a few plants and divisions far from corporate headquarters. And they were led by the general managers of those units, not by the CEO or corporate staff people.

Idea in Brief

Two years after launching a change program to counter competitive threats, a bank CEO realized his effort had produced . . . no change. Surprising, since he and his top executives had reviewed the company’s purpose and culture, published a mission statement, and launched programs (e.g., pay for-performance compensation) designed to push change throughout the organization.

But revitalization doesn’t come from the top. It starts at an organization’s periphery, led by unit managers creating ad hoc arrangements to solve concrete problems. Through task alignment—directing employees’ responsibilities and relationships toward the company’s central competitive task—these managers focus energy on work, not abstractions like “empowerment” or “culture.”

Senior managers’ role in this process? Specify the company’s desired general direction, without dictating solutions. Then spread the lessons of revitalized units throughout the company.

The general managers did not focus on formal structures and systems; they created ad hoc organizational arrangements to solve concrete business problems. By aligning employee roles, responsibilities, and relationships to address the organization’s most important competitive task—a process we call “task alignment”—they focused energy for change on the work itself, not on abstractions such as “participation” or “culture.” Unlike the CEO at U.S. Financial, they didn’t employ massive training programs or rely on speeches and mission statements. Instead, we saw that general managers carefully developed the change process through a sequence of six basic managerial interventions.

Once general managers understand the logic of this sequence, they don’t have to wait for senior management to start a process of organizational revitalization. There is a lot they can do even without support from the top. Of course, having a CEO or other senior managers who are committed to change does make a difference—and when it comes to changing an entire organization, such support is essential. But top management’s role in the change process is very different from that which the CEO played at U.S. Financial.

Idea in Practice

Successful change requires commitment, coordination, and competency.

1. Mobilize commitment to change through joint diagnosis of problems

Example: Navigation Devices had never made a profit or high-quality, cost-competitive product—because top-down decisions ignored cross-functional coordination. To change this, a new general manager had his entire team broadly assess the business. Then, his task force of engineers, production workers, managers, and union officials visited successful manufacturing organizations to identify improvement ideas. One plant’s team approach impressed them, illuminated their own problem, and suggested a solution. Commitment to change intensified.

2. Develop a shared vision of how to organize for competitiveness

Remove functional and hierarchical barriers to information sharing and problem solving—by changing roles and responsibilities, not titles or compensation.

Example: Navigation’s task force proposed developing products through cross-functional teams. A larger team refined this model and presented it to all employees—who supported it because it stemmed from their own analysis of their business problems.

3. Foster consensus for the new vision, competence to enact it, and cohesion to advance it

This requires the general manager’s strong leadership.

Example: Navigation’s general manager fostered consensus by supporting those who were committed to change and offering outplacement and counseling to those who weren’t; competence by providing requested training; and cohesion by redeploying managers who couldn’t function in the new organization. Change accelerated.

4. Spread revitalization to all departments—without pushing from the top

Example: Navigation’s new team structure required engineers to collaborate with production workers. Encouraged to develop their own approach to teamwork and coordination, the engineers selected matrix management. People willingly learned needed skills and attitudes, because the new structure was their choice.

5. Institutionalize revitalization through formal policies, systems, and structures . . . only after your new approach is up and running

Example: Navigation boosted its profits—without changing reporting relationships, evaluation procedures, or compensation. Only then did the general manager alter formal structures; e.g., eliminating a VP so that engineering and manufacturing reported directly to him.

6. Monitor the revitalization process, adjusting in response to problems

Example: At Navigation, an oversight team of managers, a union leader, an engineer, and a financial analyst kept watch over the change process—continually learning, adapting, and strengthening the commitment to change.

Grass-roots change presents senior managers with a paradox: directing a “nondirective” change process. The most effective senior managers in our study recognized their limited power to mandate corporate renewal from the top. Instead, they defined their roles as creating a climate for change, then spreading the lessons of both successes and failures. Put another way, they specified the general direction in which the company should move without insisting on specific solutions.

In the early phases of a companywide change process, any senior manager can play this role. Once grass-roots change reaches a critical mass, however, the CEO has to be ready to transform his or her own work unit as well—the top team composed of key business heads and corporate staff heads. At this point, the company’s structure and systems must be put into alignment with the new management practices that have developed at the periphery. Otherwise, the tension between dynamic units and static top management will cause the change process to break down.

We believe that an approach to change based on task alignment, starting at the periphery and moving steadily toward the corporate core, is the most effective way to achieve enduring organizational change. This is not to say that change can never start at the top, but it is uncommon and too risky as a deliberate strategy. Change is about learning. It is a rare CEO who knows in advance the fine-grained details of organizational change that the many diverse units of a large corporation demand. Moreover, most of today’s senior executives developed in an era in which top-down hierarchy was the primary means for organizing and managing. They must learn from innovative approaches coming from younger unit managers closer to the action.

The Fallacy of Programmatic Change

Most change programs don’t work because they are guided by a theory of change that is fundamentally flawed. The common belief is that the place to begin is with the knowledge and attitudes of individuals. Changes in attitudes, the theory goes, lead to changes in individual behavior. And changes in individual behavior, repeated by many people, will result in organizational change. According to this model, change is like a conversion experience. Once people “get religion,” changes in their behavior will surely follow.

This theory gets the change process exactly backward. In fact, individual behavior is powerfully shaped by the organizational roles that people play. The most effective way to change behavior, therefore, is to put people into a new organizational context, which imposes new roles, responsibilities, and relationships on them. This creates a situation that, in a sense, “forces” new attitudes and behaviors on people. (See the table, “Contrasting assumptions about change.”)

One way to think about this challenge is in terms of three interrelated factors required for corporate revitalization. Coordination or teamwork is especially important if an organization is to discover and act on cost, quality, and product development opportunities. The production and sale of innovative, high-quality, low-cost products (or services) depend on close coordination among marketing, product design, and manufacturing departments, as well as between labor and management. High levels of commitment are essential for the effort, initiative, and cooperation that coordinated action demands. New competencies such as knowledge of the business as a whole, analytical skills, and interpersonal skills are necessary if people are to identify and solve problems as a team. If any of these elements are missing, the change process will break down.

Tracking Corporate Change

WHICH STRATEGIES FOR CORPORATE change work, and which do not? We sought the answers in a comprehensive study of 12 large companies where top management was attempting to revitalize the corporation. Based on preliminary research, we identified 6 for in-depth analysis: 5 manufacturing companies and 1 large international bank. All had revenues between $4 billion and $10 billion. We studied 26 plants and divisions in these 6 companies and conducted hundreds of interviews with human resource managers; line managers engaged in change efforts at plants, branches, or business units; workers and union leaders; and, finally, top management.

Based on this material, we ranked the 6 companies according to the success with which they had managed the revitalization effort. Were there significant improvements in interfunctional coordination, decision making, work organizations, and concern for people? Research has shown that in the long term, the quality of these 4 factors will influence performance. We did not define success in terms of improved financial performance because, in the short run, corporate financial performance is influenced by many situational factors unrelated to the change process.

To corroborate our rankings of the companies, we also administered a standardized questionnaire in each company to understand how employers viewed the unfolding change process. Respondents rated their companies on a scale of 1 to 5. A score of 3 meant that no change had taken place; a score below 3 meant that, in the employee’s judgment, the organization had actually gotten worse. As the table suggests, with one exception—the company we call Livingston Electronics—employees’ perceptions of how much their companies had changed were identical to ours. And Livingston’s relatively high standard of deviation (which measures the degree of consensus among employees about the outcome of the change effort) indicates that within the company there was considerable disagreement as to just how successful revitalization had been.

Researchers and employees—similar conclusions

Extent of revitalization

The problem with most companywide change programs is that they address only one or, at best, two of these factors. Just because a company issues a philosophy statement about teamwork doesn’t mean its employees necessarily know what teams to form or how to function within them to improve coordination. A corporate reorganization may change the boxes on a formal organization chart but not provide the necessary attitudes and skills to make the new structure work. A pay-for-performance system may force managers to differentiate better performers from poorer ones, but it doesn’t help them internalize new standards by which to judge subordinates’ performances. Nor does it teach them how to deal effectively with performance problems. Such programs cannot provide the cultural context (role models from whom to learn) that people need to develop new competencies, so ultimately they fail to create organizational change.

Contrasting assumptions about change

Similarly, training programs may target competence, but rarely do they change a company’s patterns of coordination. Indeed, the excitement engendered in a good corporate training program frequently leads to increased frustration when employees get back on the job only to see their new skills go unused in an organization in which nothing else has changed. People end up seeing training as a waste of time, which undermines whatever commitment to change a program may have roused in the first place.

When one program doesn’t work, senior managers, like the CEO at U.S. Financial, often try another, instituting a rapid progression of programs. But this only exacerbates the problem. Because they are designed to cover everyone and everything, programs end up covering nobody and nothing particularly well. They are so general and standardized that they don’t speak to the day-to-day realities of particular units. Buzzwords like “quality,” “participation,” “excellence,” “empowerment,” and “leadership” become a substitute for a detailed understanding of the business.

And all these change programs also undermine the credibility of the change effort. Even when managers accept the potential value of a particular program for others—quality circles, for example, to solve a manufacturing problem—they may be confronted with another, more pressing business problem such as new product development. One-size-fits-all change programs take energy away from efforts to solve key business problems—which explains why so many general managers don’t support programs, even when they acknowledge that their underlying principles may be useful.

This is not to state that training, changes in pay systems or organizational structure, or a new corporate philosophy are always inappropriate. All can play valuable roles in supporting an integrated change effort. The problems come when such programs are used in isolation as a kind of “magic bullet” to spread organizational change rapidly through the entire corporation. At their best, change programs of this sort are irrelevant. At their worst, they actually inhibit change. By promoting skepticism and cynicism, programmatic change can inoculate companies against the real thing.

Six Steps to Effective Change

Companies avoid the shortcomings of programmatic change by concentrating on “task alignment”—reorganizing employee roles, responsibilities, and relationships to solve specific business problems. Task alignment is easiest in small units—a plant, department, or business unit—where goals and tasks are clearly defined. Thus the chief problem for corporate change is how to promote task-aligned change across many diverse units.

We saw that general managers at the business unit or plant level can achieve task alignment through a sequence of six overlapping but distinctive steps, which we call the critical path. This path develops a self-reinforcing cycle of commitment, coordination, and competence. The sequence of steps is important because activities appropriate at one time are often counterproductive if started too early. Timing is everything in the management of change.

1. Mobilize commitment to change through joint diagnosis of business problems. As the term task alignment suggests, the starting point of any effective change effort is a clearly defined business problem. By helping people develop a shared diagnosis of what is wrong in an organization and what can and must be improved, a general manager mobilizes the initial commitment that is necessary to begin the change process.

Consider the case of a division we call Navigation Devices, a business unit of about 600 people set up by a large corporation to commercialize a product originally designed for the military market. When the new general manager took over, the division had been in operation for several years without ever making a profit. It had never been able to design and produce a high-quality, cost-competitive product. This was due largely to an organization in which decisions were made at the top, without proper involvement of or coordination with other functions.

The first step the new general manager took was to initiate a broad review of the business. Where the previous general manager had set strategy with the unit’s marketing director alone, the new general manager included his entire management team. He also brought in outside consultants to help him and his managers function more effectively as a group.

Next, he formed a 20-person task force representing all the stakeholders in the organization—managers, engineers, production workers, and union officials. The group visited a number of successful manufacturing organizations in an attempt to identify what Navigation Devices might do to organize more effectively. One high-performance manufacturing plant in the task force’s own company made a particularly strong impression. Not only did it highlight the problems at Navigation Devices but it also offered an alternative organizational model, based on teams, that captured the group’s imagination. Seeing a different way of working helped strengthen the group’s commitment to change.

The Navigation Devices task force didn’t learn new facts from this process of joint diagnosis; everyone already knew the unit was losing money. But the group came to see clearly the organizational roots of the unit’s inability to compete and, even more important, came to share a common understanding of the problem. The group also identified a potential organizational solution: to redesign the way it worked, using ad hoc teams to integrate the organization around the competitive task.

2. Develop a shared vision of how to organize and manage for competitiveness. Once a core group of people is committed to a particular analysis of the problem, the general manager can lead employees toward a task-aligned vision of the organization that defines new roles and responsibilities. These new arrangements will coordinate the flow of information and work across interdependent functions at all levels of the organization. But since they do not change formal structures and systems like titles or compensation, they encounter less resistance.

At Navigation Devices, the 20-person task force became the vehicle for this second stage. The group came up with a model of the organization in which cross-functional teams would accomplish all work, particularly new product development. A business-management team composed of the general manager and his staff would set the unit’s strategic direction and review the work of lower level teams. Business-area teams would develop plans for specific markets. Product-development teams would manage new products from initial design to production. Production-process teams composed of engineers and production workers would identify and solve quality and cost problems in the plant. Finally, engineering-process teams would examine engineering methods and equipment. The teams got to the root of the unit’s problems—functional and hierarchical barriers to sharing information and solving problems.

To create a consensus around the new vision, the general manager commissioned a still larger task force of about 90 employees from different levels and functions, including union and management, to refine the vision and obtain everyone’s commitment to it. On a retreat away from the workplace, the group further refined the new organizational model and drafted a values statement, which it presented later to the entire Navigation Devices work force. The vision and the values statement made sense to Navigation Devices employees in a way many corporate mission statements never do—because it grew out of the organization’s own analysis of real business problems. And it was built on a model for solving those problems that key stakeholders believed would work.

3. Foster consensus for the new vision, competence to enact it, and cohesion to move it along. Simply letting employees help develop a new vision is not enough to overcome resistance to change—or to foster the skills needed to make the new organization work. Not everyone can help in the design, and even those who do participate often do not fully appreciate what renewal will require until the new organization is actually in place. This is when strong leadership from the general manager is crucial. Commitment to change is always uneven. Some managers are enthusiastic; others are neutral or even antagonistic. At Navigation Devices, the general manager used what his subordinates termed the “velvet glove.” He made it clear that the division was going to encourage employee involvement and the team approach. To managers who wanted to help him, he offered support. To those who did not, he offered outplacement and counseling.

Once an organization has defined new roles and responsibilities, people need to develop the competencies to make the new setup work. Actually, the very existence of the teams with their new goals and accountabilities will force learning. The changes in roles, responsibilities, and relationships foster new skills and attitudes. Changed patterns of coordination will also increase employee participation, collaboration, and information sharing.

But management also has to provide the right supports. At Navigation Devices, six resource people—three from the unit’s human resource department and three from corporate headquarters—worked on the change project. Each team was assigned one internal consultant, who attended every meeting, to help people be effective team members. Once employees could see exactly what kinds of new skills they needed, they asked for formal training programs to develop those skills further. Since these courses grew directly out of the employees’ own experiences, they were far more focused and useful than traditional training programs.

Some people, of course, just cannot or will not change, despite all the direction and support in the world. Step three is the appropriate time to replace those managers who cannot function in the new organization—after they have had a chance to prove themselves. Such decisions are rarely easy, and sometimes those people who have difficulty working in a participatory organization have extremely valuable specialized skills. Replacing them early in the change process, before they have worked in the new organization, is not only unfair to individuals; it can be demoralizing to the entire organization and can disrupt the change process. People’s understanding of what kind of manager and worker the new organization demands grows slowly and only from the experience of seeing some individuals succeed and others fail.

Once employees have bought into a vision of what’s necessary and have some understanding of what the new organization requires, they can accept the necessity of replacing or moving people who don’t make the transition to the new way of working. Sometimes people are transferred to other parts of the company where technical expertise rather than the new competencies is the main requirement. When no alternatives exist, sometimes they leave the company through early retirement programs, for example. The act of replacing people can actually reinforce the organization’s commitment to change by visibly demonstrating the general manager’s commitment to the new way.

Some of the managers replaced at Navigation Devices were high up in the organization—for example, the vice president of operations, who oversaw the engineering and manufacturing departments. The new head of manufacturing was far more committed to change and skilled in leading a critical path change process. The result was speedier change throughout the manufacturing function.

4. Spread revitalization to all departments without pushing it from the top. With the new ad hoc organization for the unit in place, it is time to turn to the functional and staff departments that must interact with it. Members of teams cannot be effective unless the department from which they come is organized and managed in a way that supports their roles as full-fledged participants in team decisions. What this often means is that these departments will have to rethink their roles and authority in the organization.

At Navigation Devices, this process was seen most clearly in the engineering department. Production department managers were the most enthusiastic about the change effort; engineering managers were more hesitant. Engineering had always been king at Navigation Devices; engineers designed products to the military’s specifications without much concern about whether manufacturing could easily build them or not. Once the new team structure was in place, however, engineers had to participate on product-development teams with production workers. This required them to re-examine their roles and rethink their approaches to organizing and managing their own department.

The impulse of many general managers faced with such a situation would be to force the issue—to announce, for example, that now all parts of the organization must manage by teams. The temptation to force newfound insights on the rest of the organization can be great, particularly when rapid change is needed, but it would be the same mistake that senior managers make when they try to push programmatic change throughout a company. It short-circuits the change process.

It’s better to let each department “reinvent the wheel”—that is, to find its own way to the new organization. At Navigation Devices, each department was allowed to take the general concepts of coordination and teamwork and apply them to its particular situation. Engineering spent nearly a year agonizing over how to implement the team concept. The department conducted two surveys, held off-site meetings, and proposed, rejected, then accepted a matrix management structure before it finally got on board. Engineering’s decision to move to matrix management was not surprising, but because it was its own choice, people committed themselves to learning the necessary new skills and attitudes.

5. Institutionalize revitalization through formal policies, systems, and structures. There comes a point where general managers have to consider how to institutionalize change so that the process continues even after they’ve moved on to other responsibilities. Step five is the time: the new approach has become entrenched, the right people are in place, and the team organization is up and running. Enacting changes in structures and systems any earlier tends to backfire. Take information systems. Creating a team structure means new information requirements. Why not have the MIS department create new systems that cut across traditional functional and departmental lines early in the change process? The problem is that without a well-developed understanding of information requirements, which can best be obtained by placing people on task-aligned teams, managers are likely to resist new systems as an imposition by the MIS department. Newly formed teams can often pull together enough information to get their work done without fancy new systems. It’s better to hold off until everyone understands what the team’s information needs are.

What’s true for information systems is even more true for other formal structures and systems. Any formal system is going to have some disadvantages; none is perfect. These imperfections can be minimized, however, once people have worked in an ad hoc team structure and learned what interdependencies are necessary. Then employees will commit to them too.

Again, Navigation Devices is a good example. The revitalization of the unit was highly successful. Employees changed how they saw their roles and responsibilities and became convinced that change could actually make a difference. As a result, there were dramatic improvements in value added per employee, scrap reduction, quality, customer service, gross inventory per employee, and profits. And all this happened with almost no formal changes in reporting relationships, information systems, evaluation procedures, compensation, or control systems.

When the opportunity arose, the general manager eventually did make some changes in the formal organization. For example, when he moved the vice president of operations out of the organization, he eliminated the position altogether. Engineering and manufacturing reported directly to him from that point on. For the most part, however, the changes in performance at Navigation Devices were sustained by the general manager’s expectations and the new norms for behavior.

6. Monitor and adjust strategies in response to problems in the revitalization process. The purpose of change is to create an asset that did not exist before—a learning organization capable of adapting to a changing competitive environment. The organization has to know how to continually monitor its behavior—in effect, to learn how to learn.

Some might say that this is the general manager’s responsibility. But monitoring the change process needs to be shared, just as analyzing the organization’s key business problem does.

At Navigation Devices, the general manager introduced several mechanisms to allow key constituents to help monitor the revitalization. An oversight team—composed of some crucial managers, a union leader, a secretary, an engineer, and an analyst from finance—kept continual watch over the process. Regular employee attitude surveys monitored behavior patterns. Planning teams were formed and reformed in response to new challenges. All these mechanisms created a long-term capacity for continual adaptation and learning.

The six-step process provides a way to elicit renewal without imposing it. When stakeholders become committed to a vision, they are willing to accept a new pattern of management—here the ad hoc team structure—that demands changes in their behavior. And as the employees discover that the new approach is more effective (which will happen only if the vision aligns with the core task), they have to grapple with personal and organizational changes they might otherwise resist. Finally, as improved coordination helps solve relevant problems, it will reinforce team behavior and produce a desire to learn new skills. This learning enhances effectiveness even further and results in an even stronger commitment to change. This mutually reinforcing cycle of improvements in commitment, coordination, and competence creates a growing sense of efficacy. It can continue as long as the ad hoc team structure is allowed to expand its role in running the business.

The Role of Top Management

To change an entire corporation, the change process we have described must be applied over and over again in many plants, branches, departments, and divisions. Orchestrating this company-wide change process is the first responsibility of senior management. Doing so successfully requires a delicate balance. Without explicit efforts by top management to promote conditions for change in individual units, only a few plants or divisions will attempt change, and those that do will remain isolated. The best senior manager leaders we studied held their subordinates responsible for starting a change process without specifying a particular approach.

Create a market for change. The most effective approach is to set demanding standards for all operations and then hold managers accountable to them. At our best-practice company, which we call General Products, senior managers developed ambitious product and operating standards. General managers unable to meet these product standards by a certain date had to scrap their products and take a sharp hit to their bottom lines. As long as managers understand that high standards are not arbitrary but are dictated by competitive forces, standards can generate enormous pressure for better performance, a key ingredient in mobilizing energy for change.

But merely increasing demands is not enough. Under pressure, most managers will seek to improve business performance by doing more of what they have always done—overmanage—rather than alter the fundamental way they organize. So, while senior managers increase demands, they should also hold managers accountable for fundamental changes in the way they use human resources.

For example, when plant managers at General Products complained about the impossibility of meeting new business standards, senior managers pointed them to the corporate organization-development department within human resources and emphasized that the plant managers would be held accountable for moving revitalization along. Thus top management had created a demand system for help with the new way of managing, and the human resource staff could support change without appearing to push a program.

Use successfully revitalized units as organizational models for the entire company. Another important strategy is to focus the company’s attention on plants and divisions that have already begun experimenting with management innovations. These units become developmental laboratories for further innovation.

There are two ground rules for identifying such models. First, innovative units need support. They need the best managers to lead them, and they need adequate resources—for instance, skilled human resource people and external consultants. In the most successful companies that we studied, senior managers saw it as their responsibility to make resources available to leading-edge units. They did not leave it to the human resource function.

Second, because resources are always limited and the costs of failure high, it is crucial to identify those units with the likeliest chance of success. Successful management innovations can appear to be failures when the bottom line is devastated by environmental factors beyond the unit’s control. The best models are in healthy markets.

Obviously, organizational models can serve as catalysts for change only if others are aware of their existence and are encouraged to learn from them. Many of our worst-practice companies had plants and divisions that were making substantial changes. The problem was, nobody knew about them. Corporate management had never bothered to highlight them as examples to follow. In the leading companies, visits, conferences, and educational programs facilitated learning from model units.

Develop career paths that encourage leadership development. Without strong leaders, units cannot make the necessary organizational changes, yet the scarcest resource available for revitalizing corporations is leadership. Corporate renewal depends as much on developing effective change leaders as it does on developing effective organizations. The personal learning associated with leadership development—or the realization by higher management that a manager does not have this capacity—cannot occur in the classroom. It only happens in an organization where the teamwork, high commitment, and new competencies we have discussed are already the norm.

The only way to develop the kind of leaders a changing organization needs is to make leadership an important criterion for promotion, and then manage people’s careers to develop it. At our best-practice companies, managers were moved from job to job and from organization to organization based on their learning needs, not on their position in the hierarchy. Successful leaders were assigned to units that had been targeted for change. People who needed to sharpen their leadership skills were moved into the company’s model units where those skills would be demanded and therefore learned. In effect, top management used leading-edge units as hot-houses to develop revitalization leaders.

But what about the top management team itself? How important is it for the CEO and his or her direct reports to practice what they preach? It is not surprising—indeed, it’s predictable—that in the early years of a corporate change effort, top managers’ actions are often not consistent with their words. Such inconsistencies don’t pose a major barrier to corporate change in the beginning, though consistency is obviously desirable. Senior managers can create a climate for grass-roots change without paying much attention to how they themselves operate and manage. And unit managers will tolerate this inconsistency so long as they can freely make changes in their own units in order to compete more effectively.

There comes a point, however, when addressing the inconsistencies becomes crucial. As the change process spreads, general managers in the ever-growing circle of revitalized units eventually demand changes from corporate staff groups and top management. As they discover how to manage differently in their own units, they bump up against constraints of policies and practices that corporate staff and top management have created. They also begin to see opportunities for better coordination between themselves and other parts of the company over which they have little control. At this point, corporate organization must be aligned with corporate strategy, and coordination between related but hitherto independent businesses improved for the benefit of the whole corporation.

None of the companies we studied had reached this “moment of truth.” Even when corporate leaders intellectually understood the direction of change, they were just beginning to struggle with how they would change themselves and the company as a whole for a total corporate revitalization.

This last step in the process of corporate renewal is probably the most important. If the CEO and his or her management team do not ultimately apply to themselves what they have been encouraging their general managers to do, then the whole process can break down. The time to tackle the tough challenge of transforming companywide systems and structures comes finally at the end of the corporate change process.

At this point, senior managers must make an effort to adopt the team behavior, attitudes, and skills that they have demanded of others in earlier phases of change. Their struggle with behavior change will help sustain corporate renewal in three ways. It will promote the attitudes and behavior needed to coordinate diverse activities in the company; it will lend credibility to top management’s continued espousal of change; and it will help the CEO identify and develop a successor who is capable of learning the new behaviors. Only such a manager can lead a corporation that can renew itself continually as competitive forces change.

Companies need a particular mind-set for managing change: one that emphasizes process over specific content, recognizes organization change as a unit-by-unit learning process rather than a series of programs, and acknowledges the payoffs that result from persistence over a long period of time as opposed to quick fixes. This mindset is difficult to maintain in an environment that presses for quarterly earnings, but we believe it is the only approach that will bring about successful renewal.

Originally published in November 1990. Reprint 90601

About the Contributors

MICHAEL BEER is the Cahners-Rabb Professor of Business Administration, Emeritus, at Harvard Business School.

RUSSELL A. EISENSTAT is a partner at TruePoint, a management consulting firm in Massachusetts, and a former professor at Harvard Business School.

DAVID A. GARVIN is the C. Roland Christensen Professor of Business Administration at Harvard Business School.

RONALD A. HEIFETZ codirects the Center for Public Leadership at Harvard University’s Kennedy School of Government.

PAUL HEMP, formerly a senior editor of Harvard Business Review, is the global director of brand transformation at HCL Technologies.

ALAN JACKSON is a senior partner at The Boston Consulting Group.

PERRY KEENAN is a partner and managing director in The Boston Consulting Group’s Chicago office.

ROBERT KEGAN is the William and Miriam Meehan Professor in Adult Learning and Professional Development at Harvard’s Graduate School of Education.

W. CHAN KIM is the Boston Consulting Group Bruce D. Henderson Chaired Professor of Strategy and International Management at Insead in France.

JOHN P. KOTTER is the Konosuke Matsushita Professor of Leadership, Emeritus, at Harvard Business School.

LISA LASKOW LAHEY is the associate director of the Change Leadership Group at Harvard’s Graduate School of Education.

MARTY LINSKY is a cofounder and partner at Cambridge Leadership Associates, a consulting firm in Boston.

RENÉE MAUBORGNE is the Insead Distinguished Fellow and a professor of strategy at Insead in France.

DEBRA E. MEYERSON is an associate professor of organizational behavior at Stanford University’s School of Education.

NITIN NOHRIA is the dean of Harvard Business School.

MICHAEL A. ROBERTO is a professor of management at Bryant University in Smithfield, Rhode Island.

HAROLD L. SIRKIN is a Chicago-based senior partner and managing director at The Boston Consulting Group, a global management consulting firm.

THOMAS A. STEWART, formerly the editor of Harvard Business Review, is the chief marketing and knowledge officer at Booz & Company in New York.

BERT SPECTOR is an associate professor of organizational behavior at Northeastern University in Boston.

Index

Adams, Jane, 72–73

adaptive change, 100, 105, 111–112

affirmation, need for, 114–115

alignment, task, 179–182

alliance building, 62, 63, 73–76, 104–108

Allied Domecq, 74–75

Amgen, 171

anchors, 103, 115–117

Anders, William A., 138

arrogance, 118

ASDA, 140–141, 148–154

assumptions

in change programs, 177–178, 184

in change theories, 138–140

competing commitments and, 122–125, 130–135

group change and, 124–125

in programmatic change, 182–186

questioning, 132–135

attitudes, changing, 182–186

backsliding, preventing, 21, 29–32, 45

Badaracco, Joseph L., Jr., 64

balance

anchors and, 103, 115–117

in approaches to change, 139–154

of realism and optimism, 21, 27–28

work/family, 67, 74

barriers. See obstacles

Beer, Michael, 137–154, 177–197

Beth Israel Deaconess Medical Center (BIDMC), 18–32

good habit modeling at, 29–32

Hunter report on, 22, 25, 26

mood management at, 26–28

performance at, 21–22, 31–32

setting the stage at, 19–25

Boston Consulting Group, 158

Boston Harbor Cleanup, 19–21

Boston Metropolitan Police, 84, 85

Boston Police District 4, 84, 85, 87–88

branding, 43

Bratton, William, 79–98

achievements of, 84–85

in Boston District 4 police, 84, 85, 87–88

cognitive hurdles and, 83–89

motivation and, 92–95

at NYPD, 79–80, 84, 88–89, 91, 93–98

at NYTP, 80, 82, 84, 85, 86, 90, 91–92

political hurdles and, 96–98

resource hurdle and, 89–92

tipping point leadership by, 80–81

callousness, 118

capability, organizational, 138

career paths, leadership development and, 195–197

Cartwright, Bill, 112

challenges, attainable, 83, 95

Champion International, 141–142–144, 143, 145, 147, 148, 153

change

adaptive versus technical, 100, 105, 111–112

archetypes of, 138–154

commitment to, 157, 158–159, 163–164

competing commitments and, 119–136

critical path to, 186–193

culture and, 15–16

diagnosing immunity to, 126–128

difficulty of, 17

drastic versus evolutionary, 63–66, 145

dysfunctional routines and, 28–29

fallacy of programmatic, 182–186

fear of, 130

framing, 18, 19, 20–21, 25–26

during good performance, 35–57

in groups, 124–125

guiding coalitions in, 7–8

hard approach to, 138

hard factors in, 155–176

leader survival and, 99–118

markets for, 194

mood management in, 18, 19, 21

persuasion in, 17–33

phases in, 1

planning for, 13–14

premature victory declarations and, 14–15

preventing backsliding and, 29–32

preventing backsliding in, 21

quiet but radical, 59–77

recognizing need for, 81–82

removing obstacles to, 11–13

risk in, 5–6

sense of urgency for, 2, 3–7

sequenced, 147–148

setting the stage for, 18, 19–25

short-term wins and, 13–14

soft approach to, 138–139

stakes in, 137

steps in, 2–16

stress levels and, 109–110

tipping point leadership and, 79–98

the uncommitted in, 104–108

vision in, 8–9

change programs, 177–197

commitment in, 180, 186–187

consensus in, 180–181, 188–190

coordination in, 182–186

fallacy of programmatic, 182–186

institutionalizing revitalization in, 191–192

monitoring revitalization in, 182

origins of, 178–180

shared vision in, 180, 187–188

spreading revitalization in, 181–182, 190–191

task alignment in, 179–182

top management in, 193–197

tracking, 183–184

change theories, 137–154

at ASDA, 140–141, 148–154

balancing, 139–140, 147–154

comparison of, 141–147

consultants in, 141, 146–147, 152–154

contradictions between, 147–154

fallacy of programmatic, 182–186

focus in, 140, 143–144, 150–151

goals in, 140, 142

leadership and, 140, 142–143

new economy and, 153

process in, 141, 144–145

reward systems and, 145–146, 151–152

reward systems in, 141

Chicago Bulls, 111–112

Clinton, Bill, 117

coalitions

forming guiding, 2, 4–5, 708

tipping point leadership and, 97

the uncommitted and, 104–108

vision communication by, 12

cognitive hurdles, 81–82, 83–89

collaborative style, 72–73

commitment, 157, 158–159, 163–164

calculating, 166–167

in change programs, 182–186, 186–187

mobilizing, 186–187

in successful change, 180

commitments, competing, 119–136

big assumptions and, 122–125, 130–132

definition of, 121

diagnosing, 122, 126–128

group change and, 124–125

uncovering, 128–131, 135–136

communication

about change theories, 149

about DICE scores, 173–176

about values, 44–54

of bad news, 10–11, 26, 27, 106, 118

cognitive hurdles and, 86–87, 87–88

of complaints and competing commitments, 122, 129

disruptive self-expression, 61–62

framing, 18, 19, 20–21, 25–26

on hard factors, 156

internal, 88–89

by Paul Levy, 23–25

of sense of urgency, 2, 3–7

in values revision, 48–54

verbal jujitsu in, 61–62, 69–71

of vision, 4–5, 8–11

compensation systems, 145–146, 184–185

competencies, 182–186, 188–190

complaints, competing commitments and, 122, 129

Compstat crime database, 92, 93–94

confidants, 115–116

conflict, managing, 108–110

competing commitments and, 119–136

Conley, Frances, 68

consensus, 188–190

consultants, 141, 146–147, 152–154

context, for action, 18

control, desire for, 113–114

coordination, 182–186, 189, 193

corporate culture. See culture, organizational

Coswell, Barry, 64–65

credibility, 185

premature victory declarations and, 15

in vision communication, 10–11

critical path to change, 186–193

criticism, personal versus role, 116–117

culture, organizational

anchoring change in, 15–16

at ASDA, 149

for change, 32–33

change theories and, 139–154

conflict management and, 108–110

hard factors versus, 156, 157

at IBM, 36

institutionalizing revitalization with, 191–192

key influencers in, 93–95

modeling, 22–23

radical, quiet change of, 59–77

tipping point leadership and, 79–80

cynicism, 118

delegation, 110–112

dependency, 114–115

DICE framework, 157–159, 164

applying, 171–176

calculating scores in, 166–168

creation of, 168–171

Digital Equipment Corporation, 114–115

distress, productive range of, 108–110, 114

downsizing

mood management during, 26, 27

vision communication during, 10–11

Dunlap, Al, 142, 143, 145, 146, 153

economic value, 138, 139, 142

at ASDA, 150–151

effort, 157, 159, 165

Eisenstat, Russell A., 177–197

employees

change theories and, 146–147

commitment of, 163–164

communicating vision to, 10–11

competing commitments of, 119–136

consensus among, 188–190

effort by, 157, 159, 165

engaging, 149–150

framing communication to, 18, 19, 20–21, 25–26

inspiring, 41

integrating, 43

mood management of, 18, 19, 21, 26–28

motivating, 80, 82, 83, 92–95

practice opportunities for, 31

in receptive environments, 32–33

sense of urgency in, 4–7

on values, 38, 44–48

engagement, 149–150

environments, hostile, 101–112

Esserman, Dean, 92

evolutionary change, 63–66, 145

executives. See also leaders and leadership; managers

commitment of, 163–164, 166–167

modeling by, 10–11

sense of urgency and, 6–7

vision communication by, 10–11

expectations

big assumptions and, 122–123, 130–133

disrupting, 66–69

loss of, 102

failure

of change programs, 177–197

guiding coalitions and, 7–8

hard factors in, 156–157

of leaders, history of, 17

planning and, 13–14

premature victory declarations and, 14–15

rates of, 137, 139, 155

reasons for, 119–136

sense of urgency and, 3–4

vision and, 8–11

fairness, 94

family, balancing work and, 67, 74

fear of change, 130

focus, in change theories, 140, 143–144, 150–151

framing, 18, 19, 20–21, 25–26

motivation and, 95

Garvin, David A., 17–33

Gates, Bill, 115

gender discrimination, 68, 74

General Dynamics, 138

General Electric, 147–148

General Products, 194

Gerstner, Lou, 36, 37, 38–39, 45

Giuliani, Rudolph, 97–98

goals

attainable, 83, 95

change theories and, 140, 142

competing commitments and, 119–136

diversion from, 100

short-term wins and, 13–14, 164

Grant, Peter, 65–66

habits

big assumptions and, 122–123, 130–135

changing, 17

competing commitments and, 129–130

dysfunctional routines, 28–29

at IBM, 54

questioning, 132–135

reinforcing good, 29–32

resistance to changing, 121–123

Haiman, Bob, 106–107

Hales, Tony, 74–75

hard factors in change, 155–176

commitment, 157, 158–159, 163–164

DICE framework for, 157–159, 166–176

duration, 157, 158, 160–161

effort, 157, 159, 165

integrity, 157, 158, 161–163

soft elements and, 156

Hart, Gary, 117

Heifetz, Ronald A., 99–118

Hemp, Paul, 40

Hewlett-Packard, 138–139

homophobia, 69–70

Hunter Group, 22, 25, 26

IBM, 35–57

Basic Beliefs at, 36, 40–41, 47

continuity at, 46–47

future of, 56–57

initiatives at, 52–54

pricing at, 53–54

values at, 36, 37, 40–41, 47

values-based management at, 42–43

ValuesJam at, 35–38, 44–48, 51

values revision at, 44–50

incentives, change theories and, 141, 145–146, 151–152

influencers, key, 82–83, 93–95

initiatives

commitment to, 163–164

communicating about, 173–176

failure rates of, 137–138, 139

at IBM, 52–54

integrity in, 157, 158, 161–163

managing, 155–176

portfolio management, 172–173

reviewing, 160–161

tracking, 171–172

innovation

at IBM, 50

planning for, 144–145, 151

insiders, tempered radicals and, 76

inspiration, 41, 45

integrity, 157, 158, 161–163, 166

Jackson, Alan, 155–176

Jackson, Phil, 111–112

Jordan, Michael, 111, 112

Joyce, John, 53–54

Karr, Jean-Baptiste Alphonse, 155–176

Keenan, Perry, 155–176

Kegan, Robert, 119–136

key influencers, 82–83, 93–95

Kim, W. Chan, 79–98

Kimberly-Clark, 146, 153

Kotter, John P., 1–16

Kukoc, Toni, 111

Lahey, Lisa Laskow, 119–136

leaders and leadership

in adaptive versus technical change, 100, 105, 111–112

anchors for, 103, 115–117

in change programs, 193–197

change theories and, 140, 142–143

conflict management and, 108–110

delegation by, 110–112

dependence on, 114–115

developing, 195–197

guiding coalitions in, 7–8

history of failure in, 17

hostile environment for, 101–112

modeling change by, 22–23, 29–32, 196–197

as observers and participants, 104

perspective of, 101–104

in radical, quiet change, 59–77

self-management and, 103, 112–117

styles of, 156, 157

survival guide for, 99–118

tempered radicals as, 60–61, 64–65

tipping point, 79–98

in transformation, 1–16

the uncommitted and, 104–108

learning, institutional, 95, 160–161, 181–182

Leighton, Allan, 150, 152

Levy, Paul, 18–32

in Boston Harbor Cleanup, 19–21

communication by, 23–25

framing by, 25–26

good habit modeling by, 29–32

on meetings, 30

mood management by, 26–28

setting the stage by, 19–25

Limited, the, 107–108

Linsky, Marty, 99–118

Los Angeles Police Department, 80

management

in change programs, 193–197

change theories and, 142–143

collaborative, 72–73

of environment, 101–112

hard side of, 155–176

portfolio, 172–173

self-, 103, 112–117

values-based, 37–39, 41

managers

cognitive hurdles and, 86–87

competing commitments and, 119–136

culture modeling by, 16

immunity of to change, 135–136

replacing, 189–190

risk management by, 6

short-term wins and, 14

as team leaders, 162–163

Maple, Jack, 89, 91

marginalization, 70–71, 100

Massachusetts Bay Transit Authority (MBTA), 84, 85, 86–87

Mauborgne, Renée, 79–98

meetings, rules for, 30–31

metrics, 55

on hard factors, 156

tracking, 171–172, 183–184

Meyerson, Debra E., 59–77

Microsoft, 115

milestones, reviewing, 160–161

Miller, John, 88–89

modeling

culture changes, 16

defusing resistance by, 106–107

by Paul Levy, 22–23

preventing backsliding and, 29–32

revitalization, 194–195

of vision, 10–11

momentum, short-term wins and, 13–14

mood management, 18, 19, 21, 26–28

at ASDA, 150

conflict levels and, 108–110

Morgan, Chris, 72

motivation

hard factors versus, 156, 157

key influencers and, 93–95

through fear versus hope, 45

tipping point leadership and, 80, 82, 83, 92–95

values in, 41–42

Myers, Pete, 111

Navigation Devices, 180–181, 186–187, 189, 190–191, 192, 193

New York Knicks, 111, 112

New York Police Department (NYPD), 79–80, 84

internal communication in, 88–89

key influencers in, 93–95

political hurdles at, 96, 97–98

resources at, 89, 91

New York Transit Police (NYTP), 80, 82, 84, 85

cognitive hurdles at, 86

resources at, 90, 91–92

Nohria, Nitin, 137–154

Norman, Archie, 140–141, 148–154

Novak, Tom, 69–70

novelty, 28

obstacles

adaptive change and, 100

change programs and, 178

cognitive, 81–82, 83–89

competing commitments, 119–136

dysfunctional routines as, 28–29

hostile environment as, 101–112

at IBM, 38, 47

identifying, 39

motivational, 80, 82, 83, 92–95

political, 83, 96–98

removing, 11–13, 39

tipping point leadership and, 80, 81

Olsen, Ken, 114–115

Olsen, Richard, 147

opportunism, variable-term, 61–63, 71–73

optimism, 21, 27–28

order, desire for, 113–114

organizational culture. See culture, organizational

organizational structure

at ASDA, 150–151

change programs and, 179

change theories and, 143–144

guiding coalitions in, 7–8

as obstacles to change, 12

task-driven, 178

values-based management and, 42

Palmisano, Samuel J., 35–57

on feedback, 51–54

on the future, 56–57

leadership style of, 38–40

on metrics versus values, 55

on routines, 54

on strategy changes, 43–44

on values, 40–41

on values-based management, 42

in ValuesJam, 35–38, 44–48

on values revisions, 44, 48–50

Palo Alto Veteran’s Administration hospital, 68

patience, 4–5

Patterson, Gene, 106–107

perceptions, assumptions and, 130–133

performance

cognitive hurdles and, 86–87

culture of, 94–95

good, leading change during, 35–57

integrity of, 157, 158, 161–163, 166

organizational culture and, 15–16

sense of urgency based on bad, 6–7

stress levels and, 109–110

tipping point leadership and, 80

personal attacks, 116–117

perspective

in change management, 155–156

in leadership, 101–104

persuasion, 17–33

context in, 18

culture and, 32–33

framing in, 18, 19, 20–21, 25–26

key influencers in, 82–83

mood management in, 18, 19, 21, 26–28

phases of, 23

preventing backsliding and, 21, 29–32

reinforcing good habits in, 29–32

setting the stage in, 18, 19–25

Pippen, Scottie, 111–112

planning, for spontaneity, 144–145, 151

policies, 191–192

political hurdles, 83, 96–98

portfolio management, 172–173

priorities, resources and, 80, 82, 89–92

problems, diagnosing, 186–187

process, change theories and, 141, 144–145

programmatic change, 182–186

Project Management Office, 174–175

racism, 65–66, 68–69

radical change, 59–77

realism, balance of optimism and, 21, 27–28

receptive environments, 32–33

reengineering, premature victory declarations in, 14–15

reflection, 102–103

reintegration, 43

resistance

to adaptive change, 105

competing commitments and, 119–136

hostile environment and, 101–112

personal attacks versus role in, 116–117

premature victory declarations and, 14–15

reasons for, 119–136

silencing opposition and, 96–98

tipping point leadership and, 80, 82, 83

the uncommitted and, 104–108

resources

revitalization and, 195

tipping point leadership and, 80, 82, 89–92

trading, 92

responsibility

acknowledging, 107–108

delegating, 110–112

at IBM, 50

reviews, 160–161

revitalization

institutionalizing, 191–192

modeling, 194–195

monitoring, 181, 192–193

spreading, 181, 190–191

rewards, change theories and, 141, 145–146, 151–152

risk

DICE framework and, 175–176

leader survival and, 99–118

paralysis from facing, 5–6

Roberto, Michael A., 17–33

Roosevelt, Franklin, 106, 110

routines, dysfunctional, 28–29, 54

Scott Paper, 141–142, 143, 145, 146, 153

Scully, Maureen, 60

self-expression, disruptive, 61–62, 66–69

self-management, 103, 112–117

Sigler, Andrew, 142, 153

silo mentality, 47

Sirkin, Harold L., 155–176

Spector, Bert, 177–197

sponsors, 162

spontaneity, planning for, 144–145, 151

Stanford Medical School, 68

Stewart, Thomas A., 40

St. Petersburg Times, 106–107

strategic alliance building, 62, 63, 73–76

strategy

revitalization and, 191–192

tipping point leadership and, 79–80

values and, 42–44

stress levels, 109–110

systems, institutionalizing revitalization with, 191–192

task alignment, 179–182

steps to change in, 186–193

task-driven organization, 178, 179–180

teams

guiding coalitions as, 7–8

integrity in, 157, 158, 161–163

technical change, 100, 105

tempered radicals, 59–77

definition of, 60

disruptive self-expression by, 61–62, 66–69

finding and developing, 61, 64–65

as leaders, 60–61, 64–65

strategic alliance building by, 62, 63, 73–76

variable-term opportunism by, 61–63, 71–73

verbal jujitsu by, 61–62, 69–71

Theory E and Theory O, 138–154

at ASDA, 140–141

balancing, 139–140, 147–154

comparison of, 141–147

consultants in, 141, 146–147, 152–154

contradictions between, 147–154

focus in, 140, 143–144, 150–151

goals in, 140, 142

leadership and, 140, 142–143

process in, 141, 144–145

reward systems and, 151–152

reward systems in, 141, 145–146

Thomas, Ellen, 68–69

timing, 157, 158, 160–161

Timoney, John, 96

tipping point leadership, 79–98

cognitive barriers and, 81–82, 83–89

definition of, 80–81

motivation and, 80, 82, 83, 92–95

political hurdles in, 96–98

resources and, 80, 82, 89–92

training programs, 185

transformations. See also change

planning for, 13–14

premature victory declarations and, 14–15

removing obstacles to, 11–13

short-term wins and, 13–14

urgency in, 3–7

vision in, 2, 4–5, 8–9

trust

at ASDA, 149, 152

at IBM, 50, 52–53

turnaround plans

framing, 18, 19, 20–21, 25–26

reinforcing good habits in, 29–32

uncommitted, courting, 104–108

UPM-Kymmene, 147, 153

urgency

establishing a sense of, 2, 3–7

guiding coalitions and, 8

U.S. Financial, 177–178, 185

values

employee input on, 38

at IBM, 36–39

as inspiration, 41

management based on, 37–39

metrics and, 55

modeling, 22–23, 29–32

obstacles to, 39

radical, quiet change of, 59–77

revising, 38–39, 40–41, 44, 48–50

shared vision and, 187–188

strategy changes and, 43–44

tipping point leadership and, 79–80

ValuesJam, 35–38, 44–48, 51, 56

verbal jujitsu, 61–62, 69–71

vested interests, 82, 83

tipping point leadership and, 80, 96–98

victory, premature declaration of, 14–15

vision

communicating, 4–5, 8–9, 10–11

consensus on, 188–190

removing obstacles to, 11–13

shared, 180, 187–188

in transformations, 2, 4–5, 8–9

walking the talk, 10–11

Wal-Mart, 149, 153–154

waste reduction, 72

Watson, Thomas, Jr., 56

Watson, Thomas, Sr., 36, 40, 46

“We Don’t Need Another Hero” (Badaracco), 64

Welch, Jack, 81, 147–148

Wexner, Leslie, 107–108

Wielgus, Paul, 74–75

Williams, Brad, 62, 71

wins, short-term, 13–14, 164

workloads, 165

Ziwak, John, 62, 67

On

Managing People

HARVARD BUSINESS REVIEW PRESS

Boston, Massachusetts

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Library of Congress Cataloging-in-Publication Data

HBR’s 10 must reads on managing people.

p. cm.

