DISCUSSION In Chapter 11 of your textbook, you read the top ten factors that can lead to the initiative decay and the eight sets of actions to ensure sustainable change. Discuss the validity of these

CHAPTER 11

Please read the following chapters from your textbook. Also, download and review the PowerPoint summaries for each chapter.

Chapter 11

Sustaining Change versus Initiative Decay

Learning Objectives

By the end of this chapter you should be able to:

LO 11.1 Understand the causes of initiative decay—threats to the sustainability of change.

LO 11.2 Distinguish between change initiatives that are “blameworthy,” and should not be sustained, and those that are “praiseworthy.”

LO 11.3 Identify and apply actions that can contribute to the sustainability of change.

LO 11.4 Understand the pitfalls that can arise when seeking to sustain change.

Tom Brokaw, journalist

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LO 11.1 Initiative Decay and Improvement Evaporation

Your reorganization was implemented successfully. Significant benefits were achieved. Revisiting the initiative some months later, however, you find that the new working practices and increased performance levels appear not to have been maintained. Things have gone back to where they were before you started. How did this happen? Unfortunately, this is a common story. Even successful initiatives can decay, leading to “the improvement evaporation effect” as the gains are lost.

For many organizations, it is a strategic imperative to embed, to have “stickability,” and to maintain changes and their contribution to performance. This chapter focuses on the problems of sustaining change and on the practical steps that can be taken to increase the probability that changes once implemented will endure, that they will become institutionalized and regarded as normal practice. This is not a new problem, having been famously identified by Lewin (1951) as the need to “refreeze” behavior once change has taken place. The attention of practicing managers and academic researchers has focused on the first two stages of his model, “unfreezing” and “moving.” The problem of refreezing, or sustaining change, is less well understood. There may be a widespread assumption that if changes have been successful, they will automatically be sustained. That assumption, however, appears to be incorrect. Sustaining change may in some cases be more difficult than implementing change in the first place.

Find on YouTube, “OCM: Sustaining Change” (2017, 3:33 minutes).

Sustainability implies that new working methods and performance levels are maintained for an appropriate period or that new practices and processes are routinized until they become obsolete. What are the causes of initiative decay? What steps can be taken to increase the probability that changes will be sustained and become embedded in the organization as routine practice? As we have explored in other chapters, what is considered to be achievable with regard to sustaining change depends on how managing change is understood. The views of sustainability from each image of change management are summarized in table 11.1.

TABLE 11.1

Images of Managing and Sustaining Change

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Momentum Busters

Robert Reisner (2002) examines the U.S. Postal Service, which during the 1990s, “transformed itself from the butt of sitcom jokes into a profitable and efficient enterprise” (p. 45). By 2001, however, morale and performance were low and losses were predicted. Why was the transformation not sustained? Reisner (vice president for strategic planning) blames three “momentum busters”: the indifference of senior managers, who regarded some aspects of strategy as a “distraction”; resistance from trade unions, whose role and voice had been marginalized; and the inability to steer funding through a budget process that favored traditional initiatives over innovations. Innovation was also stifled by governance constraints. What one competitor, UPS, achieved, the U.S. Postal Service could not have initiated without a prior hearing process before the Postal Rate Commission, and major structural changes would have required Congressional sanction. The situation was exacerbated by a weak economy, problems with e-commerce, and terrorist assaults on the U.S. Postal Service.

Reisner’s (2002, p. 52) conclusion is optimistic: “Despite the limits to any transformation effort, accomplishing meaningful change in even the largest, most complex, and traditionbound of organizations is achievable.” However, the leadership, organizational, and contextual causes of initiative decay need to be addressed to sustain these changes (Buchanan et al., 2005).

We have to recognize that management may have no direct control over many of the factors that can jeopardize the sustainability of change. That does not mean, however, that it is not possible to anticipate and to counter those factors in some manner.

For changes to “stick,” they must “seep into the bloodstream,” become “the new norm,” “baked into the organization,” or, as Kotter (2007, p. 103) observes, accepted as “the way we do things around here.” That is, it must become an integral part of the organizational culture, or what has also been described as the “mind-set” of the organization’s members (Lawson and Price, 2003). This means that new structures, processes, and working practices are no longer seen as “change,” with all the emotional, political, and operational connotations that accompany that term. Unless this happens, change may prove to be just a passing diversion, a temporary disruption. However, as we explored in chapter 5, culture change is not a straightforward process. As Lou Gerstner (2002, pp. 182 and 187) once said, referring to his leadership of the successful transformation of IBM:

I came to see, in my time at IBM, that culture isn’t just one aspect of the game—it is the game. Vision, strategy, marketing, financial management—any management system, in fact—can set you on the right path and can carry you for a while. But no enterprise—whether in business, government, education, health care, or any area of human endeavor—will succeed over the long haul if those elements aren’t part of the DNA.

What you can do is create the conditions for transformation. You can provide incentives. You can define the marketplace realities and goals. But then you have to trust. In fact, in the end, management doesn’t change culture. Management invites the workforce itself to change the culture.

What are the main threats to the sustainability of change? Buchanan et al. (2007) identify the top ten factors that can lead to initiative decay:

The initiators and drivers move on. Managers who have been successful at implementing change may be more interested in moving on to the next change challenge than in staying around for a period of relative stability. In addition, experienced andPage 358 successful change agents may be sought by other divisions or organizations, which have other novel change agendas to progress. It can be difficult to turn down promotion opportunities such as these.

Accountability for development has become diffuse. The responsibility for driving change is normally (but not always) clear, with formal change or project management roles, often accompanied by steering groups, task forces, and implementation teams. Once the changes are in place and operational, those individuals and groups return to their normal roles. There are change managers, but organizations tend not to appoint “sustainability managers.” Just who is accountable for ensuring that the changes are now embedded, that they become the new norm, is often unclear.

Knowledge and experience with new practices are lost through staff turnover. Staff training and development programs usually support change initiatives that involve new skills and knowledge. Everyone who is going to be affected will be invited to attend these programs, creating a “critical mass” of participants for training sessions. However, as individuals subsequently leave and are replaced, it may be difficult to repeat those development sessions for small numbers of participants. The knowledge that is lost when staff members leave is therefore not replaced.

Old habits are imported with recruits from less dynamic organizations. Linked to factor 3, new recruits bring with them habits and working practices from previous employers. Once again, they are unlikely to be offered retraining, but instead expected to learn new practices “on the job” by observation. The likelihood of initiative decay thus increases with the numbers of new recruits.

The issues and pressures that triggered the initiative are no longer visible. As we discussed in chapter 3, organizations usually change in response to a combination of internal problems, external environmental challenges, and new opportunities. Those triggers, however, may not be durable; the problems are solved, the challenges are addressed, the opportunities are developed. The rationale for change can thus fade with the triggers, and again lead to initiative decay.

New managers want to drive their own agendas. For personal satisfaction, visibility, and reputation, newly appointed managers often want to appear to be innovative and energetic and to “make a mark” on their new organization. This means enhancing their careers by designing and implementing their own change initiatives. Continuing with work that was started by others is less interesting and satisfying and could limit one’s promotion prospects.

Powerful stakeholders are using counter-implementation tactics to block progress. Successful implementation does not always silence the power brokers. They may remain in their posts, and if they did not welcome the changes, they may wait for opportunities to undermine the changes. This becomes easier if factor 1 applies; the initiators are no longer there to protect their changes.

The pump-priming funding runs out. Many changes are allocated additional funding to support the implementation costs. This can include the temporary appointment of specialist staff or external consultants and the cost of training programs to provide new skills and knowledge. As those resources are consumed and the temporary appointments and the training come to an end, support for the changes is weakened and initiative decay becomes more likely.Page 359

Other priorities come on stream, diverting attention and resources. Most organizations today do not suffer a shortage of internal and external pressures for change. As other urgent problems and opportunities arise, the focus inevitably shifts away from past pressures and the changes that those prompted. If those past problems have indeed been addressed, then it may be appropriate for attention and resources to move to more urgent issues. However, this will generate problems if the shift in focus to new priorities simply re-creates the situation that past changes were implemented to address.

