Stop for one minute and look around. What do you see? Every corporate giant says it wants to change. Few can do it. Every young company starts as a natural force for change. Few can sustain it. Every organization has people who think they want to be agents of change. Few can survive it. Look at each new chapter in the unfolding business revolution of the last 10 years, from Michael Milken's financial engineering to Michael Hammer's organizational reengineering, from corporate restructuring to acquisition fever, from intrapreneuring to startup mania. One dynamic links the all: change.
It's not that the business environment is changing. Change is the business environment. And it's not that every company is undergoing change. Change has overtaken every company. Creating change, managing it, mastering it, and surviving it is the agenda for anyone in business who aims to make a difference.
Even change has changed. The idea of "change programs" is discredited, mocked as "flavor-of-the-month" corporate faddism or dismissed as BOHICA — bend over here it comes again. "If you come in and announce, 'Here's the next change program,' you're dead," says U S West's Bob Knowling, a seasoned change agent. "You've just painted a target on your chest."
Today the idea of a change program sounds hopelessly artificial, the organizational equivalent of a computer add-on, an off-the-shelf peripheral that gets plugged into the company as an upgrade. Instead of an external program, change today is intrinsic to business, an integral expression of how any successful business operates. It has escaped from the narrow confines of human resources — or any other department or function — and become an issue of personal responsibility.
You can find people who make change today throughout the organization. They are individual agents, leveraging their energy, experience, talent, commitment, and connections to make things happen. They are change agents — but only as a way of working, not as a discrete job. They have real jobs, real work — and driving change is built into how they do their jobs. Creating change is a skill. But getting things done and moving the business is the passion. Says one corporate change agent, "The real challenge of change is not just to come up with a brilliant idea — it's to implement it. The successful change agent can say, This idea is alive in the company."
We looked for an example of a large, powerful company in the grips of change and found computer giant Siemens Nixdorf (SNI) — an extreme example made more instructive by its extreme dimensions. Born of the combination of old, established, slightly stodgy Siemens, and young, entrepreneurial, slightly reckless Nixdorf, SNI emerged five short years ago with almost everything going against it — despite, or because of, its heritage. The merger brought together two gifted but deeply troubled companies: SNI looked like a merger of IBM and Apple would have in 1990. Headquartered in Munich, Germany, the DM15 billion company found itself competing in one of the fastest changing global industries, operating out of a slow-to-adapt European market, and carrying the baggage as Germany's national champion.
Enter Gerhard Schulmeyer, SNI's CEO, schooled in the United States where he ran ABB's operation and learned first-hand the lessons of fast-paced change. Within months after taking over the leadership of the company, Schulmeyer launched Europe's most ambitious corporate overhaul, a cultural transformation to remake SNI and establish Schulmeyer as the Jack Welch of Europe. Schulmeyer recruited Mark Maletz, a veteran change agent with experience at Xerox, American Airlines, and Citicorp, to invent a school for change, training a cadre of change agents who could, like a virus, infect the host company. But these were not to be recruits from the "soft side" — human resource professionals looking for a new assignment. Instead, Schulmeyer drafted the young and the restless within SNI, hard-charging businesspeople from the field who cared about the company's future, who could be trained in the art of change and then injected back into the stiff, slow-moving, hierarchical SNI culture — with the promise that they'd make a difference.
It's an approach that's worked for other large companies, some in Europe, such as Royal Dutch/Shell, some in the United States, such as General Electric and Ameritech. In SNI's case, the company has moved from a DM2 billion loss on DM12 billion in revenue 1994 to a DM50 million profit on DM 14 billion in revenue in 1996. Just as important, the "change virus" strategy both offers broad lessons in change and underscores the personal stake required to make change happen. From the experiences of Maletz and the SNI change agents as well as dozens of others skilled at making change happen, we've compiled a handbook — 10 Laws of Change that you can use to gauge your development as a change agent in an era of total change.
1. Change begins and ends with the business — not with change.
"While I was at Ameritech," says Bob Knowling, who ran the Ameritech Institute that trained change agents, "our CEO made it clear that this wasn't change for the sake of change. We had to make the business perform. He took that stock from 36 to 92, it split, and when I walked out the door to join U S West, it was back up to 63. That's because the CEO embraced and led change."
