Handbook of Principles of Organizational Behavior - Soltanieh ...

544 MICHAEL BEER
need for change. Under these circumstances change cannot take place until the leader is
replaced. The price of not being vigilant can be seen in statistics for Fortune 500 CEO
tenure. Average CEO tenure in 2008 is 3.2 years versus 10.5 years in 1990. Leaders who
are not dissatisfied with the status quo are removed by boards of directors so signifi ­
cant organizational change can occur. Even new managers, however, can fail to manage
change if they do not understand and/or are unskillful in leading change. As a new CEO
John Scully had nine years to change Apple Computer. He failed because he did not take
the steps outlined below.
1. Mobilize energy for change
Energy for change must be mobilized in the top management team as well as in key
managers at lower levels. It is mobilized by creating dissatisfaction with the status quo as
was noted above. The following three actions can mobilize energy for change (Beer, 1991 ).
◆ Demanding improved performance and behavior – Leaders can energize organizational
members by articulating demanding goals and standards for behavior. When Jack
Welch took over General Electric in the early 1980s he told all business unit
managers that they had to get their business units to be number 1 or 2 in their
industries or the business would be sold. Stan Mahalik, Executive Vice President
for Manufacturing at Goodyear Tire and Rubber, energized his 100 plant managers
around the world to change their operations by demanding that unless their tires
met certain quality standards they would become scrap. This energized them to
search for new technology and management approaches. Percy Barnevik, CEO of
ABB, articulated new performance goals and behavioral standards at a worldwide
meeting of the top 500 executives in the company within weeks after a merger that
formed the new company. With regard to behavior, taking action even if it is wrong,
he said, is better than not taking action at all.
◆ Exposing the top team and employees to feedback – A general manager who is dissatisfi ed
with the status quo has come by this view through awareness of low quality, high
cost, poor profi ts, dissatisfied customers, or unhappy shareholders. Exposing managers
and workers to this information through presentations as well as direct experience
is a powerful way to unleash energy for change. When Louis Gerstner took over IBM
after it had fallen on hard times in the early 1990s he asked all top executives to visit
at least one customer a month. These visits gave them new insights into what was
happening in the industry and how IBM needed to respond. Likewise, staff groups
in corporations have been energized to become more effective when they have been
exposed to feedback from line organizations they serve. Manufacturing plant managers
faced with a resistant workforce and union have taken workers and union leaders
on trips to see customers, displayed competitive products in the lobby of the building,
and informed employees about the plant ’s financial performance through presentations
and display of information on bulletin boards.
◆ Exposing employees to model organizations – Exposing managers and lower levels to
radically different practices in other companies or within the same company can
unleash energy. This has been referred to as benchmarking best practice. A visit
to an innovative team - based manufacturing plant unleashed energy in managers,