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LeadingPositiveChange

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LEARNINGOBJECTIVES

� FOSTER POSITIVE DEVIANCEIN ORGANIZATIONS

� LEAD POSITIVE CHANGE INITIATIVES

� MOBILIZE THE CAPABILITIESOF OTHERS IN ACHIEVINGPOSITIVE CHANGE

SKILL ASSESSMENT

Diagnostic Surveys for Leading Positive Change

� Leading Positive Change� Strongest-Self Feedback Exercise� Machiavellianism Scale — MACH IV

SKILL LEARNING

Leading Positive ChangeUbiquitous and Escalating ChangeThe Need for FrameworksTendencies Toward StabilityA Framework for Leading Positive ChangeSummaryBehavioral Guidelines

SKILL ANALYSIS

Cases Involving Leading Positive Change

� Corporate Vision Statements� Lee Iacocca’s Transformation of Chrysler

SKILL PRACTICE

Exercises in Leading Positive Change

� Strongest-Self Portrait� Positive Organizational Diagnosis� A Positive Change Agenda

SKILL APPLICATION

Activities for Leading Positive Change

� Suggested Assignments� Application Plan and Evaluation

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486 CHAPTER 10 LEADING POSITIVE CHANGE

SKILL ASSESSMENT

DIAGNOSTIC SURVEYS FOR LEADING POSITIVE CHANGE

LEADING POSITIVE CHANGE

Step 1: Before you read the material in this chapter, please respond to the followingstatements by writing a number from the rating scale below in the left-hand column (Pre-assessment). Your answers should reflect your attitudes and behavior as they are now, notas you would like them to be. Be honest. This instrument is designed to help you discoveryour level of competency in problem solving and creativity so you can tailor your learningto your specific needs. When you have completed the survey, use the scoring key inAppendix I to identify the skill areas discussed in this chapter that are most important foryou to master.

Step 2: After you have completed the reading and the exercises in this chapter and, ide-ally, as many as you can of the Skill Application assignments at the end of this chapter,cover up your first set of answers. Then respond to the same statements again, this timein the right-hand column (Post-assessment). When you have completed the survey, usethe scoring key in the Appendix to measure your progress. If your score remains low inspecific skill areas, use the behavioral guidelines at the end of the Skill Learning section toguide further practice.

Rating Scale

1 Strongly disagree2 Disagree3 Slightly disagree4 Slightly agree5 Agree6 Strongly agree

Assessment

Pre- Post-

1. I create positive energy in others when I interact with them.

2. I know how to unlock the positive energy in other people.

3. I express compassion toward people who are facing pain or difficulty.

4. I help promote compassionate responses in others when it is appropriate.

5. I usually emphasize a higher purpose or meaning associated with the work I do.

6. I forgive others for the harm they may have produced or the mistakes they made.

7. I maintain high standards of performance, even though I am quick to forgive.

8. The language I use encourages virtuous actions by people.

9. I express gratitude frequently and conspicuously, even for small acts.

10. I keep track of things that go right, not just things that go wrong.

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LEADING POSITIVE CHANGE CHAPTER 10 487

Pre- Post-

11. I frequently give other people positive feedback.

12. I emphasize building on strengths, not just overcoming weaknesses.

13. I use a lot more positive comments than negative comments.

14. I compare my own (or my group’s) performance against the highest standards.

15. When I communicate a vision, I capture people’s hearts as well as their heads.

16. I work to close abundance gaps—the difference between good performance andgreat performance.

17. I exemplify absolute integrity.

18. I know how to get people to commit to my vision of the change.

19. I take advantage of a small-wins strategy in all my change initiatives.

20. I have developed a teachable point of view for subjects I care about.

STRONGEST-SELF FEEDBACK EXERCISE

All of us perform better when we capitalize on our strengths compared to working toovercome our weaknesses. For example, if you are asked to play on an athletic team, youwill select the position you play best—in which your performance can be the strongest—not the position where you need the most improvement. Similarly, when leading positivechange, you will rely on what you know how to do best and avoid areas where you strug-gle. Your special contributions are tied closely to what you do best.

The trouble is, most of us get much more feedback on our mistakes or weaknessesthan on our strengths. We neither receive nor provide as much specific feedback on whatgoes well as we do on what doesn’t go well. Most importantly, we pay a great deal moreattention to negative feedback than to positive feedback. This exercise is designed to helpyou obtain information on your strengths and unique skills. It is focused on gathering pos-itive feedback, in other words, on your “strongest self.”

You will gather information about yourself from other people who know you well. Inthe Skill Practice section of this chapter, you will be asked to develop a best-self portrait basedon this feedback. The first step is the gather the information, and here is how to go about it.

1. Identify at least 20 people who know you well. These may be family members, friends,colleagues at work, neighbors, customers, or anyone who interacts with you. The more diversethe group of 20 people you select, the better.

2. Contact each of these people and ask that they provide you with three stories or incidentsthat respond to the following statement: When I have seen you at your very best, here are the uniquestrengths you have displayed. That is, ask these people to write three descriptions that recount atime when they saw you performing at your best, and then describe the contribution you made.

3. This request may initially seem uncomfortable, but we have discovered that not only arepeople willing to provide you with this kind of feedback, but your relationships with those peopleare often strengthened. Be sure to ask at least 20 people. The more feedback you receive, thebetter will be your self-portrait.

4. You may consider saying something like the following as you make your request: I amtaking a course in which I am required to construct a profile of my unique strengths. To do this, Imust contact at least 20 people who know me well. I would like to invite you to help me in thisexercise by providing me with three stories of when you have seen me at my very best. That is,please respond to the following statement with three different incidents. “When I have seen youat your very best, here are the unique strengths you have displayed.” Please provide examples

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so I can understand the situation and the characteristics you are describing. Thank you verymuch in advance for your feedback. Please e-mail me your responses by insert a date .

5. When you have obtained your feedback, you will be guided in developing your best-selfportrait in the Skill Practice section of this chapter.

Source: Adapted from Quinn, Dutton, & Spreitzer, 2003.

MACHIAVELLIANISM SCALE—MACH IV Listed below are a number of statements. Each represents a commonly held opinion, butthere are no right or wrong answers. Indicate the extent to which you agree or disagreewith each item using this scale:

+3 Agree strongly+2 Agree somewhat+1 Agree slightly�1 Disagree slightly�2 Disagree somewhat�3 Disagree strongly

If you find that the numbers to be used in answering do not adequately indicate yourown opinion, use the one which is closest to the way you feel.