Includes index.

ISBN 978-1-4221-5801-2 (pbk. : alk. paper)

1. Supervision of employees.   2. Management.   3. Personnel management.   I. Harvard business review.   II. Title: HBR’s ten must reads on managing people.   III. Title: Harvard Business review’s 10 must reads on managing people.

HF5549.12.H395 2010

658.3—dc22

2010031618

eISBN: 978-1-4221-7204-9

Contents

Leadership That Gets Results

by Daniel Goleman

One More Time: How Do You Motivate Employees?

by Frederick Herzberg

The Set-Up-to-Fail Syndrome

by Jean-François Manzoni and Jean-Louis Barsoux

Saving Your Rookie Managers from Themselves

by Carol A. Walker

What Great Managers Do

by Marcus Buckingham

Fair Process: Managing in the Knowledge Economy

by W. Chan Kim and Reneé Mauborgne

Teaching Smart People How to Learn

by Chris Argyris

How (Un)ethical Are You?

by Mahzarin R. Banaji, Max H. Bazerman, and Dolly Chugh

The Discipline of Teams

by Jon R. Katzenbach and Douglas K. Smith

Managing Your Boss

by John J. Gabarro and John P. Kotter

About the Contributors

Index

Leadership That Gets Results

by Daniel Goleman

ASK ANY GROUP OF businesspeople the question “What do effective leaders do?” and you’ll hear a sweep of answers. Leaders set strategy; they motivate; they create a mission; they build a culture. Then ask “What should leaders do?” If the group is seasoned, you’ll likely hear one response: the leader’s singular job is to get results.

But how? The mystery of what leaders can and ought to do in order to spark the best performance from their people is age-old. In recent years, that mystery has spawned an entire cottage industry: literally thousands of “leadership experts” have made careers of testing and coaching executives, all in pursuit of creating businesspeople who can turn bold objectives—be they strategic, financial, organizational, or all three—into reality.

Still, effective leadership eludes many people and organizations. One reason is that until recently, virtually no quantitative research has demonstrated which precise leadership behaviors yield positive results. Leadership experts proffer advice based on inference, experience, and instinct. Sometimes that advice is which precise leadership behaviors yield positive results. Leadership experts proffer advice based on inference, experience, and instinct. Sometimes that advice is right on target; sometimes it’s not.

But new research by the consulting firm Hay/McBer, which draws on a random sample of 3,871 executives selected from a database of more than 20,000 executives worldwide, takes much of the mystery out of effective leadership. The research found six distinct leadership styles, each springing from different components of emotional intelligence. The styles, taken individually, appear to have a direct and unique impact on the working atmosphere of a company, division, or team, and in turn, on its financial performance. And perhaps most important, the research indicates that leaders with the best results do not rely on only one leadership style; they use most of them in a given week—seamlessly and in different measure—depending on the business situation. Imagine the styles, then, as the array of clubs in a golf pro’s bag. Over the course of a game, the pro picks and chooses clubs based on the demands of the shot. Sometimes he has to ponder his selection, but usually it is automatic. The pro senses the challenge ahead, swiftly pulls out the right tool, and elegantly puts it to work. That’s how high-impact leaders operate, too.

What are the six styles of leadership? None will shock workplace veterans. Indeed, each style, by name and brief description alone, will likely resonate with anyone who leads, is led, or as is the case with most of us, does both. Coercive leaders demand immediate compliance. Authoritative leaders mobilize people toward a vision. Affiliative leaders create emotional bonds and harmony. Democratic leaders build consensus through participation. Pacesetting leaders expect excellence and self-direction. And coaching leaders develop people for the future.

Close your eyes and you can surely imagine a colleague who uses any one of these styles. You most likely use at least one yourself. What is new in this research, then, is its implications for action. First, it offers a fine-grained understanding of how different leadership styles affect performance and results. Second, it offers clear guidance on when a manager should switch between them. It also strongly suggests that switching flexibly is well advised. New, too, is the research’s finding that each leadership style springs from different components of emotional intelligence.

Idea in Brief

Many managers mistakenly assume that leadership style is a function of personality rather than strategic choice. Instead of choosing the one style that suits their temperament, they should ask which style best addresses the demands of a particular situation.

Research has shown that the most successful leaders have strengths in the following emotional intelligence competencies: self-awareness, self-regulation, motivation, empathy, and social skill. There are six basic styles of leadership; each makes use of the key components of emotional intelligence in different combinations. The best leaders don’t know just one style of leadership—they’re skilled at several, and have the flexibility to switch between styles as the circumstances dictate.

Measuring Leadership’s Impact

It has been more than a decade since research first linked aspects of emotional intelligence to business results. The late David McClelland, a noted Harvard University psychologist, found that leaders with strengths in a critical mass of six or more emotional intelligence competencies were far more effective than peers who lacked such strengths. For instance, when he analyzed the performance of division heads at a global food and beverage company, he found that among leaders with this critical mass of competence, 87% placed in the top third for annual salary bonuses based on their business performance. More telling, their divisions on average outperformed yearly revenue targets by 15% to 20%. Those executives who lacked emotional intelligence were rarely rated as outstanding in their annual performance reviews, and their divisions underperformed by an average of almost 20%.

Our research set out to gain a more molecular view of the links among leadership and emotional intelligence, and climate and performance. A team of McClelland’s colleagues headed by Mary Fontaine and Ruth Jacobs from Hay/McBer studied data about or observed thousands of executives, noting specific behaviors and their impact on climate.[1]How did each individual motivate direct reports? Manage change initiatives? Handle crises? It was in a later phase of the research that we identified which emotional intelligence capabilities drive the six leadership styles. How does he rate in terms of self-control and social skill? Does a leader show high or low levels of empathy?

Idea in Practice

Managers often fail to appreciate how profoundly the organizational climate can influence financial results. It can account for nearly a third of financial performance. Organizational climate, in turn, is influenced by leadership style—by the way that managers motivate direct reports, gather and use information, make decisions, manage change initiatives, and handle crises. There are six basic leadership styles. Each derives from different emotional intelligence competencies, works best in particular situations, and affects the organizational climate in different ways.

1. The coercive style. This “Do what I say” approach can be very effective in a turnaround situation, a natural disaster, or when working with problem employees. But in most situations, coercive leadership inhibits the organization’s flexibility and dampens employees’ motivation.

2. The authoritative style. An authoritative leader takes a “Come with me” approach: she states the overall goal but gives people the freedom to choose their own means of achieving it. This style works especially well when a business is adrift. It is less effective when the leader is working with a team of experts who are more experienced than he is.

3. The affiliative style. The hallmark of the affiliative leader is a “People come first” attitude. This style is particularly useful for building team harmony or increasing morale. But its exclusive focus on praise can allow poor performance to go uncorrected. Also, affiliative leaders rarely offer advice, which often leaves employees in a quandary.

4. The democratic style. This style’s impact on organizational climate is not as high as you might imagine. By giving workers a voice in decisions, democratic leaders build organizational flexibility and responsibility and help generate fresh ideas. But sometimes the price is endless meetings and confused employees who feel leaderless.

5. The pacesetting style. A leader who sets high performance standards and exemplifies them himself has a very positive impact on employees who are self-motivated and highly competent. But other employees tend to feel overwhelmed by such a leader’s demands for excellence—and to resent his tendency to take over a situation.

6. The coaching style. This style focuses more on personal development than on immediate work-related tasks. It works well when employees are already aware of their weaknesses and want to improve, but not when they are resistant to changing their ways.

The more styles a leader has mastered, the better. In particular, being able to switch among the authoritative, affiliative, democratic, and coaching styles as conditions dictate creates the best organizational climate and optimizes business performance.

The team tested each executive’s immediate sphere of influence for its climate. “Climate” is not an amorphous term. First defined by psychologists George Litwin and Richard Stringer and later refined by McClelland and his colleagues, it refers to six key factors that influence an organization’s working environment: its flexibility—that is, how free employees feel to innovate unencumbered by red tape; their sense of responsibility to the organization; the level of standards that people set; the sense of accuracy about performance feedback and aptness of rewards; the clarity people have about mission and values; and finally, the level of commitment to a common purpose.

We found that all six leadership styles have a measurable effect on each aspect of climate. (For details, see “Getting Molecular: The Impact of Leadership Styles on Drivers of Climate.”) Further, when we looked at the impact of climate on financial results—such as return on sales, revenue growth, efficiency, and profitability—we found a direct correlation between the two. Leaders who used styles that positively affected the climate had decidedly better financial results than those who did not. That is not to say that organizational climate is the only driver of performance. Economic conditions and competitive dynamics matter enormously. But our analysis strongly suggests that climate accounts for nearly a third of results. And that’s simply too much of an impact to ignore.

The Styles in Detail

Executives use six leadership styles, but only four of the six consistently have a positive effect on climate and results. Let’s look then at each style of leadership in detail. (For a summary of the material that follows, see the chart “The Six Leadership Styles at a Glance.”)

The coercive style

The computer company was in crisis mode—its sales and profits were falling, its stock was losing value precipitously, and its shareholders were in an uproar. The board brought in a new CEO with a reputation as a turnaround artist. He set to work chopping jobs, selling off divisions, and making the tough decisions that should have been executed years before. The company was saved, at least in the short-term.

From the start, though, the CEO created a reign of terror, bullying and demeaning his executives, roaring his displeasure at the slightest misstep. The company’s top echelons were decimated not just by his erratic firings but also by defections. The CEO’s direct reports, frightened by his tendency to blame the bearer of bad news, stopped bringing him any news at all. Morale was at an all-time low—a fact reflected in another downturn in the business after the short-term recovery. The CEO was eventually fired by the board of directors.

It’s easy to understand why of all the leadership styles, the coercive one is the least effective in most situations. Consider what the style does to an organization’s climate. Flexibility is the hardest hit. The leader’s extreme top-down decision making kills new ideas on the vine. People feel so disrespected that they think, “I won’t even bring my ideas up—they’ll only be shot down.” Likewise, people’s sense of responsibility evaporates: unable to act on their own initiative, they lose their sense of ownership and feel little accountability for their performance. Some become so resentful they adopt the attitude, “I’m not going to help this bastard.”

Coercive leadership also has a damaging effect on the rewards system. Most high-performing workers are motivated by more than money—they seek the satisfaction of work well done. The coercive style erodes such pride. And finally, the style undermines one of the leader’s prime tools—motivating people by showing them how their job fits into a grand, shared mission. Such a loss, measured in terms of diminished clarity and commitment, leaves people alienated from their own jobs, wondering, “How does any of this matter?”

Given the impact of the coercive style, you might assume it should never be applied. Our research, however, uncovered a few occasions when it worked masterfully. Take the case of a division president who was brought in to change the direction of a food company that was losing money. His first act was to have the executive conference room demolished. To him, the room—with its long marble table that looked like “the deck of the Starship Enterprise”—symbolized the tradition-bound formality that was paralyzing the company. The destruction of the room, and the subsequent move to a smaller, more informal setting, sent a message no one could miss, and the division’s culture changed quickly in its wake.

That said, the coercive style should be used only with extreme caution and in the few situations when it is absolutely imperative, such as during a turnaround or when a hostile takeover is looming. In those cases, the coercive style can break failed business habits and shock people into new ways of working. It is always appropriate during a genuine emergency, like in the aftermath of an earthquake or a fire. And it can work with problem employees with whom all else has failed. But if a leader relies solely on this style or continues to use it once the emergency passes, the long-term impact of his insensitivity to the morale and feelings of those he leads will be ruinous.

The authoritative style

Tom was the vice president of marketing at a floundering national restaurant chain that specialized in pizza. Needless to say, the company’s poor performance troubled the senior managers, but they were at a loss for what to do. Every Monday, they met to review recent sales, struggling to come up with fixes. To Tom, the approach didn’t make sense. “We were always trying to figure out why our sales were down last week. We had the whole company looking backward instead of figuring out what we had to do tomorrow.”

Emotional Intelligence: A Primer

Emotional intelligence—the ability to manage ourselves and our relationships effectively—consists of four fundamental capabilities: self-awareness, self-management, social awareness, and social skill. Each capability, in turn, is composed of specific sets of competencies. Below is a list of the capabilities and their corresponding traits.

Self-Awareness

• Emotional self-awareness: the ability to read and understand your emotions as well as recognize their impact on work performance, relationships, and the like.

• Accurate self-assessment: a realistic evaluation of your strengths and limitations.

• Self-confidence: a strong and positive sense of self-worth.

Self-Management

• Self-control: the ability to keep disruptive emotions and impulses under control.

• Trustworthiness: a consistent display of honesty and integrity.

• Conscientiousness: the ability to manage yourself and your responsibilities.

• Adaptability: skill at adjusting to changing situations and overcoming obstacles.

• Achievement orientation: the drive to meet an internal standard of excellence.

• Initiative: a readiness to seize opportunities.

Social Awareness

• Empathy: skill at sensing other people’s emotions, understanding their perspective, and taking an active interest in their concerns.

• Organizational awareness: the ability to read the currents of organizational life, build decision networks, and navigate politics.

• Service orientation: the ability to recognize and meet customers’ needs.

Social Skill

• Visionary leadership: the ability to take charge and inspire with a compelling vision.

• Influence: the ability to wield a range of persuasive tactics.

• Developing others: the propensity to bolster the abilities of others through feedback and guidance.

• Communication: skill at listening and at sending clear, convincing, and well-tuned messages.

• Change catalyst: proficiency in initiating new ideas and leading people in a new direction.

• Conflict management: the ability to de-escalate disagreements and orchestrate resolutions.

• Building bonds: proficiency at cultivating and maintaining a web of relationships.

• Teamwork and collaboration: competence at promoting cooperation and building teams.

Tom saw an opportunity to change people’s way of thinking at an off-site strategy meeting. There, the conversation began with stale truisms: the company had to drive up shareholder wealth and increase return on assets. Tom believed those concepts didn’t have the power to inspire a restaurant manager to be innovative or to do better than a good-enough job.

So Tom made a bold move. In the middle of a meeting, he made an impassioned plea for his colleagues to think from the customer’s perspective. Customers want convenience, he said. The company was not in the restaurant business, it was in the business of distributing high-quality, convenient-to-get pizza. That notion—and nothing else—should drive everything the company did.

Getting Molecular: The Impact of Leadership Styles on Drivers of Climate

Our research investigated how each leadership style affected the six drivers of climate, or working atmosphere. The figures below show the correlation between each leadership style and each aspect of climate. So, for instance, if we look at the climate driver of flexibility, we see that the coercive style has a –.28 correlation while the democratic style has a .28 correlation, equally strong in the opposite direction. Focusing on the authoritative leadership style, we find that it has a .54 correlation with rewards—strongly positive—and a .21 correlation with responsibility—positive, but not as strong. In other words, the style’s correlation with rewards was more than twice that with responsibility.

According to the data, the authoritative leadership style has the most positive effect on climate, but three others—affiliative, democratic, and coaching—follow close behind. That said, the research indicates that no style should be relied on exclusively, and all have at least short-term uses.

With his vibrant enthusiasm and clear vision—the hallmarks of the authoritative style—Tom filled a leadership vacuum at the company. Indeed, his concept became the core of the new mission statement. But this conceptual breakthrough was just the beginning. Tom made sure that the mission statement was built into the company’s strategic planning process as the designated driver of growth. And he ensured that the vision was articulated so that local restaurant managers understood they were the key to the company’s success and were free to find new ways to distribute pizza.

Changes came quickly. Within weeks, many local managers started guaranteeing fast, new delivery times. Even better, they started to act like entrepreneurs, finding ingenious locations to open new branches: kiosks on busy street corners and in bus and train stations, even from carts in airports and hotel lobbies.

Tom’s success was no fluke. Our research indicates that of the six leadership styles, the authoritative one is most effective, driving up every aspect of climate. Take clarity. The authoritative leader is a visionary; he motivates people by making clear to them how their work fits into a larger vision for the organization. People who work for such leaders understand that what they do matters and why. Authoritative leadership also maximizes commitment to the organization’s goals and strategy. By framing the individual tasks within a grand vision, the authoritative leader defines standards that revolve around that vision. When he gives performance feedback—whether positive or negative—the singular criterion is whether or not that performance furthers the vision. The standards for success are clear to all, as are the rewards. Finally, consider the style’s impact on flexibility. An authoritative leader states the end but generally gives people plenty of leeway to devise their own means. Authoritative leaders give people the freedom to innovate, experiment, and take calculated risks.

Because of its positive impact, the authoritative style works well in almost any business situation. But it is particularly effective when a business is adrift. An authoritative leader charts a new course and sells his people on a fresh long-term vision.

The authoritative style, powerful though it may be, will not work in every situation. The approach fails, for instance, when a leader is working with a team of experts or peers who are more experienced than he is; they may see the leader as pompous or out-of-touch. Another limitation: if a manager trying to be authoritative becomes overbearing, he can undermine the egalitarian spirit of an effective team. Yet even with such caveats, leaders would be wise to grab for the authoritative “club” more often than not. It may not guarantee a hole in one, but it certainly helps with the long drive.

The affiliative style

If the coercive leader demands, “Do what I say,” and the authoritative urges, “Come with me,” the affiliative leader says, “People come first.” This leadership style revolves around people—its proponents value individuals and their emotions more than tasks and goals. The affiliative leader strives to keep employees happy and to create harmony among them. He manages by building strong emotional bonds and then reaping the benefits of such an approach, namely fierce loyalty. The style also has a markedly positive effect on communication. People who like one another a lot talk a lot. They share ideas; they share inspiration. And the style drives up flexibility; friends trust one another, allowing habitual innovation and risk taking. Flexibility also rises because the affiliative leader, like a parent who adjusts household rules for a maturing adolescent, doesn’t impose unnecessary strictures on how employees get their work done. They give people the freedom to do their job in the way they think is most effective.

As for a sense of recognition and reward for work well done, the affiliative leader offers ample positive feedback. Such feedback has special potency in the workplace because it is all too rare: outside of an annual review, most people usually get no feedback on their day-to-day efforts—or only negative feedback. That makes the affiliative leader’s positive words all the more motivating. Finally, affiliative leaders are masters at building a sense of belonging. They are, for instance, likely to take their direct reports out for a meal or a drink, one-on-one, to see how they’re doing. They will bring in a cake to celebrate a group accomplishment. They are natural relationship builders.

Joe Torre, the heart and soul of the New York Yankees, is a classic affiliative leader. During the 1999 World Series, Torre tended ably to the psyches of his players as they endured the emotional pressure cooker of a pennant race. All season long, he made a special point to praise Scott Brosius, whose father had died during the season, for staying committed even as he mourned. At the celebration party after the team’s final game, Torre specifically sought out right fielder Paul O’Neill. Although he had received the news of his father’s death that morning, O’Neill chose to play in the decisive game—and he burst into tears the moment it ended. Torre made a point of acknowledging O’Neill’s personal struggle, calling him a “warrior.” Torre also used the spotlight of the victory celebration to praise two players whose return the following year was threatened by contract disputes. In doing so, he sent a clear message to the team and to the club’s owner that he valued the players immensely—too much to lose them.

Along with ministering to the emotions of his people, an affiliative leader may also tend to his own emotions openly. The year Torre’s brother was near death awaiting a heart transplant, he shared his worries with his players. He also spoke candidly with the team about his treatment for prostate cancer.

The affiliative style’s generally positive impact makes it a good all-weather approach, but leaders should employ it particularly when trying to build team harmony, increase morale, improve communication, or repair broken trust. For instance, one executive in our study was hired to replace a ruthless team leader. The former leader had taken credit for his employees’ work and had attempted to pit them against one another. His efforts ultimately failed, but the team he left behind was suspicious and weary. The new executive managed to mend the situation by unstintingly showing emotional honesty and rebuilding ties. Several months in, her leadership had created a renewed sense of commitment and energy.

Despite its benefits, the affiliative style should not be used alone. Its exclusive focus on praise can allow poor performance to go uncorrected; employees may perceive that mediocrity is tolerated. And because affiliative leaders rarely offer constructive advice on how to improve, employees must figure out how to do so on their own. When people need clear directives to navigate through complex challenges, the affiliative style leaves them rudderless. Indeed, if overly relied on, this style can actually steer a group to failure. Perhaps that is why many affiliative leaders, including Torre, use this style in close conjunction with the authoritative style. Authoritative leaders state a vision, set standards, and let people know how their work is furthering the group’s goals. Alternate that with the caring, nurturing approach of the affiliative leader, and you have a potent combination.

The Six Leadership Styles at a Glance

Our research found that leaders use six styles, each springing from different components of emotional intelligence. Here is a summary of the styles, their origin, when they work best, and their impact on an organization’s climate and thus its performance.

The democratic style

Sister Mary ran a Catholic school system in a large metropolitan area. One of the schools—the only private school in an impoverished neighborhood—had been losing money for years, and the archdiocese could no longer afford to keep it open. When Sister Mary eventually got the order to shut it down, she didn’t just lock the doors. She called a meeting of all the teachers and staff at the school and explained to them the details of the financial crisis—the first time anyone working at the school had been included in the business side of the institution. She asked for their ideas on ways to keep the school open and on how to handle the closing, should it come to that. Sister Mary spent much of her time at the meeting just listening.

She did the same at later meetings for school parents and for the community and during a successive series of meetings for the school’s teachers and staff. After two months of meetings, the consensus was clear: the school would have to close. A plan was made to transfer students to other schools in the Catholic system.

The final outcome was no different than if Sister Mary had gone ahead and closed the school the day she was told to. But by allowing the school’s constituents to reach that decision collectively, Sister Mary received none of the backlash that would have accompanied such a move. People mourned the loss of the school, but they understood its inevitability. Virtually no one objected.

Compare that with the experiences of a priest in our research who headed another Catholic school. He, too, was told to shut it down. And he did—by fiat. The result was disastrous: parents filed lawsuits, teachers and parents picketed, and local newspapers ran editorials attacking his decision. It took a year to resolve the disputes before he could finally go ahead and close the school.

Sister Mary exemplifies the democratic style in action—and its benefits. By spending time getting people’s ideas and buy-in, a leader builds trust, respect, and commitment. By letting workers themselves have a say in decisions that affect their goals and how they do their work, the democratic leader drives up flexibility and responsibility. And by listening to employees’ concerns, the democratic leader learns what to do to keep morale high. Finally, because they have a say in setting their goals and the standards for evaluating success, people operating in a democratic system tend to be very realistic about what can and cannot be accomplished.

However, the democratic style has its drawbacks, which is why its impact on climate is not as high as some of the other styles. One of its more exasperating consequences can be endless meetings where ideas are mulled over, consensus remains elusive, and the only visible result is scheduling more meetings. Some democratic leaders use the style to put off making crucial decisions, hoping that enough thrashing things out will eventually yield a blinding insight. In reality, their people end up feeling confused and leaderless. Such an approach can even escalate conflicts.

When does the style work best? This approach is ideal when a leader is himself uncertain about the best direction to take and needs ideas and guidance from able employees. And even if a leader has a strong vision, the democratic style works well to generate fresh ideas for executing that vision.

The democratic style, of course, makes much less sense when employees are not competent or informed enough to offer sound advice. And it almost goes without saying that building consensus is wrongheaded in times of crisis. Take the case of a CEO whose computer company was severely threatened by changes in the market. He always sought consensus about what to do. As competitors stole customers and customers’ needs changed, he kept appointing committees to consider the situation. When the market made a sudden shift because of a new technology, the CEO froze in his tracks. The board replaced him before he could appoint yet another task force to consider the situation. The new CEO, while occasionally democratic and affiliative, relied heavily on the authoritative style, especially in his first months.

The pacesetting style

Like the coercive style, the pacesetting style has its place in the leader’s repertory, but it should be used sparingly. That’s not what we expected to find. After all, the hallmarks of the pacesetting style sound admirable. The leader sets extremely high performance standards and exemplifies them himself. He is obsessive about doing things better and faster, and he asks the same of everyone around him. He quickly pinpoints poor performers and demands more from them. If they don’t rise to the occasion, he replaces them with people who can. You would think such an approach would improve results, but it doesn’t.

In fact, the pacesetting style destroys climate. Many employees feel overwhelmed by the pacesetter’s demands for excellence, and their morale drops. Guidelines for working may be clear in the leader’s head, but she does not state them clearly; she expects people to know what to do and even thinks, “If I have to tell you, you’re the wrong person for the job.” Work becomes not a matter of doing one’s best along a clear course so much as second-guessing what the leader wants. At the same time, people often feel that the pacesetter doesn’t trust them to work in their own way or to take initiative. Flexibility and responsibility evaporate; work becomes so task focused and routinized it’s boring.

As for rewards, the pacesetter either gives no feedback on how people are doing or jumps in to take over when he thinks they’re lagging. And if the leader should leave, people feel directionless—they’re so used to “the expert” setting the rules. Finally, commitment dwindles under the regime of a pacesetting leader because people have no sense of how their personal efforts fit into the big picture.

For an example of the pacesetting style, take the case of Sam, a biochemist in R&D at a large pharmaceutical company. Sam’s superb technical expertise made him an early star: he was the one everyone turned to when they needed help. Soon he was promoted to head of a team developing a new product. The other scientists on the team were as competent and self-motivated as Sam; his métier as team leader became offering himself as a model of how to do first-class scientific work under tremendous deadline pressure, pitching in when needed. His team completed its task in record time.

But then came a new assignment: Sam was put in charge of R&D for his entire division. As his tasks expanded and he had to articulate a vision, coordinate projects, delegate responsibility, and help develop others, Sam began to slip. Not trusting that his subordinates were as capable as he was, he became a micromanager, obsessed with details and taking over for others when their performance slackened. Instead of trusting them to improve with guidance and development, Sam found himself working nights and weekends after stepping in to take over for the head of a floundering research team. Finally, his own boss suggested, to his relief, that he return to his old job as head of a product development team.

Although Sam faltered, the pacesetting style isn’t always a disaster. The approach works well when all employees are self-motivated, highly competent, and need little direction or coordination—for example, it can work for leaders of highly skilled and self-motivated professionals, like R&D groups or legal teams. And, given a talented team to lead, pacesetting does exactly that: gets work done on time or even ahead of schedule. Yet like any leadership style, pacesetting should never be used by itself.

The coaching style

A product unit at a global computer company had seen sales plummet from twice as much as its competitors to only half as much. So Lawrence, the president of the manufacturing division, decided to close the unit and reassign its people and products. Upon hearing the news, James, the head of the doomed unit, decided to go over his boss’s head and plead his case to the CEO.

What did Lawrence do? Instead of blowing up at James, he sat down with his rebellious direct report and talked over not just the decision to close the division but also James’s future. He explained to James how moving to another division would help him develop new skills. It would make him a better leader and teach him more about the company’s business.

Lawrence acted more like a counselor than a traditional boss. He listened to James’s concerns and hopes, and he shared his own. He said he believed James had grown stale in his current job; it was, after all, the only place he’d worked in the company. He predicted that James would blossom in a new role.

The conversation then took a practical turn. James had not yet had his meeting with the CEO—the one he had impetuously demanded when he heard of his division’s closing. Knowing this—and also knowing that the CEO unwaveringly supported the closing—Lawrence took the time to coach James on how to present his case in that meeting. “You don’t get an audience with the CEO very often,” he noted, “let’s make sure you impress him with your thoughtfulness.” He advised James not to plead his personal case but to focus on the business unit: “If he thinks you’re in there for your own glory, he’ll throw you out faster than you walked through the door.” And he urged him to put his ideas in writing; the CEO always appreciated that.

Lawrence’s reason for coaching instead of scolding? “James is a good guy, very talented and promising,” the executive explained to us, “and I don’t want this to derail his career. I want him to stay with the company, I want him to work out, I want him to learn, I want him to benefit and grow. Just because he screwed up doesn’t mean he’s terrible.”

Lawrence’s actions illustrate the coaching style par excellence. Coaching leaders help employees identify their unique strengths and weaknesses and tie them to their personal and career aspirations. They encourage employees to establish long-term development goals and help them conceptualize a plan for attaining them. They make agreements with their employees about their role and responsibilities in enacting development plans, and they give plentiful instruction and feedback. Coaching leaders excel at delegating; they give employees challenging assignments, even if that means the tasks won’t be accomplished quickly. In other words, these leaders are willing to put up with short-term failure if it furthers long-term learning.

Of the six styles, our research found that the coaching style is used least often. Many leaders told us they don’t have the time in this high-pressure economy for the slow and tedious work of teaching people and helping them grow. But after a first session, it takes little or no extra time. Leaders who ignore this style are passing up a powerful tool: its impact on climate and performance are markedly positive.

Admittedly, there is a paradox in coaching’s positive effect on business performance because coaching focuses primarily on personal development, not on immediate work-related tasks. Even so, coaching improves results. The reason: it requires constant dialogue, and that dialogue has a way of pushing up every driver of climate. Take flexibility. When an employee knows his boss watches him and cares about what he does, he feels free to experiment. After all, he’s sure to get quick and constructive feedback. Similarly, the ongoing dialogue of coaching guarantees that people know what is expected of them and how their work fits into a larger vision or strategy. That affects responsibility and clarity. As for commitment, coaching helps there, too, because the style’s implicit message is, “I believe in you, I’m investing in you, and I expect your best efforts.” Employees very often rise to that challenge with their heart, mind, and soul.

The coaching style works well in many business situations, but it is perhaps most effective when people on the receiving end are “up for it.” For instance, the coaching style works particularly well when employees are already aware of their weaknesses and would like to improve their performance. Similarly, the style works well when employees realize how cultivating new abilities can help them advance. In short, it works best with employees who want to be coached.

By contrast, the coaching style makes little sense when employees, for whatever reason, are resistant to learning or changing their ways. And it flops if the leader lacks the expertise to help the employee along. The fact is, many managers are unfamiliar with or simply inept at coaching, particularly when it comes to giving ongoing performance feedback that motivates rather than creates fear or apathy. Some companies have realized the positive impact of the style and are trying to make it a core competence. At some companies, a significant portion of annual bonuses are tied to an executive’s development of his or her direct reports. But many organizations have yet to take full advantage of this leadership style. Although the coaching style may not scream “bottom-line results,” it delivers them.

Leaders Need Many Styles

Many studies, including this one, have shown that the more styles a leader exhibits, the better. Leaders who have mastered four or more—especially the authoritative, democratic, affiliative, and coaching styles—have the very best climate and business performance. And the most effective leaders switch flexibly among the leadership styles as needed. Although that may sound daunting, we witnessed it more often than you might guess, at both large corporations and tiny start-ups, by seasoned veterans who could explain exactly how and why they lead and by entrepreneurs who claim to lead by gut alone.

Such leaders don’t mechanically match their style to fit a checklist of situations—they are far more fluid. They are exquisitely sensitive to the impact they are having on others and seamlessly adjust their style to get the best results. These are leaders, for example, who can read in the first minutes of conversation that a talented but underperforming employee has been demoralized by an unsympathetic, do-it-the-way-I-tell-you manager and needs to be inspired through a reminder of why her work matters. Or that leader might choose to reenergize the employee by asking her about her dreams and aspirations and finding ways to make her job more challenging. Or that initial conversation might signal that the employee needs an ultimatum: improve or leave.

For an example of fluid leadership in action, consider Joan, the general manager of a major division at a global food and beverage company. Joan was appointed to her job while the division was in a deep crisis. It had not made its profit targets for six years; in the most recent year, it had missed by $50 million. Morale among the top management team was miserable; mistrust and resentments were rampant. Joan’s directive from above was clear: turn the division around.

Joan did so with a nimbleness in switching among leadership styles that is rare. From the start, she realized she had a short window to demonstrate effective leadership and to establish rapport and trust. She also knew that she urgently needed to be informed about what was not working, so her first task was to listen to key people.

Her first week on the job she had lunch and dinner meetings with each member of the management team. Joan sought to get each person’s understanding of the current situation. But her focus was not so much on learning how each person diagnosed the problem as on getting to know each manager as a person. Here Joan employed the affiliative style: she explored their lives, dreams, and aspirations.

She also stepped into the coaching role, looking for ways she could help the team members achieve what they wanted in their careers. For instance, one manager who had been getting feedback that he was a poor team player confided his worries to her. He thought he was a good team member, but he was plagued by persistent complaints. Recognizing that he was a talented executive and a valuable asset to the company, Joan made an agreement with him to point out (in private) when his actions undermined his goal of being seen as a team player.

She followed the one-on-one conversations with a three-day off-site meeting. Her goal here was team building, so that everyone would own whatever solution for the business problems emerged. Her initial stance at the off-site meeting was that of a democratic leader. She encouraged everyone to express freely their frustrations and complaints.

The next day, Joan had the group focus on solutions: each person made three specific proposals about what needed to be done. As Joan clustered the suggestions, a natural consensus emerged about priorities for the business, such as cutting costs. As the group came up with specific action plans, Joan got the commitment and buy-in she sought.

With that vision in place, Joan shifted into the authoritative style, assigning accountability for each follow-up step to specific executives and holding them responsible for their accomplishment. For example, the division had been dropping prices on products without increasing its volume. One obvious solution was to raise prices, but the previous VP of sales had dithered and had let the problem fester. The new VP of sales now had responsibility to adjust the price points to fix the problem.

Over the following months, Joan’s main stance was authoritative. She continually articulated the group’s new vision in a way that reminded each member of how his or her role was crucial to achieving these goals. And, especially during the first few weeks of the plan’s implementation, Joan felt that the urgency of the business crisis justified an occasional shift into the coercive style should someone fail to meet his or her responsibility. As she put it, “I had to be brutal about this follow-up and make sure this stuff happened. It was going to take discipline and focus.”

The results? Every aspect of climate improved. People were innovating. They were talking about the division’s vision and crowing about their commitment to new, clear goals. The ultimate proof of Joan’s fluid leadership style is written in black ink: after only seven months, her division exceeded its yearly profit target by $5 million.

Expanding Your Repertory

Few leaders, of course, have all six styles in their repertory, and even fewer know when and how to use them. In fact, as we have brought the findings of our research into many organizations, the most common responses have been, “But I have only two of those!” and, “I can’t use all those styles. It wouldn’t be natural.”

Such feelings are understandable, and in some cases, the antidote is relatively simple. The leader can build a team with members who employ styles she lacks. Take the case of a VP for manufacturing. She successfully ran a global factory system largely by using the affiliative style. She was on the road constantly, meeting with plant managers, attending to their pressing concerns, and letting them know how much she cared about them personally. She left the division’s strategy—extreme efficiency—to a trusted lieutenant with a keen understanding of technology, and she delegated its performance standards to a colleague who was adept at the authoritative approach. She also had a pacesetter on her team who always visited the plants with her.

An alternative approach, and one I would recommend more, is for leaders to expand their own style repertories. To do so, leaders must first understand which emotional intelligence competencies underlie the leadership styles they are lacking. They can then work assiduously to increase their quotient of them.

Growing Your Emotional Intelligence

Unlike IQ, which is largely genetic—it changes little from childhood—the skills of emotional intelligence can be learned at any age. It’s not easy, however. Growing your emotional intelligence takes practice and commitment. But the payoffs are well worth the investment.

Consider the case of a marketing director for a division of a global food company. Jack, as I’ll call him, was a classic pacesetter: high-energy, always striving to find better ways to get things done, and too eager to step in and take over when, say, someone seemed about to miss a deadline. Worse, Jack was prone to pounce on anyone who didn’t seem to meet his standards, flying off the handle if a person merely deviated from completing a job in the order Jack thought best.

Jack’s leadership style had a predictably disastrous impact on climate and business results. After two years of stagnant performance, Jack’s boss suggested he seek out a coach. Jack wasn’t pleased but, realizing his own job was on the line, he complied.

The coach, an expert in teaching people how to increase their emotional intelligence, began with a 360-degree evaluation of Jack. A diagnosis from multiple viewpoints is essential in improving emotional intelligence because those who need the most help usually have blind spots. In fact, our research found that top-performing leaders overestimate their strengths on, at most, one emotional intelligence ability, whereas poor performers overrate themselves on four or more. Jack was not that far off, but he did rate himself more glowingly than his direct reports, who gave him especially low grades on emotional self-control and empathy.

Initially, Jack had some trouble accepting the feedback data. But when his coach showed him how those weaknesses were tied to his inability to display leadership styles dependent on those competencies—especially the authoritative, affiliative, and coaching styles—Jack realized he had to improve if he wanted to advance in the company. Making such a connection is essential. The reason: improving emotional intelligence isn’t done in a weekend or during a seminar—it takes diligent practice on the job, over several months. If people do not see the value of the change, they will not make that effort.

Once Jack zeroed in on areas for improvement and committed himself to making the effort, he and his coach worked up a plan to turn his day-to-day job into a learning laboratory. For instance, Jack discovered he was empathetic when things were calm, but in a crisis, he tuned out others. This tendency hampered his ability to listen to what people were telling him in the very moments he most needed to do so. Jack’s plan required him to focus on his behavior during tough situations. As soon as he felt himself tensing up, his job was to immediately step back, let the other person speak, and then ask clarifying questions. The point was to not act judgmental or hostile under pressure.

The change didn’t come easily, but with practice Jack learned to defuse his flare-ups by entering into a dialogue instead of launching a harangue. Although he didn’t always agree with them, at least he gave people a chance to make their case. At the same time, Jack also practiced giving his direct reports more positive feedback and reminding them of how their work contributed to the group’s mission. And he restrained himself from micromanaging them.

Jack met with his coach every week or two to review his progress and get advice on specific problems. For instance, occasionally Jack would find himself falling back on his old pacesetting tactics—cutting people off, jumping in to take over, and blowing up in a rage. Almost immediately, he would regret it. So he and his coach dissected those relapses to figure out what triggered the old ways and what to do the next time a similar moment arose. Such “relapse prevention” measures inoculate people against future lapses or just giving up. Over a six-month period, Jack made real improvement. His own records showed he had reduced the number of flare-ups from one or more a day at the beginning to just one or two a month. The climate had improved sharply, and the division’s numbers were starting to creep upward.

Why does improving an emotional intelligence competence take months rather than days? Because the emotional centers of the brain, not just the neocortex, are involved. The neocortex, the thinking brain that learns technical skills and purely cognitive abilities, gains knowledge very quickly, but the emotional brain does not. To master a new behavior, the emotional centers need repetition and practice. Improving your emotional intelligence, then, is akin to changing your habits. Brain circuits that carry leadership habits have to unlearn the old ones and replace them with the new. The more often a behavioral sequence is repeated, the stronger the underlying brain circuits become. At some point, the new neural pathways become the brain’s default option. When that happened, Jack was able to go through the paces of leadership effortlessly, using styles that worked for him—and the whole company.

For instance, an affiliative leader has strengths in three emotional intelligence competencies: in empathy, in building relationships, and in communication. Empathy—sensing how people are feeling in the moment—allows the affiliative leader to respond to employees in a way that is highly congruent with that person’s emotions, thus building rapport. The affiliative leader also displays a natural ease in forming new relationships, getting to know someone as a person, and cultivating a bond. Finally, the outstanding affiliative leader has mastered the art of interpersonal communication, particularly in saying just the right thing or making the apt symbolic gesture at just the right moment.

So if you are primarily a pacesetting leader who wants to be able to use the affiliative style more often, you would need to improve your level of empathy and, perhaps, your skills at building relationships or communicating effectively. As another example, an authoritative leader who wants to add the democratic style to his repertory might need to work on the capabilities of collaboration and communication. Such advice about adding capabilities may seem simplistic—“Go change yourself”—but enhancing emotional intelligence is entirely possible with practice. (For more on how to improve emotional intelligence, see the sidebar “Growing Your Emotional Intelligence.”)

More Science, Less Art

Like parenthood, leadership will never be an exact science. But neither should it be a complete mystery to those who practice it. In recent years, research has helped parents understand the genetic, psychological, and behavioral components that affect their “job performance.” With our new research, leaders, too, can get a clearer picture of what it takes to lead effectively. And perhaps as important, they can see how they can make that happen.

The business environment is continually changing, and a leader must respond in kind. Hour to hour, day to day, week to week, executives must play their leadership styles like a pro—using the right one at just the right time and in the right measure. The payoff is in the results.

Originally published in March 2000. Reprint R00204

Notes

1. Daniel Goleman consults with Hay/McBer on leadership development.

One More Time

How Do You Motivate Employees? by Frederick Herzberg

HOW MANY ARTICLES, BOOKS, speeches, and workshops have pleaded plaintively, “How do I get an employee to do what I want?”

The psychology of motivation is tremendously complex, and what has been unraveled with any degree of assurance is small indeed. But the dismal ratio of knowledge to speculation has not dampened the enthusiasm for new forms of snake oil that are constantly coming on the market, many of them with academic testimonials. Doubtless this article will have no depressing impact on the market for snake oil, but since the ideas expressed in it have been tested in many corporations and other organizations, it will help—I hope—to redress the imbalance in the aforementioned ratio.

“Motivating” with KITA

In lectures to industry on the problem, I have found that the audiences are usually anxious for quick and practical answers, so I will begin with a straightforward, practical formula for moving people.

What is the simplest, surest, and most direct way of getting someone to do something? Ask? But if the person responds that he or she does not want to do it, then that calls for psychological consultation to determine the reason for such obstinacy. Tell the person? The response shows that he or she does not understand you, and now an expert in communication methods has to be brought in to show you how to get through. Give the person a monetary incentive? I do not need to remind the reader of the complexity and difficulty involved in setting up and administering an incentive system. Show the person? This means a costly training program. We need a simple way.

Every audience contains the “direct action” manager who shouts, “Kick the person!” And this type of manager is right. The surest and least circumlocuted way of getting someone to do something is to administer a kick in the pants—to give what might be called the KITA.

There are various forms of KITA, and here are some of them:

Negative physical KITA

This is a literal application of the term and was frequently used in the past. It has, however, three major drawbacks: 1) It is inelegant; 2) it contradicts the precious image of benevolence that most organizations cherish; and 3) since it is a physical attack, it directly stimulates the autonomic nervous system, and this often results in negative feedback—the employee may just kick you in return. These factors give rise to certain taboos against negative physical KITA.

In uncovering infinite sources of psychological vulnerabilities and the appropriate methods to play tunes on them, psychologists have come to the rescue of those who are no longer permitted to use negative physical KITA. “He took my rug away”; “I wonder what she meant by that”; “The boss is always going around me”—these symptomatic expressions of ego sores that have been rubbed raw are the result of application of:

Negative psychological KITA

This has several advantages over negative physical KITA. First, the cruelty is not visible; the bleeding is internal and comes much later. Second, since it affects the higher cortical centers of the brain with its inhibitory powers, it reduces the possibility of physical backlash. Third, since the number of psychological pains that a person can feel is almost infinite, the direction and site possibilities of the KITA are increased many times. Fourth, the person administering the kick can manage to be above it all and let the system accomplish the dirty work. Fifth, those who practice it receive some ego satisfaction (oneupmanship), whereas they would find drawing blood abhorrent. Finally, if the employee does complain, he or she can always be accused of being paranoid; there is no tangible evidence of an actual attack.

Idea in Brief

Imagine your workforce so motivated that employees relish more hours of work, not fewer, initiate increased responsibility themselves, and boast about their challenging work, not their paychecks or bonuses.