Staff at all levels suffer initiative fatigue, and enthusiasm for change falters. The experience, or the perception, of “too much change,” successful or not, can threaten sustainability by generating a desire to “get back to normal.” Initiative decay can result when management does not pay attention to the pace and timing of the changes that staff are expected to deal with and generate burnout and initiative fatigue by attempting to drive too many changes too rapidly.

Initiative decay can be caused by many factors, at different levels of analysis. Several of those factors may be operating in a given context at any one time. In the absence of proactive management steps to address those factors, initiative decay, and not sustained change, may be the norm.

LO 11.2 Praiseworthy and Blameworthy Failures

The failure of an intended change is not always a problem that needs to be solved. A change can fail because it was inappropriate for some reason. Marks and Shaw (1995) argue that “productive failure” is valuable, if an organization has the capacity to add the learning from such experiences to its store of knowledge, rather than to conduct a witch hunt to find whom to blame. A learning organization treats occasional failure as natural and as an opportunity to develop a better understanding and to improve future performance. Marks and Shaw (1995) also argue that an organization may gain more in the long term from a productive failure than from an “unproductive success”—a change that has gone well, but nobody quite knows why: “We must be doing something right.”

Some changes, if they do not meet their intended goals, must therefore be allowed to decay. Most organizations, however, do treat such “failures” harshly. Those who were responsible may even be punished in some manner and perhaps find that their career opportunities have become more limited. In chapter 3, we discussed the work of Amy Edmondson (2011, p. 50), who describes a spectrum of reasons for failure (see table 11.2), from blameworthy at one extreme, to praiseworthy at the other. Not all these failure modes concern change, but those that do are more likely to be praiseworthy.

TABLE 11.2

A Spectrum of Reasons for Failure

From Edmondson (2011, p.50).

Most managers, Edmondson argues, do not distinguish blameworthy from praiseworthy failures, treating them all equally. This is not helpful, and is potentially wasteful:

When I ask executives to consider this spectrum and then to estimate how many of the failures in their organization are truly blameworthy, their answers are usually in single ­digits—perhaps 2% to 5%. But when I ask how many are treated as blameworthy, they say (after a pause or a laugh) 70% to 90%. The unfortunate consequence is that many failures go unreported and their lessons are lost. (Edmondson, 2011, p. 50)

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Productive Failure at McDonald’s

In 2001, McDonald’s opened two four-star Golden Arch hotels in Switzerland. They were distinctive, with a 24-hour McDonald’s restaurant attached and rooms with a patented curved wall, arch-shaped headboards, and a cylindrical, see-through shower (that was partially in the bedroom). The idea had been proposed by the McDonald’s Switzerland chairman, Urs Hammer, in response to a push from the parent company for diversification and new ideas.

The hotels were not a financial success. There were problems with the interior design (lack of privacy in the shower), and the phrase “golden arches” is not associated with McDonald’s in ­German-speaking countries (it also didn’t help that “arch,” when pronounced by German speakers, sounded like a vulgar German word for posterior). Also, and more importantly, although the restaurant venture made use of many of the company’s core competencies in areas such as franchising and real estate management, the McDonald’s brand simply didn’t work when applied to a four-star hotel.

However, international marketing professor ­Stefan Michel (2007) argues that the decision by McDonald’s to pilot this initiative was not as bizarre as it seemed. For example: (1) diversifying into ­hotels gave McDonald’s a chance to test the multibillion-dollar restaurant industry; (2) it required what was a relatively small investment for McDonald’s; (3) the damage to the McDonald’s brand was limited through the use of the name Golden Arches and restricting the experiment to Switzerland; and (4) the losses on real estate and operations were insignificant in relation to the overall McDonald’s business. Most significantly, the venture was a statement of support for entrepreneurial ideas within the company, and the outcome was treated as an important, and relatively inexpensive, learning experience.

Based on Michel (2007).

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Changes that fail can therefore be valuable, discouraging further experiments of that kind and revealing what adjustments may be necessary to make the next attempt successful. To build such a learning culture, experimentation should be encouraged, and failures (including near misses) need to be detected and subjected to an analysis that looks beyond the obvious. It is also necessary to avoid making the “fundamental attribution error,” which means blaming individuals and ignoring the context in which they were working (Ross, 1977).

Based on experience at a children’s hospital in Minnesota, Edmondson (2011, pp. 52–53) describes five practices for building a “psychologically safe environment” in which to learn from failures:

Frame the work accurately. People need a shared understanding of the kinds of failures that can be expected to occur in a given work context (routine production, complex operations, or innovation) and why openness and collaboration are important for surfacing and learning from them. Accurate framing detoxifies failure.

Embrace messengers. Those who come forward with bad news, questions, concerns, or mistakes should be rewarded rather than shot. Celebrate the value of the news first, and then figure out how to fix the failure and learn from it.

Acknowledge limits. Being open about what you don’t know, mistakes you’ve made, and what you can’t get done alone will encourage others to do the same.

Invite participation. Ask for observations and ideas, and create opportunities for people to detect and analyze failures and promote intelligent experiments. Inviting participation helps defuse resistance and defensiveness.

Set boundaries and hold people accountable. Paradoxically, people feel psychologically safer when leaders are clear about what acts are blameworthy. And there must be consequences. But if someone is punished or fired, tell those directly and indirectly affected what happened and why it warranted blame.

Will adopting such a “soft” and “understanding” management approach to failures make staff more careless and encourage more mistakes? Edmondson (2011, p. 55) argues that a failure to encourage experimentation, combined with a failure to learn from the inevitable mistakes, poses greater risks to organizational change and effectiveness. Change initiatives that do not work cannot be sustained. However, if management wants to sustain the generation of further new ideas for change, then those who develop praiseworthy failures should be recognized and rewarded, and not blamed and punished.

Find on YouTube, “Building a psychologically safe workplace: Amy Edmondson ­TEDxHGSE” (2014, 11:26 minutes).

LO 11.3 Actions to Sustain Change

What actions will increase the probability that change will be sustained? No specific set of steps can guarantee success, but awareness of the threats to sustainability can lead to timely and effective responses. Action to secure sustainability is often identified as the final point in the “change recipes” that we discussed in chapter 10. ForPage 362 example, “institutionalize new approaches” is step 8 in Kotter’s (2007) eight-step model of transformational change. However, sustainability depends not just on what happens after implementation, but also on the cumulative effects of decisions and actions during the change process. In other words, it is more effective to plan for sustainability from the beginning than to regard this as an issue that can be left until a later stage.

Sustaining Successful Change Means Permanently Changing Mindsets

Emily Lawson and Colin Price (2003) argue that the success and sustainability of change rely on people thinking differently about their jobs, and not just on persuading them to change the way they work. This is particularly the case with fundamental changes to organizational culture, for example, from reactive to proactive, from hierarchical to collegial, from introspective to externally focused. There are four conditions for the necessary change in mindsets.

First, those who are affected by a change need to understand the purpose, and agree with it. There is no point in management telling people that things must be done differently: “Anyone leading a major change program must take time to think through its ‘story’—what makes it worth undertaking—and to explain that story to all of the people involved in making change happen, so that their contributions make sense to them as individuals” (p. 33).

Second, reward and recognition systems need to be consistent with the new behaviors. Third, staff must have the necessary skills and be given time to absorb new information, link that to existing knowledge, and apply it effectively in practice.

And finally, “they must see people they respect modelling it actively” (p. 32). We all tend to model our behavior on “significant others” and especially those in influential positions. Managers at all levels thus become role models and must “walk the talk” if mindsets are to change (p. 35).

Here are eight sets of actions that should be considered when designing a change initiative, to build sustainability into the process from the beginning, or at least from an early stage.

Redesign Roles

Organizational change, particularly where new structures, processes, and technologies are involved, often leads to the redesign of existing roles and to the creation of new ones. However, these role changes may be a critical dimension of the process, and not just a product of change. Beer et al. (1990) argue that most change programs do not work because they focus on attempts to change attitudes and beliefs by introducing new perspectives. The assumption that underpins this approach, that changes in behavior will follow changes in attitudes, is in their view fundamentally flawed. The causal arrow, they suggest, runs in the opposite direction. Behavior is influenced by the context in which people find themselves—by their responsibilities, relationships, and roles. In short, first redesign roles, which require new behaviors, and attitude change will then follow. It is difficult to revert to past behavior with a new formal rolePage 363 definition, which is one of a network of similarly redesigned roles. Sustainability is not guaranteed by this approach but is significantly encouraged.