There's a reason so many people are cynical of canned change programs and distrustful of the "change weenies" sent to administer them. It's the same reason so many change programs fail: They deserve to. They have nothing to do with what really matters in the business. And they're run by people who don't understand the business. For change to take hold in an organization, it must be linked explicitly and tightly to real performance goals, and it has to be in the hands of people who understand the business first and change second.
That's precisely the model that Maletz designed for SNI: each candidate in the change agent school must have a strong project, clearly linked to one of the company's strategic goals, and supported by a senior executive. In fact, each change agent's project must deliver a minimum return to the company of DM10 million, ten times the cost of participation in the program. Without specific projects and measurable goals, says Maletz, the change agent program would be "a heap of stir and no biscuits."
Change agents who understand how their work connects to the business aren't much different from innovative and energetic managers. "People like that have concrete objectives that they want to accomplish over a set period of time," Maletz says, "and those are the things they hold themselves accountable for. Any agenda for meeting those objectives is going to require change of some sort." The difference is that change agents do more than simply check off their list of accomplishments: they focus on how their accomplishments affect the organization's operation. "It's not just whether you meet your hiring requirements on time," Maletz says. "It's whether the people you've hired will keep driving the company."
2. Change is about people. People will surprise you.
If you read the academic literature, too often change comes across as a remarkably bloodless activity: establish a vision, find a mentor, design the program, paint by the numbers.
We interrupt this program to deliver a dose of reality: it doesn't work that way. In the real world of change, leaders desert you, your staunchest allies cut and run, opposition comes from the places you least expect, and your fiercest opponent can turn out to be your most vital supporter. In other words, when emotions are running high and the stakes are even higher, people act like people.
Here's how Knowling describes the first step of his own transformation from reluctant participant to change agent. Called to a gathering of Ameritech's 70 top executives, Knowling learned that each team member would evaluate the others — and then the rankings would be shared. "I've never been more afraid in my life," says Knowling. "I felt it was a bad process. It didn't feel right, and I was afraid of the results."
Knowling tried to subvert the process, going to the team leaders and lobbying them to short-circuit the assessment. Before the night was over, he was sure he'd won.
"The next morning," Knowling recalls, "I got a rude awakening. One of the leaders came up to me and said, 'I'm going to ask you to do something for me. Trust this process.' I said, 'What are you talking about?' He said, 'We're going to do the assessment.'"
The assessment was even more traumatic than Knowling had expected. "During the process some people lost it," says Knowling. "Some who got great marks felt guilty. People got angry about what others had said about them. I've never had an undressing like that in my life."
But Knowling also found that the assessment process was a great experience. "It built the team far greater than anything we could have done. When I realized that, I took another risk. I stood up in front of the whole group and said, 'I was wrong.'"
Later, when he headed up the Ameritech Institute, Knowling relied on the assessment process he had so vehemently opposed. "I'd explain that the importance of the ranking was to get people used to a culture where you can have differences on teams and learn from those differences." From its biggest opponent, Knowling became its most ardent fan.
Klaus Karl, a change agent in Maletz's SNI program, experienced the flip side of the human surprise factor. Wooed into the program as a way to keep him from leaving SNI, Karl read in the newspaper during his Christmas holiday that the senior executive supporting his project had left the company. A few weeks later, while in the United States as part of his training, he learned that the second executive supporting him had retired. When he returned to Germany and met his third sponsor, he got the distinct impression that the man had little interest in his project. At this point, Karl faced a dilemma: do nothing and coast through his year, or deal directly with the lack of support.
"I wrote him a direct letter," Karl says, "telling him what my project could be, and saying that if the project didn't fulfill his needs, I'd like to stop and spend time on something of more value to him, the company, and me."
His new sponsor was surprised — and equally candid. "He replied to me, 'You are right. You have caught my feeling about the project correctly,'" Karl says. Within days, he abandoned the project and designed a new one dealing with the Internet that his sponsor enthusiastically supported. "If I hadn't asked," says Karl, "he never would have stopped me. I would have done a project that no one cared about, and my whole change agent year would have been a waste."