An impossible dream? Not if you understand the counterintuitive force behind motivation—and the ineffectiveness of most performance incentives. Despite media attention to the contrary, motivation does not come from perks, plush offices, or even promotions or pay. These extrinsic incentives may stimulate people to put their noses to the grindstone—but they’ll likely perform only as long as it takes to get that next raise or promotion.

The truth? You and your organization have only limited power to motivate employees. Yes, unfair salaries may damage morale. But when you do offer fat paychecks and other extrinsic incentives, people won’t necessarily work harder or smarter.

Why? Most of us are motivated by intrinsic rewards: interesting, challenging work, and the opportunity to achieve and grow into greater responsibility.

Of course, you have to provide some extrinsic incentives. After all, few of us can afford to work for no salary. But the real key to motivating your employees is enabling them to activate their own internal generators. Otherwise, you’ll be stuck trying to recharge their batteries yourself—again and again.

Now, what does negative KITA accomplish? If I kick you in the rear (physically or psychologically), who is motivated? I am motivated; you move! Negative KITA does not lead to motivation, but to movement. So:

Idea in Practice

How do you help employees charge themselves up? Enrich their jobs by applying these principles:

• Increase individuals’ accountability for their work by removing some controls.

• Give people responsibility for a complete process or unit of work.

• Make information available directly to employees rather than sending it through their managers first.

• Enable people to take on new, more difficult tasks they haven’t handled before.

• Assign individuals specialized tasks that allow them to become experts.

The payoff? Employees gain an enhanced sense of responsibility and achievement, along with new opportunities to learn and grow—continually.

Example: A large firm began enriching stockholder correspondents’ jobs by appointing subject-matter experts within each unit—then encouraging other unit members to consult with them before seeking supervisory help. It also held correspondents personally responsible for their communications’ quality and quantity. Supervisors who had proofread and signed all letters now checked only 10% of them. And rather than harping on production quotas, supervisors no longer discussed daily quantities.

These deceptively modest changes paid big dividends: Within six months, the correspondents’ motivation soared—as measured by their answers to questions such as “How many opportunities do you feel you have in your job for making worthwhile contributions?” Equally valuable, their performance noticeably improved, as measured by their communications’ quality and accuracy, and their speed of response to stockholders.

Job enrichment isn’t easy. Managers may initially fear that they’ll no longer be needed once their direct reports take on more responsibility. Employees will likely require time to master new tasks and challenges.

But managers will eventually rediscover their real functions, for example, developing staff rather than simply checking their work. And employees’ enthusiasm and commitment will ultimately rise—along with your company’s overall performance.

Positive KITA

Let us consider motivation. If I say to you, “Do this for me or the company, and in return I will give you a reward, an incentive, more status, a promotion, all the quid pro quos that exist in the industrial organization,” am I motivating you? The overwhelming opinion I receive from management people is, “Yes, this is motivation.”

I have a year-old schnauzer. When it was a small puppy and I wanted it to move, I kicked it in the rear and it moved. Now that I have finished its obedience training, I hold up a dog biscuit when I want the schnauzer to move. In this instance, who is motivated—I or the dog? The dog wants the biscuit, but it is I who want it to move. Again, I am the one who is motivated, and the dog is the one who moves. In this instance all I did was apply KITA frontally; I exerted a pull instead of a push. When industry wishes to use such positive KITAs, it has available an incredible number and variety of dog biscuits (jelly beans for humans) to wave in front of employees to get them to jump.

Myths About Motivation

Why is KITA not motivation? If I kick my dog (from the front or the back), he will move. And when I want him to move again, what must I do? I must kick him again. Similarly, I can charge a person’s battery, and then recharge it, and recharge it again. But it is only when one has a generator of one’s own that we can talk about motivation. One then needs no outside stimulation. One wants to do it.

With this in mind, we can review some positive KITA personnel practices that were developed as attempts to instill “motivation”:

1. Reducing time spent at work

This represents a marvelous way of motivating people to work—getting them off the job! We have reduced (formally and informally) the time spent on the job over the last 50 or 60 years until we are finally on the way to the “6-day weekend.” An interesting variant of this approach is the development of off-hour recreation programs. The philosophy here seems to be that those who play together, work together. The fact is that motivated people seek more hours of work, not fewer.

2. Spiraling wages

Have these motivated people? Yes, to seek the next wage increase. Some medievalists still can be heard to say that a good depression will get employees moving. They feel that if rising wages don’t or won’t do the job, reducing them will.

3. Fringe benefits

Industry has outdone the most welfare-minded of welfare states in dispensing cradle-to-the-grave succor. One company I know of had an informal “fringe benefit of the month club” going for a while. The cost of fringe benefits in this country has reached approximately 25% of the wage dollar, and we still cry for motivation.

People spend less time working for more money and more security than ever before, and the trend cannot be reversed. These benefits are no longer rewards; they are rights. A 6-day week is inhuman, a 10-hour day is exploitation, extended medical coverage is a basic decency, and stock options are the salvation of American initiative. Unless the ante is continuously raised, the psychological reaction of employees is that the company is turning back the clock.

When industry began to realize that both the economic nerve and the lazy nerve of their employees had insatiable appetites, it started to listen to the behavioral scientists who, more out of a humanist tradition than from scientific study, criticized management for not knowing how to deal with people. The next KITA easily followed.

4. Human relations training

More than 30 years of teaching and, in many instances, of practicing psychological approaches to handling people have resulted in costly human relations programs and, in the end, the same question: How do you motivate workers? Here, too, escalations have taken place. Thirty years ago it was necessary to request, “Please don’t spit on the floor.” Today the same admonition requires three “pleases” before the employee feels that a superior has demonstrated the psychologically proper attitude.

The failure of human relations training to produce motivation led to the conclusion that supervisors or managers themselves were not psychologically true to themselves in their practice of interpersonal decency. So an advanced form of human relations KITA, sensitivity training, was unfolded.

5. Sensitivity training

Do you really, really understand yourself? Do you really, really, really trust other people? Do you really, really, really, really cooperate? The failure of sensitivity training is now being explained, by those who have become opportunistic exploiters of the technique, as a failure to really (five times) conduct proper sensitivity training courses.

With the realization that there are only temporary gains from comfort and economic and interpersonal KITA, personnel managers concluded that the fault lay not in what they were doing, but in the employee’s failure to appreciate what they were doing. This opened up the field of communications, a new area of “scientifically” sanctioned KITA.

6. Communications

The professor of communications was invited to join the faculty of management training programs and help in making employees understand what management was doing for them. House organs, briefing sessions, supervisory instruction on the importance of communication, and all sorts of propaganda have proliferated until today there is even an International Council of Industrial Editors. But no motivation resulted, and the obvious thought occurred that perhaps management was not hearing what the employees were saying. That led to the next KITA.

7. Two-way communication

Management ordered morale surveys, suggestion plans, and group participation programs. Then both management and employees were communicating and listening to each other more than ever, but without much improvement in motivation.

The behavioral scientists began to take another look at their conceptions and their data, and they took human relations one step further. A glimmer of truth was beginning to show through in the writings of the so-called higher-order-need psychologists. People, so they said, want to actualize themselves. Unfortunately, the “actualizing” psychologists got mixed up with the human relations psychologists, and a new KITA emerged.

8. Job participation

Though it may not have been the theoretical intention, job participation often became a “give them the big picture” approach. For example, if a man is tightening 10,000 nuts a day on an assembly line with a torque wrench, tell him he is building a Chevrolet. Another approach had the goal of giving employees a “feeling” that they are determining, in some measure, what they do on the job. The goal was to provide a sense of achievement rather than a substantive achievement in the task. Real achievement, of course, requires a task that makes it possible.

But still there was no motivation. This led to the inevitable conclusion that the employees must be sick, and therefore to the next KITA.

9. Employee counseling

The initial use of this form of KITA in a systematic fashion can be credited to the Hawthorne experiment of the Western Electric Company during the early 1930s. At that time, it was found that the employees harbored irrational feelings that were interfering with the rational operation of the factory. Counseling in this instance was a means of letting the employees unburden themselves by talking to someone about their problems. Although the counseling techniques were primitive, the program was large indeed.

The counseling approach suffered as a result of experiences during World War II, when the programs themselves were found to be interfering with the operation of the organizations; the counselors had forgotten their role of benevolent listeners and were attempting to do something about the problems that they heard about. Psychological counseling, however, has managed to survive the negative impact of World War II experiences and today is beginning to flourish with renewed sophistication. But, alas, many of these programs, like all the others, do not seem to have lessened the pressure of demands to find out how to motivate workers.

Since KITA results only in short-term movement, it is safe to predict that the cost of these programs will increase steadily and new varieties will be developed as old positive KITAs reach their satiation points.

Hygiene vs. Motivators

Let me rephrase the perennial question this way: How do you install a generator in an employee? A brief review of my motivation-hygiene theory of job attitudes is required before theoretical and practical suggestions can be offered. The theory was first drawn from an examination of events in the lives of engineers and accountants. At least 16 other investigations, using a wide variety of populations (including some in the Communist countries), have since been completed, making the original research one of the most replicated studies in the field of job attitudes.

The findings of these studies, along with corroboration from many other investigations using different procedures, suggest that the factors involved in producing job satisfaction (and motivation) are separate and distinct from the factors that lead to job dissatisfaction. (See “Factors affecting job attitudes as reported in 12 investigations,” which is further explained below.) Since separate factors need to be considered, depending on whether job satisfaction or job dissatisfaction is being examined, it follows that these two feelings are not opposites of each other. The opposite of job satisfaction is not job dissatisfaction but, rather, no job satisfaction; and similarly, the opposite of job dissatisfaction is not job satisfaction, but no job dissatisfaction.

Factors affecting job attitudes as reported in 12 investigations

Stating the concept presents a problem in semantics, for we normally think of satisfaction and dissatisfaction as opposites; i.e., what is not satisfying must be dissatisfying, and vice versa. But when it comes to understanding the behavior of people in their jobs, more than a play on words is involved.

Two different needs of human beings are involved here. One set of needs can be thought of as stemming from humankind’s animal nature—the built-in drive to avoid pain from the environment, plus all the learned drives that become conditioned to the basic biological needs. For example, hunger, a basic biological drive, makes it necessary to earn money, and then money becomes a specific drive. The other set of needs relates to that unique human characteristic, the ability to achieve and, through achievement, to experience psychological growth. The stimuli for the growth needs are tasks that induce growth; in the industrial setting, they are the job content. Contrariwise, the stimuli inducing pain-avoidance behavior are found in the job environment.

The growth or motivator factors that are intrinsic to the job are: achievement, recognition for achievement, the work itself, responsibility, and growth or advancement. The dissatisfaction-avoidance or hygiene (KITA) factors that are extrinsic to the job include: company policy and administration, supervision, interpersonal relationships, working conditions, salary, status, and security.

A composite of the factors that are involved in causing job satisfaction and job dissatisfaction, drawn from samples of 1,685 employees, is shown in “Factors affecting job attitudes as reported in 12 investigations.” The results indicate that motivators were the primary cause of satisfaction, and hygiene factors the primary cause of unhappiness on the job. The employees, studied in 12 different investigations, included lower level supervisors, professional women, agricultural administrators, men about to retire from management positions, hospital maintenance personnel, manufacturing supervisors, nurses, food handlers, military officers, engineers, scientists, housekeepers, teachers, technicians, female assemblers, accountants, Finnish foremen, and Hungarian engineers.

They were asked what job events had occurred in their work that had led to extreme satisfaction or extreme dissatisfaction on their part. Their responses are broken down in the figure into percentages of total “positive” job events and of total “negative” job events. (The figures total more than 100% on both the “hygiene” and “motivators” sides because often at least two factors can be attributed to a single event; advancement, for instance, often accompanies assumption of responsibility.)

To illustrate, a typical response involving achievement that had a negative effect for the employee was, “I was unhappy because I didn’t do the job successfully.” A typical response in the small number of positive job events in the company policy and administration grouping was, “I was happy because the company reorganized the section so that I didn’t report any longer to the guy I didn’t get along with.”

As the lower right-hand part of the figure shows, of all the factors contributing to job satisfaction, 81% were motivators. And of all the factors contributing to the employees’ dissatisfaction over their work, 69% involved hygiene elements.

Eternal triangle

There are three general philosophies of personnel management. The first is based on organizational theory, the second on industrial engineering, and the third on behavioral science.

Organizational theorists believe that human needs are either so irrational or so varied and adjustable to specific situations that the major function of personnel management is to be as pragmatic as the occasion demands. If jobs are organized in a proper manner, they reason, the result will be the most efficient job structure, and the most favorable job attitudes will follow as a matter of course.

Industrial engineers hold that humankind is mechanistically oriented and economically motivated and that human needs are best met by attuning the individual to the most efficient work process. The goal of personnel management therefore should be to concoct the most appropriate incentive system and to design the specific working conditions in a way that facilitates the most efficient use of the human machine. By structuring jobs in a manner that leads to the most efficient operation, engineers believe that they can obtain the optimal organization of work and the proper work attitudes.

Behavioral scientists focus on group sentiments, attitudes of individual employees, and the organization’s social and psychological climate. This persuasion emphasizes one or more of the various hygiene and motivator needs. Its approach to personnel management is generally to emphasize some form of human relations education, in the hope of instilling healthy employee attitudes and an organizational climate that is considered to be felicitous to human values. The belief is that proper attitudes will lead to efficient job and organizational structure.

There is always a lively debate concerning the overall effectiveness of the approaches of organizational theorists and industrial engineers. Manifestly, both have achieved much. But the nagging question for behavioral scientists has been: What is the cost in human problems that eventually cause more expense to the organization—for instance, turnover, absenteeism, errors, violation of safety rules, strikes, restriction of output, higher wages, and greater fringe benefits? On the other hand, behavioral scientists are hard put to document much manifest improvement in personnel management, using their approach.

The motivation-hygiene theory suggests that work be enriched to bring about effective utilization of personnel. Such a systematic attempt to motivate employees by manipulating the motivator factors is just beginning. The term job enrichment describes this embryonic movement. An older term, job enlargement, should be avoided because it is associated with past failures stemming from a misunderstanding of the problem. Job enrichment provides the opportunity for the employee’s psychological growth, while job enlargement merely makes a job structurally bigger. Since scientific job enrichment is very new, this article only suggests the principles and practical steps that have recently emerged from several successful experiments in industry.

Job loading

In attempting to enrich certain jobs, management often reduces the personal contribution of employees rather than giving them opportunities for growth in their accustomed jobs. Such endeavors, which I shall call horizontal job loading (as opposed to vertical loading, or providing motivator factors), have been the problem of earlier job enlargement programs. Job loading merely enlarges the meaninglessness of the job. Some examples of this approach, and their effect, are:

• Challenging the employee by increasing the amount of production expected. If each tightens 10,000 bolts a day, see if each can tighten 20,000 bolts a day. The arithmetic involved shows that multiplying zero by zero still equals zero.

• Adding another meaningless task to the existing one, usually some routine clerical activity. The arithmetic here is adding zero to zero.

• Rotating the assignments of a number of jobs that need to be enriched. This means washing dishes for a while, then washing silverware. The arithmetic is substituting one zero for another zero.

• Removing the most difficult parts of the assignment in order to free the worker to accomplish more of the less challenging assignments. This traditional industrial engineering approach amounts to subtraction in the hope of accomplishing addition.

These are common forms of horizontal loading that frequently come up in preliminary brainstorming sessions of job enrichment. The principles of vertical loading have not all been worked out as yet, and they remain rather general, but I have furnished seven useful starting points for consideration in “Principles of vertical job loading.”

A successful application

An example from a highly successful job enrichment experiment can illustrate the distinction between horizontal and vertical loading of a job. The subjects of this study were the stockholder correspondents employed by a very large corporation. Seemingly, the task required of these carefully selected and highly trained correspondents was quite complex and challenging. But almost all indexes of performance and job attitudes were low, and exit interviewing confirmed that the challenge of the job existed merely as words.

Principles of vertical job loading

A job enrichment project was initiated in the form of an experiment with one group, designated as an achieving unit, having its job enriched by the principles described in “Principles of vertical job loading.” A control group continued to do its job in the traditional way. (There were also two “uncommitted” groups of correspondents formed to measure the so-called Hawthorne effect—that is, to gauge whether productivity and attitudes toward the job changed artificially merely because employees sensed that the company was paying more attention to them in doing something different or novel. The results for these groups were substantially the same as for the control group, and for the sake of simplicity I do not deal with them in this summary.) No changes in hygiene were introduced for either group other than those that would have been made anyway, such as normal pay increases.

Employee performance in company experiment

Three-month cumulative average

The changes for the achieving unit were introduced in the first two months, averaging one per week of the seven motivators listed in “Principles of vertical job loading.” At the end of six months the members of the achieving unit were found to be outperforming their counterparts in the control group and, in addition, indicated a marked increase in their liking for their jobs. Other results showed that the achieving group had lower absenteeism and, subsequently, a much higher rate of promotion.

“Employee performance in company experiment” illustrates the changes in performance, measured in February and March, before the study period began, and at the end of each month of the study period. The shareholder service index represents quality of letters, including accuracy of information, and speed of response to stockholders’ letters of inquiry. The index of a current month was averaged into the average of the two prior months, which means that improvement was harder to obtain if the indexes of the previous months were low. The “achievers” were performing less well before the six-month period started, and their performance service index continued to decline after the introduction of the motivators, evidently because of uncertainty after their newly granted responsibilities. In the third month, however, performance improved, and soon the members of this group had reached a high level of accomplishment.

“Change in attitudes toward tasks in company experiment” shows the two groups’ attitudes toward their job, measured at the end of March, just before the first motivator was introduced, and again at the end of September. The correspondents were asked 16 questions, all involving motivation. A typical one was, “As you see it, how many opportunities do you feel that you have in your job for making worthwhile contributions?” The answers were scaled from 1 to 5, with 80 as the maximum possible score. The achievers became much more positive about their job, while the attitude of the control unit remained about the same (the drop is not statistically significant).

How was the job of these correspondents restructured? “Enlargement versus enrichment of correspondents’ tasks in company experiment” lists the suggestions made that were deemed to be horizontal loading, and the actual vertical loading changes that were incorporated in the job of the achieving unit. The capital letters under “Principle” after “Vertical Loading” refer to the corresponding letters in “Principles of vertical job loading.” The reader will note that the rejected forms of horizontal loading correspond closely to the list of common manifestations I mentioned earlier.

Steps for Job Enrichment

Now that the motivator idea has been described in practice, here are the steps that managers should take in instituting the principle with their employees:

1. Select those jobs in which a) the investment in industrial engineering does not make changes too costly, b) attitudes are poor, c) hygiene is becoming very costly, and d) motivation will make a difference in performance.

2. Approach these jobs with the conviction that they can be changed. Years of tradition have led managers to believe that job content is sacrosanct and the only scope of action that they have is in ways of stimulating people.

3. Brainstorm a list of changes that may enrich the jobs, without concern for their practicality.

4. Screen the list to eliminate suggestions that involve hygiene, rather than actual motivation.

5. Screen the list for generalities, such as “give them more responsibility,” that are rarely followed in practice. This might seem obvious, but the motivator words have never left industry; the substance has just been rationalized and organized out. Words like “responsibility,” “growth,” “achievement,” and “challenge,” for example, have been elevated to the lyrics of the patriotic anthem for all organizations. It is the old problem typified by the pledge of allegiance to the flag being more important than contributions to the country—of following the form, rather than the substance.

6. Screen the list to eliminate any horizontal loading suggestions.

7. Avoid direct participation by the employees whose jobs are to be enriched. Ideas they have expressed previously certainly constitute a valuable source for recommended changes, but their direct involvement contaminates the process with human relations hygiene and, more specifically, gives them only a sense of making a contribution. The job is to be changed, and it is the content that will produce the motivation, not attitudes about being involved or the challenge inherent in setting up a job. That process will be over shortly, and it is what the employees will be doing from then on that will determine their motivation. A sense of participation will result only in short-term movement.

8. In the initial attempts at job enrichment, set up a controlled experiment. At least two equivalent groups should be chosen, one an experimental unit in which the motivators are systematically introduced over a period of time, and the other one a control group in which no changes are made. For both groups, hygiene should be allowed to follow its natural course for the duration of the experiment. Pre- and post-installation tests of performance and job attitudes are necessary to evaluate the effectiveness of the job enrichment program. The attitude test must be limited to motivator items in order to divorce employees’ views of the jobs they are given from all the surrounding hygiene feelings that they might have.

9. Be prepared for a drop in performance in the experimental group the first few weeks. The changeover to a new job may lead to a temporary reduction in efficiency.

10. Expect your first-line supervisors to experience some anxiety and hostility over the changes you are making. The anxiety comes from their fear that the changes will result in poorer performance for their unit. Hostility will arise when the employees start assuming what the supervisors regard as their own responsibility for performance. The supervisor without checking duties to perform may then be left with little to do.

After successful experiment, however, the supervisors usually discover the supervisory and managerial functions they have neglected, or which were never theirs because all their time was given over to checking the work of their subordinates. For example, in the R&D division of one large chemical company I know of, the supervisors of the laboratory assistants were theoretically responsible for their training and evaluation. These functions, however, had come to be performed in a routine, unsubstantial fashion. After the job enrichment program, during which the supervisors were not merely passive observers of the assistants’ performance, the supervisors actually were devoting their time to reviewing performance and administering thorough training.

Change in attitudes toward tasks in company experiment

Mean scores at beginning and end of six-month period

Enlargement versus enrichment of correspondents’ tasks in company experiment

Horizontal loading suggestions rejected

What has been called an employee-centered style of supervision will come about not through education of supervisors, but by changing the jobs that they do.

_____________________

Job enrichment will not be a one-time proposition, but a continuous management function. The initial changes should last for a very long period of time. There are a number of reasons for this:

• The changes should bring the job up to the level of challenge commensurate with the skill that was hired.

• Those who have still more ability eventually will be able to demonstrate it better and win promotion to higher level jobs.

• The very nature of motivators, as opposed to hygiene factors, is that they have a much longer-term effect on employees’ attitudes. It is possible that the job will have to be enriched again, but this will not occur as frequently as the need for hygiene.

Not all jobs can be enriched, nor do all jobs need to be enriched. If only a small percentage of the time and money that is now devoted to hygiene, however, were given to job enrichment efforts, the return in human satisfaction and economic gain would be one of the largest dividends that industry and society have ever reaped through their efforts at better personnel management.

The argument for job enrichment can be summed up quite simply: If you have employees on a job, use them. If you can’t use them on the job, get rid of them, either via automation or by selecting someone with lesser ability. If you can’t use them and you can’t get rid of them, you will have a motivation problem.

Originally published in September 1987. Reprint R0301F

The Set-Up-to-Fail Syndrome

by Jean-François Manzoni and Jean-Louis Barsoux

WHEN AN EMPLOYEE FAILS—or even just performs poorly—managers typically do not blame themselves. The employee doesn’t understand the work, a manager might contend. Or the employee isn’t driven to succeed, can’t set priorities, or won’t take direction. Whatever the reason, the problem is assumed to be the employee’s fault—and the employee’s responsibility.

But is it? Sometimes, of course, the answer is yes. Some employees are not up to their assigned tasks and never will be, for lack of knowledge, skill, or simple desire. But sometimes—and we would venture to say often—an employee’s poor performance can be blamed largely on his boss.

Perhaps “blamed” is too strong a word, but it is directionally correct. In fact, our research strongly suggests that bosses—albeit accidentally and usually with the best intentions—are often complicit in an employee’s lack of success. (See the sidebar “About the Research.”) How? By creating and reinforcing a dynamic that essentially sets up perceived underperformers to fail. If the Pygmalion effect describes the dynamic in which an individual lives up to great expectations, the set-up-to-fail syndrome explains the opposite. It describes a dynamic in which employees perceived to be mediocre or weak performers live down to the low expectations their managers have for them. The result is that they often end up leaving the organization—either of their own volition or not.

The syndrome usually begins surreptitiously. The initial impetus can be performance related, such as when an employee loses a client, undershoots a target, or misses a deadline. Often, however, the trigger is less specific. An employee is transferred into a division with a lukewarm recommendation from a previous boss. Or perhaps the boss and the employee don’t really get along on a personal basis—several studies have indeed shown that compatibility between boss and subordinate, based on similarity of attitudes, values, or social characteristics, can have a significant impact on a boss’s impressions. In any case, the syndrome is set in motion when the boss begins to worry that the employee’s performance is not up to par.

The boss then takes what seems like the obvious action in light of the subordinate’s perceived shortcomings: he increases the time and attention he focuses on the employee. He requires the employee to get approval before making decisions, asks to see more paperwork documenting those decisions, or watches the employee at meetings more closely and critiques his comments more intensely.

These actions are intended to boost performance and prevent the subordinate from making errors. Unfortunately, however, subordinates often interpret the heightened supervision as a lack of trust and confidence. In time, because of low expectations, they come to doubt their own thinking and ability, and they lose the motivation to make autonomous decisions or to take any action at all. The boss, they figure, will just question everything they do—or do it himself anyway.

Ironically, the boss sees the subordinate’s withdrawal as proof that the subordinate is indeed a poor performer. The subordinate, after all, isn’t contributing his ideas or energy to the organization. So what does the boss do? He increases his pressure and supervision again—watching, questioning, and double-checking everything the subordinate does. Eventually, the subordinate gives up on his dreams of making a meaningful contribution. Boss and subordinate typically settle into a routine that is not really satisfactory but, aside from periodic clashes, is otherwise bearable for them. In the worst-case scenario, the boss’s intense intervention and scrutiny end up paralyzing the employee into inaction and consume so much of the boss’s time that the employee quits or is fired. (See “The set-up-to-fail syndrome: No harm intended: A relationship spirals from bad to worse.”)

Idea in Brief

That darned employee! His performance keeps deteriorating—despite your close monitoring. What’s going on?

Brace yourself: You may be at fault, by unknowingly triggering the set-up-to-fail syndrome. Employees whom you (perhaps falsely) view as weak performers live down to your expectations. Here’s how:

1. You start with a positive relationship.

2. Something—a missed deadline, a lost client—makes you question the employee’s performance. You begin micromanaging him.

3. Suspecting your reduced confidence, the employee starts doubting himself. He stops giving his best, responds mechanically to your controls, and avoids decisions.

4. You view his new behavior as additional proof of mediocrity—and tighten the screws further.

Why not just fire him? Because you’re likely to repeat the pattern with others. Better to reverse the dynamic instead. Unwinding the set-up-to-fail spiral actually pays big dividends: Your company gets the best from your employees—and from you.

Perhaps the most daunting aspect of the set-up-to-fail syndrome is that it is self-fulfilling and self-reinforcing—it is the quintessential vicious circle. The process is self-fulfilling because the boss’s actions contribute to the very behavior that is expected from weak performers. It is self-reinforcing because the boss’s low expectations, in being fulfilled by his subordinates, trigger more of the same behavior on his part, which in turn triggers more of the same behavior on the part of subordinates. And on and on, unintentionally, the relationship spirals downward.

A case in point is the story of Steve, a manufacturing supervisor for a Fortune 100 company. When we first met Steve, he came across as highly motivated, energetic, and enterprising. He was on top of his operation, monitoring problems and addressing them quickly. His boss expressed great confidence in him and gave him an excellent performance rating. Because of his high performance, Steve was chosen to lead a new production line considered essential to the plant’s future.

Idea in Practice

How Set-Up-to-Fail Starts

A manager categorizes employees as “in” or “out,” based on:

• early perceptions of employees’ motivation, initiative, creativity, strategic perspectives;

• previous bosses’ impressions;

• an early mishap; and

• boss-subordinate incompatibility.

The manager then notices only evidence supporting his categorization, while dismissing contradictory evidence. The boss also treats the groups differently:

• “In” groups get autonomy, feedback, and expressions of confidence.

• “Out” groups get controlling, formal management emphasizing rules.

The Costs of Set-Up-to-Fail

This syndrome hurts everyone:

• Employees stop volunteering ideas and information and asking for help, avoid contact with bosses, or grow defensive.

• The organization fails to get the most from employees.

• The boss loses energy to attend to other activities. His reputation suffers as other employees deem him unfair.

• Team spirit wilts as targeted performers are alienated and strong performers are overburdened.

How to Reverse Set-Up-to-Fail

If the syndrome hasn’t started, prevent it:

• Establish expectations with new employees early. Loosen the reins as they master their jobs.

• Regularly challenge your own assumptions. Ask: “What are the facts regarding this employee’s performance?” “Is he really that bad?”

• Convey openness, letting employees challenge your opinions. They’ll feel comfortable discussing their performance and relationship with you.

If the syndrome has already erupted, discuss the dynamic with the employee:

1. Choose a neutral, nonthreatening location; use affirming language (“Let’s discuss our relationship and roles”); and acknowledge your part in the tension.

2. Agree on the employee’s weaknesses and strengths. Support assessments with facts, not feelings.

3. Unearth causes of the weaknesses. Do you disagree on priorities? Does your employee lack specific knowledge or skills? Ask: “How is my behavior making things worse for you?”

4. Identify ways to boost performance. Training? New experiences? Decide the quantity and type of supervision you’ll provide. Affirm your desire to improve matters.

5. Agree to communicate more openly: “Next time I do something that communicates low expectations, can you let me know immediately?”

In his new job, Steve reported to Jeff, who had just been promoted to a senior management position at the plant. In the first few weeks of the relationship, Jeff periodically asked Steve to write up short analyses of significant quality-control rejections. Although Jeff didn’t really explain this to Steve at the time, his request had two major objectives: to generate information that would help both of them learn the new production process, and to help Steve develop the habit of systematically performing root cause analysis of quality-related problems. Also, being new on the job himself, Jeff wanted to show his own boss that he was on top of the operation.

Unaware of Jeff’s motives, Steve balked. Why, he wondered, should he submit reports on information he understood and monitored himself? Partly due to lack of time, partly in response to what he considered interference from his boss, Steve invested little energy in the reports. Their tardiness and below-average quality annoyed Jeff, who began to suspect that Steve was not a particularly proactive manager. When he asked for the reports again, he was more forceful. For Steve, this merely confirmed that Jeff did not trust him. He withdrew more and more from interaction with him, meeting his demands with increased passive resistance. Before long, Jeff became convinced that Steve was not effective enough and couldn’t handle his job without help. He started to supervise Steve’s every move—to Steve’s predictable dismay. One year after excitedly taking on the new production line, Steve was so dispirited he was thinking of quitting.

How can managers break the set-up-to-fail syndrome? Before answering that question, let’s take a closer look at the dynamics that set the syndrome in motion and keep it going.

Deconstructing the Syndrome

We said earlier that the set-up-to-fail syndrome usually starts surreptitiously—that is, it is a dynamic that usually creeps up on the boss and the subordinate until suddenly both of them realize that the relationship has gone sour. But underlying the syndrome are several assumptions about weaker performers that bosses appear to accept uniformly. Our research shows, in fact, that executives typically compare weaker performers with stronger performers using the following descriptors:

• less motivated, less energetic, and less likely to go beyond the call of duty;

• more passive when it comes to taking charge of problems or projects;

• less aggressive about anticipating problems;

• less innovative and less likely to suggest ideas;

• more parochial in their vision and strategic perspective;

• more prone to hoard information and assert their authority, making them poor bosses to their own subordinates.

It is not surprising that on the basis of these assumptions, bosses tend to treat weaker and stronger performers very differently. Indeed, numerous studies have shown that up to 90% of all managers treat some subordinates as though they were members of an in-group, while they consign others to membership in an out-group. Members of the in-group are considered the trusted collaborators and therefore receive more autonomy, feedback, and expressions of confidence from their bosses. The boss-subordinate relationship for this group is one of mutual trust and reciprocal influence. Members of the out-group, on the other hand, are regarded more as hired hands and are managed in a more formal, less personal way, with more emphasis on rules, policies, and authority. (For more on how bosses treat weaker and stronger performers differently, see the chart “In with the In Crowd, Out with the Out.”)

Why do managers categorize subordinates into either in-groups or out-groups? For the same reason that we tend to typecast our family, friends, and acquaintances: it makes life easier. Labeling is something we all do, because it allows us to function more efficiently. It saves time by providing rough-and-ready guides for interpreting events and interacting with others. Managers, for instance, use categorical thinking to figure out quickly who should get what tasks. That’s the good news.

The downside of categorical thinking is that in organizations it leads to premature closure. Having made up his mind about a subordinate’s limited ability and poor motivation, a manager is likely to notice supporting evidence while selectively dismissing contrary evidence. (For example, a manager might interpret a terrific new product idea from an out-group subordinate as a lucky onetime event.) Unfortunately for some subordinates, several studies show that bosses tend to make decisions about in-groups and out-groups even as early as five days into their relationships with employees.

Are bosses aware of this sorting process and of their different approaches to “in” and “out” employees? Definitely. In fact, the bosses we have studied, regardless of nationality, company, or personal background, were usually quite conscious of behaving in a more controlling way with perceived weaker performers. Some of them preferred to label this approach as “supportive and helpful.” Many of them also acknowledged that—although they tried not to—they tended to become impatient with weaker performers more easily than with stronger performers. By and large, however, managers are aware of the controlling nature of their behavior toward perceived weaker performers. For them, this behavior is not an error in implementation; it is intentional.

About the Research

This article is based on two studies designed to understand better the causal relationship between leadership style and subordinate performance—in other words, to explore how bosses and subordinates mutually influence each other’s behavior. The first study, which comprised surveys, interviews, and observations, involved 50 boss-subordinate pairs in four manufacturing operations in Fortune 100 companies. The second study, involving an informal survey of about 850 senior managers attending INSEAD executive-development programs over the last three years, was done to test and refine the findings generated by the first study. The executives in the second study represented a wide diversity of nationalities, industries, and personal backgrounds.

What bosses typically do not realize is that their tight controls end up hurting subordinates’ performance by undermining their motivation in two ways: first, by depriving subordinates of autonomy on the job and, second, by making them feel undervalued. Tight controls are an indication that the boss assumes the subordinate can’t perform well without strict guidelines. When the subordinate senses these low expectations, it can undermine his self-confidence. This is particularly problematic because numerous studies confirm that people perform up or down to the levels their bosses expect from them or, indeed, to the levels they expect from themselves.[1]

Of course, executives often tell us, “Oh, but I’m very careful about this issue of expectations. I exert more control over my under-performers, but I make sure that it does not come across as a lack of trust or confidence in their ability.” We believe what these executives tell us. That is, we believe that they do try hard to disguise their intentions. When we talk to their subordinates, however, we find that these efforts are for the most part futile. In fact, our research shows that most employees can—and do—“read their boss’s mind.” In particular, they know full well whether they fit into their boss’s in-group or out-group. All they have to do is compare how they are treated with how their more highly regarded colleagues are treated.

The Set-Up-to-Fail Syndrome

No harm intended: A relationship spirals from bad to worse

1. Before the set-up-to-fail syndrome begins, the boss and the subordinate are typically engaged in a positive, or at least neutral, relationship.

2. The triggering event in the set-up-to-fail syndrome is often minor or surreptitious. The subordinate may miss a deadline, lose a client, or submit a subpar report. In other cases, the syndrome’s genesis is the boss, who distances himself from the subordinate for personal or social reasons unrelated to performance.

3. Reacting to the triggering event, the boss increases his supervision of the subordinate, gives more specific instructions, and wrangles longer over courses of action.

4. The subordinate responds by beginning to suspect a lack of confidence and senses he’s not part of the boss’s in-group anymore.

He starts to withdraw emotionally from the boss and from work. He may also fight to change the boss’s image of him, reaching too high or running too fast to be effective.

5. The boss interprets this problem-hoarding, overreaching, or tentativeness as signs that the subordinate has poor judgment and weak capabilities. If the subordinate does perform well, the boss does not acknowledge it or considers it a lucky “one off.”

He limits the subordinate’s discretion, withholds social contact, and shows, with increasing openness, his lack of confidence in and frustration with the subordinate.

6. The subordinate feels boxed in and underappreciated. He increasingly withdraws from his boss and from work. He may even resort to ignoring instructions, openly disputing the boss, and occasionally lashing out because of feelings of rejection.

In general, he performs his job mechanically and devotes more energy to self-protection. Moreover, he refers all nonroutine decisions to the boss or avoids contact with him.

7. The boss feels increasingly frustrated and is now convinced that the subordinate cannot perform without intense oversight. He makes this known by his words and deeds, further undermining the subordinate’s confidence and prompting inaction.

8. When the set-up-to-fail syndrome is in full swing, the boss pressures and controls the subordinate during interactions. Otherwise, he avoids contact and gives the subordinate routine assignments only.

For his part, the subordinate shuts down or leaves, either in dismay, frustration, or anger.

Just as the boss’s assumptions about weaker performers and the right way to manage them explains his complicity in the set-up-to-fail syndrome, the subordinate’s assumptions about what the boss is thinking explain his own complicity. The reason? When people perceive disapproval, criticism, or simply a lack of confidence and appreciation, they tend to shut down—a behavioral phenomenon that manifests itself in several ways.

Primarily, shutting down means disconnecting intellectually and emotionally. Subordinates simply stop giving their best. They grow tired of being overruled, and they lose the will to fight for their ideas. As one subordinate put it, “My boss tells me how to execute every detail. Rather than arguing with him, I’ve ended up wanting to say, ‘Come on, just tell me what you want me to do, and I’ll go do it.’ You become a robot.” Another perceived weak performer explained, “When my boss tells me to do something, I just do it mechanically.”

In with the In Crowd, Out with the Out

Shutting down also involves disengaging personally—essentially reducing contact with the boss. Partly, this disengagement is motivated by the nature of previous exchanges that have tended to be negative in tone. As one subordinate admitted, “I used to initiate much more contact with my boss until the only thing I received was negative feedback; then I started shying away.”

Besides the risk of a negative reaction, perceived weaker performers are concerned with not tainting their images further. Following the often-heard aphorism “Better to keep quiet and look like a fool than to open your mouth and prove it,” they avoid asking for help for fear of further exposing their limitations. They also tend to volunteer less information—a simple “heads up” from a perceived under-performer can cause the boss to overreact and jump into action when none is required. As one perceived weak performer recalled, “I just wanted to let my boss know about a small matter, only slightly out of the routine, but as soon as I mentioned it, he was all over my case. I should have kept my mouth closed. I do now.”

Finally, shutting down can mean becoming defensive. Many perceived underperformers start devoting more energy to self-justification. Anticipating that they will be personally blamed for failures, they seek to find excuses early. They end up spending a lot of time looking in the rearview mirror and less time looking at the road ahead. In some cases—as in the case of Steve, the manufacturing supervisor described earlier—this defensiveness can lead to noncompliance or even systematic opposition to the boss’s views. While this idea of a weak subordinate going head to head with his boss may seem irrational, it may reflect what Albert Camus once observed: “When deprived of choice, the only freedom left is the freedom to say no.”

The Syndrome Is Costly

There are two obvious costs of the set-up-to-fail syndrome: the emotional cost paid by the subordinate and the organizational cost associated with the company’s failure to get the best out of an employee. Yet there are other costs to consider, some of them indirect and long term.

The boss pays for the syndrome in several ways. First, uneasy relationships with perceived low performers often sap the boss’s emotional and physical energy. It can be quite a strain to keep up a facade of courtesy and pretend everything is fine when both parties know it is not. In addition, the energy devoted to trying to fix these relationships or improve the subordinate’s performance through increased supervision prevents the boss from attending to other activities—which often frustrates or even angers the boss.

Furthermore, the syndrome can take its toll on the boss’s reputation, as other employees in the organization observe his behavior toward weaker performers. If the boss’s treatment of a subordinate is deemed unfair or unsupportive, observers will be quick to draw their lessons. One outstanding performer commented on his boss’s controlling and hypercritical behavior toward another subordinate: “It made us all feel like we’re expendable.” As organizations increasingly espouse the virtues of learning and empowerment, managers must cultivate their reputations as coaches, as well as get results.

The set-up-to-fail syndrome also has serious consequences for any team. A lack of faith in perceived weaker performers can tempt bosses to overload those whom they consider superior performers; bosses want to entrust critical assignments to those who can be counted on to deliver reliably and quickly and to those who will go beyond the call of duty because of their strong sense of shared fate. As one boss half-jokingly said, “Rule number one: if you want something done, give it to someone who’s busy—there’s a reason why that person is busy.”

An increased workload may help perceived superior performers learn to manage their time better, especially as they start to delegate to their own subordinates more effectively. In many cases, however, these performers simply absorb the greater load and higher stress which, over time, takes a personal toll and decreases the attention they can devote to other dimensions of their jobs, particularly those yielding longer-term benefits. In the worst-case scenario, overburdening strong performers can lead to burnout.

Team spirit can also suffer from the progressive alienation of one or more perceived low performers. Great teams share a sense of enthusiasm and commitment to a common mission. Even when members of the boss’s out-group try to keep their pain to themselves, other team members feel the strain. One manager recalled the discomfort experienced by the whole team as they watched their boss grill one of their peers every week. As he explained, “A team is like a functioning organism. If one member is suffering, the whole team feels that pain.”

In addition, alienated subordinates often do not keep their suffering to themselves. In the corridors or over lunch, they seek out sympathetic ears to vent their recriminations and complaints, not only wasting their own time but also pulling their colleagues away from productive work. Instead of focusing on the team’s mission, valuable time and energy is diverted to the discussion of internal politics and dynamics.

Finally, the set-up-to-fail syndrome has consequences for the subordinates of the perceived weak performers. Consider the weakest kid in the school yard who gets pummeled by a bully. The abused child often goes home and pummels his smaller, weaker siblings. So it is with the people who are in the boss’s out-group. When they have to manage their own employees, they frequently replicate the behavior that their bosses show to them. They fail to recognize good results or, more often, supervise their employees excessively.

Breaking Out Is Hard to Do

The set-up-to-fail syndrome is not irreversible. Subordinates can break out of it, but we have found that to be rare. The subordinate must consistently deliver such superior results that the boss is forced to change the employee from out-group to in-group status—a phenomenon made difficult by the context in which these subordinates operate. It is hard for subordinates to impress their bosses when they must work on unchallenging tasks, with no autonomy and limited resources; it is also hard for them to persist and maintain high standards when they receive little encouragement from their bosses.

Furthermore, even if the subordinate achieves better results, it may take some time for them to register with the boss because of his selective observation and recall. Indeed, research shows that bosses tend to attribute the good things that happen to weaker performers to external factors rather than to their efforts and ability (while the opposite is true for perceived high performers: successes tend to be seen as theirs, and failures tend to be attributed to external uncontrollable factors). The subordinate will therefore need to achieve a string of successes in order to have the boss even contemplate revising the initial categorization. Clearly, it takes a special kind of courage, self-confidence, competence, and persistence on the part of the subordinate to break out of the syndrome.

Instead, what often happens is that members of the out-group set excessively ambitious goals for themselves to impress the boss quickly and powerfully—promising to hit a deadline three weeks early, for instance, or attacking six projects at the same time, or simply attempting to handle a large problem without help. Sadly, such superhuman efforts are usually just that. And in setting goals so high that they are bound to fail, the subordinates also come across as having had very poor judgment in the first place.

The set-up-to-fail syndrome is not restricted to incompetent bosses. We have seen it happen to people perceived within their organizations to be excellent bosses. Their mismanagement of some subordinates need not prevent them from achieving success, particularly when they and the perceived superior performers achieve high levels of individual performance. However, those bosses could be even more successful to the team, the organization, and themselves if they could break the syndrome.

Getting It Right

As a general rule, the first step in solving a problem is recognizing that one exists. This observation is especially relevant to the set-up-to-fail syndrome because of its self-fulfilling and self-reinforcing nature. Interrupting the syndrome requires that a manager understand the dynamic and, particularly, that he accept the possibility that his own behavior may be contributing to a subordinate’s underperformance. The next step toward cracking the syndrome, however, is more difficult: it requires a carefully planned and structured intervention that takes the form of one (or several) candid conversations meant to bring to the surface and untangle the unhealthy dynamics that define the boss and the subordinate’s relationship. The goal of such an intervention is to bring about a sustainable increase in the subordinate’s performance while progressively reducing the boss’s involvement.

It would be difficult—and indeed, detrimental—to provide a detailed script of what this kind of conversation should sound like. A boss who rigidly plans for this conversation with a subordinate will not be able to engage in real dialogue with him, because real dialogue requires flexibility. As a guiding framework, however, we offer five components that characterize effective interventions. Although they are not strictly sequential steps, all five components should be part of these interventions.

First, the boss must create the right context for the discussion

He must, for instance, select a time and place to conduct the meeting so that it presents as little threat as possible to the subordinate. A neutral location may be more conducive to open dialogue than an office where previous and perhaps unpleasant conversations have taken place. The boss must also use affirming language when asking the subordinate to meet with him. The session should not be billed as “feedback,” because such terms may suggest baggage from the past. “Feedback” could also be taken to mean that the conversation will be one-directional, a monologue delivered by the boss to the subordinate. Instead, the intervention should be described as a meeting to discuss the performance of the subordinate, the role of the boss, and the relationship between the subordinate and the boss. The boss might even acknowledge that he feels tension in the relationship and wants to use the conversation as a way to decrease it.

Finally, in setting the context, the boss should tell the perceived weaker performer that he would genuinely like the interaction to be an open dialogue. In particular, he should acknowledge that he may be partially responsible for the situation and that his own behavior toward the subordinate is fair game for discussion.

Second, the boss and the subordinate must use the intervention process to come to an agreement on the symptoms of the problem

Few employees are ineffective in all aspects of their performance. And few—if any—employees desire to do poorly on the job. Therefore, it is critical that the intervention result in a mutual understanding of the specific job responsibilities in which the subordinate is weak. In the case of Steve and Jeff, for instance, an exhaustive sorting of the evidence might have led to an agreement that Steve’s underperformance was not universal but instead largely confined to the quality of the reports he submitted (or failed to submit). In another situation, it might be agreed that a purchasing manager was weak when it came to finding off-shore suppliers and to voicing his ideas in meetings. Or a new investment professional and his boss might come to agree that his performance was subpar when it came to timing the sales and purchase of stocks, but they might also agree that his financial analysis of stocks was quite strong. The idea here is that before working to improve performance or reduce tension in a relationship, an agreement must be reached about what areas of performance contribute to the contentiousness.