1. Never tell anyone the real reason you did something +3 +2 +1 �1 �2 �3unless it is useful to do so.

2. The best way to handle people is to tell them what +3 +2 +1 �1 �2 �3they want to hear.

3. You should take action only when you’re sure it is +3 +2 +1 �1 �2 �3morally right.

4. Most people are basically good and kind. +3 +2 +1 �1 �2 �35. It is safest to assume that all people have a vicious streak +3 +2 +1 �1 �2 �3

and it will come out when it is given a chance.6. Honesty is the best policy in all cases. +3 +2 +1 �1 �2 �37. There is no excuse for lying to someone else. +3 +2 +1 �1 �2 �38. Generally speaking, people won’t work hard +3 +2 +1 �1 �2 �3

unless they’re forced to do so.9. All in all, it is better to be humble and honest than to be +3 +2 +1 �1 �2 �3

important and dishonest.10. When you ask someone to do something for you, +3 +2 +1 �1 �2 �3

it is best to give the real reasons for wanting it ratherthan giving reasons which carry more weight.

11. Most people who get ahead in the world lead clean, +3 +2 +1 �1 �2 �3moral lives.

12. Anyone who completely trusts anyone else is asking +3 +2 +1 �1 �2 �3for trouble.

13. The biggest difference between most criminals +3 +2 +1 �1 �2 �3and other people is that the criminals are stupid enough to get caught.

14. Most people are brave. +3 +2 +1 �1 �2 �315. It is wise to flatter important people. +3 +2 +1 �1 �2 �316. It is possible to be good in all respects. +3 +2 +1 �1 �2 �3

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17. Barnum was wrong when he said that there’s a sucker born every minute. +3 +2 +1 �1 �2 �3

18. It is hard to get ahead without cutting corners here +3 +2 +1 �1 �2 �3and there.

19. People suffering from incurable diseases should have +3 +2 +1 �1 �2 �3the choice of being put painlessly to death.

20. Most people forget the death of their father more easily +3 +2 +1 �1 �2 �3than the loss of their property.


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Leading Positive Change

The word “leadership” is often used as a catch-allterm to describe almost any desirable behavior by amanager. “Good leadership” is frequently the explana-tion given for the success of almost any positive orga-nizational performance—from stock price increases toupward national economic trends to happy employees.Magazine covers trumpet the remarkable achieve-ments of leaders, and the person at the top is almostalways credited as being the cause of the success orfailure. Coaches are fired when players don’t perform,CEOs lose their jobs when customers choose a com-petitor, and presidents are voted out of office when theeconomy goes south. Contrarily, leaders are oftengiven hero status when their organizations succeed(e.g., Gandhi, Welch, Buffet). The leader as scapegoat,and hero, is an image that is alive and well in modernsociety. Rationally speaking, however, most of us rec-ognize that there is much more to organizational suc-cess than the leader’s behavior; but we also recognizethat leadership is one of the most important influencesin helping organizations perform well (Pfeffer, 1998).

Some writers have differentiated between theconcepts of leadership and management (Kotter, 1999;Tichy, 1986, 1993). Leadership has often been de-scribed as what individuals do under conditions ofchange. When organizations are dynamic and under-going transformation, people exhibit leadership.Management, on the other hand, has traditionallybeen associated with the status quo. Maintaining sta-bility is the job of the manager. Leaders have been saidto focus on setting direction, initiating change, and cre-ating something new. Managers have been said tofocus on maintaining steadiness, controlling variation,and refining current performance. Leadership has beenequated with dynamism, vibrancy, and charisma; man-agement with predictability, equilibrium, and control.Hence, leadership is often defined as “doing the rightthings,” whereas management is often defined as“doing things right.”

Recent research makes clear, however, that suchdistinctions between leadership and management,which may have been appropriate in previous decades,are no longer useful (Cameron & Quinn, 1999; Quinn,2000, 2004). Managers cannot be successful withoutbeing good leaders, and leaders cannot be successful

without being good managers. No longer do organiza-tions and individuals have the luxury of holding on tothe status quo; they must now worry about doingthings right and also doing the right things, keepingthe system stable in addition to leading change andimprovement, maintaining current performance inaddition to creating something new, and concentratingon equilibrium and control in addition to vibrancy andcharisma. Effective management and leadership arelargely inseparable. The skills required to do one arealso required for the other. No organization in a postin-dustrial, hyperturbulent, twenty-first-century environ-ment will survive without individuals capable of pro-viding both management and leadership. Leadingchange and managing stability, establishing vision andaccomplishing objectives, breaking the rules and mon-itoring conformance, although paradoxical, all arerequired to be successful. Individuals who are effectivemanagers are also effective leaders much of the time.The skills required to be effective as a leader and as amanager are nearly identical.

On the other hand, Quinn (2004) has remindedus that no person is a leader all of the time. Leadershipis a temporary condition in which certain skills andcompetencies are displayed. When they are demon-strated, leadership is present. When they are notdemonstrated, leadership is absent. People choose toenter a state of leadership when they choose to adopt acertain mind-set and implement certain key skills.

Understanding that leadership is a temporary,dynamic state brings us to a radical redefini-tion of how we think about, enact, anddevelop leadership. We come to discover thatmost of the time, most people, includingCEOs, presidents, and prime ministers, arenot leaders. We discover that anyone can be aleader. Most of the time, none of us are lead-ers. (Quinn, 2004: xx)

In this chapter, we focus on the most commonactivity that demonstrates leadership—leadingchange. It is while engaging in this task that the tem-porary state of leadership is most likely to be revealed.That is, despite the heroic image of leaders, every per-son can develop the skills needed to lead change. Noone was born as either a leader or absent the abilitiesthat would enable him or her to be a leader. On the

SKILL LEARNING

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other hand, leading change involves a complex anddifficult-to-master set of skills, so assistance is requiredin order to do it successfully. That’s because of the dif-ficulties associated with change.

Ubiquitous and Escalating Change

It is not news that we live in a dynamic, turbulent, andeven chaotic world. Almost no one would try to pre-dict with any degree of certainty what the world willbe like in 10 years. Things change too fast. We knowthat the technology currently exists, for example, toput the equivalent of a full-size computer in a wrist-watch, or inject the equivalent of a laptop computerinto the bloodstream. New computers are beginning tobe etched on molecules instead of silicone wafers. Thehalf-life of any technology you can name—from com-plex computers to nuclear devices to software—is lessthan six months. Anything can be reproduced in lessthan a half a year.

