March, 1998 Volume 2, Number 6

A Three-Fold Way for Motivating Change

While company managers frequently face resistance to restructuring, case studies of a U.S. and a Japanese company reveal that overcoming opposition depends on appreciating what causes followers to alter their behavior.

Liisa Valikangas and Akihiro Okumura examined successful change initiatives in the two companies led by their chief executive. The U.S. firm is a large diversified firm (GE), and the Japanese company a large pharmaceutical company (Eisai). They distinguished three levers that the CEOs could use to motivate employee change: utility, values, and identity. The first achieves compliance by rewarding individuals for their new behavior; the second by appealing to causes they hold dear; and the third by rebuilding their commitment to the firm.

The U.S. company drove its change by focusing its managers on performance and then rewarding those who succeeded; it also fostered a culture stressing accountability and then expected its managers to comply with it. The Japanese company, by contrast, provided a training program for select managers in the meaning and purpose of the change initiative (anticipating global competition), and those managers in turn carried the message into their own operating units by publicly stating their personal commitment to the initiative and then steeping their own managers in it.

In the words of the researchers, the American chief executive served as "executor and emancipator" and the Japanese CEO served as "educator." The former expressly drove change from the top down, while the latter sought to create a perception that it was achieved from the bottom up. The former relied upon a combination of utility and value motives, while the latter stressed identification with the company as the chief motivator.

The cases indicate that mobilizing employees not only to accept but also to actively embrace a change initiative can be achieved through varied means. Whatever the industry or region, the challenge is to customize an approach that most effectively taps into what really animates and energizes your people.

Source: Liisa Valikangas and Akihiro Okumura, "Why Do People Follow Leaders? A Study of a U.S. and a Japanese Change Program," Leadership Quarterly, Vol. 8, no. 3, Fall, 1997, pp. 313-333.

Best Books

In response to a request in the last issue of the Leadership Digest for nomination of the best book on leadership and change, respondents have suggested the following titles. A brief paraphrase of the respondents' rationales are included along with their names when provided.

Herman Cain, Leadership is Common Sense (1996). How leaders can reach their full potential. -- Mike Bradley

Dale Carnegie, The Leader in You: How to Win Friends, Influence People and Succeed in a Changing World (1994). -- William R. Seese, and C. Salvador Lee.

Max DePree, Leadership is an Art (1990). Exemplary human sensitivity to "future shock." -- Richard Wood

John W. Gardner, On Leadership (1989). -- Patrick Meade

Robert K. Greenleaf, Servant Leadership: A Journey into the Nature of Legitimate Power and Greatness (1983). Why "servant-leaders" are needed, especially in team-based and shared-leadership environments. -- S. Sendjaya

Charles Handy: Age of Unreason (1991). Likens present to a seesaw: at one moment you are rising at great speed and at the next you are descending just as quickly. -- Art Shedden

David K. Hurst, Leadership: Crisis & Renewal: Meeting the Challenge of Organizational Change (1995). Connects transformational leadership and chaos theory to change management. -- Charles D. Aldridge

Rosabeth Moss Kanter (1997), On the Frontiers of Management. Insightful and analysis and critique of the current ideas on leadership and change. -- Nancy DiTomaso

Jon Katzenbach, Teams at the Top: Unleashing the Potential of Both Teams and Individual Leaders (1994). Best team book out there. -- Steven Peterson

Jon R. Katzenback, Real Change Leaders: How You Can Create Growth and High Performance at Your Company (1997). Keeps you focused.

John P. Kotter, Matsushita Leadership: Lessons from the 20th Century's Most Remarkable Entrepreneur (1997). Good examples of leadership and change. -- Paula A. Menis

Don Schmincke, The Code of the Executive: Forty-Seven Ancient Samurai Principles Essential for Twenty-First Century Leadership Success (1997). -- Garrett Matthews

Robert Townsend, Further up the Organization (1984). Identifies the characteristics of leaders -- and a non-leaders. -- R. T. Holtz

Garry Wills, Certain Trumpets: The Call of Leaders (1994). Challenges the reader to consider a broader view of leadership. -- Eileen F. Shanahan

Change Experience

Groups of managers met in January in New York and Philadelphia to identify what worked well -- and what requires more work -- during change initiatives that they have witnessed:

What worked well:

• Transforming the firm into strategic business units (SBUs).
• Visualizing and then communicating the purpose of the change.
• Recruiting fresh blood from the outside.
• Stretching decision frames.
• Upsetting the apple cart and liberating resources.
• Going beyond shareholder value as the main rationale.

What requires more work:

• Ensuring that customers have a single company contact once SBUs are formed.
• Placing change agents in key positions.
• Promoting rather than punishing advocates of change.
• Overcoming a deeply embedded culture that resists real change.
• Creating an environment that fosters calculated risk taking.
• Accepting managers recruited from the outside.
• Sustaining change initiatives over time.

The discussion was led by Lance Berger and Michael Useem, and the participants were: Marj Adler, Philadelphia School District; Andrew Bergin, Lehman Brothers; Kathleen Cook, Vanguard Group; Ronald M. Cowin, Cowin Associates; William Kaschub, PECO Energy; Charlene Parsons, Unisys Corporation; Barbara Roberts, Roberts & Co.; Richard Sedory, PNC Bank.

Strategy and Leadership in the Asian Region

Wharton Executive Education is offering a one-week program on "Managing Strategic Challenges" in Taipei, Taiwan, on July 13-17, 1998. Directed by Thomas Malnight and offered in collaboration with Grand Pacific Management International Corporation, the course focuses on the strategic issues facing companies operating in the Asian region -- and the organizational changes and executive leadership required to meet those challenges.

Information: Thomas Malnight at <malnight@wharton.upenn.edu> and Scott
Koerwer, Director of Custom Programs, at <koerwerv@wharton.upenn.edu>

Empowerment "initiatives are like loading a gun." We "must be sure that" our "field staff have the right attitudes and the right competencies to use their authority properly."

"I will have no hand in selecting my successor. However, I hope to leave behind an important legacy -- a career system that recognizes the inherent diversity at the UN and seeks to leverage that diversity for excellence."

-- Sadako Ogata, High Commissioner for Refugees, United Nations

Source: C. William Dauphinais and Colin Price, editors, Straight from the CEO: The World's Top Business Leaders Reveal Ideas That Every Manager Can Use (New York: Simon & Schuster, 1998).