We used the word “evidence” above in discussing the case of Steve and Jeff. That is because a boss needs to back up his performance assessments with facts and data—that is, if the intervention is to be useful. They cannot be based on feelings—as in Jeff telling Steve, “I just have the feeling you’re not putting enough energy into the reports.” Instead, Jeff needs to describe what a good report should look like and the ways in which Steve’s reports fall short. Likewise, the subordinate must be allowed—indeed, encouraged—to defend his performance, compare it with colleagues’ work, and point out areas in which he is strong. After all, just because it is the boss’s opinion does not make it a fact.

Third, the boss and the subordinate should arrive at a common understanding of what might be causing the weak performance in certain areas

Once the areas of weak performance have been identified, it is time to unearth the reasons for those weaknesses. Does the subordinate have limited skills in organizing work, managing his time, or working with others? Is he lacking knowledge or capabilities? Do the boss and the subordinate agree on their priorities? Maybe the subordinate has been paying less attention to a particular dimension of his work because he does not realize its importance to the boss. Does the subordinate become less effective under pressure? Does he have lower standards for performance than the boss does?

It is also critical in the intervention that the boss bring up the subject of his own behavior toward the subordinate and how this affects the subordinate’s performance. The boss might even try to describe the dynamics of the set-up-to-fail syndrome. “Does my behavior toward you make things worse for you?” he might ask, or, “What am I doing that is leading you to feel that I am putting too much pressure on you?”

This component of the discussion also needs to make explicit the assumptions that the boss and the subordinate have thus far been making about each other’s intentions. Many misunderstandings start with untested assumptions. For example, Jeff might have said, “When you did not supply me with the reports I asked for, I came to the conclusion that you were not very proactive.” That would have allowed Steve to bring his buried assumptions into the open. “No,” he might have answered, “I just reacted negatively because you asked for the reports in writing, which I took as a sign of excessive control.”

Fourth, the boss and the subordinate should arrive at an agreement about their performance objectives and on their desire to have the relationship move forward

In medicine, a course of treatment follows the diagnosis of an illness. Things are a bit more complex when repairing organizational dysfunction, since modifying behavior and developing complex skills can be more difficult than taking a few pills. Still, the principle that applies to medicine also applies to business: boss and subordinate must use the intervention to plot a course of treatment regarding the root problems they have jointly identified.

The contract between boss and subordinate should identify the ways they can improve on their skills, knowledge, experience, or personal relationship. It should also include an explicit discussion of how much and what type of future supervision the boss will have. No boss, of course, should suddenly abdicate his involvement; it is legitimate for bosses to monitor subordinates’ work, particularly when a subordinate has shown limited abilities in one or more facets of his job. From the subordinate’s point of view, however, such involvement by the boss is more likely to be accepted, and possibly even welcomed, if the goal is to help the subordinate develop and improve over time. Most subordinates can accept temporary involvement that is meant to decrease as their performance improves. The problem is intense monitoring that never seems to go away.

Fifth, the boss and the subordinate should agree to communicate more openly in the future

The boss could say, “Next time I do something that communicates low expectations, can you let me know immediately?” And the subordinate might say, or be encouraged to say, “Next time I do something that aggravates you or that you do not understand, can you also let me know right away?” Those simple requests can open the door to a more honest relationship almost instantly.

No Easy Answer

Our research suggests that interventions of this type do not take place very often. Face-to-face discussions about a subordinate’s performance tend to come high on the list of workplace situations people would rather avoid, because such conversations have the potential to make both parties feel threatened or embarrassed. Subordinates are reluctant to trigger the discussion because they are worried about coming across as thin-skinned or whiny. Bosses tend to avoid initiating these talks because they are concerned about the way the subordinate might react; the discussion could force the boss to make explicit his lack of confidence in the subordinate, in turn putting the subordinate on the defensive and making the situation worse.[2]

As a result, bosses who observe the dynamics of the set-up-to-fail syndrome being played out may be tempted to avoid an explicit discussion. Instead, they will proceed tacitly by trying to encourage their perceived weak performers. That approach has the short-term benefit of bypassing the discomfort of an open discussion, but it has three major disadvantages.

First, a one-sided approach on the part of the boss is less likely to lead to lasting improvement because it focuses on only one symptom of the problem—the boss’s behavior. It does not address the subordinate’s role in the underperformance.

Second, even if the boss’s encouragement were successful in improving the employee’s performance, a unilateral approach would limit what both he and the subordinate could otherwise learn from a more up-front handling of the problem. The subordinate, in particular, would not have the benefit of observing and learning from how his boss handled the difficulties in their relationship—problems the subordinate may come across someday with the people he manages.

Finally, bosses trying to modify their behavior in a unilateral way often end up going overboard; they suddenly give the subordinate more autonomy and responsibility than he can handle productively. Predictably, the subordinate fails to deliver to the boss’s satisfaction, which leaves the boss even more frustrated and convinced that the subordinate cannot function without intense supervision.

We are not saying that intervention is always the best course of action. Sometimes, intervention is not possible or desirable. There may be, for instance, overwhelming evidence that the subordinate is not capable of doing his job. He was a hiring or promotion mistake, which is best handled by removing him from the position. In other cases, the relationship between the boss and the subordinate is too far gone—too much damage has occurred to repair it. And finally, sometimes bosses are too busy and under too much pressure to invest the kind of resources that intervention involves.

Yet often the biggest obstacle to effective intervention is the boss’s mind-set. When a boss believes that a subordinate is a weak performer and, on top of everything else, that person also aggravates him, he is not going to be able to cover up his feelings with words; his underlying convictions will come out in the meeting. That is why preparation for the intervention is crucial. Before even deciding to have a meeting, the boss must separate emotion from reality. Was the situation always as bad as it is now? Is the subordinate really as bad as I think he is? What is the hard evidence I have for that belief? Could there be other factors, aside from performance, that have led me to label this subordinate a weak performer? Aren’t there a few things that he does well? He must have displayed above-average qualifications when we decided to hire him. Did these qualifications evaporate all of a sudden?

The boss might even want to mentally play out part of the conversation beforehand. If I say this to the subordinate, what might he answer? Yes, sure, he would say that it was not his fault and that the customer was unreasonable. Those excuses—are they really without merit? Could he have a point? Could it be that, under other circumstances, I might have looked more favorably upon them? And if I still believe I’m right, how can I help the subordinate see things more clearly?

The boss must also mentally prepare himself to be open to the subordinate’s views, even if the subordinate challenges him about any evidence regarding his poor performance. It will be easier for the boss to be open if, when preparing for the meeting, he has already challenged his own preconceptions.

Even when well prepared, bosses typically experience some degree of discomfort during intervention meetings. That is not all bad. The subordinate will probably be somewhat uncomfortable as well, and it is reassuring for him to see that his boss is a human being, too.

Calculating Costs and Benefits

As we’ve said, an intervention is not always advisable. But when it is, it results in a range of outcomes that are uniformly better than the alternative—that is, continued underperformance and tension. After all, bosses who systematically choose either to ignore their subordinates’ underperformance or to opt for the more expedient solution of simply removing perceived weak performers are condemned to keep repeating the same mistakes. Finding and training replacements for perceived weak performers is a costly and recurrent expense. So is monitoring and controlling the deteriorating performance of a disenchanted subordinate. Getting results in spite of one’s staff is not a sustainable solution. In other words, it makes sense to think of the intervention as an investment, not an expense—with the payback likely to be high.

How high that payback will be and what form it will take obviously depend on the outcome of the intervention, which will itself depend not only on the quality of the intervention but also on several key contextual factors: How long has that relationship been spiraling downward? Does the subordinate have the intellectual and emotional resources to make the effort that will be required? Does the boss have enough time and energy to do his part?

We have observed outcomes that can be clustered into three categories. In the best-case scenario, the intervention leads to a mixture of coaching, training, job redesign, and a clearing of the air; as a result, the relationship and the subordinate’s performance improve, and the costs associated with the syndrome go away or, at least, decrease measurably.

In the second-best scenario, the subordinate’s performance improves only marginally, but because the subordinate received an honest and open hearing from the boss, the relationship between the two becomes more productive. Boss and subordinate develop a better understanding of those job dimensions the subordinate can do well and those he struggles with. This improved understanding leads the boss and the subordinate to explore together how they can develop a better fit between the job and the subordinate’s strengths and weaknesses. That improved fit can be achieved by significantly modifying the subordinate’s existing job or by transferring the subordinate to another job within the company. It may even result in the subordinate’s choosing to leave the company.

While that outcome is not as successful as the first one, it is still productive; a more honest relationship eases the strain on both the boss and the subordinate, and in turn on the subordinate’s subordinates. If the subordinate moves to a new job within the organization that better suits him, he will likely become a stronger performer. His relocation may also open up a spot in his old job for a better performer. The key point is that, having been treated fairly, the subordinate is much more likely to accept the outcome of the process. Indeed, recent studies show that the perceived fairness of a process has a major impact on employees’ reactions to its outcomes. (See “Fair Process: Managing in the Knowledge Economy,” by W. Chan Kim and Renée Mauborgne, HBR July–August 1997.)

Such fairness is a benefit even in the cases where, despite the boss’s best efforts, neither the subordinate’s performance nor his relationship with his boss improves significantly. Sometimes this happens: the subordinate truly lacks the ability to meet the job requirements, he has no interest in making the effort to improve, and the boss and the subordinate have both professional and personal differences that are irreconcilable. In those cases, however, the intervention still yields indirect benefits because, even if termination follows, other employees within the company are less likely to feel expendable or betrayed when they see that the subordinate received fair treatment.

Prevention Is the Best Medicine

The set-up-to-fail syndrome is not an organizational fait accompli. It can be unwound. The first step is for the boss to become aware of its existence and acknowledge the possibility that he might be part of the problem. The second step requires that the boss initiate a clear, focused intervention. Such an intervention demands an open exchange between the boss and the subordinate based on the evidence of poor performance, its underlying causes, and their joint responsibilities—culminating in a joint decision on how to work toward eliminating the syndrome itself.

Reversing the syndrome requires managers to challenge their own assumptions. It also demands that they have the courage to look within themselves for causes and solutions before placing the burden of responsibility where it does not fully belong. Prevention of the syndrome, however, is clearly the best option.

In our current research, we examine prevention directly. Our results are still preliminary, but it appears that bosses who manage to consistently avoid the set-up-to-fail syndrome have several traits in common. They do not, interestingly, behave the same way with all subordinates. They are more involved with some subordinates than others—they even monitor some subordinates more than others. However, they do so without disempowering and discouraging subordinates.

How? One answer is that those managers begin by being actively involved with all their employees, gradually reducing their involvement based on improved performance. Early guidance is not threatening to subordinates, because it is not triggered by performance shortcomings; it is systematic and meant to help set the conditions for future success. Frequent contact in the beginning of the relationship gives the boss ample opportunity to communicate with subordinates about priorities, performance measures, time allocation, and even expectations of the type and frequency of communication. That kind of clarity goes a long way toward preventing the dynamic of the set-up-to-fail syndrome, which is so often fueled by unstated expectations and a lack of clarity about priorities.

For example, in the case of Steve and Jeff, Jeff could have made explicit very early on that he wanted Steve to set up a system that would analyze the root causes of quality control rejections systematically. He could have explained the benefits of establishing such a system during the initial stages of setting up the new production line, and he might have expressed his intention to be actively involved in the system’s design and early operation. His future involvement might then have decreased in such a way that could have been jointly agreed on at that stage.

Another way managers appear to avoid the set-up-to-fail syndrome is by challenging their own assumptions and attitudes about employees on an ongoing basis. They work hard at resisting the temptation to categorize employees in simplistic ways. They also monitor their own reasoning. For example, when feeling frustrated about a subordinate’s performance, they ask themselves, “What are the facts?” They examine whether they are expecting things from the employee that have not been articulated, and they try to be objective about how often and to what extent the employee has really failed. In other words, these bosses delve into their own assumptions and behavior before they initiate a full-blown intervention.

Finally, managers avoid the set-up-to-fail syndrome by creating an environment in which employees feel comfortable discussing their performance and their relationships with the boss. Such an environment is a function of several factors: the boss’s openness, his comfort level with having his own opinions challenged, even his sense of humor. The net result is that the boss and the subordinate feel free to communicate frequently and to ask one another questions about their respective behaviors before problems mushroom or ossify.

The methods used to head off the set-up-to-fail syndrome do, admittedly, involve a great deal of emotional investment from bosses—just as interventions do. We believe, however, that this higher emotional involvement is the key to getting subordinates to work to their full potential. As with most things in life, you can only expect to get a lot back if you put a lot in. As a senior executive once said to us, “The respect you give is the respect you get.” We concur. If you want—indeed, need—the people in your organization to devote their whole hearts and minds to their work, then you must, too.

Originally published in March 1998. Reprint 98209

Notes

1. The influence of expectations on performance has been observed in numerous experiments by Dov Eden and his colleagues. See Dov Eden, “Leadership and Expectations: Pygmalion Effects and Other Self-fulfilling Prophecies in Organizations,” Leadership Quarterly, Winter 1992, vol. 3, no. 4, pp. 271–305.

2. Chris Argyris has written extensively on how and why people tend to behave unproductively in situations they see as threatening or embarrassing. See, for example, Knowledge for Action: A Guide to Overcoming Barriers to Organizational Change (San Francisco: Jossey-Bass, 1993).

Saving Your Rookie Managers from Themselves

by Carol A. Walker

TOM EDELMAN, LIKE A million freshly minted managers before him, had done a marvelous job as an individual contributor. He was smart, confident, forward thinking, and resourceful. His clients liked him, as did his boss and coworkers. Consequently, no one in the department was surprised when his boss offered him a managerial position. Tom accepted with some ambivalence—he loved working directly with clients and was loath to give that up—but on balance, he was thrilled.

Six months later, when I was called into coach Tom (I’ve disguised his name), I had trouble even picturing the confident insider he once had been. He looked like a deer caught in the headlights. Tom seemed overwhelmed and indeed even used that word several times to describe how he felt. He had started to doubt his abilities. His direct reports, once close colleagues, no longer seemed to respect or even like him. What’s more, his department had been beset by a series of small crises, and Tom spent most of his time putting out these fires. He knew this wasn’t the most effective use of his time, but he didn’t know how to stop. These problems hadn’t yet translated into poor business results, but he was in trouble nonetheless.

His boss realized that he was in danger of failing and brought me in to assist. With support and coaching, Tom got the help he needed and eventually became an effective manager. Indeed, he has been promoted twice since I worked with him, and he now runs a small division within the same company. But his near failure—and the path that brought him to that point—is surprisingly typical. Most organizations promote employees into managerial positions based on their technical competence. Very often, however, those people fail to grasp how their roles have changed—that their jobs are no longer about personal achievement but instead about enabling others to achieve, that sometimes driving the bus means taking a backseat, and that building a team is often more important than cutting a deal. Even the best employees can have trouble adjusting to these new realities. That trouble may be exacerbated by normal insecurities that make rookie managers hesitant to ask for help, even when they find themselves in thoroughly unfamiliar territory. As these new managers internalize their stress, their focus becomes internal as well. They become insecure and self-focused and cannot properly support their teams. Inevitably, trust breaks down, staff members are alienated, and productivity suffers.

Many companies unwittingly support this downward spiral by assuming that their rookie managers will somehow learn critical management skills by osmosis. Some rookies do, to be sure, but in my experience they’re the exceptions. Most need more help. In the absence of comprehensive training and intensive coaching—which most companies don’t offer—the rookie manager’s boss plays a key role. Of course, it’s not possible for most senior managers to spend hours and hours every week overseeing a new manager’s work, but if you know what typical challenges a rookie manager faces, you’ll be able to anticipate some problems before they arise and nip others in the bud.

Delegating

Effective delegation may be one of the most difficult tasks for rookie managers. Senior managers bestow on them big responsibilities and tight deadlines, and they put a lot of pressure on them to produce results. The natural response of rookies when faced with such challenges is to “just do it,” thinking that’s what got them promoted in the first place. But their reluctance to delegate assignments also has its roots in some very real fears. First is the fear of losing stature: If I assign high-profile projects to my staff members, they’ll get the credit. What kind of visibility will I be left with? Will it be clear to my boss and my staff what value I’m adding? Second is the fear of abdicating control: If I allow Frank to do this, how can I be sure that he will do it correctly? In the face of this fear, the rookie manager may delegate tasks but supervise Frank so closely that he will never feel accountable. Finally, the rookie may be hesitant to delegate work because he’s afraid of overburdening his staff. He may be uncomfortable assigning work to former peers for fear that they’ll resent him. But the real resentment usually comes when staff members feel that lack of opportunity is blocking their advancement.

Idea in Brief

You’ve wisely promoted a top performer into management. Six months later, this rising star has fallen hard: He’s overwhelmed, fearful, not respected by his staff. Why?

You probably promoted him based on his technical competence—then expected him to learn management skills by osmosis.

But he didn’t grasp the real challenges of management—for example, empowering others versus striving for personal achievement. Insecure about asking for help, he turned inward. His team’s morale plummeted; productivity faltered.

How to save your erstwhile star? Help him master delegating, thinking strategically, and communicating—basic skills that trip up most new managers.

Signs that these fears may be playing out include new managers who work excessively long hours, are hesitant to take on new responsibilities, have staff members who seem unengaged, or have a tendency to answer on behalf of employees instead of encouraging them to communicate with you directly.

The first step toward helping young managers delegate effectively is to get them to understand their new role. Acknowledge that their job fundamentally differs from an individual contributor’s. Clarify what you and the organization value in leaders. Developing talented, promotable staff is critical in any company. Let new managers know that they will be rewarded for these less tangible efforts in addition to hitting numerical goals. Understanding this new role is half the battle for rookie managers, and one that many companies mistakenly assume is evident from the start.

Idea in Practice

Essential management skills for rookie managers:

Delegating. Under pressure to produce, rookies often “just do it” themselves because they fear losing control or overburdening others. But failure to delegate blocks their staffs’ advancement, making them resentful, and then disengaged.

How to help:

• Explain that developing staff is as essential as financial achievements.

• Lead by example. Trust and empower your rookie; he’ll engage his own team.

• Encourage him to take small risks in playing to his staff’s strengths. Early successes will build his confidence.

• Help him break complex projects into manageable chunks with clear milestones.

Getting support from above. Many rookie managers believe they’re in servitude to bosses, not in partnership. To avoid seeming vulnerable, they don’t ask for help. But if they don’t see you as a critical support source, they won’t see themselves as one for their team.

How to help:

• Emphasize that open communication is essential to your rookie’s success. Discourage covering up problems.

• Introduce him to other managers as resources.

• Have him prepare agendas for your regular meetings. The process will help him organize his thoughts.

Projecting confidence. Rookies who don’t project confidence won’t energize their teams. Frantic, arrogant, or insecure demeanors may repel others in the company.

How to help:

• Encourage “conscious comportment”: constant awareness of the image your rookie is projecting.

• Let him express his feelings—but in your office, behind closed doors.

• Keep him from undermining his own authority; e.g., by pushing an initiative only because top management requested it. Walk through the process of presenting an initiative persuasively, ensuring he can own the message—not just deliver it.

Focusing on the big picture. Many rookie managers let fire fighting eclipse strategic initiatives. Fire fighting feels productive—but it doesn’t teach teams to handle challenges themselves or think strategically.

How to help:

• Explain that strategic thinking will constitute more of your rookie’s work as his career advances.

• Help him focus on the long-term, big picture. Ask strategic questions; e.g., “What marketplace trends are you seeing that could affect you in six months?”

• Request written plans documenting strategic goals as well as concrete, supporting actions.

Giving constructive feedback. Most rookies dread correcting staffers’ inadequate performance. But avoidance costs managers their credibility.

How to help:

• Explain that constructive feedback strengthens staffers’ skills.

• Role-play giving feedback about behaviors, not personalities.

After clarifying how your rookie manager’s role has changed, you can move on to tactics. Perhaps it goes without saying, but you should lead by example. You have the responsibility to empower the rookie who works for you and do what you can to help him overcome his insecurities about his value to the organization. You can then assist him in looking for opportunities to empower and engage his team.

One young manager I worked with desperately needed to find time to train and supervise new employees. His firm had been recently acquired, and he had to deal with high staff turnover and new industrywide rules and regulations. The most senior person on his staff—a woman who had worked for the acquiring company—was about to return from an extended family leave, and he was convinced that he couldn’t ask her for help. After all, she had a part-time schedule, and she’d asked to be assigned to the company’s largest client. To complicate matters, he suspected that she resented his promotion. As we evaluated the situation, the manager was able to see that the senior staffer’s number one priority was reestablishing herself as an important part of the team. Once he realized this, he asked her to take on critical supervisory responsibilities, balanced with a smaller client load, and she eagerly agreed. Indeed, she returned from leave excited about partnering with her manager to develop the team.

When a new manager grumbles about mounting workloads, seize the opportunity to discuss delegation. Encourage him to take small risks initially, playing to the obvious strengths of his staff members. Asking his super-organized, reliable assistant to take the lead in handling the logistics of a new product launch, for example, is much less risky than asking a star salesperson, unaccustomed to this sort of detailed work, to do it. Early successes will build the manager’s confidence and willingness to take progressively larger risks in stretching each team member’s capabilities. Reinforce to him that delegation does not mean abdication. Breaking a complex project into manageable chunks, each with clearly defined milestones, makes effective follow-up easier. It’s also important to schedule regular meetings before the project even begins in order to ensure that the manager stays abreast of progress and that staff members feel accountable.

Getting Support from Above

Most first-time managers see their relationship with their boss more as one of servitude than of partnership. They will wait for you to initiate meetings, ask for reports, and question results. You may welcome this restraint, but generally it’s a bad sign. For one thing, it puts undue pressure on you to keep the flow of communication going. Even more important, it prevents new managers from looking to you as a critical source of support. If they don’t see you that way, it’s unlikely that they will see themselves that way for their own people. The problem isn’t only that your position intimidates them; it’s also that they fear being vulnerable. A newly promoted manager doesn’t want you to see weaknesses, lest you think you made a mistake in promoting her. When I ask rookie managers about their relationships with their bosses, they often admit that they are trying to “stay under the boss’s radar” and are “careful about what [they] say to the boss.”

Some inexperienced managers will not seek your help even when they start to founder. Seemingly capable rookie managers often try to cover up a failing project or relationship—just until they can get it back under control. For example, one manager I worked with at a technology company hired a professional 20 years her senior. The transition was rocky, and, despite her best efforts, the individual wasn’t acclimating to the organization. (The company, like many in the technology sector, was very youth oriented.) Rather than reaching out to her boss for help, the manager continued to grapple with the situation alone. The staff member ultimately resigned at the busiest time of the year, and the young manager suffered the dual punishment of being understaffed at the worst possible moment and having it known that she had lost a potentially important contributor.

What’s the boss of a rookie manager to do? You can begin by clarifying expectations. Explain the connection between the rookie’s success and your success, so that she understands that open communication is necessary for you to achieve your goals. Explain that you don’t expect her to have all the answers. Introduce her to other managers within the company who may be helpful, and encourage her to contact them as needed. Let her know that mistakes happen but that the cover-up is always worse than the crime. Let her know that you like to receive occasional lunch invitations as much as you like to extend them.

Lunch and drop-by meetings are important, but they usually aren’t enough. Consider meeting regularly with a new manager—perhaps weekly in the early stages of a new assignment, moving to biweekly or monthly as her confidence builds. These meetings will develop rapport, provide you with insight into how the person is approaching the job, and make the new manager organize her thoughts on a regular basis. Be clear that the meetings are her time and that it’s up to her to plan the agenda. You’re there to ask and answer questions and to offer advice. The message you send is that the individual’s work is important to you and that you’re a committed business partner. More subtly, you’re modeling how to simultaneously empower and guide direct reports.

Projecting Confidence

Looking confident when you don’t feel confident—it’s a challenge we all face, and as senior managers we’re usually conscious of the need when it arises. Rookie managers are often so internally focused that they are unaware of this need or the image they project. They are so focused on substance that they forget that form counts, too. The first weeks and months on the job are a critical time for new leaders to reach out to staff. If they don’t project confidence, they are unlikely to inspire and energize their teams.

I routinely work with new managers who are unaware that their everyday demeanor is hurting their organizations. In one rapidly growing technology company, the service manager, Linda, faced high levels of stress. Service outages were all too common, and they were beyond her control. Customers were exacting, and they too were under great pressure. Her rapidly growing staff was generally inexperienced. Distraught customers and employees had her tied up in knots almost daily. She consistently appeared breathless, rushed, and fearful that the other shoe was about to drop. The challenge was perhaps too big for a first-time manager, but that’s what happens in rapidly growing companies. On one level, Linda was doing an excellent job keeping the operation going. The client base was growing and retention was certainly high—largely as a result of her energy and resourcefulness. But on another level, she was doing a lot of damage.

Linda’s frantic demeanor had two critical repercussions. First, she had unwittingly defined the standard for acceptable conduct in her department, and her inexperienced staff began to display the same behaviors. Before long, other departments were reluctant to communicate with Linda or her team, for fear of bothering them or eliciting an emotional reaction. But for the company to arrive at real solutions to the service problems, departments needed to openly exchange information, and that wasn’t happening. Second, Linda was not portraying herself to senior managers as promotion material. They were pleased with her troubleshooting abilities, but they did not see a confident, thoughtful senior manager in the making. The image Linda was projecting would ultimately hold back both her career and her department.

Not all rookie managers display the problems that Linda did. Some appear excessively arrogant. Others wear their self-doubt on their sleeves. Whether your managers appear overwhelmed, arrogant, or insecure, honest feedback is your best tool. You can help rookie managers by telling them that it’s always safe to let out their feelings—in your office, behind closed doors. Reinforce just how long a shadow they cast once they assume leadership positions. Their staff members watch them closely, and if they see professionalism and optimism, they are likely to demonstrate those characteristics as well. Preach the gospel of conscious comportment—a constant awareness of the image one is projecting to the world. If you observe a manager projecting a less-than-positive image, tell that person right away.

You should also be alert to new managers who undermine their own authority. Linda made another classic rookie mistake when she attempted to get her staff members to implement an initiative that her boss had come up with. In presenting the initiative, she let her team know it was important to implement because it had come from the division’s senior vice president. While her intentions were good—rallying the team to perform—her words encouraged the group to focus attention above her rather than on her. There is no quicker way for a rookie manager to lose credibility with her staff than to appear to be a mouthpiece for senior management. Pointing out that senior management will be checking up on the initiative certainly won’t hurt, but the rookie manager must take care never to be perceived simply as the messenger.

Just-in-time coaching is often the most effective method for showing rookie managers how to project confidence. For instance, the first time you ask a new manager to carry out an initiative, take a little extra time to walk her through the process. Impress upon her the cardinal rule of management: Your staff members don’t necessarily have to like you, but they do need to trust you. Ensure that the new manager owns the message she’s delivering.

Layoffs are a classic example of a message the rookie manager will struggle with. Don’t allow a rookie to proceed half-prepared. Share as much information as you can. Make sure she’s ready for all the likely questions and reactions by asking her to do an informal dry run with you. You might be surprised by how poorly she conveys the message in her first few attempts. A little practice may preserve the image of your manager and your company.

Focusing on the Big Picture

Rookie managers have a real knack for allowing immediate tasks to overshadow overarching initiatives. This is particularly true for those promoted from within, because they’ve just come from the front lines where they’re accustomed to constant fire fighting. As a recent individual contributor armed with plenty of technical knowhow, the rookie manager instinctively runs to the immediate rescue of any client or staff member in need. The sense of accomplishment rookies get from such rescues is seductive and far more exhilarating than rooting out the cause of all the fire fighting. And what could be better for team spirit than having the boss jump into the trenches and fight the good fight?

Of course, a leader shows great team spirit if he joins the troops in emergencies. But are all those emergencies true emergencies? Are newer staff members being empowered to handle complex challenges? And if the rookie manager is busy fighting fires, who is thinking strategically for the department? If you’re the senior manager and these questions are popping into your head, you may well have a rookie manager who doesn’t fully understand his role or is afraid to seize it.

I recently worked with a young manager who had become so accustomed to responding to a steady flow of problems that he was reluctant to block off any time to work on the strategic initiatives we had identified. When I probed, he revealed that he felt a critical part of his role was to wait for crises to arise. “What if I schedule this time and something urgent comes up and I disappoint someone?” he asked. When I pointed out that he could always postpone his strategy sessions if a true emergency arose, he seemed relieved. But he saw the concept of making time to think about the business as self-indulgent—this, despite the fact that his group was going to be asked to raise productivity significantly in the following fiscal year, and he’d done nothing to prepare for that reality.

Senior managers can help rookies by explaining to them that strategic thinking is a necessary skill for career advancement: For first-time managers, 10% of the work might be strategic and 90% tactical. As executives climb the corporate ladder, however, those percentages will flip-flop. To be successful at the next level, managers must demonstrate that they can think and act strategically. You can use your regularly scheduled meetings to help your managers focus on the big picture. Don’t allow them to simply review the latest results and move on. Ask probing questions about those results. For example, “What trends are you seeing in the marketplace that could affect you in two quarters? Tell me how your competition is responding to those same trends.” Don’t let them regale you with the wonderful training their staffs have been getting without asking, “What additional skills do we need to build in the staff to increase productivity by 25% next year?” If you aren’t satisfied with your managers’ responses, let them know that you expect them to think this way—not to have all the answers, but to be fully engaged in the strategic thought process.

Rookie managers commonly focus on activities rather than on goals. That’s because activities can be accomplished quickly (for example, conducting a seminar to improve the sales staff’s presentation skills), whereas achieving goals generally takes more time (for example, actually enhancing the sales staff’s effectiveness). The senior manager can help the rookie manager think strategically by asking for written goals that clearly distinguish between the goals and their supporting activities. Insisting on a goal-setting discipline will help your new (and not-so-new) managers to organize their strategic game plans. Critical but soft goals, such as staff development, are often overlooked because they are difficult to measure. Putting such goals in print with clear action steps makes them concrete, rendering a sense of accomplishment when they are achieved and a greater likelihood that they will be rewarded. Managers with clear goals will be less tempted to become full-time tacticians. Just as important, the process will help you ensure that they are thinking about the right issues and deploying their teams effectively.

Giving Constructive Feedback

It’s human nature to avoid confrontations, and most people feel awkward when they have to correct others’ behavior or actions. Rookie managers are no exception, and they often avoid addressing important issues with their staff. The typical scenario goes something like this: A staff member is struggling to meet performance goals or is acting inappropriately in meetings. The manager sits back, watches, and hopes that things will magically improve. Other staff members observe the situation and become frustrated by the manager’s inaction. The manager’s own frustration builds, as she can’t believe the subordinate doesn’t get it. The straightforward performance issue has now evolved into a credibility problem. When the manager finally addresses the problem, she personalizes it, lets her frustration seep into the discussion with her staff member, and finds the recipient rushing to defend himself from attack.

Most inexperienced managers wait far too long to talk with staff about performance problems. The senior manager can help by creating an environment in which constructive feedback is perceived not as criticism but as a source of empowerment. This begins with the feedback you offer to your managers about their own development. It can be as simple as getting them to tell you where their weaknesses are before they become problematic. After a good performance review, for example, you might say to your new manager, “By all accounts, you have a bright future here, so it’s important that we talk about what you don’t want me to know. What are you feeling least confident about? How can we address those areas so that you’re ready for any opportunity that arises?” You’ll probably be surprised by how attuned most high performers are to their own development needs. But they are not likely to do much about them unless you put those needs on the table.

More than likely, the feedback your managers have to offer their staffs will not always be so positive or easy to deliver. The key is to foster in them the desire to help their reports achieve their goals. Under those circumstances, even loathsome personal issues become approachable.

One of my clients managed a high-performing senior staff member who was notably unhelpful to others in the department and who resented her own lack of advancement. Instead of avoiding the issue because he didn’t want to tell the staff member that she had a bad attitude, the senior manager took a more productive approach. He leveraged his knowledge of her personal goals to introduce the feedback. “I know that you’re anxious for your first management role, and one of my goals is to help you attain that. I can’t do that unless I’m completely honest with you. A big part of management is developing stronger skills in your staff. You aren’t demonstrating that you enjoy that role. How can we can work together on that?” No guilt, no admonishment—just an offer to help her get what she wanted. Yet the message was received loud and clear.

A brainstorming session this client and I had about ways to offer critical feedback led to that approach. Often, brainstorming sessions can help rookie managers see that sticky personal issues can be broken down into straightforward business issues. In the case of the unhelpful senior staff member, her attitude didn’t really need to enter the discussion; her actions did. Recommending a change in action is much easier than recommending a change in attitude. Never forget the old saw: You can’t ask people to change their personalities, but you can ask them to change their behaviors.

Indeed, senior managers should share their own techniques for dealing with difficult conversations. One manager I worked with became defensive whenever a staff member questioned her judgment. She didn’t really need me to tell her that her behavior was undermining her image and effectiveness. She did need me to offer her some techniques that would enable her to respond differently in the heat of the moment. She trained herself to respond quickly and earnestly with a small repertoire of questions like, “Can you tell me more about what you mean by that?” This simple technique bought her the time she needed to gather her thoughts and engage in an interchange that was productive rather than defensive. She was too close to the situation to come up with the technique herself.

_____________________

Delegating, thinking strategically, communicating—you may think this all sounds like Management 101. And you’re right. The most basic elements of management are often what trip up managers early in their careers. And because they are the basics, the bosses of rookie managers often take them for granted. They shouldn’t—an extraordinary number of people fail to develop these skills. I’ve maintained an illusion throughout this article—that only rookie managers suffer because they haven’t mastered these core skills. But the truth is, managers at all levels make these mistakes. An organization that supports its new managers by helping them to develop these skills will have surprising advantages over the competition.

Originally published in April 2002. Reprint R0204H

What Great Managers Do

by Marcus Buckingham

“THE BEST BOSS I EVER HAD.” That’s a phrase most of us have said or heard at some point, but what does it mean? What sets the great boss apart from the average boss? The literature is rife with provocative writing about the qualities of managers and leaders and whether the two differ, but little has been said about what happens in the thousands of daily interactions and decisions that allows managers to get the best out of their people and win their devotion. What do great managers actually do?

In my research, beginning with a survey of 80,000 managers conducted by the Gallup Organization and continuing during the past two years with in-depth studies of a few top performers, I’ve found that while there are as many styles of management as there are managers, there is one quality that sets truly great managers apart from the rest: They discover what is unique about each person and then capitalize on it. Average managers play checkers, while great managers play chess. The difference? In checkers, all the pieces are uniform and move in the same way; they are interchangeable. You need to plan and coordinate their movements, certainly, but they all move at the same pace, on parallel paths. In chess, each type of piece moves in a different way, and you can’t play if you don’t know how each piece moves. More important, you won’t win if you don’t think carefully about how you move the pieces. Great managers know and value the unique abilities and even the eccentricities of their employees, and they learn how best to integrate them into a coordinated plan of attack.

This is the exact opposite of what great leaders do. Great leaders discover what is universal and capitalize on it. Their job is to rally people toward a better future. Leaders can succeed in this only when they can cut through differences of race, sex, age, nationality, and personality and, using stories and celebrating heroes, tap into those very few needs we all share. The job of a manager, meanwhile, is to turn one person’s particular talent into performance. Managers will succeed only when they can identify and deploy the differences among people, challenging each employee to excel in his or her own way. This doesn’t mean a leader can’t be a manager or vice versa. But to excel at one or both, you must be aware of the very different skills each role requires.

The Game of Chess

What does the chess game look like in action? When I visited Michelle Miller, the manager who opened Walgreens’ 4,000th store, I found the wall of her back office papered with work schedules. Michelle’s store in Redondo Beach, California, employs people with sharply different skills and potentially disruptive differences in personality. A critical part of her job, therefore, is to put people into roles and shifts that will allow them to shine—and to avoid putting clashing personalities together. At the same time, she needs to find ways for individuals to grow.

There’s Jeffrey, for example, a “goth rocker” whose hair is shaved on one side and long enough on the other side to cover his face. Michelle almost didn’t hire him because he couldn’t quite look her in the eye during his interview, but he wanted the hard-to-cover night shift, so she decided to give him a chance. After a couple of months, she noticed that when she gave Jeffrey a vague assignment, such as “Straighten up the merchandise in every aisle,” what should have been a two-hour job would take him all night—and wouldn’t be done very well. But if she gave him a more specific task, such as “Put up all the risers for Christmas,” all the risers would be symmetrical, with the right merchandise on each one, perfectly priced, labeled, and “faced” (turned toward the customer). Give Jeffrey a generic task, and he would struggle. Give him one that forced him to be accurate and analytical, and he would excel. This, Michelle concluded, was Jeffrey’s forte. So, as any good manager would do, she told him what she had deduced about him and praised him for his good work.

Idea in Brief

You’ve spent months coaching that employee to treat customers better, work more independently, or get organized—all to no avail.

How to make better use of your precious time? Do what great managers do: Instead of trying to change your employees, identify their unique abilities (and even their eccentricities)—then help them use those qualities to excel in their own way.

You’ll need these three tactics:

• Continuously tweak roles to capitalize on individual strengths. One Walgreens store manager put a laconic but highly organized employee in charge of restocking aisles—freeing up more sociable employees to serve customers.

• Pull the triggers that activate employees’ strengths. Offer incentives such as time spent with you, opportunities to work independently, and recognition in forms each employee values most.

• Tailor coaching to unique learning styles. Give “analyzers” the information they need before starting a task. Start “doers” off with simple tasks, then gradually raise the bar. Let “watchers” ride shotgun with your most experienced performers.

The payoff for capitalizing on employees’ unique strengths? You save time. Your people take ownership for improving their skills. And you teach employees to value differences—building a powerful sense of team.

And a good manager would have left it at that. But Michelle knew she could get more out Jeffrey. So she devised a scheme to reassign responsibilities across the entire store to capitalize on his unique strengths. In every Walgreens, there is a responsibility called “resets and revisions.” A reset involves stocking an aisle with new merchandise, a task that usually coincides with a predictable change in customer buying patterns (at the end of summer, for example, the stores will replace sun creams and lip balms with allergy medicines). A revision is a less time-consuming but more frequent version of the same thing: Replace these cartons of toothpaste with this new and improved variety. Display this new line of detergent at this end of the row. Each aisle requires some form of revision at least once a week.

Idea in Practice

A closer look at the three tactics:

Capitalize on Employees’ Strengths

First identify each employee’s unique strengths: Walk around, observing people’s reactions to events. Note activities each employee is drawn to. Ask “What was the best day at work you’ve had in the past three months?” Listen for activities people find intrinsically satisfying.

Watch for weaknesses, too, but downplay them in your communications with employees. Offer training to help employees overcome shortcomings stemming from lack of skills or knowledge. Otherwise, apply these strategies:

• Find the employee a partner with complementary talents. A merchandising manager who couldn’t start tasks without exhaustive information performed superbly once her supervisor (the VP) began acting as her “information partner.” The VP committed to leaving the manager a brief voicemail update daily and arranging two “touch base” conversations weekly.

• Reconfigure work to neutralize weaknesses. Use your creativity to envision more effective work arrangements, and be courageous about adopting unconventional job designs.

Activate Employees’ Strengths

The ultimate trigger for activating an employee’s strengths is recognition. But each employee plays to a different audience. So tailor your praise accordingly.

Tailor Coaching to Learning Style

Adapt your coaching efforts to each employee’s unique learning style:

In most Walgreens stores, each employee “owns” one aisle, where she is responsible not only for serving customers but also for facing the merchandise, keeping the aisle clean and orderly, tagging items with a Telxon gun, and conducting all resets and revisions. This arrangement is simple and efficient, and it affords each employee a sense of personal responsibility. But Michelle decided that since Jeffrey was so good at resets and revisions—and didn’t enjoy interacting with customers—this should be his full-time job, in every single aisle.

It was a challenge. One week’s worth of revisions requires a binder three inches thick. But Michelle reasoned that not only would Jeffrey be excited by the challenge and get better and better with practice, but other employees would be freed from what they considered a chore and have more time to greet and serve customers. The store’s performance proved her right. After the reorganization, Michelle saw not only increases in sales and profit but also in that most critical performance metric, customer satisfaction. In the subsequent four months, her store netted perfect scores in Walgreens’ mystery shopper program.

So far, so very good. Sadly, it didn’t last. This “perfect” arrangement depended on Jeffrey remaining content, and he didn’t. With his success at doing resets and revisions, his confidence grew, and six months into the job, he wanted to move into management. Michelle wasn’t disappointed by this, however; she was intrigued. She had watched Jeffrey’s progress closely and had already decided that he might do well as a manager, though he wouldn’t be a particularly emotive one. Besides, like any good chess player, she had been thinking a couple of moves ahead.

Over in the cosmetics aisle worked an employee named Genoa. Michelle saw Genoa as something of a double threat. Not only was she adept at putting customers at ease—she remembered their names, asked good questions, was welcoming yet professional when answering the phone—but she was also a neatnik. The cosmetics department was always perfectly faced, every product remained aligned, and everything was arranged just so. Her aisle was sexy: It made you want to reach out and touch the merchandise.

To capitalize on these twin talents, and to accommodate Jeffrey’s desire for promotion, Michelle shuffled the roles within the store once again. She split Jeffrey’s reset and revision job in two and gave the “revision” part of it to Genoa so that the whole store could now benefit from her ability to arrange merchandise attractively. But Michelle didn’t want the store to miss out on Genoa’s gift for customer service, so Michelle asked her to focus on the revision role only between 8:30 AM and 11 AM, and after that, when the store began to fill with customers on their lunch breaks, Genoa should shift her focus over to them.

She kept the reset role with Jeffrey. Assistant managers don’t usually have an ongoing responsibility in the store, but, Michelle reasoned, he was now so good and so fast at tearing an aisle apart and rebuilding it that he could easily finish a major reset during a five-hour stint, so he could handle resets along with his managerial responsibilities.

By the time you read this, the Jeffrey–Genoa configuration has probably outlived its usefulness, and Michelle has moved on to design other effective and inventive configurations. The ability to keep tweaking roles to capitalize on the uniqueness of each person is the essence of great management.

A manager’s approach to capitalizing on differences can vary tremendously from place to place. Walk into the back office at another Walgreens, this one in San Jose, California, managed by Jim Kawashima, and you won’t see a single work schedule. Instead, the walls are covered with sales figures and statistics, the best of them circled with red felt-tip pen, and dozens of photographs of sales contest winners, most featuring a customer service representative named Manjit.

Manjit outperforms her peers consistently. When I first heard about her, she had just won a competition in Walgreens’ suggestive selling program to sell the most units of Gillette deodorant in a month. The national average was 300; Manjit had sold 1,600. Disposable cameras, toothpaste, batteries—you name it, she could sell it. And Manjit won contest after contest despite working the graveyard shift, from 12:30 AM to 8:30 AM, during which she met significantly fewer customers than did her peers.

Manjit hadn’t always been such an exceptional performer. She became stunningly successful only when Jim, who has made a habit of resuscitating troubled stores, came on board. What did Jim do to initiate the change in Manjit? He quickly picked up on her idiosyncrasies and figured out how to translate them into outstanding performance. For example, back in India, Manjit was an athlete—a runner and a weight lifter—and had always thrilled to the challenge of measured performance. When I interviewed her, one of the first things out of her mouth was, “On Saturday, I sold 343 low-carb candy bars. On Sunday, I sold 367. Yesterday, 110, and today, 105.” I asked if she always knows how well she’s doing. “Oh yes,” she replied. “Every day I check Mr. K’s charts. Even on my day off, I make a point to come in and check my numbers.”

The Research

TO GATHER THE RAW MATERIAL for my book The One Thing You Need to Know: About Great Managing, Great Leading, and Sustained Individual Success, from which this article has been adapted, I chose an approach that is rather different from the one I used for my previous books. For 17 years, I had the good fortune to work with the Gallup Organization, one of the most respected research firms in the world. During that time, I was given the opportunity to interview some of the world’s best leaders, managers, teachers, salespeople, stockbrokers, lawyers, and public servants. These interviews were a part of large-scale studies that involved surveying groups of people in the hopes of finding broad patterns in the data. For my book, I used this foundation as the jumping-off point for deeper, more individualized research.

In each of the three areas targeted in the book—managing, leading, and sustained individual success—I first identified one or two people in various roles and fields who had measurably, consistently, and dramatically outperformed their peers. These individuals included Myrtle Potter, president of commercial operations for Genentech, who transformed a failing drug into the highest selling prescription drug in the world; Sir Terry Leahy, the president of the European retailing giant Tesco; Manjit, the customer service representative from Jim Kawashima’s top-performing Walgreens store in San Jose, California, who sold more than 1,600 units of Gillette deodorant in one month; and David Koepp, the prolific screenwriter who penned such blockbusters as Jurassic Park, Mission: Impossible, and Spider-Man.

What interested me about these high achievers was the practical, seemingly banal details of their actions and their choices. Why did Myrtle Potter repeatedly turn down promotions before taking on the challenge of turning around that failing drug? Why did Terry Leahy rely more on the memories of his working-class upbringing to define his company’s strategy than on the results of customer surveys or focus groups? Manjit works the night shift, and one of her hobbies is weight lifting. Are those factors relevant to her performance? What were these special people doing that made them so very good at their roles?

Once these many details were duly noted and recorded, they slowly came together to reveal the “one thing” at the core of great managing, great leading, and sustained individual success.