The mapping of the human genome is probablythe greatest source for change, for not only can wenow change a banana into an agent to inoculate peopleagainst malaria, but new organ development and phys-iological regulation promises to dramatically alter population lifestyles. As of this writing, more than 100whole animals have been patented. Patents haveexploded from an overwhelming 4,000 applications in1991 to 22,000 in 1995, but one year later they mush-roomed to 500,000 per year, with exponential growthexpected to continue. Whereas it took 10 years to pro-duce a generic alternative to a normal pharmaceuticaldrug in 1965, the time was cut in half by 1980, cut inhalf again by 1990, and by the year 2000, genericalternatives could be produced for almost any pharma-ceutical compound in about a week. In 1980 it took ayear to assemble 12,000 DNA base pairs; by 1999 ittook less than a minute, and by the end of 2000,1,000 base pairs could be assembled in less than onesecond. Currently, computers are being configuredthat can sequence every major disease in a single day.Who can predict the changes that will result? Hence,not only is change ubiquitous and constant, but almosteveryone predicts that it will escalate exponentially(see Enrique, 2000).

The trouble is, when everything is changing, it isimpossible to manage change. No one can manageconstant and universal change. For example, let’s sayyou are flying an airplane, moving through space.Everything is changing. You’re constantly moving. Thetrouble is, it is impossible to guide the plane unless youcan find a fixed point, something that doesn’t change.

You cannot control the plane if everything is moving atonce. Consider the last flight of John Kennedy Jr., forinstance. He began to fly at dusk up the New Englandcoast. He lost sight of land, and because it got dark, ofthe horizon line as well. He lost his fixed point. Hecouldn’t see anything stable. The result was disorienta-tion, and he flew his plane into the ocean, probablywithout knowing he was headed toward water. Hecouldn’t manage change without a secure referent—something that didn’t change.

The Need for Frameworks

Frameworks or theories help provide stability andorder in the midst of constant change. To illustrate theimportance of frameworks, consider a simple experi-ment conducted by Nobel laureate Herbert A. Simon.Experimental subjects were shown a chess board as itappeared mid-game. Some of these individuals wereexperienced chess players, some were novices. Theywere allowed to observe the chess board for 10 sec-onds, and then the board was wiped clean. The sub-jects were asked to replace the pieces on the boardexactly as they had appeared before the board wascleared. This experiment was actually conducted on acomputer, so wiping the chess board clean was simple,and multiple trials could be generated for each person.Each trial showed a different configuration of a chessgame midway through.

The question being investigated was: Whichgroup was best at replacing the chess pieces, thenovices or the experienced players? After looking atthe board for 10 seconds, which individuals would bemost accurate in placing each piece in its previouslocation? An argument could be made for either group.On the one hand, the minds of novices would not becluttered by preconceptions. They would look at theboard with a fresh view. It is similar to the answer tothe question: When is the best time to teach a person anew language, age 3 or age 30? The fact that 3-year-olds can learn a new language more quickly than 30-year-olds suggests that novices might also be better atthis task because of their lack of preconceptions. Onthe other hand, the contrary argument is that experi-ence ought to count for something, and the familiarityof experienced players with the chess board shouldallow them to be more successful.

The results of the experiment were dramatic.Novices accurately replaced the pieces less than 5 per-cent of the time. Experienced players were accuratemore than 80 percent of the time. When experiencedchess players looked at the board they saw familiar

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patterns, or what might be called frameworks. Theysaid things like this: “This looks like the Leningraddefense, except this bishop is out of place and thesetwo pawns are arranged differently.” Experienced play-ers identified the patterns quickly, and then they paidattention to the few exceptions on the board. Novices,on the other hand, needed to pay attention to everysingle piece as if it was an exception, since no pattern(or framework) was available to guide their decisions.

Frameworks serve the same function for man-agers. They clarify complex or ambiguous situations.Individuals who are familiar with frameworks canmanage complex situations effectively because theycan respond to fewer exceptions. Individuals withoutframeworks are left to react to every piece of informa-tion as a unique event or an exception. The best man-agers possess the most useful frameworks.

Tendencies Toward Stability

Organizations are designed like frameworks that allowexceptions to be managed effectively. They areintended to create stability, steadiness, and predictableconditions. They try to constrain as much change aspossible. That is, organizations help specify what isexpected of employees, who reports to whom, whatthe goals are, what procedures are to be employed,what rules apply, how the work gets done, and so on.

These elements are all intended to reduce the ambigu-ity of changing conditions and to create predictabilityfor employees so that the uncertainties of environmen-tal change do not overwhelm them. Managers areobliged to try to ensure that steady, stable conditionsare fostered.

Leading change, therefore, is contradictory to thecommon requirements of ensuring predictability andconstancy. It disrupts the permanence of the systemand creates more uncertainty. The skill of leadingchange runs contrary to what organizations are funda-mentally designed to do. Even more important, lead-ing positive change is different from simply leadingordinary change in an organization. Change willalways be widespread and constant, but leading posi-tive change in organizations is unusual and difficult,and it requires a special skill set.

To illustrate the difference between leading com-monplace change and positive change, consider thecontinuum in Figure 1. It shows a line depicting nor-mal, healthy performance in the middle, withunhealthy, negative performance on the left, andunusually positive performance on the right. Mostorganizations and most managers strive to maintainperformance in the middle of the continuum. Peopleand organizations strive to be healthy, effective, effi-cient, reliable, compatible, and ethical. It is in themiddle of the continuum where things are mostcomfortable.

Source: Cameron, 2003a.

Physiological

(Medical research)

Psychological

(Psychological research)

Individual:

Deficit gaps Abundance gaps

Illness Health Flow

Illness Health Wellness

Organizational and Managerial:

(Management and organizational research)

Negative Deviance Normal Positive Deviance

Revenues

Effectiveness

Efficiency

Quality

Ethics

Relationships

Adaptation

UnprofitableIneffectiveInefficientError-proneUnethicalConflictualThreat-rigidity

ProfitableEffectiveEfficientReliableEthicalCompatibleCoping

GenerousExcellentExtraordinaryFlawlessVirtuousCaringFlourishing

Figure 1 A Continuum of Negative and Positive Deviance

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We usually refer to the left end of the continuumas negative deviance. To call someone a “deviant”usually means that he or she needs correction or treat-ment. Most managers strive to get deviant people tobehave within a normal range. If they don’t, if theycontinue to behave badly, they get transferred or fired.With few exceptions (e.g., athletes and heroic figures),the same pressure toward normal behavior exists onthe right side of the continuum as well as the left.Pressure is always brought to bear to get people tobehave in predictable, normal ways.