Busting the Momentum Busters

Reflecting on his experience of the “momentum busters” that derailed transformational change in the U.S. Postal Service, Robert Reisner (2002, pp. 51–52) identifies “four hard lessons” for organizations undertaking a major change initiative in a turbulent economic environment:

Don’t miss your moment. We missed numerous market opportunities that competitors such as UPS seized. Furthermore, we let pass at least two chances to capitalize on high morale and momentum within the Postal Service, moments that provided the best opportunity to overcome organizational resistance to change.

Connect change initiatives to your core business. Most of the innovative programs we launched to boost revenue existed at the fringes of our business. And we never established a path for them to migrate to the heart of our operations.

Don’t mistake incremental improvements for strategic transformation. [O]ur tremendous success in improving delivery times, which we enthusiastically celebrated, blinded us to the need for ­strategic change. For a time, we slipped into complacency, ignoring our competition and challenges and declaring ourselves the winner in a race with ourselves.

Be realistic about your limits and the pace of change. [I]n a change initiative, it is important to identify which obstacles are in your control and which aren’t. Some of what we wanted to do may simply not have been possible, at least at the time. . . . While some of our constraints—our regulatory framework, if not our very size and complexity—are specific to us, every organization has limits of one kind or another. It may seem heretical to say so in the can-do environment of American business, but sometimes you need to accept those limits. A failure to acknowledge that you sometimes can’t do certain things can breed discouragement and cynicism, ultimately undermining those change initiatives that are achievable.

Redesign Reward Systems

Beer and Nohria (2000, p. 267) also observe that “there are virtually no fundamental changes in organizations that do not also involve some changes in the reward system.” This is one consequence of redesigning roles and responsibilities. Fisher (1995, p. 122) cites the example of Integra Financial, a $14 billion (in assets) bank holding company that was formed through a merger. To reinforce the company’s commitment to a teamwork initiative, management implemented a carefully designed evaluation and reward system “to discourage hot-dogging, grandstanding, filibustering, and other ego games” and to ensure that “the best team players get the goodies.” Fisher (1995, p. 122) also notes, “One thing that you can count on: Whatever gets rewarded will get done.” This also means that whatever is not rewarded (such as pre-change working practices) will not get done. Changing the reward system can thus contribute significantly to sustainability by removing the financial motivation to return to old behaviors.

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Rewards should also include public recognition of behaviors that are consistent with the desired change. This both reinforces individual behavior and sends strong signals to others. The opposite also applies. Management’s failure to respond to behavior that is in direct opposition to the change undermines the credibility of the program. Lack of action in this respect can increase rapidly the rate of initiative decay. The organization’s pay system can thus support or derail a change initiative.

Link Selection to Change Objectives

Staff selection, and promotion processes, can be subtle but powerful ways in which to embed and sustain assumptions and values—to change and to maintain the organization’s culture. As with the rewards system, appointments and promotions, particularly to key and influential roles, have symbolic significance in signalling whether top management really support a change, or not. A single inappropriate senior appointment during the change process can quickly derail all the implementation work that has already been undertaken.

To support organizational changes with selection, a number of organizations have adopted “values-based recruitment” systems, which seek to select staff whose motives, attitudes, and values support what the organization is trying to achieve. For example, Rapping (2009) describes a values-based recruitment, training, and mentoring program for selecting and developing public defenders to represent poor clients in criminal cases in Georgia. Poor defendants often have problems finding lawyers, who then refuse to visit them in jail. To change this traditional culture, recruitment and selection changed to emphasize values relating to enthusiastic and loyal representation, advocating the client’s cause, studying and preparing the case, and communicating with the client.

Triggered by failures in quality of social care in the UK, Goode (2014) describes a values-based recruitment toolkit to help employers to find people with values appropriate to working in this sector. This toolkit includes sample job advertisements and an online personality profiling questionnaire and suggested values-based interview questions such as: “What excites you about working in adult social care?” “Can you give an example of where your understanding of what another person may be going through has helped you to develop your compassion for that person?” and “Tell me about a time when you have ‘gone the extra mile’ at work.” The answers to these kinds of questions reveal candidates’ behavior and their values with regard to care and compassion.

Walk the Talk

This is a well-known cliché. However, senior management can seriously jeopardize the sustainability of change if their words and actions are interpreted by employees as signalling, “We don’t really mean it.” In other words, if the top team does not support this change, why should we? Little is more damaging to the credibility of a change program than a lack of consistency between the statements and behaviors of the change advocates. Even if management did not mean to send negative signals, “unintentional hypocrisy” can be equally damaging (Fisher, 1995).

One indicator of consistency concerns changes in management practices that are clearly aligned with the goals of the change. For example, who is praised and promoted and why? Is management enthusiastically advocating teamwork while still rewarding individual performance? Where are resources—finance, staffing, expertise—being allocated?Page 365 The commitment of resources to an initiative in such a way that to withdraw would be extremely costly conveys unambiguous management support (see the box “Alan Lafley’s Moment of Truth”). All these management decisions and actions have symbolic as well as tangible effects. Schein (2010) argues that managers signal what is important by what they systematically pay attention to. “Communication” is not confined to conversations, meetings, presentations, and emails, but includes all management actions—and ­omissions—that send signals concerning goals and priorities (and we have also to recognize that those signals may or may not be interpreted in the manner that management intended).

Alan Lafley’s Moment of Truth

Early in his time as chief executive at Procter & Gamble, Alan Lafley had to decide whether to approve a ­major marketing effort to launch several new products. This would require a significant commitment of funds, and P&G had just missed earnings targets two quarters in a row. But Lafley had been working hard communicating the message that innovation was P&G’s lifeblood. Lafley describes his response: “So we locked arms and we went ahead. I had to make choices like these to convince P&G managers we were going to go for winning” (Gupta and Wendler, 2005, p. 4).

Encourage Voluntary Acts of Initiative

Kotter (2012) emphasizes the value of having many change agents in an organization, and not just a small elite team, arguing that vision and strategy should be communicated in a way that creates buy-in and attracts a growing “volunteer army” (p. 52). From their study of change in six corporations, Beer et al. (1990) conclude that in encouraging change, the most effective senior managers specified the general direction in which they wanted the company to move, and left the details of specific changes to be decided “closer to the action,” lower down in the organization. They found that change was more likely to become embedded if those at the operational level were supported when they developed for themselves the specific changes that they believed appropriate for their local circumstance.

Measure Progress

A focus on measurement is important for two reasons. First, metrics and milestones are fundamental to tracking the progress of change, highlighting the need for any corrective action. Second, what gets measured can significantly affect how people act, because measurement signals the importance of that aspect of performance. Less attention is paid to dimensions of performance that are not measured. From a survey of the change experiences of over 2,000 executives, Ghislanzoni et al. (2010, p. 8) found that two of the top five procedures used by organizations whose changes had been successful were “defining detailed metrics for reorganization’s effect on short- and long-term performance and assessing progress against them” and “using detailed plan, split into workstreams with milestones for delivery and someone accountable for reaching each.” Progress measurement is thus important both for implementation and for sustainability.

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It is important to choose appropriate metrics (see the box “Change Metrics: The Continental Airlines Experience”). David Nadler (1998) argues that organizations should carry out a comprehensive progress check on major change initiatives within six months after they have begun, and then annually thereafter. These checks should use quantitative performance measures, attitude surveys, focus groups, and individual interviews. Kanter et al. (1992) suggest that two kinds of measures are particularly helpful. First, results measures: How will we know that we have achieved our objectives? Second, process measures: How will we know that we are doing what is necessary to achieve those objectives and how plans may need to be adjusted? The Price Waterhouse Change Integration Team (1995) argues that a balanced set of performance measures should include:

Leading measures, which reveal the immediate results of a new initiative, such as changes in processing time, or time to market for new products

Lagging measures, such as financial performance and corporate image, which can take time to become apparent

Internal measures, focusing on intra-organizational processes and efficiencies

External measures, such as the perspectives of stakeholders, customers, and suppliers, and how the organization compares with benchmark competitors

Cost-based measures, which are directly financial

Noncost measures, such as market share and brand image

Exercise 11.1 asks you to apply these measures to a current change in your own organization or to one with which you are familiar. Do all these measures apply? If not, why not?