3. There is information in opposition.
Like a law of corporate physics, people in organizations have an instinctive reaction to the news that someone is going to "change them": resistance.
"Just because someone resists you doesn't mean you're right and they're wrong," says Maletz. "There's often information in resistance. People get so involved in their change efforts, when they encounter resistance they immediately make the other people the problem."
David Clarke, 35, who heads the information technology team at W.L. Gore & Associates, the maker of GORE-TEX and other high-tech products and services for the electronics, medical, and fabric industries, can attest to the notion that listening to resistance can produce smarter change. Given the task of introducing a new manufacturing system in one of the company's East Coast facilities, Clarke faced skepticism from the engineers and manufacturing associates on the plant floor. "It's human nature to resist change," Clarke says, "but they also had a sincere desire not to mess up things that were working."
Clarke's response: listen to the opposition. "Each of those people had a body of knowledge about how the equipment worked and how to produce the best products they could," says Clarke. "Their concerns weren't unfounded. We ran a lot of simulations and built a lot of prototypes. We rejected many ideas that would have hurt the product. What helped us turn the corner was having good discussions about the opportunity to make the product even better. As we went through it, we achieved more buy in. It snowballed."
It's a lesson that Knut Aasrud, one of the SNI change agents, learned during his training program. "Everything is data," he says. "When someone is negative, if you listen carefully you can hear what's really going on. If you can find out why there is resistance, you can learn a lot about your project and about your chances for success." You may even end up with a better project.
4. The informal network is as powerful as the formal chain of command. And you get to design your informal network.
Conventional wisdom says that you need the CEO's support to "fly cover" for you when you're making change. That's true — as far as it goes. But protection from the boss helps you get started; it doesn't help you get things done. Every company has the official organization chart — and then there's the way things really work. It's the informal network that's the change agent's source of influence. Once you begin to appreciate how critical that invisible, informal network really is, you can begin to design your own — keeping an eye open at conferences and company gatherings for people who share your commitment to change, exchanging business cards and email addresses, and taking advantage of every opportunity to enlist new allies whose help you can count on — and who can count on you.
Gore's Clarke understands this principle implicitly — because Gore has no formal management hierarchy, no bosses, no managers, no reports. "Networks are very important, especially for building credibility," he says. "We have leaders, but they're not appointed. You're a leader by having followers. People have to be able to trust you, and networking becomes the way you build that trust. Once you have it, you can initiate change. There are no top-down edicts here. It's all informal, based on building your network."
At SNI, one key point of the change agent program is to build an informal, self-organizing network within the stodgy, hierarchical company. By peppering change agents throughout the operation, Schulmeyer expects to short-circuit — and shortcut —the slow-moving chain of command. Schulmeyer's support for the change agents is well-known; but when it comes to getting things done, they have to rely on each other.
When Knut Aasrud, manager of SNI's software group in Norway, heard from a large engineering customer who wanted to extend the use of some software from Norway to Australia, he simply called Gerald Huang, who covers Australia for SNI. "He said, 'Thanks for the lead! I'm off to see them,'" Aasrud says.
It took one phone call to solve a transoceanic problem. Aasrud says that if he'd gone through formal channels in the Australian division, chances are the customer would never have gotten help. So how did he know to call Huang? The two met during the year they spent together in the SNI change agent program. From that experience, they not only knew each other — they also knew they could count on each other. That's the kind of power the informal network has to get things done.
5. You can't draft people into change. They have to enroll.
Unless you are the CEO and in a position to compel people to perform, change is not a compulsory exercise. In fact, even if you are the CEO, and theoretically in a position to compel people to perform, when it comes to change, you're liable to create your own worst nightmare: people quit, but stay; people say "yes," but do "no"; people go through the motions, but don't perform.
It's a common mistake among people trying to bring change to sleepy corporate settings — out of zealotry mixed with frustration, they confuse inflicting change with leading it. According to successful change agents, the key to making change happen is to create an environment where people gravitate in the direction you want them to go.
"I call it 'pull, don't push,'" says Arian Ward of Hughes Space and Communications Co. Ward's responsibilities include exploiting new technologies that allow Hughes employees to collaborate and making sure the company gets maximum benefit from their knowledge. In his six years with the company, Ward has tried it both ways. For a while he worked in a part of the organization that led classic reengineering projects. "It was an experience so painful that I didn't want to be in that position again. I went looking for another way."