Manjit loves to win and revels in public recognition. Hence, Jim’s walls are covered with charts and figures, Manjit’s scores are always highlighted in red, and there are photos documenting her success. Another manager might have asked Manjit to curb her enthusiasm for the limelight and give someone else a chance. Jim found a way to capitalize on it.

But what about Jim’s other staff members? Instead of being resentful of Manjit’s public recognition, the other employees came to understand that Jim took the time to see them as individuals and evaluate them based on their personal strengths. They also knew that Manjit’s success spoke well of the entire store, so her success galvanized the team. In fact, before long, the pictures of Manjit began to include other employees from the store, too. After a few months, the San Jose location was ranked number one out of 4,000 in Walgreens’ suggestive selling program.

Great Managers Are Romantics

Think back to Michelle. Her creative choreography may sound like a last resort, an attempt to make the best of a bad hire. It’s not. Jeffrey and Genoa are not mediocre employees, and capitalizing on each person’s uniqueness is a tremendously powerful tool.

First, identifying and capitalizing on each person’s uniqueness saves time. No employee, however talented, is perfectly well-rounded. Michelle could have spent untold hours coaching Jeffrey and cajoling him into smiling at, making friends with, and remembering the names of customers, but she probably would have seen little result for her efforts. Her time was much better spent carving out a role that took advantage of Jeffrey’s natural abilities.

The Elusive “One Thing”

IT’S BOLD TO CHARACTERIZE ANYTHING as the explanation or solution, so it’s a risky move to make such definitive assertions as “this is the one thing all great managers do.” But with enough research and focus, it is possible to identify that elusive “one thing.”

I like to think of the concept of “one thing” as a “controlling insight.” Controlling insights don’t explain all outcomes or events; they serve as the best explanation of the greatest number of events. Such insights help you know which of your actions will have the most far-reaching influence in virtually every situation.

For a concept to emerge as the single controlling insight, it must pass three tests. First, it must be applicable across a wide range of situations. Take leadership as an example. Lately, much has been made of the notion that there is no one best way to lead and that instead, the most effective leadership style depends on the circumstance. While there is no doubt that different situations require different actions from a leader, that doesn’t mean the most insightful thing you can say about leadership is that it’s situational. With enough focus, you can identify the one thing that underpins successful leadership across all situations and all styles.

Second, a controlling insight must serve as a multiplier. In any equation, some factors will have only an additive value: When you focus your actions on these factors, you see some incremental improvement. The controlling insight should be more powerful. It should show you how to get exponential improvement. For example, good managing is the result of a combination of many actions—selecting talented employees, setting clear expectations, catching people doing things right, and so on—but none of these factors qualifies as the “one thing” that great managers do, because even when done well, these actions merely prevent managers from chasing their best employees away.

Finally, the controlling insight must guide action. It must point to precise things that can be done to create better outcomes more consistently. Insights that managers can act on—rather than simply ruminate over—are the ones that can make all the difference.

Second, capitalizing on uniqueness makes each person more accountable. Michelle didn’t just praise Jeffrey for his ability to execute specific assignments. She challenged him to make this ability the cornerstone of his contribution to the store, to take ownership for this ability, to practice it, and to refine it.

Third, capitalizing on what is unique about each person builds a stronger sense of team, because it creates interdependency. It helps people appreciate one anothers’ particular skills and learn that their coworkers can fill in where they are lacking. In short, it makes people need one another. The old cliché is that there’s no “I” in “team.” But as Michael Jordan once said, “There may be no ‘I’ in ‘team,’ but there is in ‘win.’”

Finally, when you capitalize on what is unique about each person, you introduce a healthy degree of disruption into your world. You shuffle existing hierarchies: If Jeffrey is in charge of all resets and revisions in the store, should he now command more or less respect than an assistant manager? You also shuffle existing assumptions about who is allowed to do what: If Jeffrey devises new methods of resetting an aisle, does he have to ask permission to try these out, or can he experiment on his own? And you shuffle existing beliefs about where the true expertise lies: If Genoa comes up with a way of arranging new merchandise that she thinks is more appealing than the method suggested by the “planogram” sent down from Walgreens headquarters, does her expertise trump the planners back at corporate? These questions will challenge Walgreens’ orthodoxies and thus will help the company become more inquisitive, more intelligent, more vital, and, despite its size, more able to duck and weave into the future.

All that said, the reason great managers focus on uniqueness isn’t just because it makes good business sense. They do it because they can’t help it. Like Shelley and Keats, the nineteenth-century Romantic poets, great managers are fascinated with individuality for its own sake. Fine shadings of personality, though they may be invisible to some and frustrating to others, are crystal clear to and highly valued by great managers. They could no more ignore these subtleties than ignore their own needs and desires. Figuring out what makes people tick is simply in their nature.

The Three Levers

Although the Romantics were mesmerized by differences, at some point, managers need to rein in their inquisitiveness, gather up what they know about a person, and put the employee’s idiosyncrasies to use. To that end, there are three things you must know about someone to manage her well: her strengths, the triggers that activate those strengths, and how she learns.

Make the most of strengths

It takes time and effort to gain a full appreciation of an employee’s strengths and weaknesses. The great manager spends a good deal of time outside the office walking around, watching each person’s reactions to events, listening, and taking mental notes about what each individual is drawn to and what each person struggles with. There’s no substitute for this kind of observation, but you can obtain a lot of information about a person by asking a few simple, open-ended questions and listening carefully to the answers. Two queries in particular have proven most revealing when it comes to identifying strengths and weaknesses, and I recommend asking them of all new hires—and revisiting the questions periodically.

To identify a person’s strengths, first ask, “What was the best day at work you’ve had in the past three months?” Find out what the person was doing and why he enjoyed it so much. Remember: A strength is not merely something you are good at. In fact, it might be something you aren’t good at yet. It might be just a predilection, something you find so intrinsically satisfying that you look forward to doing it again and again and getting better at it over time. This question will prompt your employee to start thinking about his interests and abilities from this perspective.

To identify a person’s weaknesses, just invert the question: “What was the worst day you’ve had at work in the past three months?” And then probe for details about what he was doing and why it grated on him so much. As with a strength, a weakness is not merely something you are bad at (in fact, you might be quite competent at it). It is something that drains you of energy, an activity that you never look forward to doing and that when you are doing it, all you can think about is stopping.

What You Need to Know About Each of Your Direct Reports

■ What are his or her strengths?

■ What are the triggers that activate those strengths?

■ What is his or her learning style?

Although you’re keeping an eye out for both the strengths and weaknesses of your employees, your focus should be on their strengths. Conventional wisdom holds that self-awareness is a good thing and that it’s the job of the manager to identify weaknesses and create a plan for overcoming them. But research by Albert Bandura, the father of social learning theory, has shown that self-assurance (labeled “self-efficacy” by cognitive psychologists), not self-awareness, is the strongest predictor of a person’s ability to set high goals, to persist in the face of obstacles, to bounce back when reversals occur, and, ultimately, to achieve the goals they set. By contrast, self-awareness has not been shown to be a predictor of any of these outcomes, and in some cases, it appears to retard them.

Great managers seem to understand this instinctively. They know that their job is not to arm each employee with a dispassionately accurate understanding of the limits of her strengths and the liabilities of her weaknesses but to reinforce her self-assurance. That’s why great managers focus on strengths. When a person succeeds, the great manager doesn’t praise her hard work. Even if there’s some exaggeration in the statement, he tells her that she succeeded because she has become so good at deploying her specific strengths. This, the manager knows, will strengthen the employee’s self-assurance and make her more optimistic and more resilient in the face of challenges to come.

The focus-on-strengths approach might create in the employee a modicum of overconfidence, but great managers mitigate this by emphasizing the size and the difficulty of the employee’s goals. They know that their primary objective is to create in each employee a specific state of mind: one that includes a realistic assessment of the difficulty of the obstacle ahead but an unrealistically optimistic belief in her ability to overcome it.

And what if the employee fails? Assuming the failure is not attributable to factors beyond her control, always explain failure as a lack of effort, even if this is only partially accurate. This will obscure self-doubt and give her something to work on as she faces up to the next challenge.

Repeated failure, of course, may indicate weakness where a role requires strength. In such cases, there are four approaches for overcoming weaknesses. If the problem amounts to a lack of skill or knowledge, that’s easy to solve: Simply offer the relevant training, allow some time for the employee to incorporate the new skills, and look for signs of improvement. If her performance doesn’t get better, you’ll know that the reason she’s struggling is because she is missing certain talents, a deficit no amount of skill or knowledge training is likely to fix. You’ll have to find a way to manage around this weakness and neutralize it.

Which brings us to the second strategy for overcoming an employee weakness. Can you find her a partner, someone whose talents are strong in precisely the areas where hers are weak? Here’s how this strategy can look in action. As vice president of merchandising for the women’s clothing retailer Ann Taylor, Judi Langley found that tensions were rising between her and one of her merchandising managers, Claudia (not her real name), whose analytical mind and intense nature created an overpowering “need to know.” If Claudia learned of something before Judi had a chance to review it with her, she would become deeply frustrated. Given the speed with which decisions were made, and given Judi’s busy schedule, this happened frequently. Judi was concerned that Claudia’s irritation was unsettling the whole product team, not to mention earning the employee a reputation as a malcontent.

An average manager might have identified this behavior as a weakness and lectured Claudia on how to control her need for information. Judi, however, realized that this “weakness” was an aspect of Claudia’s greatest strength: her analytical mind. Claudia would never be able to rein it in, at least not for long. So Judi looked for a strategy that would honor and support Claudia’s need to know, while channeling it more productively. Judi decided to act as Claudia’s information partner, and she committed to leaving Claudia a voice mail at the end of each day with a brief update. To make sure nothing fell through the cracks, they set up two live “touch base” conversations per week. This solution managed Claudia’s expectations and assured her that she would get the information she needed, if not exactly when she wanted it, then at least at frequent and predictable intervals. Giving Claudia a partner neutralized the negative manifestations of her strength, allowing her to focus her analytical mind on her work. (Of course, in most cases, the partner would need to be someone other than a manager.)

Should the perfect partner prove hard to find, try this third strategy: Insert into the employee’s world a technique that helps accomplish through discipline what the person can’t accomplish through instinct. I met one very successful screenwriter and director who had struggled with telling other professionals, such as composers and directors of photography, that their work was not up to snuff. So he devised a mental trick: He now imagines what the “god of art” would want and uses this imaginary entity as a source of strength. In his mind, he no longer imposes his own opinion on his colleagues but rather tells himself (and them) that an authoritative third party has weighed in.

If training produces no improvement, if complementary partnering proves impractical, and if no nifty discipline technique can be found, you are going to have to try the fourth and final strategy, which is to rearrange the employee’s working world to render his weakness irrelevant, as Michelle Miller did with Jeffrey. This strategy will require of you, first, the creativity to envision a more effective arrangement and, second, the courage to make that arrangement work. But as Michelle’s experience revealed, the payoff that may come in the form of increased employee productivity and engagement is well worth it.

Trigger good performance

A person’s strengths aren’t always on display. Sometimes they require precise triggering to turn them on. Squeeze the right trigger, and a person will push himself harder and persevere in the face of resistance. Squeeze the wrong one, and the person may well shut down. This can be tricky because triggers come in myriad and mysterious forms. One employee’s trigger might be tied to the time of day (he is a night owl, and his strengths only kick in after 3 PM). Another employee’s trigger might be tied to time with you, the boss (even though he’s worked with you for more than five years, he still needs you to check in with him every day, or he feels he’s being ignored). Another worker’s trigger might be just the opposite—independence (she’s only worked for you for six months, but if you check in with her even once a week, she feels micromanaged).

The most powerful trigger by far is recognition, not money. If you’re not convinced of this, start ignoring one of your highly paid stars, and watch what happens. Most managers are aware that employees respond well to recognition. Great managers refine and extend this insight. They realize that each employee plays to a slightly different audience. To excel as a manager, you must be able to match the employee to the audience he values most. One employee’s audience might be his peers; the best way to praise him would be to stand him up in front of his coworkers and publicly celebrate his achievement. Another’s favorite audience might be you; the most powerful recognition would be a one-on-one conversation where you tell him quietly but vividly why he is such a valuable member of the team. Still another employee might define himself by his expertise; his most prized form of recognition would be some type of professional or technical award. Yet another might value feedback only from customers, in which case a picture of the employee with her best customer or a letter to her from the customer would be the best form of recognition.

Given how much personal attention it requires, tailoring praise to fit the person is mostly a manager’s responsibility. But organizations can take a cue from this, too. There’s no reason why a large company can’t take this individualized approach to recognition and apply it to every employee. Of all the companies I’ve encountered, the North American division of HSBC, a London-based bank, has done the best job of this. Each year it presents its top individual consumer-lending performers with its Dream Awards. Each winner receives a unique prize. During the year, managers ask employees to identify what they would like to receive should they win. The prize value is capped at $10,000, and it cannot be redeemed as cash, but beyond those two restrictions, each employee is free to pick the prize he wants. At the end of the year, the company holds a Dream Awards gala, during which it shows a video about the winning employee and why he selected his particular prize.

You can imagine the impact these personalized prizes have on HSBC employees. It’s one thing to be brought up on stage and given yet another plaque. It’s another thing when, in addition to public recognition of your performance, you receive a college tuition fund for your child, or the Harley-Davidson motorcycle you’ve always dreamed of, or—the prize everyone at the company still talks about—the airline tickets to fly you and your family back to Mexico to visit the grandmother you haven’t seen in ten years.

Tailor to learning styles

Although there are many learning styles, a careful review of adult learning theory reveals that three styles predominate. These three are not mutually exclusive; certain employees may rely on a combination of two or perhaps all three. Nonetheless, staying attuned to each employee’s style or styles will help focus your coaching.

First, there’s analyzing. Claudia from Ann Taylor is an analyzer. She understands a task by taking it apart, examining its elements, and reconstructing it piece by piece. Because every single component of a task is important in her eyes, she craves information. She needs to absorb all there is to know about a subject before she can begin to feel comfortable with it. If she doesn’t feel she has enough information, she will dig and push until she gets it. She will read the assigned reading. She will attend the required classes. She will take good notes. She will study. And she will still want more.

The best way to teach an analyzer is to give her ample time in the classroom. Role-play with her. Do postmortem exercises with her. Break her performance down into its component parts so she can carefully build it back up. Always allow her time to prepare. The analyzer hates mistakes. A commonly held view is that mistakes fuel learning, but for the analyzer, this just isn’t true. In fact, the reason she prepares so diligently is to minimize the possibility of mistakes. So don’t expect to teach her much by throwing her into a new situation and telling her to wing it.

The opposite is true for the second dominant learning style, doing. While the most powerful learning moments for the analyzer occur prior to the performance, the doer’s most powerful moments occur during the performance. Trial and error are integral to this learning process. Jeffrey, from Michelle Miller’s store, is a doer. He learns the most while he’s in the act of figuring things out for himself. For him, preparation is a dry, uninspiring activity. So rather than role-play with someone like Jeffrey, pick a specific task within his role that is simple but real, give him a brief overview of the outcomes you want, and get out of his way. Then gradually increase the degree of each task’s complexity until he has mastered every aspect of his role. He may make a few mistakes along the way, but for the doer, mistakes are the raw material for learning.

Finally, there’s watching. Watchers won’t learn much through role-playing. They won’t learn by doing, either. Since most formal training programs incorporate both of these elements, watchers are often viewed as rather poor students. That may be true, but they aren’t necessarily poor learners.

Watchers can learn a great deal when they are given the chance to see the total performance. Studying the individual parts of a task is about as meaningful for them as studying the individual pixels of a digital photograph. What’s important for this type of learner is the content of each pixel, its position relative to all the others. Watchers are only able to see this when they view the complete picture.

As it happens, this is the way I learn. Years ago, when I first began interviewing, I struggled to learn the skill of creating a report on a person after I had interviewed him. I understood all the required steps, but I couldn’t seem to put them together. Some of my colleagues could knock out a report in an hour; for me, it would take the better part of a day. Then one afternoon, as I was staring morosely into my Dictaphone, I overheard the voice of the analyst next door. He was talking so rapidly that I initially thought he was on the phone. Only after a few minutes did I realize that he was dictating a report. This was the first time I had heard someone “in the act.” I’d seen the finished results countless times, since reading the reports of others was the way we were supposed to learn, but I’d never actually heard another analyst in the act of creation. It was a revelation. I finally saw how everything should come together into a coherent whole. I remember picking up my Dictaphone, mimicking the cadence and even the accent of my neighbor, and feeling the words begin to flow.

If you’re trying to teach a watcher, by far the most effective technique is to get her out of the classroom. Take her away from the manuals, and make her ride shotgun with one of your most experienced performers.

_____________________

We’ve seen, in the stories of great managers like Michelle Miller and Judi Langley, that at the very heart of their success lies an appreciation for individuality. This is not to say that managers don’t need other skills. They need to be able to hire well, to set expectations, and to interact productively with their own bosses, just to name a few. But what they do—instinctively—is play chess. Mediocre managers assume (or hope) that their employees will all be motivated by the same things and driven by the same goals, that they will desire the same kinds of relationships and learn in roughly the same way. They define the behaviors they expect from people and tell them to work on behaviors that don’t come naturally. They praise those who can overcome their natural styles to conform to preset ideas. In short, they believe the manager’s job is to mold, or transform, each employee into the perfect version of the role.

Great managers don’t try to change a person’s style. They never try to push a knight to move in the same way as a bishop. They know that their employees will differ in how they think, how they build relationships, how altruistic they are, how patient they can be, how much of an expert they need to be, how prepared they need to feel, what drives them, what challenges them, and what their goals are. These differences of trait and talent are like blood types: They cut across the superficial variations of race, sex, and age and capture the essential uniqueness of each individual.

Like blood types, the majority of these differences are enduring and resistant to change. A manager’s most precious resource is time, and great managers know that the most effective way to invest their time is to identify exactly how each employee is different and then to figure out how best to incorporate those enduring idiosyncrasies into the overall plan.

To excel at managing others, you must bring that insight to your actions and interactions. Always remember that great managing is about release, not transformation. It’s about constantly tweaking your environment so that the unique contribution, the unique needs, and the unique style of each employee can be given free rein. Your success as a manager will depend almost entirely on your ability to do this.

Originally published in March 2005. Reprint R0503D

Fair Process

Managing in the Knowledge Economy. by W. Chan Kim and Renée Mauborgne

A LONDON POLICEMAN GAVE a woman a ticket for making an illegal turn. When the woman protested that there was no sign prohibiting the turn, the policeman pointed to one that was bent out of shape and difficult to see from the road. Furious, the woman decided to appeal by going to court. Finally, the day of her hearing arrived, and she could hardly wait to speak her piece. But she had just begun to tell her side of the story when the magistrate stopped her and summarily ruled in her favor.

How did the woman feel? Vindicated? Victorious? Satisfied?

No, she was frustrated and deeply unhappy. “I came for justice,” she complained, “but the magistrate never let me explain what happened.” In other words, although she liked the outcome, she didn’t like the process that had created it.

For the purposes of their theories, economists assume that people are maximizers of utility, driven mainly by rational calculations of their own self-interest. That is, economists assume people focus solely on outcomes. That assumption has migrated into much of management theory and practice. It has, for instance, become embedded in the tools managers traditionally use to control and motivate employees’ behavior—from incentive systems to organizational structures. But it is an assumption that managers would do well to reexamine because we all know that in real life it doesn’t always hold true. People do care about outcomes, but—like the woman in London—they also care about the processes that produce those outcomes. They want to know that they had their say—that their point of view was considered even if it was rejected. Outcomes matter, but no more than the fairness of the processes that produce them.

Never has the idea of fair process been more important for managers than it is today. Fair process turns out to be a powerful management tool for companies struggling to make the transition from a production-based to a knowledge-based economy, in which value creation depends increasingly on ideas and innovation. Fair process profoundly influences attitudes and behaviors critical to high performance. It builds trust and unlocks ideas. With it, managers can achieve even the most painful and difficult goals while gaining the voluntary cooperation of the employees affected. Without fair process, even outcomes that employees might favor can be difficult to achieve—as the experience of an elevator manufacturer we’ll call Elco illustrates.

Good Outcome, Unfair Process

In the late 1980s, sales in the elevator industry headed south as over-construction of office space left some large U.S. cities with vacancy rates as high as 20%. Faced with diminished domestic demand for its product, Elco knew it had to improve its operations. The company made the decision to replace its batch-manufacturing system with a cellular approach that would allow self-directed teams to achieve superior performance. Given the industry’s collapse, top management felt the transformation had to be made in record time.

Lacking expertise in cellular manufacturing, Elco retained a consulting firm to design a master plan for the conversion. Elco asked the consultants to work quickly and with minimal disturbance to employees. The new manufacturing system would be installed first at Elco’s Chester plant, where employee relations were so good that in 1983 workers had decertified their own union. Subsequently, Elco would roll the process out to its High Park plant, where a strong union would probably resist that, or any other, change.

Idea in Brief

In just months, a model workforce degenerated into a cauldron of mistrust, resistance, and plummeting performance. Why? Management launched a major change effort without inviting employees’ input, without explaining the reasons for the change, and without clarifying new performance expectations.

In other words, the company ignored fair process—a decision-making approach that addresses our basic human need to be valued and respected. When people feel a decision affecting them was made fairly, they trust and cooperate with managers. They share ideas and willingly go beyond the call of duty. Corporate performance soars.

In knowledge-based organizations—whose lifeblood consists of employees’ trust, commitment, and ideas—fair process is essential. It enables companies to channel people’s energy and creativity toward organizational goals.

The benefits of fair process may seem obvious—yet most organizations don’t practice it. Why? Some managers find it threatening, assuming it will diminish their power. They keep employees at arm’s length to avoid challenges to their authority. Others believe employees are concerned only with what’s best for themselves. But evidence shows that most people will accept outcomes not wholly in their favor—if they believe the process for arriving at those outcomes was fair.

Under the leadership of a much beloved plant manager, Chester was in all respects a model operation. Visiting customers were always impressed by the knowledge and enthusiasm of Chester’s employees, so much so that the vice president of marketing saw the plant as one of Elco’s best marketing tools. “Just let customers talk with Chester employees,” he observed, “and they walk away convinced that buying an Elco elevator is the smart choice.”

But one day in January of 1991, Chester’s employees arrived at work to discover strangers at the plant. Who were these people wearing dark suits, white dress shirts, and ties? They weren’t customers. They showed up daily and spoke in low tones to one another. They didn’t interact with employees. They hovered behind people’s backs, taking notes and drawing fancy diagrams. The rumor circulated that after employees went home in the afternoon, these people would swarm across the plant floor, snoop around people’s workstations, and have heated discussions.

Idea in Practice

Fair process isn’t decision by consensus or democracy in the workplace. Its goal is to pursue the best ideas, not create harmony. Fair process consists of three principles:

• Engagement—involving individuals in decisions by inviting their input and encouraging them to challenge one another’s ideas. Engagement communicates management’s respect for individuals and their ideas and builds collective wisdom. It generates better decisions and greater commitment from those involved in executing those decisions.

• Explanation—clarifying the thinking behind a final decision. Explanation reassures people that managers have considered their opinions and made the decision with the company’s overall interests at heart. Employees trust managers’ intentions—even if their own ideas were rejected.

• Expectation clarity—stating the new rules of the game, including performance standards, penalties for failure, and new responsibilities. By minimizing political jockeying and favoritism, expectation clarity enables employees to focus on the job at hand.

Example: Facing decreasing demand, an elevator manufacturer we’ll call Elco decided to design a more efficient manufacturing system. It would introduce the system at its Chester plant, a model operation with such positive employee relations that it decertified its own union. Then it would incorporate the new system at High Park, a strongly unionized plant highly resistant to change.

Seeking minimal workforce disturbance, managers didn’t involve the Chester employees in the system design process, explain why change was necessary, or clarify new performance expectations. Soon rumors about layoffs proliferated, trust and commitment deteriorated, and fights erupted on the shop floor. Quality sank.

Rattled but wiser, Elco took a different tack at their High Park site. Managers held ongoing plantwide meetings to explain the need for the new system, encouraged employees to help design the new process, and laid out new expectations. The anticipated resistance never came—and trusting employees embraced the new system.

During this period, the plant manager was increasingly absent. He was spending more time at Elco’s head office in meetings with the consultants—sessions deliberately scheduled away from the plant so as not to distract the employees. But the plant manager’s absence produced the opposite effect. As people grew anxious, wondering why the captain of their ship seemed to be deserting them, the rumor mill moved into high gear. Everyone became convinced that the consultants would downsize the plant. They were sure they were about to lose their jobs. The fact that the plant manager was always gone—obviously, he was avoiding them—and that no explanation was given, could only mean that management was, they thought, “trying to pull one over on us.” Trust and commitment at the Chester plant quickly deteriorated. Soon, people were bringing in newspaper clippings about other plants around the country that had been shut down with the help of consultants. Employees saw themselves as imminent victims of yet another management fad and resented it.

In fact, Elco managers had no intention of closing the plant. They wanted to cut out waste, freeing people to enhance quality and produce elevators for new international markets. But plant employees could not have known that.

The master plan

In March 1991, management gathered the Chester employees in a large room. Three months after the consultants had first appeared, they were formally introduced. At the same time, management unveiled to employees the master plan for change at the Chester plant. In a meeting that lasted only 30 minutes, employees heard how their time-honored way of working would be abolished and replaced by something called “cellular manufacturing.” No one explained why the change was needed, nor did anyone say exactly what would be expected of employees under the new approach. The managers didn’t mean to skirt the issues; they just didn’t feel they had the time to go into details.

The employees sat in stunned silence, which the managers mistook for acceptance, forgetting how many months it had taken them as leaders to get comfortable with the idea of cellular manufacturing and the changes it entailed. The managers felt good when the meeting was over, believing the employees were on board. With such a terrific staff, they thought, implementation of the new system was bound to go well.

Master plan in hand, management quickly began rearranging the plant. When employees asked what the new layout aimed to achieve, the response was “efficiency gains.” The managers didn’t have time to explain why efficiency needed to be improved and didn’t want to worry employees. But lacking an intellectual understanding of what was happening to them, some employees literally began feeling sick when they came to work.

Managers informed employees that they would no longer be judged on individual performance but rather on the performance of the cell. They said quicker or more experienced employees would have to pick up the slack for slower or less experienced colleagues. But they didn’t elaborate. How the new system was supposed to work, management didn’t make clear.

In fact, the new cell design offered tremendous benefits to employees, making vacations easier to schedule, for example, and giving them the opportunity to broaden their skills and engage in a greater variety of work. But lacking trust in the change process, employees could see only its negative side. They began taking out their fears and anger on one another. Fights erupted on the plant floor as employees refused to help those they called “lazy people who can’t finish their own jobs” or interpreted offers of help as meddling, responding with, “This is my job. You keep to your own workstation.”

Chester’s model workforce was falling apart. For the first time in the plant manager’s career, employees refused to do as they were asked, turning down assignments “even if you fire me.” They felt they could no longer trust the once popular plant manager, so they began to go around him, taking their complaints directly to his boss at the head office.

The plant manager then announced that the new cell design would allow employees to act as self-directed teams and that the role of the supervisor would be abolished. He expected people to react with excitement to his vision of Chester as the epitome of the factory of the future, where employees are empowered as entrepreneurial agents. Instead, they were simply confused. They had no idea how to succeed in this new environment. Without supervisors, what would they do if stock ran short or machines broke down? Did empowerment mean that the teams could self-authorize overtime, address quality problems such as rework, or purchase new machine tools? Unclear about how to succeed, employees felt set up to fail.

Time out

By the summer of 1991, both cost and quality performance were in a free fall. Employees were talking about bringing the union back. Finally, in despair, the plant manager phoned Elco’s industrial psychologist. “I need your help,” he said. “I have lost control.”

The psychologist conducted an employee opinion survey to learn what had gone wrong. Employees complained, “Management doesn’t care about our ideas or our input.” They felt that the company had scant respect for them as individuals, treating them as if they were not worthy of knowing about business conditions: “They don’t bother to tell us where we are going and what this means to us.” And they were deeply confused and mistrustful: “We don’t know exactly what management expects of us in this new cell.”

What Is Fair Process?

The theme of justice has preoccupied writers and philosophers throughout the ages, but the systematic study of fair process emerged only in the mid-1970s, when two social scientists, John W. Thibaut and Laurens Walker, combined their interest in the psychology of justice with the study of process. Focusing their attention on legal settings, they sought to understand what makes people trust a legal system so that they will comply with laws without being coerced into doing so. Their research established that people care as much about the fairness of the process through which an outcome is produced as they do about the outcome itself. Subsequent researchers such as Tom R. Tyler and E. Allan Lind demonstrated the power of fair process across diverse cultures and social settings.

Making Sense of Irrational Behavior at VW and Siemens-Nixdorf

Economic theories do a good job of explaining the rational side of human behavior, but they fall short in explaining why people can act negatively in the face of positive outcomes. Fair process offers managers a theory of behavior that explains—or might help predict—what would otherwise appear to be bewilderingly noneconomic, or irrational, behavior.

Consider what happened to Volkswagen. In 1992, the German carmaker was in the midst of expanding its manufacturing facility in Puebla, Mexico, its only production site in North America. The appreciation of the deutsche mark against the U.S. dollar was pricing Volkswagen out of the U.S. market. But after the North American Free Trade Agreement (NAFTA) became law in 1992, Volkswagen’s cost-efficient Mexican facility was well positioned to reconquer the large North American market.

In the summer of 1992, a new labor agreement had to be hammered out. The accord VW signed with the union’s secretary-general included a generous 20% pay raise for employees. VW thought the workers would be pleased.

But the union’s leaders had not involved the employees in discussions about the contract’s terms; they did a poor job of communicating what the new agreement would mean to employees and why a number of work-rule changes were necessary. Workers did not understand the basis for the decisions their leaders had taken. They felt betrayed.

VW’s management was completely caught off guard when, on July 21, the employees started a massive walkout that cost the company as much as an estimated $10 million per day. On August 21, about 300 protesters were attacked by police dogs. The government was forced to step in to end the violence. Volkswagen’s plans for the U.S. market were in disarray, and its performance was devastated.

In contrast, consider the turnaround of Siemens-Nixdorf Informationssysteme (SNI), the largest European supplier of information technology. Created in 1990 when Siemens acquired the troubled Nixdorf Computer Company, SNI had cut head count from 52,000 to 35,000 by 1994. Anxiety and fear were rampant at the company.

In 1994, Gerhard Schulmeyer, the newly appointed CEO, went out to talk to as many employees as he could. In a series of meetings large and small with a total of more than 11,000 people, Schulmeyer shared his crusading mission to engage everyone in turning the company around. He began by painting a bleakly honest picture of SNI’s situation: The company was losing money despite recent efforts to slash costs. Deeper cuts were needed, and every business would have to demonstrate its viability or be eliminated. Schulmeyer set clear but tough rules about how decisions would be made. He then asked for volunteers to come up with ideas.

Within three months, the initial group of 30 volunteers grew to encompass an additional 75 SNI executives and 300 employees. These 405 change agents soon turned into 1,000, then 3,000, then 9,000, as they progressively recruited others to help save the company. Throughout the process, ideas were solicited from managers and employees alike concerning decisions that affected them, and they all understood how decisions would be made. Ideas would be auctioned off to executives willing to champion and finance them. If no executive bought a proposal on its merits, the idea would not be pursued. Although 20% to 30% of their proposals were rejected, employees thought the process was fair.

People voluntarily pitched in—mostly after business hours, often until midnight. In just over two years, SNI has achieved a transformation notable in European corporate history. Despite accumulated losses of DM 2 billion, by 1995 SNI was already operating in the black. In the same period, employee satisfaction almost doubled, despite the radical and difficult changes under way.

Why did employees of Volkswagen revolt, despite their upbeat economic circumstances? How, in the face of such demoralizing economic conditions, could SNI turn around its performance? What is at issue is not what the two companies did but how they did it. The cases illustrate the tremendous power of fair process—fairness in the process of making and executing decisions. Fair process profoundly influences attitudes and behavior critical to high performance.

We discovered the managerial relevance of fair process more than a decade ago, during a study of strategic decision making in multinational corporations. Many top executives in those corporations were frustrated—and baffled—by the way the senior managers of their local subsidiaries behaved. Why did those managers so often fail to share information and ideas with the executives? Why did they sabotage the execution of plans they had agreed to carry out? In the 19 companies we studied, we found a direct link between processes, attitudes, and behavior. Managers who believed the company’s processes were fair displayed a high level of trust and commitment, which, in turn, engendered active cooperation. Conversely, when managers felt fair process was absent, they hoarded ideas and dragged their feet.

In subsequent field research, we explored the relevance of fair process in other business contexts—for example, in companies in the midst of transformations, in teams engaged in product innovation, and in company-supplier partnerships. (See the sidebar “Making Sense of Irrational Behavior at VW and Siemens-Nixdorf.”) For companies seeking to harness the energy and creativity of committed managers and employees, the central idea that emerges from our fair-process research is this: Individuals are most likely to trust and cooperate freely with systems—whether they themselves win or lose by those systems—when fair process is observed.

Fair process responds to a basic human need. All of us, whatever our role in a company, want to be valued as human beings and not as “personnel” or “human assets.” We want others to respect our intelligence. We want our ideas to be taken seriously. And we want to understand the rationale behind specific decisions. People are sensitive to the signals conveyed through a company’s decision-making processes. Such processes can reveal a company’s willingness to trust people and seek their ideas—or they can signal the opposite.

The three principles

In all the diverse management contexts we have studied, we have asked people to identify the bedrock elements of fair process. And whether we were working with senior executives or shop floor employees, the same three mutually reinforcing principles consistently emerged: engagement, explanation, and expectation clarity.

Engagement means involving individuals in the decisions that affect them by asking for their input and allowing them to refute the merits of one another’s ideas and assumptions. Engagement communicates management’s respect for individuals and their ideas. Encouraging refutation sharpens everyone’s thinking and builds collective wisdom. Engagement results in better decisions by management and greater commitment from all involved in executing those decisions.

Explanation means that everyone involved and affected should understand why final decisions are made as they are. An explanation of the thinking that underlies decisions makes people confident that managers have considered their opinions and have made those decisions impartially in the overall interests of the company. An explanation allows employees to trust managers’ intentions even if their own ideas have been rejected. It also serves as a powerful feedback loop that enhances learning.

Expectation clarity requires that once a decision is made, managers state clearly the new rules of the game. Although the expectations may be demanding, employees should know up front by what standards they will be judged and the penalties for failure. What are the new targets and milestones? Who is responsible for what? To achieve fair process, it matters less what the new rules and policies are and more that they are clearly understood. When people clearly understand what is expected of them, political jockeying and favoritism are minimized, and they can focus on the job at hand.

Notice that fair process is not decision by consensus. Fair process does not set out to achieve harmony or to win people’s support through compromises that accommodate every individual’s opinions, needs, or interests. While fair process gives every idea a chance, the merit of the ideas—and not consensus—is what drives the decision making.

Nor is fair process the same as democracy in the workplace. Achieving fair process does not mean that managers forfeit their prerogative to make decisions and establish policies and procedures. Fair process pursues the best ideas whether they are put forth by one or many.

“We really screwed up”

Elco managers violated all three basic principles of fair process at the Chester plant. They failed to engage employees in decisions that directly affected them. They didn’t explain why decisions were being made the way they were and what those decisions meant to employees’ careers and work methods. And they neglected to make clear what would be expected of employees under cellular manufacturing. In the absence of fair process, the employees at Chester rejected the transformation.

A week after the psychologist’s survey was completed, management invited employees to meetings in groups of 20. Employees surmised that management was either going to pretend that the survey had never happened or accuse employees of disloyalty for having voiced their complaints. But to their amazement, managers kicked off the meeting by presenting the undiluted survey results and declaring, “We were wrong. We really screwed up. In our haste and ignorance, we did not go through the proper process.” Employees couldn’t believe their ears. There were whispers in the back of the room, “What the devil did they say?” At more than 20 meetings over the next few weeks, managers repeated their confession. “No one was prepared to believe us at first,” one manager said. “We had screwed up too badly.”

At subsequent meetings, management shared with employees the company’s dismal business forecast and the limited options available. Without cost reduction, Elco would have to raise its prices, and higher prices would further depress sales. That would mean cutting production even more, perhaps even moving manufacturing offshore. Heads nodded. Employees saw the bind the company was in. The business problem was becoming theirs, not just management’s.

But still there were concerns: “If we help to cut costs and learn to produce elevators that are twice as good in half the time, will we work ourselves out of a job?” In response, the managers described their strategy to increase sales outside the United States. They also announced a new policy called proaction time: No one would be laid off because of any improvements made by an employee. Instead, employees could use their newly free time to attend cross-training programs designed to give them the skills they would need to work in any area of operations. Or employees could act as consultants addressing quality issues. In addition, management agreed not to replace any departing employees with new hires until business conditions improved. At the same time, however, management made it clear that it retained the right to let people go if business conditions grew worse.

Employees may not have liked what they heard, but they understood it. They began to see that they shared responsibility with management for Elco’s success. If they could improve quality and productivity, Elco could bring more value to the market and prevent further sales erosion. To give employees confidence that they were not being misled, management pledged to regularly share data on sales, costs, and market trends—a first step toward rebuilding trust and commitment.

Elco’s managers could not undo past mistakes, but they could involve employees in making future decisions. Managers asked employees why they thought the new manufacturing cells weren’t working and how to fix them. Employees suggested making changes in the location of materials, in the placement of machines, and in the way tasks were performed. They began to share their knowledge; as they did so, the cells were redesigned and performance steadily improved, often far exceeding the expectations originally set by the consultants. As trust and commitment were restored, talk of bringing the union back died out.

High Park’s turn

Meanwhile, management worried about introducing the new work methods at Elco’s High Park plant, which, unlike the Chester plant, had a history of resisting change. The union was strong at High Park, and some employees there had as much as 25 years’ service. Moreover, the plant manager, a young engineer new to High Park, had never run a plant before. The odds seemed to be against him. If change had created animosity at Chester, one could only imagine how much worse the situation could become at High Park.

But management’s fears went unrealized. When the consultants came to the plant, the young manager introduced them to all employees. At a series of plantwide meetings, corporate executives openly discussed business conditions and the company’s declining sales and profits. They explained that they had visited other companies’ plants and had seen the productivity improvements that cellular manufacturing could bring. They announced the proaction-time policy to calm employees’ justifiable fears of layoffs. At the High Park plant, managers encouraged employees to help the consultants design the new manufacturing cells, and they encouraged active debate. Then, as the old performance measures were discarded, managers worked with employees to develop new ones and to establish the cell teams’ new responsibilities.

Every day, the High Park plant manager waited for the anticipated meltdown, but it never came. Of course, there were some gripes, but even when people didn’t like the decisions, they felt they had been treated fairly and, so, willingly participated in the plant’s eventual performance turnaround.

Three years later, we revisited a popular local eatery to talk with people from both plants. Employees from both Chester and High Park now believe that the cellular approach is a better way to work. High Park employees spoke about their plant manager with admiration, and they commiserated with the difficulties Elco’s managers had in making the changeover to cellular manufacturing. They concluded that it had been a necessary, worthwhile, and positive experience. But Chester employees spoke with anger and indignation as they described their treatment by Elco’s managers. (See “The Price of Unfairness.”) For them, as for the London woman who had been unfairly ticketed, fair process was as important as—if not more important than—the outcome.

Fair Process in the Knowledge Economy

Fair process may sound like a soft issue, but understanding its value is crucial for managers trying to adapt their companies to the demands of the knowledge-based economy. Unlike the traditional factors of production—land, labor, and capital—knowledge is a resource locked in the human mind. Creating and sharing knowledge are intangible activities that can neither be supervised nor forced out of people. They happen only when people cooperate voluntarily. As the Nobel laureate economist Friedrich Hayek has argued, “Practically every individual . . . possesses unique information” that can be put to use only with “his active cooperation.” Getting that cooperation may well turn out to be one of the key managerial issues of the next few decades. (See “Fair Process Is Critical in Knowledge Work.”)

Voluntary cooperation was not what Frederick Winslow Taylor had in mind when at the turn of the century he began to develop an arsenal of tools to promote efficiency and consistency by controlling individuals’ behavior and compelling employees to comply with management dictates. Traditional management science, which is rooted in Taylor’s time-and-motion studies, encouraged a managerial preoccupation with allocating resources, creating economic incentives and rewards, monitoring and measuring performance, and manipulating organizational structures to set lines of authority. These conventional management levers still have their role to play, but they have little to do with encouraging active cooperation. Instead, they operate in the realm of outcome fairness or what social scientists call distributive justice, where the psychology works like this: When people get the compensation (or the resources, or the place in the organizational hierarchy) they deserve, they feel satisfied with that outcome. They will reciprocate by fulfilling to the letter their obligation to the company. The psychology of fair process, or procedural justice, is quite different. Fair process builds trust and commitment, trust and commitment produce voluntary cooperation, and voluntary cooperation drives performance, leading people to go beyond the call of duty by sharing their knowledge and applying their creativity. In all the management contexts we’ve studied, whatever the task, we have consistently observed this dynamic at work. (See the exhibit “Two complementary paths to performance.”)

The Price of Unfairness

Historically, policies designed to establish fair process in organizations arise mainly in reaction to employees’ complaints and uprisings. But by then it is too late. When individuals have been so angered by the violation of fair process that they have been driven to organized protest, their demands often stretch well beyond the reasonable to a desire for what theorists call retributive justice: Not only do they want fair process restored, they also seek to visit punishment and vengeance upon those who have violated it in compensation for the disrespect the unfair process signals.

Lacking trust in management, employees push for policies that are laboriously detailed, inflexible, and often administratively constricting. They want to ensure that managers will never have the discretion to act unjustly again. In their indignation, they may try to roll back decisions imposed unfairly even when the decisions themselves were good ones—even when they were critical to the company’s competitiveness or beneficial to the workers themselves. Such is the emotional power that unfair process can provoke.

Managers who view fair process as a nuisance or as a limit on their freedom to manage must understand that it is the violation of fair process that will wreak the most serious damage on corporate performance. Retribution can be very expensive.

Consider the transformation of Bethlehem Steel Corporation’s Sparrows Point, Maryland, division, a business unit responsible for marketing, sales, production, and financial performance. Until 1993, the 106-year-old division was managed in the classic command-and-control style. People were expected to do what they were told to do—no more and no less—and management and employees saw themselves as adversaries.

That year, Bethlehem Steel introduced a management model so different at Sparrows Point that Taylor—who was, in fact, the company’s consulting engineer about 100 years ago—wouldn’t have recognized it. The new model was designed to invoke in employees an active sense of responsibility for sharing their knowledge and ideas with one another and with management. It was also meant to encourage them to take the initiative for getting things done. In the words of Joe Rosel, the president of one of the division’s five unions, “It’s all about involvement, justification for decisions, and a clear set of expectations.”

At Sparrows Point, employees are involved in making and executing decisions at three levels. At the top is a joint-leadership team, composed of senior managers and five employee representatives, that deals with companywide issues when they arise. At the department level are area teams, consisting of managers like superintendents and of employees from the different areas of the plant, such as zone committee people. Those teams deal with day-to-day operational issues such as customer service, quality, and logistics. Ad hoc problem-solving teams of employees address opportunities and obstacles as they arise on the shop floor. At each level, teammates share and debate their ideas. Thus, employees are assured a fair hearing for their points of view on decisions likely to affect them. With the exception of decisions involving major changes or resource commitments, the teams make and execute the decisions themselves.

Sparrows Point uses numerous processes and devices to ensure that all employees can understand why decisions have been made and how such decisions need to be executed. There is, for example, a bulletin board where decisions are posted and explained, allowing employees who haven’t been directly involved in those decisions to understand what’s going on and why. In addition, in more than 70 four-hour seminars, groups ranging in size from 50 to 250 employees have met to discuss changes occurring at the division, learn about new ideas under consideration, and find out how changes might affect employees’ roles and responsibilities. A quarterly newsletter and a monthly “report card” of the division’s strategic, marketing, operational, and financial performance keeps each of the unit’s 5,300 employees informed. And the teams report back to their colleagues about the changes they are making, seeking help in making the ideas work.

Fair Process Is Critical in Knowledge Work

It is easy to see fair process at work on the plant floor, where its violation can produce such highly visible manifestations as strikes, slowdowns, and high defect rates. But fair process can have an even greater impact on the quality of professional and managerial work. That is because innovation is the key challenge of the knowledge-based economy, and innovation requires the exchange of ideas, which in turn depends on trust.

Executives and professionals rarely walk the picket line, but when their trust has not been won, they frequently withhold their full cooperation—and their ideas. In knowledge work, then, ignoring fair process creates high opportunity costs in the form of ideas that never see daylight and initiatives that are never seized. For example:

A multifunctional team is created to develop an important new product. Because it contains representatives from every major functional area of the company, the team should produce more innovative products, with less internal fighting, shortened lead times, and lower costs. The team meets, but people drag their feet. Executives at a computer maker developing a new workstation, for example, thoughtfully deploy the traditional management levers. They hammer out a good incentive scheme. They define the project scope and structure. And they allocate the right resources. Yet the trust, idea sharing, and commitment that everyone wants never materialize. Why? Early in the project, manufacturing and marketing representatives on the team propose building a prototype, but the strong design-engineering group driving the project ignores them. Subsequently, problems surface because the design is difficult to manufacture and the application software is inadequate. The team members from manufacturing and marketing are aware of these issues all along but remain passive in sharing their concerns with the powerful design engineers. Instead, they wait until the problems reveal themselves—at which time they are very expensive to fix.

