Handbook of Principles of Organizational Behavior - Soltanieh ...

550 MICHAEL BEER
problems and its performance did not meet top management ’s expectations. There were
numerous reasons for this. The division had organized itself and was being managed
in a manner similar to HP ’s traditional test and measurement divisions. Yet the systems
business was significantly different, particularly with respect to the need to customize systems.
The mismatch between the traditional approach to organizing and managing and
the demands of a very different business environment and strategy created many tensions
between functions and between the top team and the remainder of the organization.
Data collected by a taskforce of the division’s best employees revealed that the six silent
killers described above were blocking organizational effectiveness. Employees perceived
the general manager ’s style was laissez faire. He was not engaging his top team in a discussion
of conflicting strategies and priorities perceived by lower levels. Consequently,
coordination between several functions essential for successful execution of two interdependent
strategies was not occurring. Section managers who had been assigned to lead
cross - functional teams were ineffective in gaining consensus in their teams in part because
they lacked experience and skills needed to lead teams and in part because they lacked
formal authority. And, while everyone in the division knew of these problems and complained
about them to each other in private conversations, they did not give voice to their
frustrations to the top team. The division manager and his staff were also aware of tensions
and knew the division was failing but without feedback from lower levels they did
not quite understand the urgency for change that lower level managers felt.
With the encouragement of his human resource executive, the division manager hired
an external consultant, who, using a process called the Strategic Fitness Process (Beer
and Eisenstat, 2004 ), helped the top team go through the seven step change process. This
enabled these issues to be surfaced for discussion and diagnosis. As a result the top team
identified their own ineffectiveness as a team, the general manager ’s style, and the ineffectiveness
of cross - functional teams in coordinating functional departments as the root
cause of poor performance. In that same meeting they agreed to reorganize the division
as a matrix structure in order to facilitate coordination, defined new roles for key people
and teams in the new structure, and defined a new role for the top team, one that would
fit the new structure, and created new ground rules for how the top team should operate
and how decisions would be made.
Data collected a year later by the same taskforce and an employee survey showed significant
improvement, though some issues persisted. Sales had tripled and profits went up
250%. While the division’s management attributed some of the improvements in the division’s
performance to an upturn in the market they served, they felt that they would not
have been able to take advantage of market demand without the changes in organizing
and managing they had made. The division manager and his team also decided to lead
the seven step task alignment process once a year as a way of fostering continuous change.
Five years later HP ’s top management felt that SRSD, which had lagged its sister divisions
in performance and effectiveness, was now a model to which others divisions could look.
Division management had successfully led change and innovated when they adopted the
Strategic Fitness Process for fast change.
ASDA : successful corporate - wide strategic change
ASDA, a UK grocery chain, offers an example of excellent top management leadership
of strategic change (Beer and Weber, 1998b ). With the company £ 1.5 billion in debt and