Think, for example, of people you have encoun-tered who are positively deviant at work—flawlessperformers, flourishing in everything they do, and con-stantly extraordinary. They’re too perfect. They makepeople feel uncomfortable. They make others feelguilty. We accuse them of showing up other people.There is a lot of pressure to get them back in line orwithin a normal range of performance. Most of thetime we insist that others stay in the middle range.Being on either the right side or the left side of the con-tinuum is usually interpreted as against the rules.

Not surprisingly, we know a lot more about theleft side of the continuum than the right side. Considerthe top line of Figure 1, for example, and think of yourown physical health. If you’re ill, you usually get treat-ment from a medical professional who provides med-ication or therapy until you return to normal health.When you’re healthy you stop seeing the doctor andthe doctor stops treating you. About 90 percent of allmedical research has focused on how to get peoplefrom the left side of the continuum—illness—to themiddle of the continuum—health. Yet, everyoneknows that a condition exists on the right side of thecontinuum which is better than just being healthy. It isexemplified by people who can run a marathon, do400 pushups, or compete at Olympic fitness levels.They are positively deviant on the health continuum.In medical science much less serious attention hasbeen paid to how people can reach this state of posi-tive deviance. Leading positive change (from the mid-dle point to the right side) is more uncertain than lead-ing change from the left side to the middle point.

Similarly, the second line of the figure refers topsychological health. On the left is illness—depres-sion, anxiety, burnout, paranoia, and so forth—andthe middle depicts normal psychological functioning.Seligman (2002) reported that more than 99 percentof psychological research in the last 50 years hasfocused on the left and middle points on the contin-uum—that is, how to treat people who are ill in orderto get them to a state of normality or health. Again,

however, a positively deviant psychological conditionis also possible. It is sometimes characterized by a stateof “flow” (Csikszentmihalyi, 1990)—where people’sminds are totally engaged in a challenging task so thatthey lose track of time, physical appetites, and outsideinfluences—or they experience especially positiveemotions (Fredrickson, 2003) such as joy, excitement,or love. A new movement in psychology studies posi-tively deviant psychological states, and we will sum-marize some of those recent findings. Most managersand most organizations, however, are in business tocreate normal behavior, not to foster deviant behavior.This is illustrated by the lower lines in Figure 1 thatrefer to organizations and managers.

The figure lists conditions ranging from unprof-itable, ineffective, inefficient, and error-prone perfor-mance on the left side, to profitable, effective, efficient,and reliable performance in the middle. For the mostpart, managers are charged with the responsibility toensure that their organizations are operating in themiddle range. They are consumed with the problemsand challenges that threaten their organizations fromthe left side of the continuum (e.g., unethical behavior,dissatisfied employees or customers, financial losses,and so on.) Most managers are content if they can gettheir organizations to that middle state—profitable,effective, reliable. In fact, almost all organizational andmanagerial research has focused on how to ensure thatorganizations can perform in the normal range. Wedon’t have very good language to describe the rightside of the organizational continuum. Instead of justbeing profitable, positively deviant organizations mightstrive to be generous, using their resources to do good.Instead of just being effective, efficient, and reliable,they might strive to be extraordinarily excellent, flour-ishing, and flawless.

The right side of the continuum is referred to asan abundance approach to performance. The leftside of the continuum is referred to as a deficitapproach to performance. Much more attention hasbeen paid to solving problems, surmounting obstacles,battling competitors, eliminating errors, making aprofit, and closing deficit gaps rather than to identify-ing the flourishing and life-giving aspects of organiza-tions, or closing abundance gaps. Jim Walsh (1999)found, for example, that words such as “win,” “beat,”and “competition” have dominated the business pressover the past two decades, whereas words such as“virtue,” “caring,” and “compassion” have seldomappeared at all. Less is known, therefore, about theright side of the continuum in Figure 1 and the con-cepts that characterize it. Most research on managers

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and organizations has remained fixed on the left andcenter points of the continuum. Yet, it is on the rightend that the skill of leading positive change becomesrelevant. It is on that side of the continuum that ourdiscussion will focus in this chapter.

A Framework for Leading Positive Change

Leading positive change is a management skill thatfocuses on unlocking positive human potential.Positive change enables individuals to experienceappreciation, collaboration, vitality, and meaningful-ness in their work. It focuses on creating abundanceand human well-being; it fosters positive deviance; itacknowledges that positive change engages the heartas well as the mind.

A Case Example An example of this kind ofchange occurred in a New England hospital that faceda crisis of leadership when the popular vice presidentof operations was forced to resign (Cameron & Caza,2002). Most employees viewed him as the most inno-vative and effective administrator in the hospital andas the chief exemplar of positive energy and change.Upon his resignation, the organization was throwninto turmoil. Conflict, backbiting, criticism, and adver-sarial feelings permeated the system. Eventually, agroup of employees appealed to the board of directorsto replace the current president and CEO with thisousted vice president. Little confidence was expressedin the current leadership, and the hospital’s perfor-mance was deteriorating. Their lobbying efforts wereeventually successful in that the president and CEOresigned under pressure, and the popular vice presi-dent was hired back as president and CEO.

Within six months of his return, however, thedecimated financial circumstances at the hospital ledto an announced downsizing aimed at reducing theworkforce by 10 percent. The hospital faced millionsof dollars in losses. This newly hired CEO had to elim-inate the jobs of some of the very same people whosupported his return. The most likely results of thisaction were an escalation in the negative effects ofdownsizing: loss of loyalty and morale, perceptions ofinjustice and duplicity, blaming and accusations. Basedon research on the effects of downsizing, a continua-tion of the tumultuous, antagonistic climate wasalmost guaranteed (Cameron, Whetten, & Kim, 1987).

Instead, the opposite results occurred. Upon hisreturn, the new CEO made a concerted effort to leadpositive change in the organization, not merely man-

age the required change. He institutionalized forgive-ness, optimism, trust, and integrity. Throughout theorganization, stories of compassionate acts of kindnessand virtue were almost daily fare. One typical exampleinvolved a nurse who was diagnosed with terminalcancer. Respondents reported that when word spreadof the man’s illness, doctors and staff members fromevery area in the hospital donated vacation days andpersonal leave time so that he would continue to col-lect a salary even though he could not work. Ironically,the pool of days expired just before he died, so he wasnever terminated, and he received a salary right up tohis last day.

Employees also reported that the personal andorganizational damage done by the announced down-sizing—friends losing jobs, budgets being cut—hadbeen formally forgiven. Employees released grudgesand moved on toward an optimistic future. One indi-cation was the language used throughout the organiza-tion, which commonly included words such as love,hope, compassion, forgiveness, and humility, espe-cially in reference to the leadership that announcedthe downsizing actions.