What he found is an organic approach to change that can sound almost spiritual. "The best pull I know of," says Ward, "is to make people aware of best practices. They'll naturally use a better way if you make one available." Ward has been applying this technique in the reuse of engineering designs and solutions: each time Hughes designs and builds a satellite, it should take advantage of the innovations, mistakes, and solutions of previous satellites. But in the past, reuse has been haphazard at best, in part because old designs weren't easily accessible to engineers, in part because the lessons from those designs had never been made explicit. Reuse also requires a shift in work style for engineers used to sitting down with a clean sheet of paper to attack a given assignment.
There are two approaches to implementing reuse. "One is to tell the engineers they have to," Ward says. "Another way is to make it very appealing. You make it easier for them to reuse designs than to invent new ones from scratch. In fact, the reason a lot of reuse efforts fail is that people are given the opposite situation: we make it harder to reuse than to invent."
The experiment has led Hughes to assemble previous satellite designs into an easy-to-use catalog, accessible and searchable through a computer network browser. And it has made a convert of Ward. "I'm no longer in the mode of trying to change people," he says. "I'm in a mode of finding a way to enable them to change. Because it's going to happen naturally."
6. It's not a calling. It's a job.
Arian Ward's approach to change may sound spiritual. But other change agents believe it's actually a religion. They begin to think they're on a crusade — and they're not only right, but also righteous. Those who resist are worse than wrong; they're heretics.
The most important thing for change agents to remember is: it's just business. If you're going to get something done, you're going to discomfit people around you. You're going to interrupt routines, reveal problems, make more work on the way to making less work. It's hardly surprising that the organization will push back. It will push back harder if you're sanctimonious. And occasionally it will be forgiving — if not cooperative — if you work like a professional.
When it comes to change, sometimes it takes a leap of faith to get things going. Just don't confuse a leap of faith with a religious order.
7. Forget balance. Create tension.
"Most managers are uncomfortable with what they don't know," says Maletz. "Change leaders operate that way all the time. In a world that is changing with incredible speed, ambiguity is a constant." Ambiguity defines the work of the change agent: not a comfortable balance, but a dynamic tension between opposing forces. Change is all about taking people outside of their comfort zones. Change agents find themselves working simultaneously across the borders of conflicts — and almost always outside their own comfort zones.
Change agents have to be able to lead — and follow. They operate as insiders, working closely with teams — and also as outsiders, focused on making change happen. Change agents are simultaneously highly visible, willing to stand up in public to rally the troops, and genuinely invisible: turning the spotlight over to others when handing out credit is the best way to advance the cause. They need to be equally comfortable dealing with senior management and frontline workers — because a change agent needs the support of both groups. A change agent must always be in two places at once: where the organization is and where it's going.
At Gore, says David Clarke, change agents think about their work in terms of polarities. "Take insider and outsider," Clarke says. "There are advantages and disadvantages to both. It's not an 'either-or' situation, but it's also not 'both-and.' No matter how hard I try, I can't do both at once. So my approach is to play the role of insider until that doesn't work any more. Then I play the outsider role for all its advantages, until it doesn't work. I can flop back and forth between the roles, taking advantage of each."
According to Clarke, the idea of polarities extends from the individual change agent to a change agenda for the company — a way of keeping a healthy tension alive in the business. "When you can get a computer systems group talking about the polarity between ease of use and security, for instance, you tend to cut down on the religious wars," says Clarke. "You can get people to agree, 'Right now let's put a premium on security. When that starts to feel wrong, let's put the emphasis on ease of use.' The whole company can live between the polarities."
8. No change agent ever succeeded by dying for his company.
"I want you to remember," says General George S. Patton at the opening of the film Patton, "that no bastard ever won a war by dying for his country."
He could have been talking about change agents. "I learned a long time ago," says Bob Knowling, "that a change agent has got to learn to stay alive. A dead change agent doesn't do anybody any good." In fact, Knowling says, most change agents who do end up dead are "kamikaze pilots" bent on self-destruction.