Celebrate En Route

Months or years can pass before the outcomes of a change initiative are fully realized. Those involved expect to see evidence that their efforts are rewarded. A lack of clear evidence of success strengthens the views of those who initially resisted the change. Skepticism concerning the value of the change may thus be increased by delays in demonstrating the benefits. However, it is often the case that some tangible benefits can be identified at an early stage in the process. Kotter (2012, p. 52) thus argues that one of the “accelerators” of change is to celebrate significant short-term wins. Celebrating the early benefits, even if they are relatively small in scale, recognizes and rewards those who are involved, strengthens the credibility of the program, and helps to weaken the skepticism.

In addition, the links between changed systems and working practices and organizational performance should be made clear. Staff members who have to work out those links for themselves may not make accurate assumptions. And successes, if they are effectively publicized and widely understood, can act as catalysts for further changes (see the box “Celebrating Success at Sandvik”). A further implication of the focus on celebrating “en route” concerns the allocation of resources to priority areas; those areas that need the most urgent attention may provide the best opportunities to demonstrate clear and immediate benefits, which can then be celebrated as short-term wins. Failure to establish those priorities at an early stage in the change process may be a direct cause of change failure.

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Change Metrics The Continental Airlines Experience

Continental was one of America’s major airlines until 2010, when it merged with United. Before that, Continental had tough times. When Gordon Bethune became chief executive of Continental in 1994, it had been losing money for most of the previous decade, had a debt-to-equity ratio of 50-to-1, and had served some time in Chapter 11 of the federal bankruptcy code. During this period, Continental had emphasized competing on the basis of cheaper fares than its major competitors. However, although it achieved the lowest revenue per available seat mile (of the major airlines), it also had the lowest revenue per available seat mile and a loss overall. Bethune reflects on this situation:

I firmly believe that what you measure is what you get. This is an example of a company that said that it couldn’t compete with the big boys unless it was able to have cheaper fares. That set the culture and mind-set. So, we had a culture that said, “Cost is everything.” That’s the Holy Grail. We even had pilots turning down the air-conditioning and slowing down airplanes to save the cost of fuel. They made passengers hot, mad and late. That’s a dysfunctional measure, a measure some accountant dreamed up who does not understand our business.

Bethune responded by investigating what factors most influenced passengers’ level of satisfaction with airlines. This revealed that on-time performance was the most significant factor. Unfortunately, at the time of Bethune’s arrival, Continental ranked tenth of the 10 largest U.S. carriers on this criterion. Nonetheless, Bethune changed the core metric used inside Continental to on-time performance:

We use that measure for two reasons. One because it is the single most vital sign of a functioning airline, and two, it’s ranked by our Government and we can’t screw the metrics.

To reinforce the centrality of this factor, a new system of rewards was established in which bonuses were paid to all staff each month that Continental was ranked in the top five of the 10 largest U.S. carriers for on-time performance. The cost of the bonus payments was more than covered by the reduction in the amount—that had risen to $6 million per month—that Continental had been paying to put passengers on other airlines, put them up in hotels, bus them across town, and so forth.

The next month, March 1995, we wound up in first place. We had never been in first place in 60 years. I mean, Continental, the worst company in America for the last 20 years, is first place in “on time” which is a metric everyone kind of understands.

By 1996 (and again in 1997), Continental had won the J.D. Power & Associates award for customer satisfaction as the best airline for flights of 500 miles or more and was in the top three in terms of fewest customer complaints and lost baggage. From 1995 to 1998, Continental’s market capitalization rose from $230 million to $3 billion.

Case Source

Kurtzman, J. 1998. Paying attention to what really counts. Art of Taking Charge 3(1):1–12. Copyright © 1998 Joel Kurtzman. All rights reserved. Used with permission.

Fine-Tuning

Despite careful advance planning, most change initiatives do not unfold as anticipated. The need for corrective action is to be expected. Making timely modifications in the light of experience will normally be more effective than attempting not to deviate from the plan. Problems arise for two main reasons. First, by definition, the implementation of change always involves doing something new, something that has never been done before. A particular type of change program may, of course, have been implemented in anotherPage 368 division, or another organization—but that change will always be new here, in this organization, in this division, at this time, for these reasons, with those resources, affecting our staff. In other words, change management always involves “building the plane as you fly,” and it is not surprising if parts fall off. Second, organizational changes are multifaceted, affecting many different factors, which are themselves interlinked. It is therefore difficult to anticipate all the “knock on” effects or “ripples” that a change in one area will have elsewhere.

Celebrating Success at Sandvik

Sandvik AB makes advanced alloys and ceramics, employs 42,000 people, and has sales in 160 countries. When a change program focusing on business processes was introduced, some of Sandvik’s units achieved significant improvements. People from these units then visited other units, particularly where there was skepticism about the change. These visits spread knowledge of successes and helped other units see what improvements could be achieved through the change initiative. Later, when a key financial target was reached, this was acknowledged by having a photograph taken of the Sandvik management team standing on top of a pile of gravel. However, according to Sandvik President Peter Gossas, “When we looked at the photo we thought, ‘Yes, success should be celebrated but hey, this is the wrong message.’ So we added five bigger piles to symbolize mountains we have yet to climb” (Ahlberg and Nauclér, 2007, p. 4).

Case Sources

Ahlberg, J., and Nauclér, T. 2007. Leading change: An interview with Sandvik’s Peter Gossas. McKinsey Quarterly, January:1–3.

https://www.home.sandvik (2019).

For the change manager, this means adjusting and refining aspects of the implementation process without this being seen as an admission of failure. This can be difficult in practice, because as “we have learned from experience” can also be described as, “you made mistakes in the planning.” This can be addressed by communicating the fine-tuning in terms of consistency with the original goals. As we have noted elsewhere, part of the change management responsibility is to help others to make sense of what is happening, to shape and to retell the story, and to explain that the core principles that lie behind the change remain intact.

Fine-Tuning at Ford

In 1995, Ford Motor company introduced a series of changes to the way the company designed and manufactured its cars and trucks. This involved changing from an existing functional structure, consolidating activities into five vehicle centers, and using a reduced number of platforms for its vehicle range. After a year and a half, senior management decided to make modifications in light of the initial experience. However, some groups and individuals, both inside the company and in the financial community, viewed the changes with some skepticism. As a result, when the time came to announce the modifications (for example, consolidating further from five to three vehicle centers), the company paid a lot of attention to making sure that the further changes were presented as a refinement, that is, a logical adjustment completely in keeping with the spirit and intent of the original change (Nadler, 1988).

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In this section, we have discussed eight sets of actions to consider when designing a change initiative, to build sustainability into the process from the beginning, or at least from an early stage. These include redesign roles, redesign reward systems, link selection to organizational objectives, walk the talk, encourage voluntary acts of initiative, measure progress, celebrate en route, and fine-tuning. Finally, based on a study by David Buchanan et al. (2007) of the UK National Health Service, one of the largest employing organizations in the world, table 11.3 summarizes key sustainability “actions and cautions.” This research emphasizes that sustainability relies on local management judgement, and on two main forms of action: preventive maintenance and developmental maintenance. Preventive maintenance involves action to sustain the status quo, to keep new working practices operating as intended, and to meet predetermined targets and objectives. Developmental maintenance involves continuing to adapt the changes to local circumstances to sustain an improvement trajectory, to exceed expectations, and to meet higher targets. Preventive maintenance sustains the changes; developmental maintenance both sustains and builds on the benefits.

TABLE 11.3

Managing the Improvement Evaporation Effect

Source: Based on Buchanan et al. (2007).

LO 11.4 Words of Warning

It can be difficult to manage sustainability after a change has been successfully implemented; by then, it may be too late. Building sustainability into a change initiative from the beginning provides no secure guarantees, but it is more likely to be an effective approach. However, there are a number of further factors about which the change manager needs to be aware.

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Expect the Unanticipated

Most change initiatives will generate unanticipated consequences, unless the links between the changes and outcomes are controllable and predictable (which is rare). Unanticipated consequences may be positive and support the change process. For example, staff may demonstrate greater levels of enthusiasm and commitment to making the changes work than was initially anticipated; cost saving may be higher than planned; processing times may be cut more dramatically. On the other hand, support may be more limited than expected, causing disruption and delay; cost savings may not materialize; time savings may be minimal. Unanticipated outcomes are not necessarily a sign of management failure; in complex change processes, the unexpected is to be expected. No amount of careful preplanning is likely to overcome this.