We are in a very competitive health care mar-ket, so we have differentiated ourselvesthrough our compassionate and caring cul-ture . . . I know it sounds trite, but we reallydo love our patients . . . People love workinghere, and their family members love us too . . .Even when we downsized, [our leader] main-tained the highest levels of integrity. He toldthe truth, and he shared everything. He gotthe support of everyone by his genuinenessand personal concern . . . It wasn’t hard toforgive. (representative responses from afocus group interview of employees, 2002)

Even the redesigned physical architecture of thehospital reflected its positive approach to change,being designed to foster a more humane climate for patients and to communicate the virtuousness ofthe organization. For example, the maternity wardinstalled double beds (which didn’t previously exist) sohusbands could sleep with their wives rather than sit-ting in a chair all night; numerous communal roomswere created for family and friend gatherings; hallwaysand floors were all carpeted; volunteer pets werebrought in to comfort and cheer up patients; originalpaintings on walls displayed optimistic and inspiringthemes; nurses’ stations were all within eyesight ofpatients’ beds; Jacuzzis were installed in the maternity

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Source: Cameron, Bright, & Caza, 2003.

94–5 96–7 98–9 00–195–6 97–8

Downsized

Emphasis on organizationalvirtuousness

(positive change)

99–0

2000

–2000

–6000

0

–4000

–8000

–10000

4000

Year

Fin

an

cia

l P

erf

orm

an

ce

Figure 2 Financial Performance of a Hospital After Positive Change (Revenues in 000s)

ward; and so on. Employees indicate that the leader-ship of positive change—not merely the managementof change—was the key to their recovery and thriving.Special language, activities, and processes were impor-tant parts of employees’ explanations for the organiza-tion’s renewal. Figure 2 illustrates the financial turn-around associated with the hospital’s concentratedfocus on virtuousness.

A Framework of Positive Change This chap-ter reviews the five key management skills and activi-ties required to effectively lead positive change. Theyinclude (1) establishing a climate of positivity, (2) cre-ating readiness for change, (3) articulating a vision ofabundance, (4) generating commitment, and (5) insti-tutionalizing the positive change (Cameron & Ulrich,1986). Figure 3 summarizes these steps, and we dis-cuss them in the next section. Leaders of positivechange are not all CEOs, of course, nor are they intitled or powerful positions. On the contrary, the mostimportant leadership demonstrated in organizationsusually occurs in departments, divisions, and teamsand with individuals who take it upon themselves toenter a temporary state of leadership (Meyerson,

2001; Quinn, 2004). These principles apply as muchto the first-time manager, in other words, as to theexperienced executive.

ESTABLISHING A CLIMATE OF POSITIVITY

The first and most crucial step in leading positivechange is to set the stage by establishing a climate ofpositivity. Because constant change is typical of allorganizations, most managers focus most of the timeon the negative or problematic aspects of change. Aleader who will focus on positive change is both rareand valuable. Not everyone masters it, although every-one can.

Baumeister and associates (2001) pointed out thatnegative occurrences, bad events, and disapprovingfeedback are more influential and longer-lasting in peo-ple than positive, encouraging, and upbeat occur-rences. For example, if someone breaks into yourhome and steals $1,000, it will affect you more, andwill be more long-lasting in its effects, than if someonesends you a $1,000 gift. If three people complimentyou on your appearance and one person is critical, the

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Establish a positive climate

Institutionalize the change Create readiness

Generate commitment Articulate vision

Figure 3 A Framework of Positive Change

one criticism will carry more weight than the threecompliments. In other words, according toBaumeister’s review of the literature, “bad is strongerthan good.” People tend to pay more attention to neg-ative than positive phenomena, and for good reason.Ignoring a negative threat could cost you your life.Ignoring a positive, pleasant experience would onlyresult in regret. Consequently, managers and organiza-tions—constantly confronted by problems, threats,and obstacles—have a tendency to focus on the nega-tive much more than the positive. Managers must con-sciously choose to pay attention to the positive, uplift-ing, and flourishing side of the continuum in Figure 1;otherwise negative tendencies overwhelm the posi-tive. Leading positive change, in other words, is goingagainst the grain. It is not necessarily a natural thing todo. It requires skill and practice.

Mahatma Gandhi’s statement illustrates thenecessity of positivity, even though it is difficult:

Keep your thoughts positive, because yourthoughts become your words. Keep yourwords positive, because your words becomeyour behavior. Keep your behavior positive,because your behavior becomes your habits.Keep your habits positive because your habitsbecome your values. Keep your values posi-tive, because your values become your destiny.(Gold, 2002)

In order to establish a climate of positivity in anorganization, managers must help establish at least

three necessary conditions: (1) positive energynetworks, (2) a climate of compassion, forgiveness,and gratitude, and (3) attention to strengths and thebest self.

Create Positive Energy Networks

Have you ever been around a person who just makesyou feel good? You leave every interaction happier,more energized, and uplifted? In contrast, do youknow people who are constantly critical, negative, anddiscouraging? They seem to deplete your own reserveof positive energy? Recent research has discovered thatpeople can be identified as “positive energizers” or“negative energizers” in their relationships withothers (Baker, Cross, & Wooten, 2003). Positive ener-gizers are those who strengthen and create vitality andliveliness in others. Negative energizers are peoplewho deplete the good feelings and enthusiasm in peo-ple and make them feel diminished, devalued, or criti-cized. Research shows that positive energizers arehigher performers; they enable others to perform bet-ter, and help their own organizations succeed morethan negative energizers (Baker, Cross, & Wooten,2003). People who drain energy from others tend tobe critical, express negative views; they fail to engageothers, and are more self-centered than positive ener-gizers. Being a positive energizer is associated withbeing sensitive in interpersonal relationships, trustwor-thy, supportive to others in comments, actively (notpassively) engaged in social interactions, flexible andtolerant in thinking, and unselfish. They are not neces-

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sarily charismatic, giddy, or just Pollyannaish. Rather,positive energy creators are optimistic and giving, andothers feel better by being around them.