Maletz agrees. "There's a tendency for change agents to see themselves as pioneers, headed off alone into the frontier," he says. "And what happens to pioneers alone on the frontier? They get shot."
In almost every instance, it comes down to judgment: What's worth fighting for? What's the difference between a skirmish and the war? Maletz cautions that the times when a change agent should go down in a heroic blaze of glory over a matter of principle are very rare.
"Change agents sometimes chose their battles poorly," he says. "They're busy celebrating successes when the war is at risk. Or they're in the trenches fighting for something that looks important, but in the larger sense isn't all that significant."
Only on matters of ethics does Maletz draw the line. When a change agent's personal word and integrity are on the line, a principled stand is the only option. "If you made a set of personal commitments that no one would be laid off due to your initiative, and management decides to go ahead with layoffs, then it's okay to get shot," Maletz says. "It has to be that important to you personally to make a stand."
Maletz faced just such a dilemma at Xerox, early in his career. Having launched a pivotal change effort at Xerox's United Kingdom subsidiary, Maletz faced a direct order from a high-ranking executive to shut down the program. Maletz refused, and found himself in the middle of a formal disciplinary hearing for "insubordination." Maletz had three choices: back down, be fired, or quit. He decided to make it a matter of principle. "I wanted the system to wrestle with the issue of what was more important — some bureaucratic regulation or a key project for reshaping the company."
The company chose the regulation; Maletz left the company — and took his change team with him.
9. You can't change the company without changing yourself.
In any change effort, the first person to change is you. It happens for two reasons. First, once you begin to work as a change agent, you're automatically subject to a higher level of scrutiny and a tougher standard of judgment — from those both above and below you. As Bob Knowling found at Ameritech, once he embraced his role as a change agent, the CEO not only came to rely on him more, but also demand more from him. "I honestly think the CEO was tougher on me and my team than he was on the business leaders," says Knowling. "I took his wrath more than anyone else. He also never wavered in his belief in us and his support for us." At the same time, Knowling's new visibility made people watch him even more closely to make sure he measured up.
Second, to do the job means developing skills and techniques that immediately change how you work. In the course of implementing his project at SNI, Mark Miller, an American with degrees in math and computer science, became his own most important change project. His task involved creating a marketing area where all SNI's financial services were on display, using real computer terminals and ATMs, so banks, financial institutions, and brokerages could experience what SNI had to offer. A simple enough marketing strategy, but one unheard of within SNI's disparate parts.
To pull it off, Miller had to win the financial and technical support of SNI's various divisions. "At the beginning I encountered a large degree of uninterest," Miller says with understatement. Hardware, support, and sales simply weren't prepared to back the idea with the equipment, services, and money that Miller needed.
But he began to make progress when he changed. "I was trying to convince people that the way I looked at the project was the way they should look at it," Miller say. He became persuasive when he asked himself, "What are the people who hear this going to think? How can this idea benefit them?"
Today Miller's showroom often gets two sets of customer visits per day. And Miller's "uninterested" internal partners eagerly keep their sections of the display up to date.
10. Even if the company doesn't change, you will.
"Change is what I do," says Gore's David Clarke. "It's what excites me. I try to make a difference. I believe change and growth are linked. I've never seen anybody grow without making changes."
It's true that most change efforts fail. And that most change agents feel squeezed, pushed, and pulled almost daily as they do their work of moving their team, their group, their company out of its comfort zone. And it's still the case that change agents who can master the skills make themselves the most valuable of all employees.
"Companies know intuitively that one of the scarcest resources today is the person who can help them through this period of turbulent change," says Maletz. If that career promise doesn't convince you, consider the alternative: You're not a change agent. You settle in as a process manager — and after you've learned the process, your learning stops. After 10 years on the job, you don't have 10 years of experience — you've got 1 year of experience repeated 10 times. And that person coming to see you is a change agent, who's going to try to teach you how to start learning all over again — so your career won't be over.
In the end, that's the 11th Law of Change: change — or die.
Charles Fishman (firstname.lastname@example.org) is a journalist based in Raleigh, North Carolina.
A version of this article appeared in the April/May 1997 issue of Fast Company magazine.