The change management challenge is to respond in timely and appropriate ways to the unexpected, which, on some occasions, may be early warnings of more serious problems, requiring a combination of resilience and improvisation.

Unanticipated Consequences at FedEx

Federal Express (FedEx) introduced a new aircraft routing system with the intention of increasing the productivity of its pilots. More powerful computers and developments in scheduling algorithms made this seem feasible, the estimated savings in the hundreds of millions of dollars made it attractive, and the pilots had a record of supporting measures intended to improve competitive efficiencies.

However, things did not work out as planned. The new system produced flight plans that required pilots to cross the time zones of two hemispheres, undertake back-to-back trans-Pacific and trans-Atlantic flights, and spend hours travelling by land to change aircraft. Efforts by FedEx to improve the working of the new system failed to produce any improvement, but the company persisted with the new system. In response, the pilots’ union, despite having a reputation for compliance with management requirements, threatened a work stoppage if the system was not abandoned. Then, having taken this stance, their demands extended to a substantial wage increase, fewer flying hours, and improved retirement benefits.

Faced with the prospect of a strike by the pilots—which would have been the first pilot strike in the company’s history—FedEx management relented, and the new scheduling system was abandoned.

Based on Pascale et al. (2000).

Beware the Limitations of Measurement

The benefits derived from new ways of doing things (online customer satisfaction, brand image, and reputation) may not immediately be reflected in traditional measures (sales per square foot, stock turnover, market share). The credibility of a new idea may be threatened if it does not succeed on established criteria. However, in some circumstances, a change may be regarded as successful even where the intended aims have not been met—such as a major process redesign initiative that achieved few of the intended goals but that increased the organization’s receptiveness to and capacity for further changes. Assessing the effectiveness of change is therefore complex and challenging.

“Premature measurement” can also create problems. As discussed earlier, celebrating short-term wins can be valuable, but measuring the overall success of a change initiative should be related to the timescale over which benefits are expected to be delivered. A focusPage 371 on short-term gains and quick fixes can weaken the persistence that is often required to achieve gains that develop over a longer period. In addition, organizational change rarely flows in a linear fashion, and the outcomes tend to be shaped by the combination and interaction of multiple factors. At times, change may appear to be progressing rapidly, while at other times, it may appear to have stalled. In some instances, performance may deteriorate before it improves, as people learn how to adjust to and work with new structures systems, procedures, and practices. This initial dip followed by an uptick in performance is known as the “J-curve” (see Figure 11.1). This is also known as “Kanter’s law” (chapter 10), which states that “Everything can look like a failure in the middle” (Kanter, 2009).

FIGURE 11.1

The J-Curve

The shape of the J-curve, and the timescale over which it operates, will of course vary from one setting to another (performance may not dip in some cases and may never recover in others). Assessment of how well a change is progressing must consider not only which metrics to apply, but also the timing of those measurements. The J-curve can be helpful in managing the expectations of others, with regard to justifying a deterioration in performance, and also explaining the rate at which the benefits of the change are likely to become apparent.

Beware Premature Declaration of Victory

Embedding and sustaining organizational culture change can take a considerable amount of time—years in some cases. For any transformational change, Kotter (2012, p. 52) advises the change manager to “never let up; keep learning from experience; and don’t declare victory too soon.” In other words, celebrate the wins, but do not declare overall victory. Until a change is firmly embedded, the possibility of a return to previous working practices will remain possible. There may be significant numbers of people who are hoping that the change will not succeed and that “things will return to normal.” Those who feel this way may not make their views known. Anne Fisher uses the term “vicious compliance” to describe those who display support in public (“they will nod and smile and agree with everything that you say”) but are resentful of the change and are waiting for the opportunity to return to the “old ways” of working to which they remain committed.

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Beware the Escalation of Commitment

It is important to recognize that not all proposed changes are going to be beneficial (de Barros Teixeira et al., 2019). If a change is not producing the desired outcome, then this may be a “praiseworthy failure,” which it would be wise to discontinue. However, it is also wise to guard against the understandable tendency of the advocates of this change to argue that failure to deliver is due to insufficient funding and that more time is needed to demonstrate the benefits. If those arguments are accepted, then further resources will be allocated to the initiative, creating an “escalation of commitment.” Barry Staw and Jerry Ross (2004) identify four factors that can lead to escalation:

Project determinants. Commitment is likely to increase where the lack of progress is considered to be due to a temporary problem, where additional funding is considered likely to be effective, or where the relative payoff to come from additional investment is considered to be large.

Psychological determinants. “Sunk costs are not sunk psychologically.” Escalation can result from self-justification biases. This happens when you have been personally responsible for a decision and want to avoid being associated with losses, so you maintain your commitment.

Social determinants. Escalation may occur as those most closely identified with a project commit more resources in an attempt to revive it and thereby save face by not being associated with a failure. This response is encouraged by the existence of “the hero effect” or the “special praise and adoration for managers who ‘stick to their guns’ in the face of opposition and seemingly bleak odds” (Staw and Ross, 2004, p. 209).

Organizational determinants. Organizational units are likely to resist the abandonment of a project that is seen as central to their identity. Staw and Ross cite the example of the aerospace and defense company Lockheed Martin’s L1011 Tri-Star Jet program, arguing that the company persisted with this project for more than a decade, despite huge losses—and predictions that it was unlikely to earn a profit—because to abandon it would have meant admitting that they were simply a defense contractor and not, as they preferred to believe, a pioneer in commercial aircraft.

How can escalation of commitment be avoided? Mark Keil and Ramiro Montealegre (2000) identify the following advice:

Don’t ignore negative feedback or external pressure.

Hire an external assessor to provide an independent view on progress.

Don’t be afraid to withhold further resources and funding; as well as limiting losses, it has symbolic value in that it is a fairly emphatic signal that there is concern with progress.

Look for opportunities to redefine the problem and thereby generate ideas for courses of action other than the one being abandoned.

Manage impressions. Frame the “de-escalation” in a way that saves face.

Prepare your stakeholders because, if they shared the initial belief in the rationale for the change, their reaction to an announcement of the abandonment of the change may be to resist.

Look for opportunities to deinstitutionalize the project, that is, to make clear that the project is not a central defining feature of the organization, so that “stepping back” does not imply any weakening of commitment to the central mission of the organization.

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Dipankar Ghosh (1997) suggests three further steps that can help to reduce the escalation of commitment. First, unambiguous feedback on progress reduces escalation; where feedback is ambiguous, the tendency to filter information selectively can lead to escalation by those who are already committed to the change. Second, provide regular progress reports, including explanations for deviations from budget. If progress reports are not a requirement, then they will not necessarily be requested before further resources are committed. Third, provide information on future benefits. In the absence of these data, decisions will be too heavily influenced by historical costs.

Awareness of the phenomenon of escalation of commitment is the starting point for identifying solutions. However, this can be a challenging problem to manage as the line between an optimistic “can do” attitude and over-commitment can be difficult to establish.

Recognize Deep Structures

To understand what is involved in producing sustained organizational change, it is important to recognize two different and coexisting levels of analysis (Clausen and Kragh, 2019). First is the level of specific change projects that may be relatively surface-level phenomena, in the sense that they do not disrupt or significantly challenge key aspects of underlying cultural and power relationships. Second is the level of “deep structures” involving embedded senses of identity and normative beliefs that, as noted in chapter 8, can generate resistance. Surface-level changes still need to be well managed as they are not immune from negative reactions, but they are typically less complex forms of change to manage than those where deep structures are involved.