Here is why that is so important in leading positivechange. Research by Wayne Baker (2001) has investi-gated the kinds of networks that exist in organizations.Most research investigates two kinds of networks—information networks and influence networks. If youare at the center of an information network, thatmeans more information and communication flowthrough you than anyone else. You have access to agreater amount of information than others. Predictably,people at the center of an information network havehigher performance and are more successful in theircareers than people on the periphery. The same can besaid for people at the center of influence networks.Influential people are not always people with the mostprestigious titles, but they tend to be people who caninfluence others to get things done (see Chapter 5 onpower and influence). Recent research has discovered,however, that positive energy networks are farmore powerful in predicting success than informationor influence networks. In fact, being a positive ener-gizer in an organization is four times more predictive ofsuccess than being at the center of an information net-work or even being the person with an important titleor senior position. Displaying positive energy, in otherwords, tends to be a very powerful predictor of per-sonal as well as organizational success.

Effective managers identify positive energizersand then make certain that networks of people areformed who associate with these energizers. Positiveenergizers are placed in positions where others caninteract with them and be influenced by them. Theresearch findings are clear that people who interactwith positive energizers perform better, as well as dothe positive energizers themselves, so make sure youand others rub shoulders with them often. In additionto forming positive energy networks, effective man-agers will also foster positive energy in other peopleby: (1) exemplifying or role-modeling positive energythemselves, (2) recognizing and rewarding peoplewho exemplify positive energy, and (3) providingopportunities for individuals to form friendships atwork (which usually are positive energy creators).

Ensure a Climate of Compassion,Forgiveness, and Gratitude

A second aspect of a climate of positivity is the appro-priate display of compassion, forgiveness, and gratitudein organizations. These terms may sound a bit saccha-

rine and soft—even out of place in a serious discussionof developing management skills for the competitiveworld of business. Yet, recent research has found themto be very important predictors of organizational suc-cess. Companies that scored higher on these attributesperformed significantly better than others (Cameron,2003a). That is, when managers fostered compassion-ate behavior among employees, forgiveness for mis-steps and mistakes, and gratitude resulting from posi-tive occurrences, their firms excelled in profitability,productivity, quality, innovation, and customer reten-tion. Managers that reinforced these virtues weremore successful in producing bottom-line results.

Paying attention to these concepts simply acknowl-edges that employees have human concerns—they feelpain, experience difficulty, and encounter injustice intheir work and personal lives. Think of people youknow, for example, who are currently managing asevere family illness, experiencing a failed relationship,coping with hostile and unpleasant co-workers or asso-ciates, or facing overload and burnout. Many organiza-tions don’t allow personal problems to get in the way ofgetting the job done. Human concerns take a back seatto work-related concerns. Regardless of what is happen-ing personally, responsibilities and performance expecta-tions remain the same. To lead positive change, how-ever, managers must build a climate in which humanconcerns are acknowledged and where healing andrestoration can occur. Because change always createspain, discomfort, and disruption, leaders of positivechange are sensitive to the human concerns that cansabotage many change efforts. Without a reserve ofgood will and positive feelings, almost all change fails.Therefore, unlocking people’s inherent tendency to feelcompassion, to forgive mistakes, and to express grati-tude helps build the human capital and reserve that isneeded to successfully lead positive change. How mightthat occur?

Compassion Kanov and colleagues (2003) foundthat compassion is built in organizations when man-agers foster three things: collective noticing, collec-tive feeling, and collective responding. When peo-ple are suffering or experiencing difficulty, the first stepis to notice or simply to become aware of what is occur-ring. An iron-clad rule exists at Cisco Systems, forexample, where CEO John Chambers must be notifiedwithin 48 hours of the death or serious illness of anyCisco employee or family member. People are on thelookout for colleagues who need help.

The second step is to enable the expression of col-lective feeling. Planned events where people can share

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feelings (such as grief, support, or love) help build a cli-mate of compassion. For example, a memorial servicefor a recently deceased executive at which the CEOshed tears was a powerful signal to organization mem-bers that responding compassionately to human suffer-ing was important to the organization (Frost, 2003).

The third step is collective responding, meaningthat the manager ensures that an appropriate responseis made when healing or restoration is needed. In theaftermath of the September 11, 2001, tragedy, manyexamples of compassion—and noncompassion—werewitnessed in organizations around the country. Whilesome leaders modeled caring and compassion in theresponses they fostered, others stifled the healingprocess (see Dutton et al., 2002).

Forgiveness Most managers assume that forgive-ness has no place in the work setting. Because of highquality standards, the need to eliminate mistakes, and arequirement to “do it right the first time,” managersassume that they cannot afford to let errors go unpun-ished. Forgiving mistakes will just encourage people tobe careless and unthinking, they conclude. However,forgiveness and high standards are not incompatible.That is because forgiveness is not the same as pardon-ing, condoning, excusing, forgetting, denying, minimiz-ing, or trusting (Enright & Coyle, 1998). To forgive doesnot mean relieving the offender of a penalty (i.e., par-doning), or saying that the offense is okay, not serious,or forgotten (i.e., condoned, excused, denied, mini-mized). The memory of the offense need not be erasedfor forgiveness to occur. Instead, forgiveness in an orga-nization involves the capacity to abandon justifiedresentment, bitterness, and blame, and instead, toadopt positive, forward-looking approaches in responseto harm or damage (Cameron & Caza, 2002).

For example, because minor offenses and dis-agreements occur in almost all human interactions,especially in close relationships, most people are prac-ticed forgivers. Without forgiveness, realtionshipscould not endure and organizations would disintegrateinto squabbles, conflicts, and hostilities. One explana-tion for the successful formation of the EuropeanEconomic Union is forgiveness (Glynn, 1994). Col-lectively speaking, the French, Dutch, and British for-gave the Germans for the atrocities of World War II, asdid other damaged nations. Likewise, the reciprocalforgiveness demonstrated by the United States andJapan after World War II helps explain the flourishingeconomic and social interchange that developed insubsequent decades. On the other hand, the lack ofpeace in certain war-torn areas of the world can be at

least partly explained by the refusal of organizationsand nations to forgive one another for past trespassess(Helmick & Petersen, 2001).

Forgiveness is enhanced in organizations whenmanagers: (1) acknowledge the trauma, harm, andinjustice that their organization members have experi-enced, but they define the occurrence of hurtfulevents as an opportunity to move forward toward anew goal. (2) Associate the outcomes of the organiza-tion (e.g., its products and services) with a higher pur-pose that provides personal meaning for organizationmembers. This higher purpose replaces a focus on self(e.g., retribution, self-pity) with a focus on a higherobjective. (3) Maintain high standards and communi-cate the fact that forgiveness is not synonymous withtolerance for error or lowered expectations. Use for-giveness to facilitate excellence by refusing to focus onthe negative, and instead, focus on achieving excel-lence. (4) Provide support by communicating thathuman development and human welfare are as impor-tant in the organization’s p riorities as the financial bot-tom line. This kind of support helps employees catchsight of a way to move past the injury. (5) Pay attentionto language, so that terms such as forgiveness, compas-sion, humility, courage, and love are acceptable; thislanguage provides a humanistic foundation uponwhich most forgiveness occurs. An analysis of the sev-eral organizations’ successful turnaround after thetrauma of downsizing reveals these five steps beingdemonstrated in institutionalizing forgiveness.