Two companies create a joint venture that offers clear benefits to both parties. But they then hold their cards so close to their chests that they ensure the alliance will create limited value for either partner. The Chinese joint-venture partner of a European engineering group, for example, withholds critical information from the field, failing to report that customers are having problems installing the partner’s products and sitting on requests for new product features. Why do the Chinese fail to cooperate fully, even if it means hurting their own business?

Early in the partnership, the Chinese felt they had been shut out of key product and operating decisions. To make matters worse, the Europeans never explained the logic guiding their decisions. As the Chinese withhold critical information, the increasingly frustrated European partner responds in kind by slowing the transfer of managerial know-how, which the Chinese need badly.

Two companies create a supplier partnership to achieve improved value at lower cost. They agree to act in a seamless fashion, as one company. But the supplier seems to spend more energy on developing other customers than on deepening the partnership. One consumer goods manufacturer, for example, keeps delaying the installation of a joint electronic consumer-response data system with a major food retailer. The system will substantially improve inventory management for both partners. But the supplier remains too wary to invest. Why? The retailer has a history of dropping some of the supplier’s products without explanation. And the consumer company can’t understand the retailer’s ambiguous criteria for designating “preferred suppliers.”

Fair process has produced significant changes in people’s attitudes and behavior. Consider, for example, the tin mill unit at Sparrows Point. In 1992, the unit’s performance was among the worst in the industry. But then, as one employee explains, “People started coming forward and sharing their ideas. They started caring about doing great work, not just getting by. Take the success we’ve had in light-gauge cable sheathing. We had let this high value-added product slip because the long throughput time required for production held up the other mills in the unit. But after we started getting everyone involved and explained why we needed to improve throughput, ideas started to flow. At first, the company was doubtful: If the product had created a bottleneck before, why should it be different now? But people came up with the idea of using two sequential mills instead of one to eliminate the bottleneck. Did people suddenly get smarter? No. I’d say they started to care.”

The object in creating this new way of working at Sparrows Point was to improve the intellectual buy-in and emotional commitment of employees. It has apparently been successful. Since 1993, Sparrows Point has turned a profit three years in a row, the first time that has happened since the late 1970s. The division is becoming a showcase demonstrating how a declining industry can be revitalized in today’s knowledge economy. In the words of one Sparrows Point employee, “Since we know now everything that’s going on in the company, we have more trust in management and are more committed to making things happen. People have started doing things beyond the normal call of duty.”

Two complementary paths to performance

Overcoming Mental Barriers

If fair process is such a simple idea and yet so powerful, why do so few companies practice it? Most people think of themselves as fair, and managers are no exception. But if you ask them what it means to be a fair manager, most will describe how they give people the authority they deserve, or the resources they need, or the rewards they have earned. In other words, they will confuse fair process with fair outcomes. The few managers who focus on process might identify only one of the three fair-process principles (the most widely understood is engagement), and they would stop there.

But there are two more fundamental reasons, beyond this simple lack of understanding, that explain why fair process is so rare. The first involves power. Some managers continue to believe that knowledge is power and that they retain power only by keeping what they know to themselves. Their implicit strategy is to preserve their managerial discretion by deliberately leaving the rules for success and failure vague. Other managers maintain control by keeping employees at arm’s length, substituting memos and forms for direct, two-way communication, thus avoiding challenges to their ideas or authority. Such styles can reflect deeply ingrained patterns of behavior, and rarely are managers conscious of how they exercise power. For them, fair process would represent a threat.

The second reason is also largely unconscious because it resides in an economic assumption that most of us have grown up taking at face value: the belief that people are concerned only with what’s best for themselves. But, as we have seen, there is ample evidence to show that when the process is perceived to be fair, most people will accept outcomes that are not wholly in their favor. People realize that compromises and sacrifices are necessary on the job. They accept the need for short-term personal sacrifices in order to advance the long-term interests of the corporation. Acceptance is conditional, however, hinged as it is on fair process.

Fair process reaches into a dimension of human psychology that hasn’t been fully explored in conventional management practice. Yet every company can tap into the voluntary cooperation of its people by building trust through fair processes.

Originally published in July 1997. Reprint R0301K

Teaching Smart People How to Learn

by Chris Argyris

ANY COMPANY THAT ASPIRES to succeed in the tougher business environment of the 1990s must first resolve a basic dilemma: success in the marketplace increasingly depends on learning, yet most people don’t know how to learn. What’s more, those members of the organization that many assume to be the best at learning are, in fact, not very good at it. I am talking about the well-educated, high-powered, high-commitment professionals who occupy key leadership positions in the modern corporation.

Most companies not only have tremendous difficulty addressing this learning dilemma; they aren’t even aware that it exists. The reason: they misunderstand what learning is and how to bring it about. As a result, they tend to make two mistakes in their efforts to become a learning organization.

First, most people define learning too narrowly as mere “problem solving,” so they focus on identifying and correcting errors in the external environment. Solving problems is important. But if learning is to persist, managers and employees must also look inward. They need to reflect critically on their own behavior, identify the ways they often inadvertently contribute to the organization’s problems, and then change how they act. In particular, they must learn how the very way they go about defining and solving problems can be a source of problems in its own right.

I have coined the terms “single loop” and “double loop” learning to capture this crucial distinction. To give a simple analogy: a thermostat that automatically turns on the heat whenever the temperature in a room drops below 68 degrees is a good example of single-loop learning. A thermostat that could ask, “Why am I set at 68 degrees?” and then explore whether or not some other temperature might more economically achieve the goal of heating the room would be engaging in double-loop learning.

Highly skilled professionals are frequently very good at single-loop learning. After all, they have spent much of their lives acquiring academic credentials, mastering one or a number of intellectual disciplines, and applying those disciplines to solve real-world problems. But ironically, this very fact helps explain why professionals are often so bad at double-loop learning.

Put simply, because many professionals are almost always successful at what they do, they rarely experience failure. And because they have rarely failed, they have never learned how to learn from failure. So whenever their single-loop learning strategies go wrong, they become defensive, screen out criticism, and put the “blame” on anyone and everyone but themselves. In short, their ability to learn shuts down precisely at the moment they need it the most.

The propensity among professionals to behave defensively helps shed light on the second mistake that companies make about learning. The common assumption is that getting people to learn is largely a matter of motivation. When people have the right attitudes and commitment, learning automatically follows. So companies focus on creating new organizational structures—compensation programs, performance reviews, corporate cultures, and the like—that are designed to create motivated and committed employees.

But effective double-loop learning is not simply a function of how people feel. It is a reflection of how they think—that is, the cognitive rules or reasoning they use to design and implement their actions. Think of these rules as a kind of “master program” stored in the brain, governing all behavior. Defensive reasoning can block learning even when the individual commitment to it is high, just as a computer program with hidden bugs can produce results exactly the opposite of what its designers had planned.

Idea in Brief

Problem solving is an example of single-loop learning. You identify an error and apply a particular remedy to correct it. But genuine learning involves an extra step, in which you reflect on your assumptions and test the validity of your hypotheses. Achieving this double-loop learning is more than a matter of motivation—you have to reflect on the way you think.

Failure forces you to reflect on your assumptions and inferences. Which is why an organization’s smartest and most successful employees are often such poor learners: they haven’t had the opportunity for introspection that failure affords. So when they do fail—or merely underperform—they can be surprisingly defensive. Instead of critically examining their own behavior, they cast blame outward—on anyone or anything they can.

Companies can learn how to resolve the learning dilemma. What it takes is to make the ways managers and employees reason about their behavior a focus of organizational learning and continuous improvement programs. Teaching people how to reason about their behavior in new and more effective ways breaks down the defenses that block learning.

All of the examples that follow involve a particular kind of professional: fast-track consultants at major management consulting companies. But the implications of my argument go far beyond this specific occupational group. The fact is, more and more jobs—no matter what the title—are taking on the contours of “knowledge work.” People at all levels of the organization must combine the mastery of some highly specialized technical expertise with the ability to work effectively in teams, form productive relationships with clients and customers, and critically reflect on and then change their own organizational practices. And the nuts and bolts of management—whether of high-powered consultants or service representatives, senior managers or factory technicians—increasingly consists of guiding and integrating the autonomous but interconnected work of highly skilled people.

Idea in Practice

People often profess to be open to critique and new learning, but their actions suggest a very different set of governing values or theories-in-use:

• the desire to remain in unilateral control

• the goal of maximizing “winning” while minimizing “losing”

• the belief that negative feelings should be suppressed

• the desire to appear as rational as possible.

Taken together, these values betray a profoundly defensive posture: a need to avoid embarrassment, threat, or feelings of vulnerability and incompetence. This closed-loop reasoning explains why the mere encouragement of open inquiry can be intimidating to some. And it’s especially relevant to the behavior of many of the most highly skilled and best-trained employees. Behind their high aspirations are an equally high fear of failure and a tendency to be ashamed when they don’t live up to their high standards. Consequently, they become brittle and despondent in situations in which they don’t excel immediately.

Fortunately, it is possible for individuals and organizations to develop more productive patterns of behavior. Two suggestions for how to make this happen:

1. Apply the same kind of “tough reasoning” you use to conduct strategic analysis. Collect the most objective data you can find. Make your inferences explicit and test them constantly. Submit your conclusions to the toughest tests of all: make sure they aren’t self-serving or impossible for others to verify.

2. Senior managers must model the desired changes first. When the leadership demonstrates its willingness to examine critically its own theories-in-use, changing them as indicated, everyone will find it easier to do the same.

Example: The CEO of an organizational-development firm created a case study to address real problems caused by the intense competition among his direct reports. In a paragraph, he described a meeting he intended to have with his subordinates. Then he wrote down what he planned to say, how he thought his subordinates would respond, as well any thoughts or feelings he thought he might have but not express for fear of derailing the conversation. Instead of actually holding the meeting, he analyzed the scenario he had developed with his direct reports. The result was an illuminating conversation in which the CEO and his subordinates were able to circumvent the closed-loop reasoning that had characterized so many prior discussions.

How Professionals Avoid Learning

For 15 years, I have been conducting in-depth studies of management consultants. I decided to study consultants for a few simple reasons. First, they are the epitome of the highly educated professionals who play an increasingly central role in all organizations. Almost all of the consultants I’ve studied have MBAs from the top three or four U.S. business schools. They are also highly committed to their work. For instance, at one company, more than 90% of the consultants responded in a survey that they were “highly satisfied” with their jobs and with the company.

I also assumed that such professional consultants would be good at learning. After all, the essence of their job is to teach others how to do things differently. I found, however, that these consultants embodied the learning dilemma. The most enthusiastic about continuous improvement in their own organizations, they were also often the biggest obstacle to its complete success.

As long as efforts at learning and change focused on external organizational factors—job redesign, compensation programs, performance reviews, and leadership training—the professionals were enthusiastic participants. Indeed, creating new systems and structures was precisely the kind of challenge that well-educated, highly motivated professionals thrived on.

And yet the moment the quest for continuous improvement turned to the professionals’ own performance, something went wrong. It wasn’t a matter of bad attitude. The professionals’ commitment to excellence was genuine, and the vision of the company was clear. Nevertheless, continuous improvement did not persist. And the longer the continuous improvement efforts continued, the greater the likelihood that they would produce ever-diminishing returns.

What happened? The professionals began to feel embarrassed. They were threatened by the prospect of critically examining their own role in the organization. Indeed, because they were so well paid (and generally believed that their employers were supportive and fair), the idea that their performance might not be at its best made them feel guilty.

Far from being a catalyst for real change, such feelings caused most to react defensively. They projected the blame for any problems away from themselves and onto what they said were unclear goals, insensitive and unfair leaders, and stupid clients.

Consider this example. At a premier management consulting company, the manager of a case team called a meeting to examine the team’s performance on a recent consulting project. The client was largely satisfied and had given the team relatively high marks, but the manager believed the team had not created the value added that it was capable of and that the consulting company had promised. In the spirit of continuous improvement, he felt that the team could do better. Indeed, so did some of the team members.

The manager knew how difficult it was for people to reflect critically on their own work performance, especially in the presence of their manager, so he took a number of steps to make possible a frank and open discussion. He invited to the meeting an outside consultant whom team members knew and trusted—“just to keep me honest,” he said. He also agreed to have the entire meeting tape-recorded. That way, any subsequent confusions or disagreements about what went on at the meeting could be checked against the transcript. Finally, the manager opened the meeting by emphasizing that no subject was off limits—including his own behavior.

“I realize that you may believe you cannot confront me,” the manager said. “But I encourage you to challenge me. You have a responsibility to tell me where you think the leadership made mistakes, just as I have the responsibility to identify any I believe you made. And all of us must acknowledge our own mistakes. If we do not have an open dialogue, we will not learn.”

The professionals took the manager up on the first half of his invitation but quietly ignored the second. When asked to pinpoint the key problems in the experience with the client, they looked entirely outside themselves. The clients were uncooperative and arrogant. “They didn’t think we could help them.” The team’s own managers were unavailable and poorly prepared. “At times, our managers were not up to speed before they walked into the client meetings.” In effect, the professionals asserted that they were helpless to act differently—not because of any limitations of their own but because of the limitations of others.

The manager listened carefully to the team members and tried to respond to their criticisms. He talked about the mistakes that he had made during the consulting process. For example, one professional objected to the way the manager had run the project meetings. “I see that the way I asked questions closed down discussions,” responded the manager. “I didn’t mean to do that, but I can see how you might have believed that I had already made up my mind.” Another team member complained that the manager had caved in to pressure from his superior to produce the project report far too quickly, considering the team’s heavy work load. “I think that it was my responsibility to have said no,” admitted the manager. “It was clear that we all had an immense amount of work.”

Finally, after some three hours of discussion about his own behavior, the manager began to ask the team members if there were any errors they might have made. “After all,” he said, “this client was not different from many others. How can we be more effective in the future?”

The professionals repeated that it was really the clients’ and their own managers’ fault. As one put it, “They have to be open to change and want to learn.” The more the manager tried to get the team to examine its own responsibility for the outcome, the more the professionals bypassed his concerns. The best one team member could suggest was for the case team to “promise less”—implying that there was really no way for the group to improve its performance.

The case team members were reacting defensively to protect themselves, even though their manager was not acting in ways that an outsider would consider threatening. Even if there were some truth to their charges—the clients may well have been arrogant and closed, their own managers distant—the way they presented these claims was guaranteed to stop learning. With few exceptions, the professionals made attributions about the behavior of the clients and the managers but never publicly tested their claims. For instance, they said that the clients weren’t motivated to learn but never really presented any evidence supporting that assertion. When their lack of concrete evidence was pointed out to them, they simply repeated their criticisms more vehemently.

If the professionals had felt so strongly about these issues, why had they never mentioned them during the project? According to the professionals, even this was the fault of others. “We didn’t want to alienate the client,” argued one. “We didn’t want to be seen as whining,” said another.

The professionals were using their criticisms of others to protect themselves from the potential embarrassment of having to admit that perhaps they too had contributed to the team’s less-than-perfect performance. What’s more, the fact that they kept repeating their defensive actions in the face of the manager’s efforts to turn the group’s attention to its own role shows that this defensiveness had become a reflexive routine. From the professionals’ perspective, they weren’t resisting; they were focusing on the “real” causes. Indeed, they were to be respected, if not congratulated, for working as well as they did under such difficult conditions.

The end result was an unproductive parallel conversation. Both the manager and the professionals were candid; they expressed their views forcefully. But they talked past each other, never finding a common language to describe what had happened with the client. The professionals kept insisting that the fault lay with others. The manager kept trying, unsuccessfully, to get the professionals to see how they contributed to the state of affairs they were criticizing. The dialogue of this parallel conversation looks like this:

Professionals: “The clients have to be open. They must want to change.”

Manager: “It’s our task to help them see that change is in their interest.”

Professionals: “But the clients didn’t agree with our analyses.”

Manager: “If they didn’t think our ideas were right, how might we have convinced them?”

Professionals: “Maybe we need to have more meetings with the client.”

Manager: “If we aren’t adequately prepared and if the clients don’t think we’re credible, how will more meetings help?”

Professionals: “There should be better communication between case team members and management.”

Manager: “I agree. But professionals should take the initiative to educate the manager about the problems they are experiencing.”

Professionals: “Our leaders are unavailable and distant.”

Manager: “How do you expect us to know that if you don’t tell us?”

Conversations such as this one dramatically illustrate the learning dilemma. The problem with the professionals’ claims is not that they are wrong but that they aren’t useful. By constantly turning the focus away from their own behavior to that of others, the professionals bring learning to a grinding halt. The manager understands the trap but does not know how to get out of it. To learn how to do that requires going deeper into the dynamics of defensive reasoning—and into the special causes that make professionals so prone to it.

Defensive Reasoning and the Doom Loop

What explains the professionals’ defensiveness? Not their attitudes about change or commitment to continuous improvement; they really wanted to work more effectively. Rather, the key factor is the way they reasoned about their behavior and that of others.

It is impossible to reason anew in every situation. If we had to think through all the possible responses every time someone asked, “How are you?” the world would pass us by. Therefore, everyone develops a theory of action—a set of rules that individuals use to design and implement their own behavior as well as to understand the behavior of others. Usually, these theories of actions become so taken for granted that people don’t even realize they are using them.

One of the paradoxes of human behavior, however, is that the master program people actually use is rarely the one they think they use. Ask people in an interview or questionnaire to articulate the rules they use to govern their actions, and they will give you what I call their “espoused” theory of action. But observe these same people’s behavior, and you will quickly see that this espoused theory has very little to do with how they actually behave. For example, the professionals on the case team said they believed in continuous improvement, and yet they consistently acted in ways that made improvement impossible.

When you observe people’s behavior and try to come up with rules that would make sense of it, you discover a very different theory of action—what I call the individual’s “theory-in-use.” Put simply, people consistently act inconsistently, unaware of the contradiction between their espoused theory and their theory-in-use, between the way they think they are acting and the way they really act.

What’s more, most theories-in-use rest on the same set of governing values. There seems to be a universal human tendency to design one’s actions consistently according to four basic values:

1. To remain in unilateral control;

2. To maximize “winning” and minimize “losing”;

3. To suppress negative feelings; and

4. To be as “rational” as possible—by which people mean defining clear objectives and evaluating their behavior in terms of whether or not they have achieved them.

The purpose of all these values is to avoid embarrassment or threat, feeling vulnerable or incompetent. In this respect, the master program that most people use is profoundly defensive. Defensive reasoning encourages individuals to keep private the premises, inferences, and conclusions that shape their behavior and to avoid testing them in a truly independent, objective fashion.

Because the attributions that go into defensive reasoning are never really tested, it is a closed loop, remarkably impervious to conflicting points of view. The inevitable response to the observation that somebody is reasoning defensively is yet more defensive reasoning. With the case team, for example, whenever anyone pointed out the professionals’ defensive behavior to them, their initial reaction was to look for the cause in somebody else—clients who were so sensitive that they would have been alienated if the consultants had criticized them or a manager so weak that he couldn’t have taken it had the consultants raised their concerns with him. In other words, the case team members once again denied their own responsibility by externalizing the problem and putting it on someone else.

In such situations, the simple act of encouraging more open inquiry is often attacked by others as “intimidating.” Those who do the attacking deal with their feelings about possibly being wrong by blaming the more open individual for arousing these feelings and upsetting them.

Needless to say, such a master program inevitably short-circuits learning. And for a number of reasons unique to their psychology, well-educated professionals are especially susceptible to this.

Nearly all the consultants I have studied have stellar academic records. Ironically, their very success at education helps explain the problems they have with learning. Before they enter the world of work, their lives are primarily full of successes, so they have rarely experienced the embarrassment and sense of threat that comes with failure. As a result, their defensive reasoning has rarely been activated. People who rarely experience failure, however, end up not knowing how to deal with it effectively. And this serves to reinforce the normal human tendency to reason defensively.

In a survey of several hundred young consultants at the organizations I have been studying, these professionals describe themselves as driven internally by an unrealistically high ideal of performance: “Pressure on the job is self-imposed.” “I must not only do a good job; I must also be the best.” “People around here are very bright and hardworking; they are highly motivated to do an outstanding job.” “Most of us want not only to succeed but also to do so at maximum speed.”

These consultants are always comparing themselves with the best around them and constantly trying to better their own performance. And yet they do not appreciate being required to compete openly with each other. They feel it is somehow inhumane. They prefer to be the individual contributor—what might be termed a “productive loner.”

Behind this high aspiration for success is an equally high fear of failure and a propensity to feel shame and guilt when they do fail to meet their high standards. “You must avoid mistakes,” said one. “I hate making them. Many of us fear failure, whether we admit it or not.”

To the extent that these consultants have experienced success in their lives, they have not had to be concerned about failure and the attendant feelings of shame and guilt. But to exactly the same extent, they also have never developed the tolerance for feelings of failure or the skills to deal with these feelings. This in turn has led them not only to fear failure but also to fear the fear of failure itself. For they know that they will not cope with it superlatively—their usual level of aspiration.

The consultants use two intriguing metaphors to describe this phenomenon. They talk about the “doom loop” and “doom zoom.” Often, consultants will perform well on the case team, but because they don’t do the jobs perfectly or receive accolades from their managers, they go into a doom loop of despair. And they don’t ease into the doom loop, they zoom into it.

As a result, many professionals have extremely “brittle” personalities. When suddenly faced with a situation they cannot immediately handle, they tend to fall apart. They cover up their distress in front of the client. They talk about it constantly with their fellow case team members. Interestingly, these conversations commonly take the form of bad-mouthing clients.

Such brittleness leads to an inappropriately high sense of despondency or even despair when people don’t achieve the high levels of performance they aspire to. Such despondency is rarely psychologically devastating, but when combined with defensive reasoning, it can result in a formidable predisposition against learning.

There is no better example of how this brittleness can disrupt an organization than performance evaluations. Because it represents the one moment when a professional must measure his or her own behavior against some formal standard, a performance evaluation is almost tailor-made to push a professional into the doom loop. Indeed, a poor evaluation can reverberate far beyond the particular individual involved to spark defensive reasoning throughout an entire organization.

At one consulting company, management established a new performance-evaluation process that was designed to make evaluations both more objective and more useful to those being evaluated. The consultants participated in the design of the new system and in general were enthusiastic because it corresponded to their espoused values of objectivity and fairness. A brief two years into the new process, however, it had become the object of dissatisfaction. The catalyst for this about-face was the first unsatisfactory rating.

Senior managers had identified six consultants whose performance they considered below standard. In keeping with the new evaluation process, they did all they could to communicate their concerns to the six and to help them improve. Managers met with each individual separately for as long and as often as the professional requested to explain the reasons behind the rating and to discuss what needed to be done to improve—but to no avail. Performance continued at the same low level and, eventually, the six were let go.

When word of the dismissal spread through the company, people responded with confusion and anxiety. After about a dozen consultants angrily complained to management, the CEO held two lengthy meetings where employees could air their concerns.

At the meetings, the professionals made a variety of claims. Some said the performance-evaluation process was unfair because judgments were subjective and biased and the criteria for minimum performance unclear. Others suspected that the real cause for the dismissals was economic and that the performance-evaluation procedure was just a fig leaf to hide the fact that the company was in trouble. Still others argued that the evaluation process was antilearning. If the company were truly a learning organization, as it claimed, then people performing below the minimum standard should be taught how to reach it. As one professional put it: “We were told that the company did not have an up-or-out policy. Up-or-out is inconsistent with learning. You misled us.”

The CEO tried to explain the logic behind management’s decision by grounding it in the facts of the case and by asking the professionals for any evidence that might contradict these facts.

Is there subjectivity and bias in the evaluation process? Yes, responded the CEO, but “we strive hard to reduce them. We are constantly trying to improve the process. If you have any ideas, please tell us. If you know of someone treated unfairly, please bring it up. If any of you feel that you have been treated unfairly, let’s discuss it now or, if you wish, privately.”

Is the level of minimum competence too vague? “We are working to define minimum competence more clearly,” he answered. “In the case of the six, however, their performance was so poor that it wasn’t difficult to reach a decision.” Most of the six had received timely feedback about their problems. And in the two cases where people had not, the reason was that they had never taken the responsibility to seek out evaluations—and, indeed, had actively avoided them. “If you have any data to the contrary,” the CEO added, “let’s talk about it.”

Were the six asked to leave for economic reasons? No, said the CEO. “We have more work than we can do, and letting professionals go is extremely costly for us. Do any of you have any information to the contrary?”

As to the company being antilearning, in fact, the entire evaluation process was designed to encourage learning. When a professional is performing below the minimum level, the CEO explained, “we jointly design remedial experiences with the individual. Then we look for signs of improvement. In these cases, either the professionals were reluctant to take on such assignments or they repeatedly failed when they did. Again, if you have information or evidence to the contrary, I’d like to hear about it.”

The CEO concluded: “It’s regrettable, but sometimes we make mistakes and hire the wrong people. If individuals don’t produce and repeatedly prove themselves unable to improve, we don’t know what else to do except dismiss them. It’s just not fair to keep poorly performing individuals in the company. They earn an unfair share of the financial rewards.”

Instead of responding with data of their own, the professionals simply repeated their accusations but in ways that consistently contradicted their claims. They said that a genuinely fair evaluation process would contain clear and documentable data about performance—but they were unable to provide firsthand examples of the unfairness that they implied colored the evaluation of the six dismissed employees. They argued that people shouldn’t be judged by inferences unconnected to their actual performance—but they judged management in precisely this way. They insisted that management define clear, objective, and unambiguous performance standards—but they argued that any humane system would take into account that the performance of a professional cannot be precisely measured. Finally, they presented themselves as champions of learning—but they never proposed any criteria for assessing whether an individual might be unable to learn.

In short, the professionals seemed to hold management to a different level of performance than they held themselves. In their conversation at the meetings, they used many of the features of ineffective evaluation that they condemned—the absence of concrete data, for example, and the dependence on a circular logic of “heads we win, tails you lose.” It is as if they were saying, “Here are the features of a fair performance-evaluation system. You should abide by them. But we don’t have to when we are evaluating you.”

Indeed, if we were to explain the professionals’ behavior by articulating rules that would have to be in their heads in order for them to act the way they did, the rules would look something like this:

1. When criticizing the company, state your criticism in ways that you believe are valid—but also in ways that prevent others from deciding for themselves whether your claim to validity is correct.

2. When asked to illustrate your criticisms, don’t include any data that others could use to decide for themselves whether the illustrations are valid.

3. State your conclusions in ways that disguise their logical implications. If others point out those implications to you, deny them.

Of course, when such rules were described to the professionals, they found them abhorrent. It was inconceivable that these rules might explain their actions. And yet in defending themselves against this observation, they almost always inadvertently confirmed the rules.

Learning How to Reason Productively

If defensive reasoning is as widespread as I believe, then focusing on an individual’s attitudes or commitment is never enough to produce real change. And as the previous example illustrates, neither is creating new organizational structures or systems. The problem is that even when people are genuinely committed to improving their performance and management has changed its structures in order to encourage the “right” kind of behavior, people still remain locked in defensive reasoning. Either they remain unaware of this fact, or if they do become aware of it, they blame others.

There is, however, reason to believe that organizations can break out of this vicious circle. Despite the strength of defensive reasoning, people genuinely strive to produce what they intend. They value acting competently. Their self-esteem is intimately tied up with behaving consistently and performing effectively. Companies can use these universal human tendencies to teach people how to reason in a new way—in effect, to change the master programs in their heads and thus reshape their behavior.

People can be taught how to recognize the reasoning they use when they design and implement their actions. They can begin to identify the inconsistencies between their espoused and actual theories of action. They can face up to the fact that they unconsciously design and implement actions that they do not intend. Finally, people can learn how to identify what individuals and groups do to create organizational defenses and how these defenses contribute to an organization’s problems.

Once companies embark on this learning process, they will discover that the kind of reasoning necessary to reduce and overcome organizational defenses is the same kind of “tough reasoning” that underlies the effective use of ideas in strategy, finance, marketing, manufacturing, and other management disciplines. Any sophisticated strategic analysis, for example, depends on collecting valid data, analyzing it carefully, and constantly testing the inferences drawn from the data. The toughest tests are reserved for the conclusions. Good strategists make sure that their conclusions can withstand all kinds of critical questioning.

So too with productive reasoning about human behavior. The standard of analysis is just as high. Human resource programs no longer need to be based on “soft” reasoning but should be as analytical and as data-driven as any other management discipline.

Of course, that is not the kind of reasoning the consultants used when they encountered problems that were embarrassing or threatening. The data they collected was hardly objective. The inferences they made rarely became explicit. The conclusions they reached were largely self-serving, impossible for others to test, and as a result, “self-sealing,” impervious to change.

How can an organization begin to turn this situation around, to teach its members how to reason productively? The first step is for managers at the top to examine critically and change their own theories-in-use. Until senior managers become aware of how they reason defensively and the counterproductive consequences that result, there will be little real progress. Any change activity is likely to be just a fad.

Change has to start at the top because otherwise defensive senior managers are likely to disown any transformation in reasoning patterns coming from below. If professionals or middle managers begin to change the way they reason and act, such changes are likely to appear strange—if not actually dangerous—to those at the top. The result is an unstable situation where senior managers still believe that it is a sign of caring and sensitivity to bypass and cover up difficult issues, while their subordinates see the very same actions as defensive.

The key to any educational experience designed to teach senior managers how to reason productively is to connect the program to real business problems. The best demonstration of the usefulness of productive reasoning is for busy managers to see how it can make a direct difference in their own performance and in that of the organization. This will not happen overnight. Managers need plenty of opportunity to practice the new skills. But once they grasp the powerful impact that productive reasoning can have on actual performance, they will have a strong incentive to reason productively not just in a training session but in all their work relationships.

One simple approach I have used to get this process started is to have participants produce a kind of rudimentary case study. The subject is a real business problem that the manager either wants to deal with or has tried unsuccessfully to address in the past. Writing the actual case usually takes less than an hour. But then the case becomes the focal point of an extended analysis.

For example, a CEO at a large organizational-development consulting company was preoccupied with the problems caused by the intense competition among the various business functions represented by his four direct reports. Not only was he tired of having the problems dumped in his lap, but he was also worried about the impact the interfunctional conflicts were having on the organization’s flexibility. He had even calculated that the money being spent to iron out disagreements amounted to hundreds of thousands of dollars every year. And the more fights there were, the more defensive people became, which only increased the costs to the organization.

In a paragraph or so, the CEO described a meeting he intended to have with his direct reports to address the problem. Next, he divided the paper in half, and on the right-hand side of the page, he wrote a scenario for the meeting—much like the script for a movie or play—describing what he would say and how his subordinates would likely respond. On the left-hand side of the page, he wrote down any thoughts and feelings that he would be likely to have during the meeting but that he wouldn’t express for fear they would derail the discussion.

But instead of holding the meeting, the CEO analyzed this scenario with his direct reports. The case became the catalyst for a discussion in which the CEO learned several things about the way he acted with his management team.

He discovered that his four direct reports often perceived his conversations as counterproductive. In the guise of being “diplomatic,” he would pretend that a consensus about the problem existed, when in fact none existed. The unintended result: instead of feeling reassured, his subordinates felt wary and tried to figure out “what is he really getting at.”

The CEO also realized that the way he dealt with the competitiveness among department heads was completely contradictory. On the one hand, he kept urging them to “think of the organization as a whole.” On the other, he kept calling for actions—department budget cuts, for example—that placed them directly in competition with each other.

Finally, the CEO discovered that many of the tacit evaluations and attributions he had listed turned out to be wrong. Since he had never expressed these assumptions, he had never found out just how wrong they were. What’s more, he learned that much of what he thought he was hiding came through to his subordinates anyway—but with the added message that the boss was covering up.

The CEO’s colleagues also learned about their own ineffective behavior. They learned by examining their own behavior as they tried to help the CEO analyze his case. They also learned by writing and analyzing cases of their own. They began to see that they too tended to bypass and cover up the real issues and that the CEO was often aware of it but did not say so. They too made inaccurate attributions and evaluations that they did not express. Moreover, the belief that they had to hide important ideas and feelings from the CEO and from each other in order not to upset anyone turned out to be mistaken. In the context of the case discussions, the entire senior management team was quite willing to discuss what had always been undiscussable.

In effect, the case study exercise legitimizes talking about issues that people have never been able to address before. Such a discussion can be emotional—even painful. But for managers with the courage to persist, the payoff is great: management teams and entire organizations work more openly and more effectively and have greater options for behaving flexibly and adapting to particular situations.

When senior managers are trained in new reasoning skills, they can have a big impact on the performance of the entire organization—even when other employees are still reasoning defensively. The CEO who led the meetings on the performance-evaluation procedure was able to defuse dissatisfaction because he didn’t respond to professionals’ criticisms in kind but instead gave a clear presentation of relevant data. Indeed, most participants took the CEO’s behavior to be a sign that the company really acted on the values of participation and employee involvement that it espoused.

Of course, the ideal is for all the members of an organization to learn how to reason productively. This has happened at the company where the case team meeting took place. Consultants and their managers are now able to confront some of the most difficult issues of the consultant-client relationship. To get a sense of the difference productive reasoning can make, imagine how the original conversation between the manager and case team might have gone had everyone engaged in effective reasoning. (The following dialogue is based on actual sessions I have attended with other case teams at the same company since the training has been completed.)

First, the consultants would have demonstrated their commitment to continuous improvement by being willing to examine their own role in the difficulties that arose during the consulting project. No doubt they would have identified their managers and the clients as part of the problem, but they would have gone on to admit that they had contributed to it as well. More important, they would have agreed with the manager that as they explored the various roles of clients, managers, and professionals, they would make sure to test any evaluations or attributions they might make against the data. Each individual would have encouraged the others to question his or her reasoning. Indeed, they would have insisted on it. And in turn, everyone would have understood that act of questioning not as a sign of mistrust or an invasion of privacy but as a valuable opportunity for learning.

The conversation about the manager’s unwillingness to say no might look something like this:

Professional #1: “One of the biggest problems I had with the way you managed this case was that you seemed to be unable to say no when either the client or your superior made unfair demands.” [Gives an example.]

Professional #2: “I have another example to add. [Describes a second example.] But I’d also like to say that we never really told you how we felt about this. Behind your back we were bad-mouthing you—you know, ‘he’s being such a wimp’—but we never came right out and said it.”

Manager: “It certainly would have been helpful if you had said something. Was there anything I said or did that gave you the idea that you had better not raise this with me?”

Professional #3: “Not really. I think we didn’t want to sound like we were whining.”

Manager: “Well, I certainly don’t think you sound like you’re whining. But two thoughts come to mind. If I understand you correctly, you were complaining, but the complaining about me and my inability to say no was covered up. Second, if we had discussed this, I might have gotten the data I needed to be able to say no.”

Notice that when the second professional describes how the consultants had covered up their complaints, the manager doesn’t criticize her. Rather, he rewards her for being open by responding in kind. He focuses on the ways that he too may have contributed to the cover-up. Reflecting undefensively about his own role in the problem then makes it possible for the professionals to talk about their fears of appearing to be whining. The manager then agrees with the professionals that they shouldn’t become complainers. At the same time, he points out the counterproductive consequences of covering up their complaints.

Another unresolved issue in the case team meeting concerned the supposed arrogance of the clients. A more productive conversation about that problem might go like this:

Manager: “You said that the clients were arrogant and uncooperative. What did they say and do?”

Professional #1: “One asked me if I had ever met a payroll. Another asked how long I’ve been out of school.”

Professional #2: “One even asked me how old I was!”

Professional #3: “That’s nothing. The worst is when they say that all we do is interview people, write a report based on what they tell us, and then collect our fees.”

Manager: “The fact that we tend to be so young is a real problem for many of our clients. They get very defensive about it. But I’d like to explore whether there is a way for them to freely express their views without our getting defensive...”

“What troubled me about your original responses was that you assumed you were right in calling the clients stupid. One thing I’ve noticed about consultants—in this company and others—is that we tend to defend ourselves by bad-mouthing the client.”

Professional #1: “Right. After all, if they are genuinely stupid, then it’s obviously not our fault that they aren’t getting it!”

Professional #2: “Of course, that stance is antilearning and overprotective. By assuming that they can’t learn, we absolve ourselves from having to.”

Professional #3: “And the more we all go along with the badmouthing, the more we reinforce each other’s defensiveness.”

Manager: “So what’s the alternative? How can we encourage our clients to express their defensiveness and at the same time constructively build on it?”

Professional #1: “We all know that the real issue isn’t our age; it’s whether or not we are able to add value to the client’s organization. They should judge us by what we produce. And if we aren’t adding value, they should get rid of us—no matter how young or old we happen to be.”

Manager: “Perhaps that is exactly what we should tell them.”

In both these examples, the consultants and their manager are doing real work. They are learning about their own group dynamics and addressing some generic problems in client-consultant relationships. The insights they gain will allow them to act more effectively in the future—both as individuals and as a team. They are not just solving problems but developing a far deeper and more textured understanding of their role as members of the organization. They are laying the groundwork for continuous improvement that is truly continuous. They are learning how to learn.

Originally published in May 1991. Reprint 4304

How (Un)ethical Are You?

by Mahzarin R. Banaji, Max H. Bazerman, and Dolly Chugh

ANSWER TRUE OR FALSE: “I am an ethical manager.”

If you answered “true,” here’s an uncomfortable fact: You’re probably not. Most of us believe that we are ethical and unbiased. We imagine we’re good decision makers, able to objectively size up a job candidate or a venture deal and reach a fair and rational conclusion that’s in our, and our organization’s, best interests. But more than two decades of research confirms that, in reality, most of us fall woefully short of our inflated self-perception. We’re deluded by what Yale psychologist David Armor calls the illusion of objectivity, the notion that we’re free of the very biases we’re so quick to recognize in others. What’s more, these unconscious, or implicit, biases can be contrary to our consciously held, explicit beliefs. We may believe with confidence and conviction that a job candidate’s race has no bearing on our hiring decisions or that we’re immune to conflicts of interest. But psychological research routinely exposes counterintentional, unconscious biases. The prevalence of these biases suggests that even the most well-meaning person unwittingly allows unconscious thoughts and feelings to influence seemingly objective decisions. These flawed judgments are ethically problematic and undermine managers’ fundamental work—to recruit and retain superior talent, boost the performance of individuals and teams, and collaborate effectively with partners.

This article explores four related sources of unintentional unethical decision making: implicit forms of prejudice, bias that favors one’s own group, conflict of interest, and a tendency to overclaim credit. Because we are not consciously aware of these sources of bias, they often cannot be addressed by penalizing people for their bad decisions. Nor are they likely to be corrected through conventional ethics training. Rather, managers must bring a new type of vigilance to bear. To begin, this requires letting go of the notion that our conscious attitudes always represent what we think they do. It also demands that we abandon our faith in our own objectivity and our ability to be fair. In the following pages, we will offer strategies that can help managers recognize these pervasive, corrosive, unconscious biases and reduce their impact.

Implicit Prejudice: Bias That Emerges from Unconscious Beliefs

Most fair-minded people strive to judge others according to their merits, but our research shows how often people instead judge according to unconscious stereotypes and attitudes, or “implicit prejudice.” What makes implicit prejudice so common and persistent is that it is rooted in the fundamental mechanics of thought. Early on, we learn to associate things that commonly go together and expect them to inevitably coexist: thunder and rain, for instance, or gray hair and old age. This skill—to perceive and learn from associations—often serves us well.

But, of course, our associations only reflect approximations of the truth; they are rarely applicable to every encounter. Rain doesn’t always accompany thunder, and the young can also go gray. Nonetheless, because we automatically make such associations to help us organize our world, we grow to trust them, and they can blind us to those instances in which the associations are not accurate— when they don’t align with our expectations.

Because implicit prejudice arises from the ordinary and unconscious tendency to make associations, it is distinct from conscious forms of prejudice, such as overt racism or sexism. This distinction explains why people who are free from conscious prejudice may still harbor biases and act accordingly. Exposed to images that juxtapose black men and violence, portray women as sex objects, imply that the physically disabled are mentally weak and the poor are lazy, even the most consciously unbiased person is bound to make biased associations. These associations play out in the workplace just as they do anywhere else.

Idea in Brief

Are you an ethical manager? Most would probably say, “Of course!” The truth is, most of us are not.

Most of us believe that we’re ethical and unbiased. We assume that we objectively size up job candidates or venture deals and reach fair and rational conclusions that are in our organization’s best interests.

But the truth is, we harbor many unconscious—and unethical—biases that derail our decisions and undermine our work as managers. Hidden biases prevent us from recognizing high-potential workers and retaining talented managers. They stop us from collaborating effectively with partners. They erode our teams’ performance. They can also lead to costly lawsuits.

But how can we root out these biases if they’re unconscious? Fortunately, as a manager, you can take deliberate actions to counteract their pull. Regularly audit your decisions. Have you, for example, hired a disproportionate number of people of your own race? Expose yourself to non-stereotypical environments that challenge your biases. If your department is led by men, spend time in one with women in leadership positions. And consider counterintuitive options when making decisions. Don’t rely on a mental short-list of candidates for a new assignment; consider every employee with relevant qualifications.

In the mid-1990s, Tony Greenwald, a professor of psychology at the University of Washington, developed an experimental tool called the Implicit Association Test (IAT) to study unconscious bias. A computerized version of the test requires subjects to rapidly classify words and images as “good” or “bad.” Using a keyboard, test takers must make split-second “good/bad” distinctions between words like “love,” “joy,” “pain,” and “sorrow” and at the same time sort images of faces that are (depending on the bias in question) black or white, young or old, fat or thin, and so on. The test exposes implicit biases by detecting subtle shifts in reaction time that can occur when test takers are required to pair different sets of words and faces. Subjects who consciously believe that they have no negative feelings toward, say, black Americans or the elderly are nevertheless likely to be slower to associate elderly or black faces with the “good” words than they are to associate youthful or white faces with “good” words.

Idea in Practice

Unconscious Biases

Are the following unconscious biases levying what amounts to a “stereotype tax” on your company?

Implicit prejudice Judging according to unconscious stereotypes rather than merit exacts a high business cost. Exposed to images that juxtapose physical disabilities with mental weakness or portray poor people as lazy, even the most consciously unbiased person is bound to make biased associations. As a result, we routinely overlook highly qualified candidates for assignments.

In-group favoritism Granting favors to people with your same background—your nationality or alma mater—effectively discriminates against those who are different from you. Consider the potential cost of offering bonuses to employees who refer their friends for job openings: hires who may not have made the grade without in-group favoritism.

Overclaiming credit Most of us consider ourselves above average. But when every member of a team thinks he’s making the biggest contribution, each starts to think the others aren’t pulling their weight. That jeopardizes future collaborations. It also frustrates talented workers who may resign because they feel underappreciated.

Counteract Biases

To keep yourself from making similarly skewed calls, consider these guidelines:

Gather better data Expose your own implicit biases. Take the Implicit Association Test (at http://implicit.harvard.edu). If you discover gender or racial biases, examine your hiring and promotion decisions in that new light. When working with others, have team members estimate their colleagues’ contributions before they claim their own credit.

Rid your workplace of stereotypical cues Think about the biased associations your workplace may foster. Do your company’s advertising and marketing materials frequently include sports metaphors or high-tech jargon? Make a conscious effort to curb such “insider” language—making your products more appealing to a diverse customer base. And if your department invariably promotes the same type of manager—highly analytic, for instance—shadow a department that values a different—perhaps more conceptual—skill-set.

Broaden your mind-set when making decisions Apply the “veil of ignorance” to your next managerial decision. Suppose you’re considering a new policy that would give more vacation time to all employees but eliminate the flextime that has allowed new parents to keep working. How would your opinion differ if you were a parent or childless? Male or female? Healthy or unhealthy? You’ll learn how strongly implicit biases influence you.

Since 1998, when Greenwald, Brian Nosek, and Mahzarin Banaji put the IAT online, people from around the world have taken over 2.5 million tests, confirming and extending the findings of more traditional laboratory experiments. Both show implicit biases to be strong and pervasive. (For more information on the IAT, see “Are You Biased?”.)

Biases are also likely to be costly. In controlled experiments, psychologists Laurie Rudman at Rutgers and Peter Glick at Lawrence University have studied how implicit biases may work to exclude qualified people from certain roles. One set of experiments examined the relationship between participants’ implicit gender stereotypes and their hiring decisions. Those holding stronger implicit biases were less likely to select a qualified woman who exhibited stereotypically “masculine” personality qualities, such as ambition or independence, for a job requiring stereotypically “feminine” qualities, such as interpersonal skills. Yet they would select a qualified man exhibiting these same qualities. The hirers’ biased perception was that the woman was less likely to be socially skilled than the man, though their qualifications were in fact the same. These results suggest that implicit biases may exact costs by subtly excluding qualified people from the very organizations that seek their talents.

Legal cases also reveal the real costs of implicit biases, both economic and social. Consider Price Waterhouse v. Hopkins. Despite logging more billable hours than her peers, bringing in $25 million to the company, and earning the praise of her clients, Ann Hopkins was turned down for partner, and she sued. The details of the case reveal that her evaluators were explicitly prejudiced in their attitudes. For example, they had commented that Ann “overcompensated for being a woman” and needed a “course at charm school.” But perhaps more damning from a legal standpoint was blunt testimony from experimental research. Testifying as an expert witness for the defense, psychology professor Susan Fiske, now at Princeton University, argued that the potential for biased decision making is inherent in a system in which a person has “solo” status—that is, a system in which the person is the only one of a kind (the only woman, the only African-American, the only person with a disability, and the like). Judge Gerhard Gesell concluded that “a far more subtle process [than the usual discriminatory intent] is involved” in the assessments made of Ann Hopkins, and she won both in a lower court and in the Supreme Court in what is now a landmark case in discrimination law.