Sustainable Organizations

Jeffrey Pfeffer (2010) argues that, to build sustainable organizations, we need to treat human sustainability as seriously as we do environmental and ecological concerns. Organizational policies and management practices influence the human and social environment and affect employee well-being in various ways: provision of health insurance, effects of layoffs, working hours and work–life balance, job design and stress, income inequalities, organizational culture, and emotional climate:

Companies that do not provide health insurance, lay people off, pay inadequate wages, and have work arrangements that stress and overwork their employees also impose externalities that others pay for even as they save on their own costs. (p. 42)

However, “green management,” which is concerned with environmental awareness, energy efficiency, and carbon emissions, has not been matched by a parallel focus on employee welfare, “even though that might be an interesting and informative indicator of what companies are doing about the sustainability of their people” (p. 36). Actions affecting the physical environment are more visible:

You can see the icebergs melting, polar bears stranded, forests cut down, and mountaintops ­reshaped by mining, and experience firsthand the dirty air and water that can come from company economic activities that impose externalities. Reduced life expectancy and poorer physical and mental health status are more hidden from view. Even the occasional and well-publicized act of employee or ex-employee violence has multiple causes and is often seen as aberrant behavior outside of the control and responsibility of the employer. (p. 41)

Pfeffer proposes a research agenda to explore the implications of “human sustainability” policies on both employee welfare and organizational effectiveness. What steps is your organization taking to address human and social sustainability? What further action would be desirable, and why?

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EXERCISE 11.1

A Balanced Set of Measures

LO 11.3

It is helpful to consider appropriate measures of success for a change initiative. Thinking of a change initiative that is currently under way in your organization (or a change that is taking place in an organization with which you are familiar), identify the measures that you think should be applied, and list them in the following table. By ticking the appropriate column (✓), note which type of measures you have identified. It may be possible to classify any one measure in more than one category; brand image, for example, may be lagging, external, and noncost.

If the measures that you are proposing do not include all six types of measures, you need to explain why the “missing” types are not included. If you cannot give a good explanation, you may need to propose additional measures.

Type of Measure

Measure Leading Lagging Internal External Cost Noncost

1. . . . . . . . . . . . . . . .

2. . . . . . . . . . . . . . . .

3. . . . . . . . . . . . . . . .

4. . . . . . . . . . . . . . . .

5. . . . . . . . . . . . . . . .

EXERCISE 11.2

Treating Initiative Decay

LO 11.3

Earlier in this chapter, we identified the top ten causes of initiative decay. Which of these factors apply to the recent changes in your organization? What additional factors, not mentioned here, could cause initiative decay in your organization? Considering each cause in turn, what treatment would you prescribe to avoid or reduce the decay?

Cause Prescribed Treatment

Initiators move on.

Accountability becomes diffuse.

Knowledge lost through staff turnover.

Old habits imported with new recruits.

Change triggers no longer visible.

New managers with their own agendas.

Power brokers blocking progress.

Pump-priming funds have run out.

Other priorities diverting attention.

Initiative fatigue, lack of enthusiasm.

Other.

Other.

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EXERCISE 11.3

The Challenger and Columbia Shuttle Disasters

LO 11.4

We discussed the 2003 Columbia shuttle disaster in chapter 3. There, we explored reasons why organizations (in this case NASA) often fail to change following accidents such as this one, having previously lost the shuttle Challenger in 1986. We also explored the organizational culture at NASA in chapter 5, emphasizing that, while the blame for both shuttle losses was linked to technical problems, the more significant contributory factors lay with leadership, management, and organizational culture issues. This is a familiar pattern, seen in many major catastrophes. Here is a fuller account of both disasters, which contain lessons concerning organizational change in general and the sustainability of change in particular. Space exploration is unique in many respects, but from a change management perspective, the lessons from this experience are generic.

As you read this case account, consider the following questions:

What aspects of NASA practice revealed following the Columbia disaster suggest that the changes that were recommended following the Challenger disaster were not sustained?

This chapter has discussed actions that can be taken to sustain change. In your judgment, which of the following would have been most useful to NASA after the Challenger disaster?

Redesign roles.

Redesign reward systems.

Link selection to organizational objectives.

Walk the talk.

Encourage voluntary acts of initiative.

Measure progress.

Celebrate en route.

Fine-tuning.

This chapter has explained “words of warning” in terms of what to be alert to in regard to sustaining change. Which of the following do you see as most applicable to NASA?

Recognize productive, praiseworthy failures.

Expect the unanticipated.

Beware the limitations of measurement.

Beware premature declaration of victory.

Beware the escalation of commitment.

The Challenger Disaster

On January 28, 1986, the space shuttle Challenger rose into the sky, its seven crew members strapped into their padded seats while the 2,000-ton vehicle vibrated as it gained speed and altitude. The launch was going perfectly. Seventy seconds had passed since lift-off, and the shuttle was already 50,000 feet above the earth. From NASA Mission Control at Houston’s Johnson Space Center, Spacecraft Communicator Richard Covey instructed, “Challenger, go at throttle up.” “Roger, go at throttle up,” replied Challenger Commander Dick Scobee.

In the next few seconds, however, Challenger experienced some increasingly violent maneuvers. The pilot, Mike Smith, expressed his sudden apprehension: “Uh-oh.” In MissionPage 376 Control, the pulsing digits on the screen abruptly stopped. Mission Control spokesman Steve Nesbitt sat above the four console tiers. For a long moment he stared around the silent, softly lit room. The red ascent trajectory line was stationary on the display screen. Finally he spoke: “Flight controllers here looking very carefully at the situation. Obviously a major malfunction.”

Headed by former Secretary of State William Rogers, the Presidential Commission that was set up to investigate the cause of the Challenger disaster had little trouble identifying the physical cause. One of the joints on a booster rocket failed to seal. The “culprit” was one of the synthetic rubber O-rings that were designed to keep the rockets’ superhot gases from escaping from the joints between the booster’s four main segments. When one of the O-rings failed, the resulting flames burned through the shuttle’s external fuel tank. Liquid hydrogen and liquid oxygen then mixed and ignited, causing the explosion that destroyed Challenger.

However, the so-called Rogers Commission investigations also revealed a great deal about the internal workings of NASA. It was a geographically dispersed matrix organization. Headquarters were in Washington, DC, where its most senior managers, including its head, NASA administrator James Beggs, were mainly involved in lobbying activity, reflecting the dependence on federal funds (and its vulnerability to fluctuations in funding). Mission Control was located at the Johnson Space Center in Houston, Texas. All propulsion aspects—main engines, rocket boosters, fuel tanks—were the responsibility of the Marshall Space Center in Huntsville, Alabama. Assembly and launch took place at the Kennedy Space Center in Cape Canaveral, Florida.

These various centers existed in an uneasy alliance of cooperation and competition. The Marshall Center in particular was known for its independent stance based on its proud tradition going right back through the Apollo program to the early days of rocketry with Wernher von Braun. One manifestation of this pride, reinforced by its autocratic leader William Lucas, was that loyalty to Marshall came before all. Any problems that were identified were to be kept strictly “in-house,” which at Marshall meant within Marshall. Those who failed to abide by this expectation—perhaps by speaking too freely to other parts of NASA—could expect to receive a very public admonishment. Marshall was also at the center of a “can-do” attitude within NASA, supporting the idea that great objectives are achievable if only the will is there. Born of the Apollo success, this took form in Marshall as pride in the achievement of objectives and strongly held views that if a flight was to be delayed for any reason, it would never be because of something caused by Marshall.

The Rogers Commission also concluded that NASA was working with an unrealistic flight schedule. The formal schedule demanded twelve flights in 1984, fourteen in 1985, seventeen in 1986 and again in 1987, and twenty-four in 1988. In practice, NASA had managed five launches in 1984 and eight in 1985. Congressional critics had begun to question the appropriateness of continuing the current (high) level of program funding when NASA was falling so far short in meeting its own goals. However, rather than revise its schedules, these were retained and senior NASA managers increased the pressure on staff and contractors to meet the schedules.

Most of the design and construction work in the shuttle program was contracted out. One of the contractors was Morton-Thiokol, a Brigham City, Utah-based company that had won the contract to produce the solid rocket boosters. At the time of the Challenger launch, Thiokol and NASA were in the middle of contract renewal negotiations.

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The Rogers Commission revealed that there had been doubts about the reliability of the O-rings for some time. Since 1982, they had been labelled a “criticality 1” item, a label reserved for components whose failure would have a catastrophic result. However, despite evidence of O-ring erosion on many flights and requests from O-ring experts from both NASA and Thiokol that flights be suspended until the problem was resolved, no action had been taken. There was no reliable backup to the O-rings. This violated a long-standing NASA principle, but each time a flight was scheduled, this principle was formally waived.