Gratitude Observing acts of compassion and forgive-ness—not to mention being the recipient of them—cre-ates a sense of gratitude in people. Gratitude is crucialin organizations because it leads to reciprocal behavior,equity, and justice (e.g., returning a favor, doing good inreturn for receiving good, being fair). Simmel (1950)referred to gratitude as “the moral memory of mankind. . . if every grateful action . . . were suddenly elimi-nated, society (at least as we know it) would breakapart” (Simmel, 1950: 388).

Feelings of gratitude have been found to have dra-matic effects on individual and organizational perfor-mance. For example, Emmons (2003) induced feelingsof gratitude in students by assigning them to keep jour-nals as part of a semester-long assignment. Some of thestudents were required to keep “gratitude journals” ona daily or weekly basis. That is, they wrote downevents or incidents that happened during the day (orweek) for which they were grateful. Other studentswere assigned to write down events or incidents thatwere frustrating, and still other students were assigned

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to write down events or incidents that were merelyneutral. Students keeping gratitude journals, com-pared to frustrated students and neutral students,experienced fewer physical symptoms such asheadaches, colds, and so on; felt better about theirlives as a whole; were more optimistic about the com-ing week; had higher states of alertness, attentiveness,determination and energy; reported fewer hassles intheir lives; engaged in more helping behaviors towardother people; experienced better sleep quality; and hada sense of being more connected to others. In addition,they were absent and tardy less often and had highergrade-point averages. Feelings of gratitude had signifi-cant impact on student classroom performance as wellas people’s personal lives.

In addition, Emmons found that expressions ofgratitude by one person tend to motivate others toexpress gratitude, so a self-perpetuating, virtuous cycleoccurs when gratitude is expressed. Gratitude elicitspositive behaviors on the part of other people (e.g.,they are more likely to loan money, provide compas-sionate support, or behave reciprocally). For example,a handwritten “thank you” on a restaurant bill by theserver elicits about 11 percent higher tips, and visits bycase workers and social workers are 80 percent higherif they are thanked for coming (McCullough, Emmons,& Tsang, 2002). People respond positively to expres-sions of gratitude. Thus, gratitude not only helps peo-ple feel good; it helps them to do good as well.

Managers engender gratitude in an organizationsimply by expressing gratitude frequently and conspic-uously themselves, even for small acts and small suc-cesses; and by keeping track of things that go right (notjust things that go wrong), and expressing gratitude forthem. Elaborate programs are not needed, just fre-quent thank yous.

Pay Attention to Strengths and the Strongest Self

Identifying people’s strengths (or what they do right),and then building on them, creates more benefit thanidentifying weaknesses (or what people do wrong) andtrying to correct them. For example, managers whospend more time with their strongest performers(rather than their weakest performers) achieved dou-ble the productivity. In organizations where workershave a chance to “do what they do best every day,”productivity is one and a half times greater than in nor-mal organizations. People who are given feedback ontheir strengths are significantly more likely to feelhighly engaged and to be more productive than people

who are given feedback on their weaknesses. Studentswho are given feedback on their talents have fewerdays of absenteeism, are tardy less often, and havehigher GPAs than students who get no feedback ontheir talents. The strongest readers make moreimprovement in a speed reading class designed toimprove reading than the poor readers (Clifton &Harter, 2003).

Another illustration of this principle that buildingon positive strengths is more effective than concentrat-ing on overcoming weaknesses is a classic study of(American) bowling (Kirschenbaum, 1984). To explainthe study, let’s assume that we decided to take a groupof people to a bowling alley. The objective is to helpthese folks improve their bowling scores. We ask themall to bowl three games, and as they bowl, we video-tape each person. Then, we ask that the entire grouppractice bowling for the next six months in order toimprove their scores. However, to assist them, we willshow them the videotape of the three games wefilmed. For half the group, we show them only videofootage of when they rolled strikes, or knocked all thepins down. For the other half of the group, we showthem only video footage of when they did not rollstrikes, or they did not knock all the pins down. Halfthe people are trying to capitalize on what they didright; half are trying to correct mistakes. After sixmonths of practice, we bring all the people backtogether and ask them to bowl three more games. Wewould discover that there is a statistically significantdifference between the two groups. One group wouldbowl significantly better than the other. Which wouldyou predict would do the best?

The research indicates that those who watchedtheir past successes—they saw footage of theirstrikes—improved significantly more than those whowatched footage of mistakes. That’s because when westart out almost any activity, we make mostly mistakes.Yet, we tend to learn how to do it right over time. Wetend to make more and more strikes, hit the ball downthe center of the fairway, swish the free throw, orimprove our public speaking ability, even though wemake a lot of mistakes in the beginning. In otherwords, focusing on the positive will bring superiorresults to focusing on the negative. The trouble is,most people, most of the time, are inclined to payattention to what’s wrong, the problems, the negativefeedback, or the failures they experience. Theresearch, however, demonstrates the potency of thepositive.

An even more dramatic finding resulted from astudy of top management teams engaged in strategic

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planning for their organizations. Losada and Heaphy(2004) studied 60 teams of senior executives who metto set objectives, refine budgets, and identify plans forthe upcoming year. The research focused on investigat-ing why some teams, and their organizations, per-formed better than others. The teams used in theresearch were executives and top managers in well-recognized corporations.

The teams were categorized into three groupsbased on six measures of performance such as firmprofitability, productivity, managerial capability, andso on. The three groups were: those that performedwell, those that performed about average, and thosethat performed poorly. To explain differences amongthe groups, the communication patterns of the teamswere carefully monitored and analyzed. The singlemost important factor in predicting success—whichwas four times more powerful in predicting successthan any other factor—was the ratio of positive com-ments to negative comments. Positive comments arethose that express appreciation, support, helpfulness,or compliments. Negative comments express criti-cism, disapproval, or blame. The results of theresearch were dramatic. In high-performing teams,the ratio of positive to negative comments was 5:1.Five times more positive comments were made thannegative comments. In medium-performing teams,the ratio was 1:1. In low-performing teams, the ratiowas 0.36:1. In other words, in low-performing teams,there were three negative comments for every posi-tive comment.