Likewise, the 1999 case of Thomas v. Kodak demonstrates that implicit biases can be the basis for rulings. Here, the court posed the question of “whether the employer consciously intended to base the evaluations on race or simply did so because of unthinking stereotypes or bias.” The court concluded that plaintiffs can indeed challenge “subjective evaluations which could easily mask covert or unconscious race discrimination.” Although courts are careful not to assign responsibility easily for unintentional biases, these cases demonstrate the potential for corporate liability that such patterns of behavior could unwittingly create.

In-Group Favoritism: Bias That Favors Your Group

Think about some of the favors you have done in recent years, whether for a friend, a relative, or a colleague. Have you helped someone get a useful introduction, admission to a school, or a job? Most of us are glad to help out with such favors. Not surprisingly, we tend to do more favors for those we know, and those we know tend to be like ourselves: people who share our nationality, social class, and perhaps religion, race, employer, or alma mater. This all sounds rather innocent. What’s wrong with asking your neighbor, the university dean, to meet with a coworker’s son? Isn’t it just being helpful to recommend a former sorority sister for a job or to talk to your banker cousin when a friend from church gets turned down for a home loan?

Few people set out to exclude anyone through such acts of kindness. But when those in the majority or those in power allocate scarce resources (such as jobs, promotions, and mortgages) to people just like them, they effectively discriminate against those who are different from them. Such “in-group favoritism” amounts to giving extra credit for group membership. Yet while discriminating against those who are different is considered unethical, helping people close to us is often viewed favorably. Think about the number of companies that explicitly encourage this by offering hiring bonuses to employees who refer their friends for job opportunities.

But consider the finding that banks in the United States are more likely to deny a mortgage application from a black person than from a white person, even when the applicants are equally qualified. The common view has been that banks are hostile to African-Americans. While this may be true of some banks and some loan officers, social psychologist David Messick has argued that in-group favoritism is more likely to be at the root of such discriminatory lending. A white loan officer may feel hopeful or lenient toward an unqualified white applicant while following the bank’s lending standards strictly with an unqualified black applicant. In denying the black applicant’s mortgage, the loan officer may not be expressing hostility toward blacks so much as favoritism toward whites. It’s a subtle but crucial distinction.

The ethical cost is clear and should be reason enough to address the problem. But such inadvertent bias produces an additional effect: It erodes the bottom line. Lenders who discriminate in this way, for example, incur bad-debt costs they could have avoided if their lending decisions were more objective. They also may find themselves exposed to damaging publicity or discrimination lawsuits if the skewed lending pattern is publicly revealed. In a different context, companies may pay a real cost for marginal hires who wouldn’t have made the grade but for the sympathetic hiring manager swayed by in-group favoritism.

Are You Biased?

ARE YOU WILLING TO bet that you feel the same way toward European-Americans as you do toward African-Americans? How about women versus men? Or older people versus younger ones? Think twice before you take that bet. Visit implicit.harvard.edu or www.tolerance.org/hidden_bias to examine your unconscious attitudes.

The Implicit Association Tests available on these sites reveal unconscious beliefs by asking takers to make split-second associations between words with positive or negative connotations and images representing different types of people. The various tests on these sites expose the differences—or the alignment—between test takers’ conscious and unconscious attitudes toward people of different races, sexual orientation, or physical characteristics. Data gathered from over 2.5 million online tests and further research tells us that unconscious biases are:

• widely prevalent. At least 75% of test takers show an implicit bias favoring the young, the rich, and whites.

• robust. The mere conscious desire not to be biased does not eliminate implicit bias.

• contrary to conscious intention. Although people tend to report little or no conscious bias against African-Americans, Arabs, Arab-Americans, Jews, gay men, lesbians, or the poor, they show substantial biases on implicit measures.

• different in degree depending on group status. Minority group members tend to show less implicit preference for their own group than majority group members show for theirs. For example, African-Americans report strong preference for their group on explicit measures but show relatively less implicit preference in the tests. Conversely, white Americans report a low explicit bias for their group but a higher implicit bias.

• consequential. Those who show higher levels of bias on the IAT are also likely to behave in ways that are more biased in face-to-face interactions with members of the group they are biased against and in the choices they make, such as hiring decisions.

• costly. Research currently under way in our lab suggests that implicit bias generates a “stereotype tax”—negotiators leave money on the table because biases cause them to miss opportunities to learn about their opponent and thus create additional value through mutually beneficial trade-offs.

In-group favoritism is tenacious when membership confers clear advantages, as it does, for instance, among whites and other dominant social groups. (It may be weaker or absent among people whose group membership offers little societal advantage.) Thus for a wide array of managerial tasks—from hiring, firing, and promoting to contracting services and forming partnerships—qualified minority candidates are subtly and unconsciously discriminated against, sometimes simply because they are in the minority: There are not enough of them to counter the propensity for in-group favoritism in the majority.

Overclaiming Credit: Bias That Favors You

It’s only natural for successful people to hold positive views about themselves. But many studies show that the majority of people consider themselves above average on a host of measures, from intelligence to driving ability. Business executives are no exception. We tend to overrate our individual contribution to groups, which, bluntly put, tends to lead to an overblown sense of entitlement. We become the unabashed, repeated beneficiaries of this unconscious bias, and the more we think only of our own contributions, the less fairly we judge others with whom we work.

Lab research demonstrates this most personal of biases. At Harvard, Eugene Caruso, Nick Epley, and Max Bazerman recently asked MBA students in study groups to estimate what portion of their group’s work each had done. The sum of the contribution by all members, of course, must add up to 100%. But the researchers found that the totals for each study group averaged 139%. In a related study, Caruso and his colleagues uncovered rampant overestimates by academic authors of their contribution to shared research projects. Sadly, but not surprisingly, the more the sum of the total estimated group effort exceeded 100% (in other words, the more credit each person claimed), the less the parties wanted to collaborate in the future.

Likewise in business, claiming too much credit can destabilize alliances. When each party in a strategic partnership claims too much credit for its own contribution and becomes skeptical about whether the other is doing its fair share, they both tend to reduce their contributions to compensate. This has obvious repercussions for the joint venture’s performance.

Unconscious overclaiming can be expected to reduce the performance and longevity of groups within organizations, just as it diminished the academic authors’ willingness to collaborate. It can also take a toll on employee commitment. Think about how employees perceive raises. Most are not so different from the children at Lake Wobegon, believing that they, too, rank in the upper half of their peer group. But many necessarily get pay increases that are below the average. If an employee learns of a colleague’s greater compensation—while honestly believing that he himself is more deserving—resentment may be natural. At best, his resentment might translate into reduced commitment and performance. At worst, he may leave the organization that, it seems, doesn’t appreciate his contribution.

Conflict of Interest: Bias That Favors Those Who Can Benefit You

Everyone knows that conflict of interest can lead to intentionally corrupt behavior. But numerous psychological experiments show how powerfully such conflicts can unintentionally skew decision making. (For an examination of the evidence in one business arena, see Max Bazerman, George Loewenstein, and Don Moore’s November 2002 HBR article, “Why Good Accountants Do Bad Audits.”) These experiments suggest that the work world is rife with situations in which such conflicts lead honest, ethical professionals to unconsciously make unsound and unethical recommendations.

Physicians, for instance, face conflicts of interest when they accept payment for referring patients into clinical trials. While, surely, most physicians consciously believe that their referrals are the patient’s best clinical option, how do they know that the promise of payment did not skew their decisions? Similarly, many lawyers earn fees based on their clients’ awards or settlements. Since going to trial is expensive and uncertain, settling out of court is often an attractive option for the lawyer. Attorneys may consciously believe that settling is in their clients’ best interests. But how can they be objective, unbiased judges under these circumstances?

Research done with brokerage house analysts demonstrates how conflict of interest can unconsciously distort decision making. A survey of analysts conducted by the financial research service First Call showed that during a period in 2000 when the Nasdaq dropped 60%, fully 99% of brokerage analysts’ client recommendations remained “strong buy,” “buy,” or “hold.” What accounts for this discrepancy between what was happening and what was recommended? The answer may lie in a system that fosters conflicts of interest. A portion of analysts’ pay is based on brokerage firm revenues. Some firms even tie analysts’ compensation to the amount of business the analysts bring in from clients, giving analysts an obvious incentive to prolong and extend their relationships with clients. But to assume that during this Nasdaq free fall all brokerage house analysts were consciously corrupt, milking their clients to exploit this incentive system, defies common sense. Surely there were some bad apples. But how much more likely it is that most of these analysts believed their recommendations were sound and in their clients’ best interests. What many didn’t appreciate was that the built-in conflict of interest in their compensation incentives made it impossible for them to see the implicit bias in their own flawed recommendations.

Trying Harder Isn’t Enough

As companies keep collapsing into financial scandal and ruin, corporations are responding with ethics-training programs for managers, and many of the world’s leading business schools have created new courses and chaired professorships in ethics. Many of these efforts focus on teaching broad principles of moral philosophy to help managers understand the ethical challenges they face.

We applaud these efforts, but we doubt that a well-intentioned, just-try-harder approach will fundamentally improve the quality of executives’ decision making. To do that, ethics training must be broadened to include what is now known about how our minds work and must expose managers directly to the unconscious mechanisms that underlie biased decision making. And it must provide managers with exercises and interventions that can root out the biases that lead to bad decisions.

Managers can make wiser, more ethical decisions if they become mindful of their unconscious biases. But how can we get at something outside our conscious awareness? By bringing the conscious mind to bear. Just as the driver of a misaligned car deliberately counteracts its pull, so can managers develop conscious strategies to counteract the pull of their unconscious biases. What’s required is vigilance—continual awareness of the forces that can cause decision making to veer from its intended course and continual adjustments to counteract them. Those adjustments fall into three general categories: collecting data, shaping the environment, and broadening the decision-making process.

Collect data

The first step to reducing unconscious bias is to collect data to reveal its presence. Often, the data will be counterintuitive. Consider many people’s surprise to learn of their own gender and racial biases on the IAT. Why the surprise? Because most of us trust the “statistics” our intuition provides. Better data are easily, but rarely, collected. One way to get those data is to examine our decisions in a systematic way.

Remember the MBA study groups whose participants overestimated their individual contributions to the group effort so that the totals averaged 139%? When the researchers asked group members to estimate what each of the other members’ contributions were before claiming their own, the total fell to 121%. The tendency to claim too much credit still persisted, but this strategy of “unpacking” the work reduced the magnitude of the bias. In environments characterized by “I deserve more than you’re giving me” claims, merely asking team members to unpack the contributions of others before claiming their own share of the pot usually aligns claims more closely with what’s actually deserved. As this example demonstrates, such systematic audits of both individual and group decision-making processes can occur even as the decisions are being made.

Unpacking is a simple strategy that managers should routinely use to evaluate the fairness of their own claims within the organization. But they can also apply it in any situation where team members or subordinates may be overclaiming. For example, in explaining a raise that an employee feels is inadequate, a manager should ask the subordinate not what he thinks he alone deserves but what he considers an appropriate raise after taking into account each coworker’s contribution and the pool available for pay increases. Similarly, when an individual feels she’s doing more than her fair share of a team’s work, asking her to consider other people’s efforts before estimating her own can help align her perception with reality, restore her commitment, and reduce a skewed sense of entitlement.

Taking the IAT is another valuable strategy for collecting data. We recommend that you and others in your organization use the test to expose your own implicit biases. But one word of warning: Because the test is an educational and research tool, not a selection or evaluation tool, it is critical that you consider your results and others’ to be private information. Simply knowing the magnitude and pervasiveness of your own biases can help direct your attention to areas of decision making that are in need of careful examination and reconsideration. For example, a manager whose testing reveals a bias toward certain groups ought to examine her hiring practices to see if she has indeed been disproportionately favoring those groups. But because so many people harbor such biases, they can also be generally acknowledged, and that knowledge can be used as the basis for changing the way decisions are made. It is important to guard against using pervasiveness to justify complacency and inaction: Pervasiveness of bias is not a mark of its appropriateness any more than poor eyesight is considered so ordinary a condition that it does not require corrective lenses.

Shape your environment

Research shows that implicit attitudes can be shaped by external cues in the environment. For example, Curtis Hardin and colleagues at UCLA used the IAT to study whether subjects’ implicit race bias would be affected if the test was administered by a black investigator. One group of students took the test under the guidance of a white experimenter; another group took the test with a black experimenter. The mere presence of a black experimenter, Hardin found, reduced the level of subjects’ implicit antiblack bias on the IAT. Numerous similar studies have shown similar effects with other social groups. What accounts for such shifts? We can speculate that experimenters in classrooms are assumed to be competent, in charge, and authoritative. Subjects guided by a black experimenter attribute these positive characteristics to that person, and then perhaps to the group as a whole. These findings suggest that one remedy for implicit bias is to expose oneself to images and social environments that challenge stereotypes.

We know of a judge whose court is located in a predominantly African-American neighborhood. Because of the crime and arrest patterns in the community, most people the judge sentences are black. The judge confronted a paradox. On the one hand, she took a judicial oath to be objective and egalitarian, and indeed she consciously believed that her decisions were unbiased. On the other hand, every day she was exposed to an environment that reinforced the association between black men and crime. Although she consciously rejected racial stereotypes, she suspected that she harbored unconscious prejudices merely from working in a segregated world. Immersed in this environment each day, she wondered if it was possible to give the defendants a fair hearing.

Rather than allow her environment to reinforce a bias, the judge created an alternative environment. She spent a vacation week sitting in a fellow judge’s court in a neighborhood where the criminals being tried were predominantly white. Case after case challenged the stereotype of blacks as criminal and whites as law abiding and so challenged any bias against blacks that she might have harbored.

Think about the possibly biased associations your workplace fosters. Is there, perhaps, a “wall of fame” with pictures of high achievers all cast from the same mold? Are certain types of managers invariably promoted? Do people overuse certain analogies drawn from stereotypical or narrow domains of knowledge (sports metaphors, for instance, or cooking terms)? Managers can audit their organization to uncover such patterns or cues that unwittingly lead to stereotypical associations.

If an audit reveals that the environment may be promoting unconscious biased or unethical behavior, consider creating countervailing experiences, as the judge did. For example, if your department reinforces the stereotype of men as naturally dominant in a hierarchy (most managers are male, and most assistants are female), find a department with women in leadership positions and set up a shadow program. Both groups will benefit from the exchange of best practices, and your group will be quietly exposed to counter-stereotypical cues. Managers sending people out to spend time in clients’ organizations as a way to improve service should take care to select organizations likely to counter stereotypes reinforced in your own company.

Broaden your decision making

Imagine that you are making a decision in a meeting about an important company policy that will benefit some groups of employees more than others. A policy might, for example, provide extra vacation time for all employees but eliminate the flex time that has allowed many new parents to balance work with their family responsibilities. Another policy might lower the mandatory retirement age, eliminating some older workers but creating advancement opportunities for younger ones. Now pretend that, as you make your decisions, you don’t know which group you belong to. That is, you don’t know whether you are senior or junior, married or single, gay or straight, a parent or childless, male or female, healthy or unhealthy. You will eventually find out, but not until after the decision has been made. In this hypothetical scenario, what decision would you make? Would you be willing to risk being in the group disadvantaged by your own decision? How would your decisions differ if you could make them wearing various identities not your own?

This thought experiment is a version of philosopher John Rawls’s concept of the “veil of ignorance,” which posits that only a person ignorant of his own identity is capable of a truly ethical decision. Few of us can assume the veil completely, which is precisely why hidden biases, even when identified, are so difficult to correct. Still, applying the veil of ignorance to your next important managerial decision may offer some insight into how strongly implicit biases influence you.

Just as managers can expose bias by collecting data before acting on intuition, they can take other preemptive steps. What list of names do you start with when considering whom to send to a training program, recommend for a new assignment, or nominate for a fast-track position? Most of us can quickly and with little concentration come up with such a list. But keep in mind that your intuition is prone to implicit prejudice (which will strongly favor dominant and well-liked groups), in-group favoritism (which will favor people in your own group), overclaiming (which will favor you), and conflict of interest (which will favor people whose interests affect your own). Instead of relying on a mental short list when making personnel decisions, start with a full list of names of employees who have relevant qualifications.

Using a broad list of names has several advantages. The most obvious is that talent may surface that might otherwise be overlooked. Less obvious but equally important, the very act of considering a counter-stereotypical choice at the conscious level can reduce implicit bias. In fact, merely thinking about hypothetical, counter-stereotypical scenarios—such as what it would be like to trust a complex presentation to a female colleague or to receive a promotion from an African-American boss—can prompt less-biased and more ethical decision making. Similarly, consciously considering counterintuitive options in the face of conflicts of interest, or when there’s an opportunity to overclaim, can promote more objective and ethical decisions.

The Vigilant Manager

If you answered “true” to the question at the start of this article, you felt with some confidence that you are an ethical decision maker. How would you answer it now? It’s clear that neither simple conviction nor sincere intention is enough to ensure that you are the ethical practitioner you imagine yourself to be. Managers who aspire to be ethical must challenge the assumption that they’re always unbiased and acknowledge that vigilance, even more than good intention, is a defining characteristic of an ethical manager. They must actively collect data, shape their environments, and broaden their decision making. What’s more, an obvious redress is available. Managers should seek every opportunity to implement affirmative action policies—not because of past wrongs done to one group or another but because of the everyday wrongs that we can now document are inherent in the ordinary, everyday behavior of good, well-intentioned people. Ironically, only those who understand their own potential for unethical behavior can become the ethical decision makers that they aspire to be.

Originally published in December 2003. Reprint 5526

The Discipline of Teams

by Jon R. Katzenbach and Douglas K. Smith

EARLY IN THE 1980S, Bill Greenwood and a small band of rebel railroaders took on most of the top management of Burlington Northern and created a multibillion-dollar business in “piggybacking” rail services despite widespread resistance, even resentment, within the company. The Medical Products Group at Hewlett-Packard owes most of its leading performance to the remarkable efforts of Dean Morton, Lew Platt, Ben Holmes, Dick Alberding, and a handful of their colleagues who revitalized a health care business that most others had written off. At Knight Ridder, Jim Batten’s “customer obsession” vision took root at the Tallahassee Democrat when 14 frontline enthusiasts turned a charter to eliminate errors into a mission of major change and took the entire paper along with them.

Such are the stories and the work of teams—real teams that perform, not amorphous groups that we call teams because we think that the label is motivating and energizing. The difference between teams that perform and other groups that don’t is a subject to which most of us pay far too little attention. Part of the problem is that “team” is a word and concept so familiar to everyone. (See “Not All Groups Are Teams: How to Tell the Difference.”)

Or at least that’s what we thought when we set out to do research for our book The Wisdom of Teams (HarperBusiness, 1993). We wanted to discover what differentiates various levels of team performance, where and how teams work best, and what top management can do to enhance their effectiveness. We talked with hundreds of people on more than 50 different teams in 30 companies and beyond, from Motorola and Hewlett-Packard to Operation Desert Storm and the Girl Scouts.

We found that there is a basic discipline that makes teams work. We also found that teams and good performance are inseparable: You cannot have one without the other. But people use the word “team” so loosely that it gets in the way of learning and applying the discipline that leads to good performance. For managers to make better decisions about whether, when, or how to encourage and use teams, it is important to be more precise about what a team is and what it isn’t.

Most executives advocate teamwork. And they should. Teamwork represents a set of values that encourage listening and responding constructively to views expressed by others, giving others the benefit of the doubt, providing support, and recognizing the interests and achievements of others. Such values help teams perform, and they also promote individual performance as well as the performance of an entire organization. But teamwork values by themselves are not exclusive to teams, nor are they enough to ensure team performance. (See “Building Team Performance.”)

Nor is a team just any group working together. Committees, councils, and task forces are not necessarily teams. Groups do not become teams simply because that is what someone calls them. The entire workforce of any large and complex organization is never a team, but think about how often that platitude is offered up.

To understand how teams deliver extra performance, we must distinguish between teams and other forms of working groups. That distinction turns on performance results. A working group’s performance is a function of what its members do as individuals. A team’s performance includes both individual results and what we call “collective work products.” A collective work product is what two or more members must work on together, such as interviews, surveys, or experiments. Whatever it is, a collective work product reflects the joint, real contribution of team members.

Idea in Brief

The word team gets bandied about so loosely that many managers are oblivious to its real meaning—or its true potential. With a run-of-the-mill working group, performance is a function of what the members do as individuals. A team’s performance, by contrast, calls for both individual and mutual accountability.

Though it may not seem like anything special, mutual accountability can lead to astonishing results. It enables a team to achieve performance levels that are far greater than the individual bests of the team’s members. To achieve these benefits, team members must do more than listen, respond constructively, and provide support to one another. In addition to sharing these team-building values, they must share an essential discipline.

Working groups are both prevalent and effective in large organizations where individual accountability is most important. The best working groups come together to share information, perspectives, and insights; to make decisions that help each person do his or her job better; and to reinforce individual performance standards. But the focus is always on individual goals and accountabilities. Working-group members don’t take responsibility for results other than their own. Nor do they try to develop incremental performance contributions requiring the combined work of two or more members.

Teams differ fundamentally from working groups because they require both individual and mutual accountability. Teams rely on more than group discussion, debate, and decision, on more than sharing information and best-practice performance standards. Teams produce discrete work products through the joint contributions of their members. This is what makes possible performance levels greater than the sum of all the individual bests of team members. Simply stated, a team is more than the sum of its parts.

The first step in developing a disciplined approach to team management is to think about teams as discrete units of performance and not just as positive sets of values. Having observed and worked with scores of teams in action, both successes and failures, we offer the following. Think of it as a working definition or, better still, an essential discipline that real teams share: A team is a small number of people with complementary skills who are committed to a common purpose, set of performance goals, and approach for which they hold themselves mutually accountable.

Idea in Practice

A team’s essential discipline comprises five characteristics:

1. A meaningful common purpose that the team has helped shape. Most teams are responding to an initial mandate from outside the team. But to be successful, the team must “own” this purpose, develop its own spin on it.

2. Specific performance goals that flow from the common purpose. For example, getting a new product to market in less than half the normal time. Compelling goals inspire and challenge a team, give it a sense of urgency. They also have a leveling effect, requiring members to focus on the collective effort necessary rather than any differences in title or status.

3. A mix of complementary skills. These include technical or functional expertise, problem-solving and decision-making skills, and interpersonal skills. Successful teams rarely have all the needed skills at the outset—they develop them as they learn what the challenge requires.

4. A strong commitment to how the work gets done. Teams must agree on who will do what jobs, how schedules will be established and honored, and how decisions will be made and modified. On a genuine team, each member does equivalent amounts of real work; all members, the leader included, contribute in concrete ways to the team’s collective work-products.

5. Mutual accountability. Trust and commitment cannot be coerced. The process of agreeing upon appropriate goals serves as the crucible in which members forge their accountability to each other—not just to the leader.

Once the essential discipline has been established, a team is free to concentrate on the critical challenges it faces:

• For a team whose purpose is to make recommendations, that means making a fast and constructive start and providing a clean handoff to those who will implement the recommendations.

• For a team that makes or does things, it’s keeping the specific performance goals in sharp focus.

• For a team that runs things, the primary task is distinguishing the challenges that require a real team approach from those that don’t.

If a task doesn’t demand joint work-products, a working group can be the more effective option. Team opportunities are usually those in which hierarchy or organizational boundaries inhibit the skills and perspectives needed for optimal results. Little wonder, then, that teams have become the primary units of productivity in high-performance organizations.

The essence of a team is common commitment. Without it, groups perform as individuals; with it, they become a powerful unit of collective performance. This kind of commitment requires a purpose in which team members can believe. Whether the purpose is to “transform the contributions of suppliers into the satisfaction of customers,” to “make our company one we can be proud of again,” or to “prove that all children can learn,” credible team purposes have an element related to winning, being first, revolutionizing, or being on the cutting edge.

Teams develop direction, momentum, and commitment by working to shape a meaningful purpose. Building ownership and commitment to team purpose, however, is not incompatible with taking initial direction from outside the team. The often-asserted assumption that a team cannot “own” its purpose unless management leaves it alone actually confuses more potential teams than it helps. In fact, it is the exceptional case—for example, entrepreneurial situations—when a team creates a purpose entirely on its own.

Most successful teams shape their purposes in response to a demand or opportunity put in their path, usually by higher management. This helps teams get started by broadly framing the company’s performance expectation. Management is responsible for clarifying the charter, rationale, and performance challenge for the team, but management must also leave enough flexibility for the team to develop commitment around its own spin on that purpose, set of specific goals, timing, and approach.

The best teams invest a tremendous amount of time and effort exploring, shaping, and agreeing on a purpose that belongs to them both collectively and individually. This “purposing” activity continues throughout the life of the team. By contrast, failed teams rarely develop a common purpose. For whatever reason—an insufficient focus on performance, lack of effort, poor leadership—they do not coalesce around a challenging aspiration.

The best teams also translate their common purpose into specific performance goals, such as reducing the reject rate from suppliers by 50% or increasing the math scores of graduates from 40% to 95%. Indeed, if a team fails to establish specific performance goals or if those goals do not relate directly to the team’s overall purpose, team members become confused, pull apart, and revert to mediocre performance. By contrast, when purposes and goals build on one another and are combined with team commitment, they become a powerful engine of performance.

Transforming broad directives into specific and measurable performance goals is the surest first step for a team trying to shape a purpose meaningful to its members. Specific goals, such as getting a new product to market in less than half the normal time, responding to all customers within 24 hours, or achieving a zero-defect rate while simultaneously cutting costs by 40%, all provide firm footholds for teams. There are several reasons:

• Specific team-performance goals help define a set of work products that are different both from an organization-wide mission and from individual job objectives. As a result, such work products require the collective effort of team members to make something specific happen that, in and of itself, adds real value to results. By contrast, simply gathering from time to time to make decisions will not sustain team performance.

• The specificity of performance objectives facilitates clear communication and constructive conflict within the team. When a plant-level team, for example, sets a goal of reducing average machine changeover time to two hours, the clarity of the goal forces the team to concentrate on what it would take either to achieve or to reconsider the goal. When such goals are clear, discussions can focus on how to pursue them or whether to change them; when goals are ambiguous or nonexistent, such discussions are much less productive.

• The attainability of specific goals helps teams maintain their focus on getting results. A product-development team at Eli Lilly’s Peripheral Systems Division set definite yardsticks for the market introduction of an ultrasonic probe to help doctors locate deep veins and arteries.

The probe had to have an audible signal through a specified depth of tissue, be capable of being manufactured at a rate of 100 per day, and have a unit cost less than a preestablished amount. Because the team could measure its progress against each of these specific objectives, the team knew throughout the development process where it stood. Either it had achieved its goals or not.

• As Outward Bound and other team-building programs illustrate, specific objectives have a leveling effect conducive to team behavior. When a small group of people challenge themselves to get over a wall or to reduce cycle time by 50%, their respective titles, perks, and other stripes fade into the background. The teams that succeed evaluate what and how each individual can best contribute to the team’s goal and, more important, do so in terms of the performance objective itself rather than a person’s status or personality.

• Specific goals allow a team to achieve small wins as it pursues its broader purpose. These small wins are invaluable to building commitment and overcoming the inevitable obstacles that get in the way of a long-term purpose. For example, the Knight Ridder team mentioned at the outset turned a narrow goal to eliminate errors into a compelling customer service purpose.

• Performance goals are compelling. They are symbols of accomplishment that motivate and energize. They challenge the people on a team to commit themselves, as a team, to make a difference. Drama, urgency, and a healthy fear of failure combine to drive teams that have their collective eye on an attainable, but challenging, goal. Nobody but the team can make it happen. It’s their challenge.

The combination of purpose and specific goals is essential to performance. Each depends on the other to remain relevant and vital. Clear performance goals help a team keep track of progress and hold itself accountable; the broader, even nobler, aspirations in a team’s purpose supply both meaning and emotional energy.

Virtually all effective teams we have met, read or heard about, or been members of have ranged between two and 25 people. For example, the Burlington Northern piggybacking team had seven members, and the Knight Ridder newspaper team had 14. The majority of them have numbered less than ten. Small size is admittedly more of a pragmatic guide than an absolute necessity for success. A large number of people, say 50 or more, can theoretically become a team. But groups of such size are more likely to break into subteams rather than function as a single unit.

Why? Large numbers of people have trouble interacting constructively as a group, much less doing real work together. Ten people are far more likely than 50 to work through their individual, functional, and hierarchical differences toward a common plan and to hold themselves jointly accountable for the results.

Large groups also face logistical issues, such as finding enough physical space and time to meet. And they confront more complex constraints, like crowd or herd behaviors, which prevent the intense sharing of viewpoints needed to build a team. As a result, when they try to develop a common purpose, they usually produce only superficial “missions” and well-meaning intentions that cannot be translated into concrete objectives. They tend fairly quickly to reach a point when meetings become a chore, a clear sign that most of the people in the group are uncertain why they have gathered, beyond some notion of getting along better. Anyone who has been through one of these exercises understands how frustrating it can be. This kind of failure tends to foster cynicism, which gets in the way of future team efforts.

In addition to finding the right size, teams must develop the right mix of skills; that is, each of the complementary skills necessary to do the team’s job. As obvious as it sounds, it is a common failing in potential teams. Skill requirements fall into three fairly self-evident categories.

Technical or functional expertise

It would make little sense for a group of doctors to litigate an employment discrimination case in a court of law. Yet teams of doctors and lawyers often try medical malpractice or personal injury cases. Similarly, product development groups that include only marketers or engineers are less likely to succeed than those with the complementary skills of both.

Problem-solving and decision-making skills

Teams must be able to identify the problems and opportunities they face, evaluate the options they have for moving forward, and then make necessary trade-offs and decisions about how to proceed. Most teams need some members with these skills to begin with, although many will develop them best on the job.

Interpersonal skills

Common understanding and purpose cannot arise without effective communication and constructive conflict, which in turn depend on interpersonal skills. These skills include risk taking, helpful criticism, objectivity, active listening, giving the benefit of the doubt, and recognizing the interests and achievements of others.

Obviously, a team cannot get started without some minimum complement of skills, especially technical and functional ones. Still, think about how often you’ve been part of a team whose members were chosen primarily on the basis of personal compatibility or formal position in the organization, and in which the skill mix of its members wasn’t given much thought.

Not All Groups Are Teams: How to Tell the Difference

Working Group

• Strong, clearly focused leader

• Individual accountability

• The group’s purpose is the same as the broader organizational mission

• Individual work products

• Runs efficient meetings

• Measures its effectiveness indirectly by its influence on others (such as financial performance of the business)

• Discusses, decides, and delegates

Team

• Shared leadership roles

• Individual and mutual accountability

• Specific team purpose that the team itself delivers

• Collective work products

• Encourages open-ended discussion and active problem-solving meetings

• Measures performance directly by assessing collective work products

• Discusses, decides, and does real work together

It is equally common to overemphasize skills in team selection. Yet in all the successful teams we’ve encountered, not one had all the needed skills at the outset. The Burlington Northern team, for example, initially had no members who were skilled marketers despite the fact that their performance challenge was a marketing one. In fact, we discovered that teams are powerful vehicles for developing the skills needed to meet the team’s performance challenge. Accordingly, team member selection ought to ride as much on skill potential as on skills already proven.

Effective teams develop strong commitment to a common approach; that is, to how they will work together to accomplish their purpose. Team members must agree on who will do particular jobs, how schedules will be set and adhered to, what skills need to be developed, how continuing membership in the team is to be earned, and how the group will make and modify decisions. This element of commitment is as important to team performance as the team’s commitment to its purpose and goals.

Agreeing on the specifics of work and how they fit together to integrate individual skills and advance team performance lies at the heart of shaping a common approach. It is perhaps self-evident that an approach that delegates all the real work to a few members (or staff outsiders) and thus relies on reviews and meetings for its only “work together” aspects, cannot sustain a real team. Every member of a successful team does equivalent amounts of real work; all members, including the team leader, contribute in concrete ways to the team’s work product. This is a very important element of the emotional logic that drives team performance.

When individuals approach a team situation, especially in a business setting, each has preexisting job assignments as well as strengths and weaknesses reflecting a variety of talents, backgrounds, personalities, and prejudices. Only through the mutual discovery and understanding of how to apply all its human resources to a common purpose can a team develop and agree on the best approach to achieve its goals. At the heart of such long and, at times, difficult interactions lies a commitment-building process in which the team candidly explores who is best suited to each task as well as how individual roles will come together. In effect, the team establishes a social contract among members that relates to their purpose and guides and obligates how they must work together.

No group ever becomes a team until it can hold itself accountable as a team. Like common purpose and approach, mutual accountability is a stiff test. Think, for example, about the subtle but critical difference between “the boss holds me accountable” and “we hold ourselves accountable.” The first case can lead to the second, but without the second, there can be no team.

Companies like Hewlett-Packard and Motorola have an ingrained performance ethic that enables teams to form organically whenever there is a clear performance challenge requiring collective rather than individual effort. In these companies, the factor of mutual accountability is commonplace. “Being in the boat together” is how their performance game is played.

At its core, team accountability is about the sincere promises we make to ourselves and others, promises that underpin two critical aspects of effective teams: commitment and trust. Most of us enter a potential team situation cautiously because ingrained individualism and experience discourage us from putting our fates in the hands of others or accepting responsibility for others. Teams do not succeed by ignoring or wishing away such behavior.

Mutual accountability cannot be coerced any more than people can be made to trust one another. But when a team shares a common purpose, goals, and approach, mutual accountability grows as a natural counterpart. Accountability arises from and reinforces the time, energy, and action invested in figuring out what the team is trying to accomplish and how best to get it done.

When people work together toward a common objective, trust and commitment follow. Consequently, teams enjoying a strong common purpose and approach inevitably hold themselves responsible, both as individuals and as a team, for the team’s performance. This sense of mutual accountability also produces the rich rewards of mutual achievement in which all members share. What we heard over and over from members of effective teams is that they found the experience energizing and motivating in ways that their “normal” jobs never could match.

On the other hand, groups established primarily for the sake of becoming a team or for job enhancement, communication, organizational effectiveness, or excellence rarely become effective teams, as demonstrated by the bad feelings left in many companies after experimenting with quality circles that never translated “quality” into specific goals. Only when appropriate performance goals are set does the process of discussing the goals and the approaches to them give team members a clearer and clearer choice: They can disagree with a goal and the path that the team selects and, in effect, opt out, or they can pitch in and become accountable with and to their teammates.

The discipline of teams we’ve outlined is critical to the success of all teams. Yet it is also useful to go one step further. Most teams can be classified in one of three ways: teams that recommend things, teams that make or do things, and teams that run things. In our experience, each type faces a characteristic set of challenges.

Teams that recommend things

These teams include task forces; project groups; and audit, quality, or safety groups asked to study and solve particular problems. Teams that recommend things almost always have predetermined completion dates. Two critical issues are unique to such teams: getting off to a fast and constructive start and dealing with the ultimate handoff that’s required to get recommendations implemented.

The key to the first issue lies in the clarity of the team’s charter and the composition of its membership. In addition to wanting to know why and how their efforts are important, task forces need a clear definition of whom management expects to participate and the time commitment required. Management can help by ensuring that the team includes people with the skills and influence necessary for crafting practical recommendations that will carry weight throughout the organization. Moreover, management can help the team get the necessary cooperation by opening doors and dealing with political obstacles.

Missing the handoff is almost always the problem that stymies teams that recommend things. To avoid this, the transfer of responsibility for recommendations to those who must implement them demands top management’s time and attention. The more top managers assume that recommendations will “just happen,” the less likely it is that they will. The more involvement task force members have in implementing their recommendations, the more likely they are to get implemented.

To the extent that people outside the task force will have to carry the ball, it is critical to involve them in the process early and often, certainly well before recommendations are finalized. Such involvement may take many forms, including participating in interviews, helping with analyses, contributing and critiquing ideas, and conducting experiments and trials. At a minimum, anyone responsible for implementation should receive a briefing on the task force’s purpose, approach, and objectives at the beginning of the effort as well as regular reviews of progress.

Teams that make or do things

These teams include people at or near the front lines who are responsible for doing the basic manufacturing, development, operations, marketing, sales, service, and other value-adding activities of a business. With some exceptions, such as new-product development or process design teams, teams that make or do things tend to have no set completion dates because their activities are ongoing.

In deciding where team performance might have the greatest impact, top management should concentrate on what we call the company’s “critical delivery points”—that is, places in the organization where the cost and value of the company’s products and services are most directly determined. Such critical delivery points might include where accounts get managed, customer service performed, products designed, and productivity determined. If performance at critical delivery points depends on combining multiple skills, perspectives, and judgments in real time, then the team option is the smartest one.

When an organization does require a significant number of teams at these points, the sheer challenge of maximizing the performance of so many groups will demand a carefully constructed and performance-focused set of management processes. The issue here for top management is how to build the necessary systems and process supports without falling into the trap of appearing to promote teams for their own sake.

The imperative here, returning to our earlier discussion of the basic discipline of teams, is a relentless focus on performance. If management fails to pay persistent attention to the link between teams and performance, the organization becomes convinced that “this year, we are doing ‘teams’.” Top management can help by instituting processes like pay schemes and training for teams responsive to their real time needs, but more than anything else, top management must make clear and compelling demands on the teams themselves and then pay constant attention to their progress with respect to both team basics and performance results. This means focusing on specific teams and specific performance challenges. Otherwise “performance,” like “team,” will become a cliché.

Teams that run things

Despite the fact that many leaders refer to the group reporting to them as a team, few groups really are. And groups that become real teams seldom think of themselves as a team because they are so focused on performance results. Yet the opportunity for such teams includes groups from the top of the enterprise down through the divisional or functional level. Whether it is in charge of thousands of people or just a handful, as long as the group oversees some business, ongoing program, or significant functional activity, it is a team that runs things.

The main issue these teams face is determining whether a real team approach is the right one. Many groups that run things can be more effective as working groups than as teams. The key judgment is whether the sum of individual bests will suffice for the performance challenge at hand or whether the group must deliver substantial incremental performance requiring real joint work products. Although the team option promises greater performance, it also brings more risk, and managers must be brutally honest in assessing the trade-offs.

Members may have to overcome a natural reluctance to trust their fate to others. The price of faking the team approach is high: At best, members get diverted from their individual goals, costs outweigh benefits, and people resent the imposition on their time and priorities. At worst, serious animosities develop that undercut even the potential personal bests of the working-group approach.

Working groups present fewer risks. Effective working groups need little time to shape their purpose, since the leader usually establishes it. Meetings are run against well-prioritized agendas. And decisions are implemented through specific individual assignments and accountabilities. Most of the time, therefore, if performance aspirations can be met through individuals doing their respective jobs well, the working-group approach is more comfortable, less risky, and less disruptive than trying for more elusive team performance levels. Indeed, if there is no performance need for the team approach, efforts spent to improve the effectiveness of the working group make much more sense than floundering around trying to become a team.

Having said that, we believe the extra level of performance teams can achieve is becoming critical for a growing number of companies, especially as they move through major changes during which company performance depends on broad-based behavioral change. When top management uses teams to run things, it should make sure the team succeeds in identifying specific purposes and goals.

This is a second major issue for teams that run things. Too often, such teams confuse the broad mission of the total organization with the specific purpose of their small group at the top. The discipline of teams tells us that for a real team to form, there must be a team purpose that is distinctive and specific to the small group and that requires its members to roll up their sleeves and accomplish something beyond individual end products. If a group of managers looks only at the economic performance of the part of the organization it runs to assess overall effectiveness, the group will not have any team performance goals of its own.

While the basic discipline of teams does not differ for them, teams at the top are certainly the most difficult. The complexities of long-term challenges, heavy demands on executive time, and the deep-seated individualism of senior people conspire against teams at the top. At the same time, teams at the top are the most powerful. At first we thought such teams were nearly impossible. That is because we were looking at the teams as defined by the formal organizational structure; that is, the leader and all his or her direct reports equals the team. Then we discovered that real teams at the top were often smaller and less formalized: Whitehead and Weinberg at Goldman Sachs; Hewlett and Packard at HP; Krasnoff, Pall, and Hardy at Pall Corporation; Kendall, Pearson, and Calloway at Pepsi; Haas and Haas at Levi Strauss; Batten and Ridder at Knight Ridder. They were mostly twos and threes, with an occasional fourth.

Nonetheless, real teams at the top of large, complex organizations are still few and far between. Far too many groups at the top of large corporations needlessly constrain themselves from achieving real team levels of performance because they assume that all direct reports must be on the team, that team goals must be identical to corporate goals, that the team members’ positions rather than skills determine their respective roles, that a team must be a team all the time, and that the team leader is above doing real work.

As understandable as these assumptions may be, most of them are unwarranted. They do not apply to the teams at the top we have observed, and when replaced with more realistic and flexible assumptions that permit the team discipline to be applied, real team performance at the top can and does occur. Moreover, as more and more companies are confronted with the need to manage major change across their organizations, we will see more real teams at the top.

We believe that teams will become the primary unit of performance in high-performance organizations. But that does not mean that teams will crowd out individual opportunity or formal hierarchy and process. Rather, teams will enhance existing structures without replacing them. A team opportunity exists anywhere hierarchy or organizational boundaries inhibit the skills and perspectives needed for optimal results. Thus, new-product innovation requires preserving functional excellence through structure while eradicating functional bias through teams. And frontline productivity requires preserving direction and guidance through hierarchy while drawing on energy and flexibility through self-managing teams.

Building Team Performance

Although there is no guaranteed how-to recipe for building team performance, we observed a number of approaches shared by many successful teams.

Establish urgency, demanding performance standards, and direction

All team members need to believe the team has urgent and worthwhile purposes, and they want to know what the expectations are. Indeed, the more urgent and meaningful the rationale, the more likely it is that the team will live up to its performance potential, as was the case for a customer-service team that was told that further growth for the entire company would be impossible without major improvements in that area. Teams work best in a compelling context. That is why companies with strong performance ethics usually form teams readily.

Select members for skill and skill potential, not personality

No team succeeds without all the skills needed to meet its purpose and performance goals. Yet most teams figure out the skills they will need after they are formed. The wise manager will choose people for their existing skills and their potential to improve existing skills and learn new ones.

Pay particular attention to first meetings and actions. Initial impressions always mean a great deal

When potential teams first gather, everyone monitors the signals given by others to confirm, suspend, or dispel assumptions and concerns. They pay particular attention to those in authority: the team leader and any executives who set up, oversee, or otherwise influence the team. And, as always, what such leaders do is more important than what they say. If a senior executive leaves the team kickoff to take a phone call ten minutes after the session has begun and he never returns, people get the message.

Set some clear rules of behavior

All effective teams develop rules of conduct at the outset to help them achieve their purpose and performance goals. The most critical initial rules pertain to attendance (for example, “no interruptions to take phone calls”), discussion (“no sacred cows”), confidentiality (“the only things to leave this room are what we agree on”), analytic approach (“facts are friendly”), end-product orientation (“everyone gets assignments and does them”), constructive confrontation (“no finger pointing”), and, often the most important, contributions (“everyone does real work”).

Set and seize upon a few immediate performance-oriented tasks and goals

Most effective teams trace their advancement to key performance-oriented events. Such events can be set in motion by immediately establishing a few challenging goals that can be reached early on. There is no such thing as a real team without performance results, so the sooner such results occur, the sooner the team congeals.

Challenge the group regularly with fresh facts and information

New information causes a team to redefine and enrich its understanding of the performance challenge, thereby helping the team shape a common purpose, set clearer goals, and improve its common approach. A plant quality improvement team knew the cost of poor quality was high, but it wasn’t until they researched the different types of defects and put a price tag on each one that they knew where to go next. Conversely, teams err when they assume that all the information needed exists in the collective experience and knowledge of their members.

Spend lots of time together

Common sense tells us that team members must spend a lot of time together, scheduled and unscheduled, especially in the beginning. Indeed, creative insights as well as personal bonding require impromptu and casual interactions just as much as analyzing spreadsheets and interviewing customers. Busy executives and managers too often intentionally minimize the time they spend together. The successful teams we’ve observed all gave themselves the time to learn to be a team. This time need not always be spent together physically; electronic, fax, and phone time can also count as time spent together.

Exploit the power of positive feedback, recognition, and reward

Positive reinforcement works as well in a team context as elsewhere. Giving out “gold stars” helps shape new behaviors critical to team performance. If people in the group, for example, are alert to a shy person’s initial efforts to speak up and contribute, they can give the honest positive reinforcement that encourages continued contributions. There are many ways to recognize and reward team performance beyond direct compensation, from having a senior executive speak directly to the team about the urgency of its mission to using awards to recognize contributions. Ultimately, however, the satisfaction shared by a team in its own performance becomes the most cherished reward.

We are convinced that every company faces specific performance challenges for which teams are the most practical and powerful vehicle at top management’s disposal. The critical role for senior managers, therefore, is to worry about company performance and the kinds of teams that can deliver it. This means top management must recognize a team’s unique potential to deliver results, deploy teams strategically when they are the best tool for the job, and foster the basic discipline of teams that will make them effective. By doing so, top management creates the kind of environment that enables team as well as individual and organizational performance.

Originally published in March 1993. Reprint R0507P

Managing Your Boss

by John J. Gabarro and John P. Kotter

TO MANY PEOPLE, THE PHRASE “managing your boss” may sound unusual or suspicious. Because of the traditional top-down emphasis in most organizations, it is not obvious why you need to manage relationships upward—unless, of course, you would do so for personal or political reasons. But we are not referring to political maneuvering or to apple polishing. We are using the term to mean the process of consciously working with your superior to obtain the best possible results for you, your boss, and the company.

Recent studies suggest that effective managers take time and effort to manage not only relationships with their subordinates but also those with their bosses. These studies also show that this essential aspect of management is sometimes ignored by otherwise talented and aggressive managers. Indeed, some managers who actively and effectively supervise subordinates, products, markets, and technologies assume an almost passively reactive stance vis-à-vis their bosses. Such a stance almost always hurts them and their companies.