A cold front hit Cape Canaveral the day before the scheduled launch. Temperatures as low as 18ºF were forecast for that night. Engineers from Thiokol expressed their serious reservations about the wisdom of launching in such conditions because the unusually cold conditions at the launch site would affect the O-rings’ ability to seal. As a result, a teleconference was called for that evening.

At the teleconference, Roger Boisjoly, Thiokol’s O-ring expert, argued that temperature was a factor in the performance of the rings and Robert Lund, Thiokol’s vice president for engineering, stated that unless the temperature reached at least 53ºF, he did not want the launch to proceed. This position led to a strong reaction from NASA; from Lawrence Mulloy, Marshall’s chief of the solid rocket booster program; and George Hardy, Marshall’s deputy director of science and engineering. Hardy said that he was “appalled” at the reasoning behind Thiokol’s recommendation to delay the launch, and Mulloy argued that Thiokol had not proven the link between temperature and erosion of the O-rings, adding, “My God, Thiokol, when do you want me to launch, next April?” A view expressed at the Commission was that the Thiokol engineers had been put in a position where, for a delay to be approved, they were being required to prove that the O-rings would fail, rather than to prove that they would be safe at the low temperatures, before a go-ahead was approved.

The teleconference took a break, to allow the Thiokol management team to consider their position. The Thiokol engineers were still unanimously opposed to a launch. Jerald Mason, Thiokol’s senior vice president, asked Robert Lund to “take off his engineering hat and put on his management hat.” Polling just the senior Thiokol managers present, and not any of the engineers, Mason managed to get agreement to launch. The teleconference was then reconvened, the Thiokol approval was conveyed, no NASA managers expressed any reservations, and the OK to launch was given.

Post-Challenger Changes at NASA

The Rogers Commission’s recommendations included that NASA restructure its management to tighten control, set up a group dedicated to finding and tracking hazards with regard to shuttle safety, and review its critical items as well as submitting its redesign of the booster joint to a National Academy of Sciences group for verification. The official line within NASA was that the necessary changes had been successfully implemented. A NASA news release on January 22, 1988, stated:

In response to various reviews of NASA safety and quality programs conducted in the aftermath of the Challenger accident and associated recommendations for improvements, NASA has acted to elevate agency emphasis on safety and implement organizational changes to strengthen SRM&QA [Safety, Reliability, Management & Quality Assurance] programs. There has been a 30 percent increase in NASA personnel assigned to SRM&QA functions since January 1986.

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The Columbia Disaster

On February 1, 2003, the space shuttle Columbia’s braking rockets were fired as the shuttle headed toward a landing at Kennedy Space Center. As it passed over the United States, observers spotted glowing pieces of debris falling from the shuttle. At 8:59 am EST, commander Rick Husband replied to a call from Mission Control, but his acknowledgment ceased mid-transmission. About a minute later, Columbia broke up, killing its seven astronauts.

The Columbia Accident Investigation Board (CAIB or Board) was formed to identify what had happened. In its August 2003 final report, it identified the physical cause of the accident. A 1.67-pound slab of insulating foam fell off the external fuel tank 81.7 seconds after Columbia was launched (on January 16), hit the left wing, and caused a breach in the tiles designed to protect the aluminum wing from the heat of reentry. On reentry, the breach allowed superheated gas into the wing, which, as a result, melted in critical areas.

But the Board also addressed the nonphysical factors that contributed to the disaster. Because of no improvement in the level of NASA funding, NASA Administrator Daniel Goldin pushed a “Faster, Better, Cheaper” (FBC) initiative that impacted on the shuttle program.

The premium placed on maintaining an operational schedule, combined with ever-decreasing resources, gradually led shuttle managers and engineers to miss signals of potential danger. Foam strikes on the orbiter’s thermal protection system (TPS), no matter what the size of the debris, were “normalized” and accepted as not being a “safety-of-flight risk.”

The shuttle workforce was downsized, and various program responsibilities (including safety oversight) were outsourced. Success was measured through cost reduction and the meeting of schedules and the shuttle was still being mischaracterized as an operational rather than a developmental technology.

The Board particularly identified NASA’s organizational culture as being as much to blame as the physical causes. According to the Board:

Though NASA underwent many management reforms in the wake of the Challenger accident, the agency’s powerful human space flight culture remained intact, as did many practices such as inadequate concern over deviations from expected performance, a silent safety program, and schedule pressure.

Cultural traits and organization practices detrimental to safety and reliability were allowed to develop, including: reliance on past success as a substitute for sound engineering practices (such as testing to understand why systems were not performing in accordance with requirements/specifications); organizational barriers which prevented effective communication of critical safety information and stifled professional differences of opinion; lack of integrated management across program elements, and the evolution of an informal chain of command and decision-making processes that operated outside the organization’s rules.

According to the Board: “NASA’s blind spot is that it believes it has a strong safety culture [when in fact it] has become reactive, complacent, and dominated by unjustified optimism.” The Board found that while NASA managers said that staff members were encouraged to identify safety issues and bring these to the attention of management, there was evidence to the contrary, including insufficient deference to engineers and other technical experts. Also, while NASA’s safety policy specified oversight at headquartersPage 379 combined with decentralized execution of safety programs at the program and project levels, the Board found that NASA had not been willing to give the project teams the independent status for this to actually work.

The external tank of the shuttle was designed with a layer of insulation tiles that were designed to stick to the tank, not to be shed. Similarly, the shuttle’s heat shield was not designed to be damaged; the tiles were fragile, such that the shuttle was not allowed to fly in rain or stay outside in hail.

However, the experience of previous launches was that foam sometimes did fall off and tiles sometimes were damaged. But this was occurring without any noticeable negative effect on the functioning of the shuttle. Of 112 flights prior to the fatal Columbia flight, foam had been shed 70 times and tiles had come back damaged every time. Over time, NASA managers got used to the idea that such damage would occur and convinced themselves there was no safety-of-flight issue. The Board reported that “program management made erroneous assumptions about the robustness of a system based on prior success rather than on dependable engineering data and rigorous testing.”

The report cites eight separate “missed opportunities” by NASA during the 16-day flight to respond to expressions of concern or offers that could have assisted. For example, engineer Rodney Rocha’s email four days into the mission, asking Johnson Space Center if the crew had been directed to inspect Columbia’s left wing for damage, had been left unanswered. Also, NASA had failed to accept the U.S. Defense Department’s offer to obtain spy satellite imagery of the damaged shuttle.

The Board faulted NASA managers for assuming that there would be nothing that could be done if the foam strike had indeed caused serious damage to the TPS. After the accident, NASA engineers, working at the request of the Board, concluded that it might have been possible either to repair the wing using materials on board Columbia, or to rescue the crew through a sped-up launch of the shuttle Atlantis. The Board also criticized NASA managers for not taking steps to ensure that minority and dissenting voices were heard, commenting:

All voices must be heard, which can be difficult when facing a hierarchy. An employee’s location in the hierarchy can encourage silence. Organizations interested in safety must take steps to guarantee that all relevant information is presented to decision makers. This did not happen in the meetings during the Columbia mission. Program managers created huge barriers against dissenting opinions by stating preconceived conclusions based on subjective knowledge and experience, rather than on solid data.

The NASA Intercenter Photo Working Group had recommended that the loss of foam be classified as an in-flight anomaly—a much more critical designation than it currently had—but this was not approved by the program requirements control board. The engineers were placed in the situation of having to prove that a safety-of-flight issue existed before the shuttle program management would take action to get images of the left wing. The Board found that this was just one example of a more general situation where those concerned with safety found themselves having to prove that a situation was unsafe, whereas it might be reasonably expected that the emphasis would be on proving instead that a high level of safety existed. The Board also concluded that there was an unofficial hierarchy among NASA programs and directorates that hindered the flow of communications:

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Management decisions made during Columbia’s final flight reflect missed opportunities, blocked or ineffective communication channels, flawed analysis, and ineffective leadership. Perhaps most striking is the fact that management displayed no interest in understanding a problem and its implications. Because managers failed to avail themselves of the wide range of expertise and opinion necessary to achieve the best answer to the debris strike question—“was this a safety-of-flight concern?”—some space shuttle program managers failed to fulfil the implicit contract to do whatever is possible to ensure the safety of the crew. In fact, their management techniques unknowingly imposed barriers that kept at bay both engineering concerns and dissenting views, and ultimately helped create “blind spots” that prevented them from seeing the danger the foam strike posed.