If you doubt the importance of managing your relationship with your boss or how difficult it is to do so effectively, consider for a moment the following sad but telling story:

Frank Gibbons was an acknowledged manufacturing genius in his industry and, by any profitability standard, a very effective executive. In 1973, his strengths propelled him into the position of vice president of manufacturing for the second largest and most profitable company in its industry. Gibbons was not, however, a good manager of people. He knew this, as did others in his company and his industry. Recognizing this weakness, the president made sure that those who reported to Gibbons were good at working with people and could compensate for his limitations. The arrangement worked well.

In 1975, Philip Bonnevie was promoted into a position reporting to Gibbons. In keeping with the previous pattern, the president selected Bonnevie because he had an excellent track record and a reputation for being good with people. In making that selection, however, the president neglected to notice that, in his rapid rise through the organization, Bonnevie had always had good-to-excellent bosses. He had never been forced to manage a relationship with a difficult boss. In retrospect, Bonnevie admits he had never thought that managing his boss was a part of his job.

Fourteen months after he started working for Gibbons, Bonnevie was fired. During that same quarter, the company reported a net loss for the first time in seven years. Many of those who were close to these events say that they don’t really understand what happened. This much is known, however: While the company was bringing out a major new product—a process that required sales, engineering, and manufacturing groups to coordinate decisions very carefully—a whole series of misunderstandings and bad feelings developed between Gibbons and Bonnevie.

For example, Bonnevie claims Gibbons was aware of and had accepted Bonnevie’s decision to use a new type of machinery to make the new product; Gibbons swears he did not. Furthermore, Gibbons claims he made it clear to Bonnevie that the introduction of the product was too important to the company in the short run to take any major risks.

As a result of such misunderstandings, planning went awry: A new manufacturing plant was built that could not produce the new product designed by engineering, in the volume desired by sales, at a cost agreed on by the executive committee. Gibbons blamed Bonnevie for the mistake. Bonnevie blamed Gibbons.

Idea in Brief

Managing our bosses? Isn’t that merely manipulation? Corporate cozying up? Out-and-out apple polishing? In fact, we manage our bosses for very good reasons: to get resources to do the best job, not only for ourselves, but for our bosses and our companies as well. We actively pursue a healthy and productive working relationship based on mutual respect and understanding—understanding our own and our bosses’ strengths, weaknesses, goals, work styles, and needs. Here’s what can happen when we don’t:

Example: A new president with a formal work style replaced someone who’d been looser, more intuitive. The new president preferred written reports and structured meetings. One of his managers found this too controlling. He seldom sent background information, and was often blindsided by unanticipated questions. His boss found their meetings inefficient and frustrating. The manager had to resign.

In contrast, here’s how another manager’s sensitivity to this same boss’s style really paid off:

Example: This manager identified the kinds and frequency of information the president wanted. He sent ahead background reports and discussion agendas. The result? Highly productive meetings and even more innovative problem solving than with his previous boss.

Managers often don’t realize how much their bosses depend on them. They need cooperation, reliability, and honesty from their direct reports. Many managers also don’t realize how much they depend on their bosses—for links to the rest of the organization, for setting priorities, and for obtaining critical resources.

Recognizing this mutual dependence, effective managers seek out information about the boss’s concerns and are sensitive to his work style. They also understand how their own attitudes toward authority can sabotage the relationship. Some see the boss as the enemy and fight him at every turn; others are overly compliant, viewing the boss as an all-wise parent.

Of course, one could argue that the problem here was caused by Gibbons’s inability to manage his subordinates. But one can make just as strong a case that the problem was related to Bonnevie’s inability to manage his boss. Remember, Gibbons was not having difficulty with any other subordinates. Moreover, given the personal price paid by Bonnevie (being fired and having his reputation within the industry severely tarnished), there was little consolation in saying the problem was that Gibbons was poor at managing subordinates. Everyone already knew that.

Idea in Practice

You can benefit from this mutual dependence and develop a very productive relationship with your boss by focusing on:

• compatible work styles. Bosses process information differently. “Listeners” prefer to be briefed in person so they can ask questions. “Readers” want to process written information first, and then meet to discuss.

Decision-making styles also vary. Some bosses are highly involved. Touch base with them frequently. Others prefer to delegate. Inform them about important decisions you’ve already made.

• mutual expectations. Don’t passively assume you know what the boss expects. Find out. With some bosses, write detailed outlines of your work for their approval. With others, carefully planned discussions are key.

Also, communicate your expectations to find out if they are realistic. Persuade the boss to accept the most important ones.

• information flow. Managers typically underestimate what their bosses need to know—and what they do know. Keep the boss informed through processes that fit his style. Be forthright about both good and bad news.

• dependability and honesty. Trustworthy subordinates only make promises they can keep and don’t shade the truth or play down difficult issues.

• good use of time and resources. Don’t waste your boss’s time with trivial issues. Selectively draw on his time and resources to meet the most important goals—yours, his, and the company’s.

We believe that the situation could have turned out differently had Bonnevie been more adept at understanding Gibbons and at managing his relationship with him. In this case, an inability to manage upward was unusually costly. The company lost $2 million to $5 million, and Bonnevie’s career was, at least temporarily, disrupted. Many less costly cases similar to this probably occur regularly in all major corporations, and the cumulative effect can be very destructive.

Misreading the Boss–Subordinate Relationship

People often dismiss stories like the one we just related as being merely cases of personality conflict. Because two people can on occasion be psychologically or temperamentally incapable of working together, this can be an apt description. But more often, we have found, a personality conflict is only a part of the problem—sometimes a very small part.

Bonnevie did not just have a different personality from Gibbons, he also made or had unrealistic assumptions and expectations about the very nature of boss–subordinate relationships. Specifically, he did not recognize that his relationship to Gibbons involved mutual dependence between two fallible human beings. Failing to recognize this, a manager typically either avoids trying to manage his or her relationship with a boss or manages it ineffectively.

Some people behave as if their bosses were not very dependent on them. They fail to see how much the boss needs their help and cooperation to do his or her job effectively. These people refuse to acknowledge that the boss can be severely hurt by their actions and needs cooperation, dependability, and honesty from them.

Some people see themselves as not very dependent on their bosses. They gloss over how much help and information they need from the boss in order to perform their own jobs well. This superficial view is particularly damaging when a manager’s job and decisions affect other parts of the organization, as was the case in Bonnevie’s situation. A manager’s immediate boss can play a critical role in linking the manager to the rest of the organization, making sure the manager’s priorities are consistent with organizational needs, and in securing the resources the manager needs to perform well. Yet some managers need to see themselves as practically self-sufficient, as not needing the critical information and resources a boss can supply.

Many managers, like Bonnevie, assume that the boss will magically know what information or help their subordinates need and provide it to them. Certainly, some bosses do an excellent job of caring for their subordinates in this way, but for a manager to expect that from all bosses is dangerously unrealistic. A more reasonable expectation for managers to have is that modest help will be forthcoming. After all, bosses are only human. Most really effective managers accept this fact and assume primary responsibility for their own careers and development. They make a point of seeking the information and help they need to do a job instead of waiting for their bosses to provide it.

In light of the foregoing, it seems to us that managing a situation of mutual dependence among fallible human beings requires the following:

1. You have a good understanding of the other person and yourself, especially regarding strengths, weaknesses, work styles, and needs.

2. You use this information to develop and manage a healthy working relationship—one that is compatible with both people’s work styles and assets, is characterized by mutual expectations, and meets the most critical needs of the other person.

This combination is essentially what we have found highly effective managers doing.

Understanding the Boss

Managing your boss requires that you gain an understanding of the boss and his or her context, as well as your own situation. All managers do this to some degree, but many are not thorough enough.

At a minimum, you need to appreciate your boss’s goals and pressures, his or her strengths and weaknesses. What are your boss’s organizational and personal objectives, and what are his or her pressures, especially those from his or her own boss and others at the same level? What are your boss’s long suits and blind spots? What is the preferred style of working? Does your boss like to get information through memos, formal meetings, or phone calls? Does he or she thrive on conflict or try to minimize it? Without this information, a manager is flying blind when dealing with the boss, and unnecessary conflicts, misunderstandings, and problems are inevitable.

In one situation we studied, a top-notch marketing manager with a superior performance record was hired into a company as a vice president “to straighten out the marketing and sales problems.” The company, which was having financial difficulties, had recently been acquired by a larger corporation. The president was eager to turn it around and gave the new marketing vice president free rein—at least initially. Based on his previous experience, the new vice president correctly diagnosed that greater market share was needed for the company and that strong product management was required to bring that about. Following that logic, he made a number of pricing decisions aimed at increasing high-volume business.

When margins declined and the financial situation did not improve, however, the president increased pressure on the new vice president. Believing that the situation would eventually correct itself as the company gained back market share, the vice president resisted the pressure.

When by the second quarter, margins and profits had still failed to improve, the president took direct control over all pricing decisions and put all items on a set level of margin, regardless of volume. The new vice president began to find himself shut out by the president, and their relationship deteriorated. In fact, the vice president found the president’s behavior bizarre. Unfortunately, the president’s new pricing scheme also failed to increase margins, and by the fourth quarter, both the president and the vice president were fired.

What the new vice president had not known until it was too late was that improving marketing and sales had been only one of the president’s goals. His most immediate goal had been to make the company more profitable—quickly.

Nor had the new vice president known that his boss was invested in this short-term priority for personal as well as business reasons. The president had been a strong advocate of the acquisition within the parent company, and his personal credibility was at stake.

The vice president made three basic errors. He took information supplied to him at face value, he made assumptions in areas where he had no information, and—what was most damaging—he never actively tried to clarify what his boss’s objectives were. As a result, he ended up taking actions that were actually at odds with the president’s priorities and objectives.

Managers who work effectively with their bosses do not behave this way. They seek out information about the boss’s goals and problems and pressures. They are alert for opportunities to question the boss and others around him or her to test their assumptions. They pay attention to clues in the boss’s behavior. Although it is imperative that they do this especially when they begin working with a new boss, effective managers also do this on an ongoing basis because they recognize that priorities and concerns change.

Being sensitive to a boss’s work style can be crucial, especially when the boss is new. For example, a new president who was organized and formal in his approach replaced a man who was informal and intuitive. The new president worked best when he had written reports. He also preferred formal meetings with set agendas.

One of his division managers realized this need and worked with the new president to identify the kinds and frequency of information and reports that the president wanted. This manager also made a point of sending background information and brief agendas ahead of time for their discussions. He found that with this type of preparation their meetings were very useful. Another interesting result was, he found that with adequate preparation his new boss was even more effective at brainstorming problems than his more informal and intuitive predecessor had been.

In contrast, another division manager never fully understood how the new boss’s work style differed from that of his predecessor. To the degree that he did sense it, he experienced it as too much control. As a result, he seldom sent the new president the background information he needed, and the president never felt fully prepared for meetings with the manager. In fact, the president spent much of the time when they met trying to get information that he felt he should have had earlier. The boss experienced these meetings as frustrating and inefficient, and the subordinate often found himself thrown off guard by the questions that the president asked. Ultimately, this division manager resigned.

The difference between the two division managers just described was not so much one of ability or even adaptability. Rather, one of the men was more sensitive to his boss’s work style and to the implications of his boss’s needs than the other was.

Understanding Yourself

The boss is only one-half of the relationship. You are the other half, as well as the part over which you have more direct control. Developing an effective working relationship requires, then, that you know your own needs, strengths and weaknesses, and personal style.

You are not going to change either your basic personality structure or that of your boss. But you can become aware of what it is about you that impedes or facilitates working with your boss and, with that awareness, take actions that make the relationship more effective.

For example, in one case we observed, a manager and his superior ran into problems whenever they disagreed. The boss’s typical response was to harden his position and overstate it. The manager’s reaction was then to raise the ante and intensify the forcefulness of his argument. In doing this, he channeled his anger into sharpening his attacks on the logical fallacies he saw in his boss’s assumptions. His boss in turn would become even more adamant about holding his original position. Predictably, this escalating cycle resulted in the subordinate avoiding whenever possible any topic of potential conflict with his boss.

In discussing this problem with his peers, the manager discovered that his reaction to the boss was typical of how he generally reacted to counterarguments—but with a difference. His response would overwhelm his peers but not his boss. Because his attempts to discuss this problem with his boss were unsuccessful, he concluded that the only way to change the situation was to deal with his own instinctive reactions. Whenever the two reached an impasse, he would check his own impatience and suggest that they break up and think about it before getting together again. Usually when they renewed their discussion, they had digested their differences and were more able to work them through.

Gaining this level of self-awareness and acting on it are difficult but not impossible. For example, by reflecting over his past experiences, a young manager learned that he was not very good at dealing with difficult and emotional issues where people were involved. Because he disliked those issues and realized that his instinctive responses to them were seldom very good, he developed a habit of touching base with his boss whenever such a problem arose. Their discussions always surfaced ideas and approaches the manager had not considered. In many cases, they also identified specific actions the boss could take to help.

Although a superior–subordinate relationship is one of mutual dependence, it is also one in which the subordinate is typically more dependent on the boss than the other way around. This dependence inevitably results in the subordinate feeling a certain degree of frustration, sometimes anger, when his actions or options are constrained by his boss’s decisions. This is a normal part of life and occurs in the best of relationships. The way in which a manager handles these frustrations largely depends on his or her predisposition toward dependence on authority figures.

Some people’s instinctive reaction under these circumstances is to resent the boss’s authority and to rebel against the boss’s decisions. Sometimes a person will escalate a conflict beyond what is appropriate. Seeing the boss almost as an institutional enemy, this type of manager will often, without being conscious of it, fight with the boss just for the sake of fighting. The subordinate’s reactions to being constrained are usually strong and sometimes impulsive. He or she sees the boss as someone who, by virtue of the role, is a hindrance to progress, an obstacle to be circumvented or at best tolerated.

Psychologists call this pattern of reactions counterdependent behavior. Although a counterdependent person is difficult for most superiors to manage and usually has a history of strained relationships with superiors, this sort of manager is apt to have even more trouble with a boss who tends to be directive or authoritarian. When the manager acts on his or her negative feelings, often in subtle and nonverbal ways, the boss sometimes does become the enemy. Sensing the subordinate’s latent hostility, the boss will lose trust in the subordinate or his or her judgment and then behave even less openly.

Paradoxically, a manager with this type of predisposition is often a good manager of his or her own people. He or she will many times go out of the way to get support for them and will not hesitate to go to bat for them.

At the other extreme are managers who swallow their anger and behave in a very compliant fashion when the boss makes what they know to be a poor decision. These managers will agree with the boss even when a disagreement might be welcome or when the boss would easily alter a decision if given more information. Because they bear no relationship to the specific situation at hand, their responses are as much an overreaction as those of counterdependent managers. Instead of seeing the boss as an enemy, these people deny their anger—the other extreme—and tend to see the boss as if he or she were an all-wise parent who should know best, should take responsibility for their careers, train them in all they need to know, and protect them from overly ambitious peers.

Both counterdependence and overdependence lead managers to hold unrealistic views of what a boss is. Both views ignore that bosses, like everyone else, are imperfect and fallible. They don’t have unlimited time, encyclopedic knowledge, or extrasensory perception; nor are they evil enemies. They have their own pressures and concerns that are sometimes at odds with the wishes of the subordinate—and often for good reason.

Altering predispositions toward authority, especially at the extremes, is almost impossible without intensive psychotherapy (psychoanalytic theory and research suggest that such predispositions are deeply rooted in a person’s personality and upbringing). However, an awareness of these extremes and the range between them can be very useful in understanding where your own predispositions fall and what the implications are for how you tend to behave in relation to your boss.

If you believe, on the one hand, that you have some tendencies toward counterdependence, you can understand and even predict what your reactions and overreactions are likely to be. If, on the other hand, you believe you have some tendencies toward overdependence, you might question the extent to which your overcompliance or inability to confront real differences may be making both you and your boss less effective.

Developing and Managing the Relationship

With a clear understanding of both your boss and yourself, you can usually establish a way of working together that fits both of you, that is characterized by unambiguous mutual expectations, and that helps you both be more productive and effective. The “Checklist for managing your boss” summarizes some things such a relationship consists of. Following are a few more.

Checklist for Managing Your Boss

Make sure you understand your boss and his or her context, including:

■ Goals and objectives

■ Pressures

■ Strengths, weaknesses, blind spots

■ Preferred work style

Assess yourself and your needs, including:

■ Strengths and weaknesses

■ Personal style

■ Predisposition toward dependence on authority figures

Develop and maintain a relationship that:

■ Fits both your needs and styles

■ Is characterized by mutual expectations

■ Keeps your boss informed

■ Is based on dependability and honesty

■ Selectively uses your boss’s time and resources

Compatible work styles

Above all else, a good working relationship with a boss accommodates differences in work style. For example, in one situation we studied, a manager (who had a relatively good relationship with his superior) realized that during meetings his boss would often become inattentive and sometimes brusque. The subordinate’s own style tended to be discursive and exploratory. He would often digress from the topic at hand to deal with background factors, alternative approaches, and so forth. His boss preferred to discuss problems with a minimum of background detail and became impatient and distracted whenever his subordinate digressed from the immediate issue.

Recognizing this difference in style, the manager became terser and more direct during meetings with his boss. To help himself do this, before meetings, he would develop brief agendas that he used as a guide. Whenever he felt that a digression was needed, he explained why. This small shift in his own style made these meetings more effective and far less frustrating for both of them.

Subordinates can adjust their styles in response to their bosses’ preferred method for receiving information. Peter Drucker divides bosses into “listeners” and “readers.” Some bosses like to get information in report form so they can read and study it. Others work better with information and reports presented in person so they can ask questions. As Drucker points out, the implications are obvious. If your boss is a listener, you brief him or her in person, then follow it up with a memo. If your boss is a reader, you cover important items or proposals in a memo or report, then discuss them.

Other adjustments can be made according to a boss’s decision-making style. Some bosses prefer to be involved in decisions and problems as they arise. These are high-involvement managers who like to keep their hands on the pulse of the operation. Usually their needs (and your own) are best satisfied if you touch base with them on an ad hoc basis. A boss who has a need to be involved will become involved one way or another, so there are advantages to including him or her at your initiative. Other bosses prefer to delegate—they don’t want to be involved. They expect you to come to them with major problems and inform them about any important changes.

Creating a compatible relationship also involves drawing on each other’s strengths and making up for each other’s weaknesses. Because he knew that the boss—the vice president of engineering—was not very good at monitoring his employees’ problems, one manager we studied made a point of doing it himself. The stakes were high: The engineers and technicians were all union members, the company worked on a customer-contract basis, and the company had recently experienced a serious strike.

The manager worked closely with his boss, along with people in the scheduling department and the personnel office, to make sure that potential problems were avoided. He also developed an informal arrangement through which his boss would review with him any proposed changes in personnel or assignment policies before taking action. The boss valued his advice and credited his subordinate for improving both the performance of the division and the labor–management climate.

Mutual expectations

The subordinate who passively assumes that he or she knows what the boss expects is in for trouble. Of course, some superiors will spell out their expectations very explicitly and in great detail. But most do not. And although many corporations have systems that provide a basis for communicating expectations (such as formal planning processes, career planning reviews, and performance appraisal reviews), these systems never work perfectly. Also, between these formal reviews, expectations invariably change.

Ultimately, the burden falls on the subordinate to find out what the boss’s expectations are. They can be both broad (such as what kinds of problems the boss wishes to be informed about and when) as well as very specific (such things as when a particular project should be completed and what kinds of information the boss needs in the interim).

Getting a boss who tends to be vague or not explicit to express expectations can be difficult. But effective managers find ways to get that information. Some will draft a detailed memo covering key aspects of their work and then send it to their boss for approval. They then follow this up with a face-to-face discussion in which they go over each item in the memo. A discussion like this will often surface virtually all of the boss’s expectations.

Other effective managers will deal with an inexplicit boss by initiating an ongoing series of informal discussions about “good management” and “our objectives.” Still others find useful information more indirectly through those who used to work for the boss and through the formal planning systems in which the boss makes commitments to his or her own superior. Which approach you choose, of course, should depend on your understanding of your boss’s style.

Developing a workable set of mutual expectations also requires that you communicate your own expectations to the boss, find out if they are realistic, and influence the boss to accept the ones that are important to you. Being able to influence the boss to value your expectations can be particularly important if the boss is an overachiever. Such a boss will often set unrealistically high standards that need to be brought into line with reality.

A flow of information

How much information a boss needs about what a subordinate is doing will vary significantly depending on the boss’s style, the situation he or she is in, and the confidence the boss has in the subordinate. But it is not uncommon for a boss to need more information than the subordinate would naturally supply or for the subordinate to think the boss knows more than he or she really does. Effective managers recognize that they probably underestimate what their bosses need to know and make sure they find ways to keep them informed through processes that fit their styles.

Managing the flow of information upward is particularly difficult if the boss does not like to hear about problems. Although many people would deny it, bosses often give off signals that they want to hear only good news. They show great displeasure—usually nonverbally—when someone tells them about a problem. Ignoring individual achievement, they may even evaluate more favorably subordinates who do not bring problems to them.

Nevertheless, for the good of the organization, the boss, and the subordinate, a superior needs to hear about failures as well as successes. Some subordinates deal with a good-news-only boss by finding indirect ways to get the necessary information to him or her, such as a management information system. Others see to it that potential problems, whether in the form of good surprises or bad news, are communicated immediately.

Dependability and honesty

Few things are more disabling to a boss than a subordinate on whom he cannot depend, whose work he cannot trust. Almost no one is intentionally undependable, but many managers are inadvertently so because of oversight or uncertainty about the boss’s priorities. A commitment to an optimistic delivery date may please a superior in the short term but become a source of displeasure if not honored. It’s difficult for a boss to rely on a subordinate who repeatedly slips deadlines. As one president (describing a subordinate) put it: “I’d rather he be more consistent even if he delivered fewer peak successes—at least I could rely on him.”

Nor are many managers intentionally dishonest with their bosses. But it is easy to shade the truth and play down issues. Current concerns often become future surprise problems. It’s almost impossible for bosses to work effectively if they cannot rely on a fairly accurate reading from their subordinates. Because it undermines credibility, dishonesty is perhaps the most troubling trait a subordinate can have. Without a basic level of trust, a boss feels compelled to check all of a subordinate’s decisions, which makes it difficult to delegate.

Good use of time and resources

Your boss is probably as limited in his or her store of time, energy, and influence as you are. Every request you make of your boss uses up some of these resources, so it’s wise to draw on these resources selectively. This may sound obvious, but many managers use up their boss’s time (and some of their own credibility) over relatively trivial issues.

One vice president went to great lengths to get his boss to fire a meddlesome secretary in another department. His boss had to use considerable influence to do it. Understandably, the head of the other department was not pleased. Later, when the vice president wanted to tackle more important problems, he ran into trouble. By using up blue chips on a relatively trivial issue, he had made it difficult for him and his boss to meet more important goals.

No doubt, some subordinates will resent that on top of all their other duties, they also need to take time and energy to manage their relationships with their bosses. Such managers fail to realize the importance of this activity and how it can simplify their jobs by eliminating potentially severe problems. Effective managers recognize that this part of their work is legitimate. Seeing themselves as ultimately responsible for what they achieve in an organization, they know they need to establish and manage relationships with everyone on whom they depend—and that includes the boss.

Originally published in January 1980. Reprint R0501J

About the Contributors

DANIEL GOLEMAN cochairs the Consortium for Research on Emotional Intelligence in Organizations at Rutgers University.

FREDERICK HERZBERG was a professor of management at the University of Utah.

JEAN-FRANÇOIS MANZONI is a professor of leadership and organizational development at IMD in Switzerland.

JEAN-LOUIS BARSOUX is a senior research fellow at Insead in France.

CAROL A.WALKER is the president of Prepared to Lead, a management consulting firm in Weston, Massachusetts.

MARCUS BUCKINGHAM is a consultant and speaker on leadership and management practices.

W. CHAN KIM is the Boston Consulting Group Bruce D. Henderson Chaired Professor of Strategy and International Management at Insead in France.

RENÉE MAUBORGNE is the Insead Distinguished Fellow and a professor of strategy at Insead in France.

CHRIS ARGYRIS is a professor emeritus at Harvard’s Graduate School of Education.

MAHZARIN R. BANAJI is the Richard Clarke Cabot Professor of Social Ethics at Harvard University.

MAX H. BAZERMAN is the Jesse Isidor Straus Professor of Business Administration at Harvard Business School.

DOLLY CHUGH is an assistant professor of management and organizations at New York University’s Stern School of Business.

JON R. KATZENBACH is a senior partner at Booz & Company, a global management consulting firm.

DOUGLAS K. SMITH is an organizational consultant and a former McKinsey & Company partner.

JOHN J. GABARRO is the UPS Foundation Professor of Human Resource Management, Emeritus, at Harvard Business School.

JOHN P. KOTTER is the Konosuke Matsushita Professor of Leadership, Emeritus, at Harvard Business School.

Index

accountability, and team discipline, 178, 185–186

affiliative leadership style

approach used by, 2, 4, 12

authoritative leadership style used with, 13–14

correlations between aspects of climate and, 10

description of, 12–14

emotional intelligence competencies and, 26

example of leader using, 12–13

impact of, 13

need for mastery of several styles including, 21, 22

situations in which best used, 4–5, 13–14

summary (“At a Glance” chart) of, 15

switching between styles and, 5, 13–14, 22

affirmative action policies, 173

Alberding, Dick, 175

Argyris, Chris, 133–155

Armor, David, 157

authoritative leadership style

affiliative leadership style used with, 13–14

approach used by, 2, 4, 7–10

correlations between aspects of climate and, 10

description of, 7–11

effectiveness of, 10

emotional intelligence competencies and, 26

example of leader using, 7–11

impact of, 11

need for mastery of several styles including, 21, 22–23

situations in which best used, 4, 11

summary (“At a Glance” chart) of, 14

switching between styles and, 5, 13–14, 22–23

authority

managing your boss and attitudes toward, 205

of new managers, 81, 85–86

Banaji, Mahzarin R., 157–173

Bandura, Albert, 103

Barsoux, Jean-Louis, 51–74

Batten, Jim, 175, 191

Bazerman, Max H., 157–173, 165, 166

behavioral science, and motivation, 40–41

Bethlehem Steel Corporation, 126–130

bias

auditing decisions for, 159, 164, 169

conflict of interest and, 166–167

data collection on, 168–170

environmental cues and, 159, 170–171

implicit prejudice from unconscious beliefs and, 158–162

in-group favoritism and, 162–165

overclaiming credit as, 165–166

bosses

managing relationships with. See managing your boss

new managers and support from, 82–84

set-up-to-fail syndrome and intervention by, 69–71

Brosius, Scott, 12

Buckingham, Marcus, 91–110

Burlington Northern, 175, 182, 184

business performance

coaching leadership style and, 20

emotional intelligence components and, 4

leadership style and, 1, 2, 5

Calloway, Wayne, 191

Camus, Albert, 61

Caruso, Eugene, 165

“Checklist for Managing Your Boss,” 206, 207

Chugh, Dolly, 157–173

clarity

authoritative leadership style and, 11

coaching leadership style and, 20

correlations between leadership style and, 10

organizational climate and, 5

climate

coercive leadership style and, 6–7

financial performance influenced by, 4, 5–6

impact of leadership style on, 4, 5, 10

key factors in, 4–5

research on, 3–4

switching between leadership styles and, 5

coaching

great managers and learning styles in, 93, 95, 107–109

growing emotional intelligence using, 24–25

new managers and, 77, 78, 86

coaching leadership style

approach used by, 2, 5, 18–19

correlations between aspects of climate and, 10

description of, 18–21

effectiveness of, 20

example of leader using, 18–19

impact of, 19

need for mastery of several styles including, 21, 22

situations in which best used, 5, 19–20

summary (“At a Glance” chart) of, 15

switching between styles and, 5, 22

coercive leadership style

approach used by, 2, 4, 6

correlations between aspects of climate and, 10

description of, 6–7

effectiveness of, 6

example of leader using, 6

impact of, 6–7

situations in which best used, 4, 7

summary (“At a Glance” chart) of, 14

collaboration, and democratic leadership style, 26

commitment

authoritative leadership style and, 11

coaching leadership style and, 20

correlations between leadership style and, 10

organizational climate and, 5

pacesetting leadership style and, 17

team discipline and, 178, 185

communication

affiliative leadership style and, 12, 13, 26

democratic leadership style and, 26

feedback from new managers and, 81, 88–90

motivation and, 35–36

new managers and, 79, 80

confidence, of new managers, 80–81, 84–86

conflict of interest, and ethical managers, 158, 166–167

consensus, compared with fair process, 121

controlling insight, and new managers, 100–101

counseling, and motivation, 36–37

counterdependent behavior, and bosses, 205

credit, overclaiming, 158, 160

culture, and leadership, 1

data collection on bias and, 168–170

defensive reasoning, and learning, 142–148

delegation, by new managers, 78–82, 90

democratic leadership style

approach used by, 2, 5, 14–16

correlations between aspects of climate and, 10

description of, 14–16

emotional intelligence competencies and, 26

example of leader using, 14–16

impact of, 14–16

need for mastery of several styles including, 21, 22

situations in which best used, 5, 16

summary (“At a Glance” chart) of, 15

switching between styles and, 5, 22

dependability, and managing your boss, 198, 210

distributive justice, 125–126, 130

double-loop learning, 134–135

Drucker, Peter, 207

Elco, 112–117, 122–124

Eli Lilly Peripheral Systems Division, 181

emotional intelligence components

effectiveness of leadership and critical mass of, 4–5

enhancing and growing, 24–25, 26

expanding repertory of leadership styles and, 26

fundamental capabilities of, 8–9

leadership styles related to, 2, 3, 4

emotions, and affiliative leadership style, 12, 13

empathy, and leadership styles, 3, 26

engagement, and fair process, 114, 121, 122

environmental cues, and bias, 159, 170–171

Epley, Nick, 165

ethical managers, 157–173

auditing decisions for bias and, 159, 164

broadening decision making and, 171–173

conflict of interest and, 166–167

data collection on bias and, 168–170

ethics training and, 167–168

guidelines to counteract biases and, 161

Implicit Association Test (IAT) used by, 159–160,170

implicit prejudice and, 158–162

in-group favoritism and, 162–165

overclaiming credit and, 165–166

research on bias and, 164

shaping environment and, 159, 170–171

sources of unintentional unethical decision making and, 158

ethics training, 158, 167–168

expectation clarity, and fair process, 114, 121, 122

expectations

managing your boss and, 198, 208–209

of new managers, 83

explanation, and fair process, 114, 121, 122

failure of employees, and great managers, 104

fair process, 111–132

benefits of, 113

consensus compared with, 121

engagement and, 114, 121

example of failure from lack of, 112–117, 122–123

example of success of, 123–124

expectation clarity and, 114, 121

explanation and, 114, 121

importance of, to managers, 112, 120

irrational behavior theory and, 118–119

knowledge-based organizations and, 113, 125–131

mental barriers to, 131–132

price of unfairness and, 124, 126

principles of, 114, 121–122

research on, 117–120

fear, and delegation by new managers, 79, 80

feedback

from new managers, 81, 88–90

team performance and, 193

financial performance, impact of organizational climate on, 4, 5–6

First Call, 167

Fiske, Susan, 162

flexibility aspect of climate

affiliative leadership style and, 12

authoritative leadership style and, 11

coaching leadership style and, 20

coercive leadership style and, 6

impact of leadership style on, 4, 10

pacesetting leadership style and, 17

flexibility of leaders

impact of, 2, 3

need for mastery of several styles and, 21–23

focus, of new managers, 81, 86–88

Fontaine, Mary, 3

fringe benefits, and motivation, 34

Gabarro, John J., 195–211

Gallup Organization, 91, 98

gender stereotypes, and hiring decisions, 161–162

Gesell, Gerhard, 162

Girl Scouts, 176

Glick, Peter, 161

goals

great managers and, 103–104

new managers and, 87–88

team discipline and, 178, 180–182, 193

Goldman Sachs, 191

Goleman, Daniel, 1–27

great managers, 91–110

example of, 92–99

great leaders compared with, 92

learning styles and, 107–109

performance of employees and, 106–107

research on, 91, 98–99

single controlling insight and, 100–101

strengths of employees and, 102–105

three things to know about direct reports, 102, 103

uniqueness of employees and, 99–101, 110

Greenwald, Tony, 159–160, 175

groups

favoritism of, 158, 160, 162–165

set-up-to-fail syndrome and categorization of, 54, 57–59, 60

Haas, Robert D., 191

Haas, Walter A., Jr., 191

Hardin, Curtis, 170

Hardy, Maurice, 181

Hawthorne experiment, 36, 43

Hay/McBer, 2, 3

Hewlett, Bill, 191

Hewlett-Packard (HP), 176, 186, 191

Hewlett-Packard Medical Products Group, 175

hiring decisions, and gender stereotypes, 161–162

Holmes, Ben, 175

honesty, and managing your boss, 198, 210

Hopkins, Ann, 162

HSBC, 107

Herzberg, Frederick, 29–50

horizontal job loading, and motivation, 41–42, 49

human relations training, 34–35

illusion of objectivity, 157

Implicit Association Test (IAT), 159–160, 169, 170

industrial engineering, and motivation, 40, 41

information flow, and managing your boss, 198, 209–210

in-group favoritism, 158, 160, 162–165

in-groups, in set-up-to-fail syndrome, 54, 57–59, 60

irrational behavior theory, 118–119

Jacobs, Ruth, 3

job attitudes, and motivation, 37–40

job enlargement, 41, 49

job enrichment

experiment example involving, 42–45

motivation and, 32

steps for, 46–50

use of term, 41

job participation, and motivation, 36

job satisfaction and job dissatisfaction, and motivation, 37–40

Jordan, Michael, 100

Katzenbach, Jon R., 175–194

Kawashima, Jim, 99

Kendall, Donald M., 191

Kim, W. Chan, 72, 111–132

Knight Ridder, 175, 181, 182, 191

knowledge economy

fair process and, 113, 125–131

teaching smart people how to learn in, 135–136

Koepp, David, 99

Kotter, John P., 195–211

Krasnoff, Abraham, 191

layoffs, and new managers, 86

leadership, 1–27

getting results and, 1

measuring impact of, 4–6

quantitative research on behaviors in, 1–2

styles of, 2

leadership styles

climate and, 4, 5, 10

correlations between drivers of climate and, 10

description of, 6–21

emotional intelligence components related to, 2, 3, 4–5

expanding repertory of, 23–26

flexibility in using, 2, 3

need for mastery of several styles, 21–23

number of styles, 2

performance and results affected by, 2

quantitative research on, 2

summary (“At a Glance” chart) of, 14–15

switching between styles, 2, 5, 21, 22–23

Leahy, Sir Terry, 98, 99

learning by smart people, 133–155

defensive reasoning and, 142–148

governing values in, 136

reasoning productively and, 148–155

reasons for avoidance of learning and, 136–141

single-loop and double-loop, 134–135

learning style, and coaching, 93, 95, 107–109

Levi Strauss, 191

Lind, E. Allan, 120

Litwin, George, 4

Loewenstein, George, 166

managing your boss, 195–211

checklist for, 206

compatible work styles and, 198, 207–208

dependability and honesty in, 198, 210

as essential aspect of management, 195

example of importance of, 195–199

information flow and, 198, 209–210

mutual expectations and, 198, 208–209

reading the relationship in, 199–200

understanding your boss in, 200–203

understanding yourself in, 203–206

use of time and resources in, 198, 210–211

Manzoni, Jean-François, 51–74

Mauborgne, Renée, 72, 111–132

McClelland, David, 3, 4

meetings

with new managers, 84

team performance and, 192

Messick, David, 163

mission, and leadership, 1

Moore, Don, 166

Morton, Dean, 175

motivation, 29–50

affiliative leadership style and, 12

coercive leadership style and, 6

enriching employees’ jobs and, 32

extrinsic incentives in, 31

horizontal job loading and, 41–42, 49

hygiene theory of job attitudes and, 37–40

intrinsic rewards in, 31

job attitude factors and, 37, 38, 39–40

job enrichment experiment example involving, 42–45

job enrichment steps and, 46–50

job satisfaction and job dissatisfaction and, 37–40

KITA approach to, 29–33

leadership and, 1, 3, 4

myths about, 33–37

personnel management theories and, 40–41

set-up-to-fail syndrome and, 58

vertical job loading and, 42, 43, 45, 49

Motorola, 176, 186

mutual accountability, and team discipline, 178, 185–186

myths about motivation, 33–37

new managers, 77–90

basic elements of management and, 79, 90

changing roles of, 78, 79–80, 87, 89

confidence of, 84–86

delegating by, 78–82

example of, 77–78

feedback given by, 88–90

focusing on the big picture by, 86–88

insecurities of, 78

support from bosses for, 82–84

Nixdorf Computer Company, 118

Nosek, Brian, 160

objectivity, illusion of, 157

O’Neill, Paul, 12–13

One Thing You Need to Know, The (Buckingham), 98

Operation Desert Storm, 176

organizational climate

coercive leadership style and, 6–7

financial performance influenced by, 4, 5–6

impact of leadership style on, 4, 5, 10

key factors in, 4–5

research on, 3–4

switching between leadership styles and, 5

organizational theory, and motivation, 40, 41

out-groups, in set-up-to-fail syndrome, 54, 57–59, 60

Outward Bound, 181

overclaiming credit, 158, 160

pacesetting leadership style

approach used by, 2, 5, 17

correlations between aspects of climate and, 10

description of, 16–18

emotional intelligence competencies and, 26

example of leader using, 17–18

impact of, 17

situations in which best used, 5, 18

summary (“At a Glance” chart) of, 15

Packard, David, 191

Pall, David, 191

Pall Corporation, 191

partnering employees, 104–105

Pearson, Andrall E., 191

Pepsi, 191

performance

emotional intelligence components and, 4

great managers and, 106–107

leadership style and impact on, 1, 2, 5

new managers and feedback on, 81, 88–89

organizational climate and, 4, 5–6

performance goals, and team discipline, 178, 180–182

personality, and leadership style, 3

personnel management theories, and management, 40–41

Platt, Lew, 175

positive reinforcement, and teams, 193

Potter, Myrtle, 98, 99

prejudice, implicit, 158–162

Price Waterhouse v. Hopkins, 162

procedural justice, 125–126, 130

Project Implicit, 164

purpose, and team discipline, 178, 179–180

racial stereotypes, 170–171

racism, 158–159

reasoning, and learning by smart people, 148–155

recognition, and team performance, 193

recommendations, and teams, 187–188

recreation programs, and motivation, 33–34

relationship building, and affiliative leadership style, 26

resources use, and managing your boss, 198, 210–211

responsibility

authoritative leadership style and, 22–23

coaching leadership style and, 20

coercive leadership style and, 6

correlations between leadership style and, 10

organizational climate and, 4

pacesetting leadership style and, 17

retributive justice, 125

rewards

authoritative leadership style and, 11

coercive leadership style and, 7

correlations between leadership style and, 10

organizational climate and, 5

pacesetting leadership style and, 17

team performance and, 193

Ridder, P. Anthony, 191

roles of employees

authoritative leadership style and, 23

coaching leadership style and, 19

great managers and tweaking of, 93, 96–97

implicit biases as barriers to, 161–162

set-up-to-fail syndrome and, 55, 69

roles of new managers, 78, 79–80, 87, 89

rookie managers. See new managers

Rudman, Laurie, 161

Schulmeyer, Gerhard, 119

self-assurance, of employees, 103

self-awareness

emotional intelligence and traits of, 8

employees and, 103

leadership styles and, 3

managing your boss and, 203–204

self-management, and emotional intelligence, 8

self-regulation, and leadership styles, 3

senior managers

support for new managers from, 80, 82–84

training of new managers and, 78

sensitivity training, 35

set-up-to-fail syndrome, 51–74

benefits of intervention in, 71–72

boss’s role in intervention in, 69–71

categorization of in-groups and out-groups in, 54, 57–59, 60

costs of, 54, 62–63

description of behavior in, 52–53

example of, 53–56

intervention steps in, 65–69

prevention of, 72–74

research on, 58

reversing, 54–55, 63–64

self-fulfilling and self-reinforcing aspects of, 53, 65

shutting down by employees in, 60–61

start of, 52, 54, 56–57

steps in, 59

sexism, 158–159

Siemens-Nixdorf Informationssysteme (SNI), 118–119

single-loop learning, 134–135

size of teams, 182–183

skills, and team discipline, 178, 183–185, 192

Smith, Douglas K., 175–194

social awareness, and emotional intelligence, 9

social skill

emotional intelligence and traits of, 9

leadership styles and, 3

standards

authoritative leadership style and, 11, 13

correlations between leadership style and, 10

organizational climate and, 4

team performance and, 192

stereotypes

environmental cues and, 159, 161, 170–171

hiring decisions and, 161–162

implicit prejudice and, 158, 160, 162

strategic thinking, and new managers, 79, 81, 87–88, 90

strategy, and leadership, 1

strengths of employees, and great managers, 93, 94–95, 102–105

Stringer, Richard, 4

support for new managers, 80, 82–84

Tallahassee Democrat, 175

task forces, 187–188

Taylor, Frederick Winslow, 125

Teaching Tolerance, 164

team-building programs, 181

teams, 175–194

building performance of, 192–193

challenges for, 179

characteristics of discipline of, 178–179

classification of, 187–191

commitment of, 178, 185

as discrete units of performance, 177–178

making or doing things by, 188–189

mutual accountability and, 178, 185–186

performance goals and, 178, 180–182

purpose of, 178, 179–180

recommendations from, 187–188

research on, 175–176

size of, 182–183

skills requirements of, 183–185

teams at the top and, 190–191

teams that run things, 189–191

working groups compared with, 176–177, 184, 189–190

Thibaut, John W., 117

Thomas v. Kodak, 162

time use, and managing your boss, 198, 210–211

Torre, Joe, 12–13

training

for employees, from great managers, 104

in ethics, 158, 167–168

for new managers, 78

trust

fair process and, 112, 113, 114, 115, 116, 117–118, 120, 121, 123, 125, 126, 128, 130, 131

leadership styles and, 12, 13, 17, 22

new managers and, 78, 80, 86

set-up-to-fail syndrome and, 52, 56, 57, 58

team discipline and, 186

Tyler, Tom R., 120

uniqueness of employees, and great managers, 99–101, 110

vertical job loading, and motivation, 42, 43, 45, 49

vision

authoritative leadership style and, 2, 10, 11, 13, 22–23

coaching leadership style and, 20

democratic leadership style and, 16

pacesetting leadership style and, 19

social skill and, 9

Volkswagen (VW), 118

wages, and motivation, 34

Walker, Carol A., 77–90

Walker, Laurens, 117

weaknesses, identification of, 102–103

Weinberg, John, 191

Western Electric Company, 36

Whitehead, John C., 191

“Why Good Accountants Do Bad Audits” (Bazerman, Loewenstein, and Moore), 166

Wisdom of Teams, The (Katzenbach and Smith), 175–176

working groups, compared with teams, 176–177, 184, 189–190

work styles, and managing your boss, 198, 207–208

Table of Contents

Contents

HBR’s 10 Must Reads on Reinventing HR

Title Page

Copyright

Contents

BONUS ARTICLE: People Before Strategy: A New Role for the CHRO

How Netflix Reinvented HR

HR Goes Agile

Reinventing Performance Management

Better People Analytics

21st-Century Talent Spotting

Tours of Duty: The New Employer-Employee Compact

Creating the Best Workplace on Earth

Why Diversity Programs Fail

When No One Retires

Collaborative Intelligence: Humans and AI Are Joining Forces

About the Contributors

Index

HBR’s 10 Must Reads on Building a Great Culture

Title Page

Copyright

Contents

The Leader’s Guide to Corporate Culture

Manage Your Emotional Culture

The Neuroscience of Trust

Creating a Purpose-Driven Organization

Creating the Best Workplace on Earth

Cultural Change That Sticks

BONUS ARTICLE: How to Build a Culture of Originality

When Culture Doesn’t Translate

Culture Is Not the Culprit

Conquering a Culture of Indecision

Radical Change, the Quiet Way

About the Contributors

Index

HBR’s 10 Must Reads on Diversity

Title Page

Copyright

Contents

BONUS ARTICLE: Making Differences Matter: A New Paradigm for Managing Diversity

Why Diversity Programs Fail

“Numbers Take Us Only So Far”

Race Matters: The Truth About Mentoring Minorities

Leadership in Your Midst: Tapping the Hidden Strengths of Minority Executives

What Most People Get Wrong About Men and Women

Hacking Tech’s Diversity Problem

Why Men Still Get More Promotions Than Women

When No One Retires

Neurodiversity as a Competitive Advantage

Managing Multicultural Teams

BONUS ARTICLE FROM HBR.ORG: 7 Myths About Coming Out at Work

About the Contributors

Index

HBR’s 10 Must Reads on Change Management

Title Page

Copyright

Contents

Leading Change: Why Transformation Efforts Fail

Change Through Persuasion

Leading Change When Business Is Good: An Interview with Samuel J. Palmisano

Radical Change, the Quiet Way

Tipping Point Leadership

A Survival Guide for Leaders

The Real Reason People Won’t Change

Cracking the Code of Change

The Hard Side of Change Management

Why Change Programs Don’t Produce Change

About the Contributors

Index

Back Cover

HBR’s 10 Must Reads on Managing People

Title Page

Copyright

Contents

Leadership That Gets Results

One More Time: How Do You Motivate Employees?

The Set-Up-to-Fail Syndrome

Saving Your Rookie Managers from Themselves

What Great Managers Do

Fair Process: Managing in the Knowledge Economy

Teaching Smart People How to Learn

How (Un)ethical Are You?

The Discipline of Teams

Managing Your Boss

About the Contributors

Index

Back Cover