The Board concluded that the post-Challenger changes “were undone over time by management actions” and that “the pre-Challenger layers of processes, boards and panels that had produced a false sense of confidence in the system and its level of safety returned in full force prior to Columbia.”

Case Sources

Berger, B. 2003. Columbia report faults NASA culture, government oversight. Space.com, August 26. http://www.space.com/missionlaunches/caib_preview_030707-1.html.

Columbia Accident Investigation Board. 2003. Columbia Accident Investigation Board Report, ­Volumes I to VI. Washington, DC: National Aeronautics and Space Administration and the Government Printing Office.

Covault, C. 2003. Failure an option?: NASA’s shallow safety program put Columbia and her crew on same path as Challenger. Aviation Week & Space Technology 159(9):27–35.

McConnell, M. 1987. Challenger: A serious malfunction. London: Simon & Schuster.

Magnusson, E. 1986. A serious deficiency. Time (March 10):34–36.

Morring, F. Jr. 2003. Culture shock. Aviation Week & Space Technology 159(9):31–34.

Additional Reading

Buchanan, D. A., Fitzgerald, L., and Ketley, D. (eds). 2007. The sustainability and spread of organizational change: Modernizing healthcare, London: Routledge. Reports a study of the problems of diffusing and sustaining new working practices in the UK National Health Service. Based on case studies of sustainability practice in different areas of healthcare, offers practical advice on the dissemination of new ideas and the steps necessary to sustain those once implemented. The organization and management issues—and implications for practice—apply to other organizations and sectors and are not confined to health.

Edmondson, A. 2018. The fearless organization: Creating psychological safety in the workplace for learning, innovation, and growth. Hoboken, NJ: John Wiley & Sons. Discusses the steps necessary to create a psychologically safe environment at work, in which people feel able to experiment and make mistakes without punishment.

Mahler, J. G., and Casamayou, M. H. 2009. Organizational learning at NASA: The Challenger and Columbia accidents. Washington, DC: Georgetown University Press. Offers a fresh analysis of the two NASA shuttle disasters, in terms of organizational learning. What did NASA learn from the Challenger disaster? How much of that learning was symbolic,Page 381 and not substantive? What did NASA not learn? And what did NASA learn and then forget—thus contributing to the loss of the shuttle Columbia? External political and budgetary pressures were often to blame for the nonlearning and forgetting, and these are factors that also jeopardize the sustainability of the kinds of organizational changes that NASA was advised to make.

Pfeffer, J. 2010. Building sustainable organizations: The human factor. Academy of Management Perspectives 24(1):34–45. Argues that environmental sustainability has attracted most of the attention and that human and social sustainability are equally important. Suggests that, while “green management” can benefit an organization financially, and in terms of reputation, a similar focus on human sustainability should also generate returns. Proposes a research agenda, to explore links between human and social sustainability practices and organizational effectiveness.

Sull, D., Homkes, R., and Sull, C. 2015. Why strategy execution unravels—and what to do about it. Harvard Business Review 93(3):58–66. Strategy execution seems to be more problematic than developing strategy, because execution is misunderstood. The problem is not alignment, but coordination; research shows that people in other units (internal and external) are not reliable. Execution does not mean “sticking to the plan” where changing conditions demand flexibility. Communications from top management may be frequent but are often inconsistent; only half of middle managers can name any of their organization’s top priorities. Does execution require a “performance culture”? Perhaps, but agility, teamwork, and ambition should also be rewarded. The idea that execution should be driven from the top is a myth; execution “lives and dies with managers in the middle—but they are hamstrung by the poor communication from above” (p. 66). Concludes that fostering coordination and building agility are key to strategy execution. The same guidelines apply to change implementation.

Roundup

Reflections for the Practicing Manager

If you have been involved previously as a manager of change, how would you rate yourself in terms of your handling of the need to take actions that sustain change? What have you done well? What not so well?

When you have been on the receiving end of the change initiatives of others, how well have they handled the need to take actions that sustain change? What have they done well? What not so well?

Of the cases presented in this chapter, which one resonates best with you? What is it about this case that you can relate to? Are there any implications for how you would act in the future?

How good are you at handling unanticipated outcomes? How could you improve in this area?

If there was one main idea that you took away from this chapter that you believe can be of most use to you as a change manager, what would it be?

If you were to add an idea, suggestion, or practice to the treatment of sustaining change that is provided in this chapter, what would be your contribution?

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Here is a short summary of the key points that we would like you to take from this chapter, in relation to each of the learning outcomes:

LO 11.1

* Understand the causes of initiative decay—threats to the sustainability of change.

This chapter has emphasized that even changes that have been implemented successfully are liable to decay. Sustainability cannot be taken for granted. The “improvement evaporation effect,” as the benefits from change are lost, is common. The change manager may have little direct control over the factors that lead to initiative decay, but measures can be put in place to counter those factors and to increase the probability that change will be sustained. Initiative decay can be caused by many factors, and we identified 10: initiators move on, accountability becomes diffuse, knowledge is lost with staff turnover, old habits are imported with new recruits, the change triggers are no longer visible, new managers have their own agendas, power brokers block progress, start-up funding runs out, other priorities emerge, staff suffer initiative fatigue—and enthusiasm for change drops. The change manager thus has to remain vigilant with regard to potential threats to sustainability such as these. Many of the change models and frameworks discussed in chapter 10 identify sustainability as a final step in the process. Managing sustainability as an afterthought, however, can be problematic. It is more appropriate to design sustainability into a change initiative from the start.

LO 11.2

* Distinguish between change initiatives that are “blameworthy,” and should not be sustained, and those that are “praiseworthy.”

We also emphasized that, when a change does not work out as planned, this is not necessarily a problem. Failures are not always bad. We discussed the distinction between blameworthy and praiseworthy failures. The former include deliberate or inadvertent deviations from prescribed practice. Experiments designed to improve performance, and reasonable actions that have undesirable but unpredictable outcomes, are praiseworthy—because they offer opportunities from which to learn. Many organizations, however, treat most failures as blameworthy. This is wasteful, because the lessons are lost, and those who are inappropriately punished are likely to be demotivated. The change management challenge is to establish a psychologically safe environment that welcomes experimentation, recognizes and rewards praiseworthy failures, and enables learning.

LO 11.3

* Identify and apply actions that can contribute to the sustainability of change.

Although some of the threats to sustainability are beyond direct management control, awareness of those threats and their impact can generate timely and appropriate responses. We discussed eight sets of possible actions to strengthen the sustainability of a given change: redesign roles, redesign reward systems, link staff selection to change objectives, “walk the talk,” encourage voluntary acts of initiative, measure progress, celebrate “smaller wins” en route, and fine-tune the approach when the process (as almost always happens) does not unfold as anticipated. We also distinguished between sustaining the substance of change (new working practices, for example) and an improvement trajectory (further reductions in time to market, for example). Preventive maintenance involves action to sustain the former, to keep those practices operating as intended. Developmental maintenance, on the other hand, involves adapting to circumstances to gain increasing benefits.

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LO 11.4

* Understand the pitfalls that can arise when seeking to sustain change.

We closed the chapter with a number of words of warning for the change manager. First, expect the unexpected and manage the (positive and negative) unintended consequences. Second, beware the limitations of measurement, and recognize the implications of the J-curve and Kanter’s law, which states, “Everything looks like a failure in the middle.” Third, beware the premature declaration of victory, which may divert energy and attention from the change process, but continue to celebrate the “small wins” as appropriate. Finally, beware the escalation of commitment to struggling change initiatives by accepting the requests of advocates for further resources when it is becoming clear that the initiative is not going to deliver the planned outcomes (but may be a praiseworthy failure).

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Source of opening quote from Tom Brokaw https://conantleadership.com/25-quotes-about-managing-change/

Source of the chapter opening quote: 25 Quotes about Managing Change, Conant ­Leadership, August 28, 2017, https://conantleadership.com/25-quotes-about-managing-change.

Chapter opening silhouette credit: CharlotteRaboff/Shutterstock

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