What these results show is that high-performingteams have an abundance of positive comments com-pared to negative comments. Effective teams are farmore complimentary and supportive than ineffectiveteams. It’s not that correction and criticism are entirelyabsent—it’s not Pollyanna or rose-colored glasses allthe time—but the positive outweighs the negative by aratio of 5 to 1. Teams that performed moderately wellhad about an equal number of positive and negativecomments, and teams that performed poorly had morenegative than positive comments. The same ratio, bythe way, has been found in successful marriages.Marriages that are strong also have a ratio of 5 to 1positive interactions. Marriages that end in divorcehave more negative than positive interactions(Gottman, 1994).

Obviously, the management skill demonstrated byeffective leaders of positive change is a bias in theircommunication toward positive, supportive commentsrather than negative and corrective comments.Remember, however, that the ratio is not 100:1 or 5:0.

That is, critical, confrontive, and corrective commentsneed to be present and cannot be ignored. It’s just thateffective managers are, by and large, more focused onpositive than negative communication.

Strongest-Self Feedback One technique thatmanagers can use to enhance positivity and focus onstrengths is called “strongest-self feedback”(Quinn, Dutton, & Spreitzer, 2003). It is a techniquedeveloped and used extensively at the University ofMichigan Business School and adopted at the HarvardBusiness School, MIT, and several major corporations.It is designed to provide people with feedback on theirstrengths and unique capabilities. This kind of informa-tion is not frequently given to people, if ever, butreceiving it allows individuals to build on their uniquestrengths in a positive way. Figure 4 illustrates the kindof feedback resulting from this exercise.

Begin at the bottom of the figure. Most of us havea lot of weaknesses—areas that are underdeveloped,areas in which we are uninformed, areas in which wehave little skill. Most feedback systems provide infor-mation on what those areas are and how we compareto other people’s capabilities in the same areas. Thoseare labeled weaknesses in Figure 4. We also all haveareas in which we perform competently. We do fine—not stellar, but good enough. Those are areas ofcompetence. A third category is areas of well-developed skill. We’re outstanding performers in someareas; we have special capabilities or talents, and wedo better than most people. These are areas ofstrength. Finally, we all have areas that are unique tous. If we don’t contribute what we have, or if we don’tshare our capacities and gifts, no one else has the abil-ity to do so. Our talent or skill is special. We refer tothis area as uniquenesses. Research indicates thatcapitalizing on our strengths and uniquenesses pro-duces more success than trying to work on and over-come weaknesses—even though weaknesses may bemore numerous (Clifton & Harter, 2003).

You engaged in a strongest-self feedback processas part of the Skill Pre-assessment section of this chap-ter. In this technique each person is asked to identify20 other individuals who are acquaintances. Thesecan be friends, co-workers, neighbors, or family mem-bers. Each of these acquaintances is asked to writethree stories responding to this question: “When youhave seen me at my best, or when you have seen memake a real contribution, what strengths did I dis-play?” In other words, the 20 people write three sto-ries about when the person was his or her best self.Those 60 stories identify the key strengths and unique

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Uniquenesses

Weaknesses

Competencies

Strengths

Figure 4 Personal Weaknesses, Competencies, Strengths, and Uniquenesses

talents of the individual—information that is both rareand extremely valuable. This information is analyzedby the person receiving the stories and summarizedinto a few key themes. Those themes represent thestrengths and uniquenesses of the person. The feed-back comes in the form of incidents and stories, notnumbers or trend lines, so it is connected directly tobehaviors that the person has displayed in the past andwhich can be repeated and enhanced in the future. Itcaptures emotions and feelings as well as intentionalactions. These are the strengths and uniquenesses thatcan be built upon and enhanced. This kind of feed-back does not even mention weaknesses or shortcom-ings. It does not motivate people to overcome areas ofdeficiency. Rather, it emphasizes the positive and helpspeople develop strategies to capitalize on it.

Of course, completely ignoring weaknesses andinadequacies is not healthy either. Focusing exclu-sively on the positive and disregarding critical weak-nesses is not apt to be healthy in the long run. It’s justthat most individuals, and most organizations, concen-trate almost exclusively on the negative and are likelyto ignore, or at least short-change, the positive. Thereflective best-self feedback technique is a way tocounterbalance that tendency.

Summary In summary, being a source of positiveenergy and building positive energy networks leads tohigher levels of personal success and organizationalsuccess. Similarly, the expression of compassion, for-

giveness, and gratitude in organizations is also associ-ated with superior performance, personally and organi-zationally. And, focusing on strengths and talents—celebrating successes, complimenting on what is goingright, recognizing what folks do well—produces supe-rior performance as well. Therefore, as the first step inleading positive change, establishing a positive climateis a crucial prerequisite. Without it, resistance and neg-ativity are almost certain to present major obstacles.The tendency of most people is to focus on the prob-lems, challenges, and negative issues associated withchange. With a positive climate, however, positivechange is much more likely to be successful. Figure 5shows the relationship among these three aspects ofpositive climate.

Receiving feedback on strengths and successesproduces feelings of gratitude and compassion which,in turn, leads to being positively energized. Each fac-tor, in turn, affects performance directly as well as incombination with the other factors.

CREATING READINESS FOR CHANGE

In addition to establishing a climate of positivity, indi-viduals must feel a need for the change and to under-stand its importance and urgency. A positive climate isa crucial foundation, but leading positive changerequires engaging individuals in the actual process of

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Expressions of gratitude,compassion, and forgiveness

Positive feedback on strengthsand the best self

Superior individual andorganizational performance

Positive personal energy andpositive energy networks

Figure 5 Relationships Among Factors in a Climate of Positivity

change. The second step in leading positive change,therefore, is to create readiness among those to beinvolved in the change. Many techniques are avail-able, but three are mentioned here.

Benchmark Best Practice, andCompare Current Performance to the Highest Standards

One way to create readiness for change is to comparecurrent levels of performance to the highest standardsyou can find. Identifying who else performs at spectac-ular levels helps set a standard toward which peoplecan aspire. It identifies a target of opportunity. This isreferred to as benchmarking, and it involves findingbest practice, studying it in detail, and then planning toexceed that performance. “Shooting ahead of theduck” is the principle. Identifying best practice doesn’tmean copying it; it means learning from it and exceed-ing it. Planned performance goes beyond the best prac-tice, otherwise benchmarking is merely mimicking.Several different kinds of best practice standards areavailable for comparison.

❏ Comparative standards, or comparing cur-rent performance to similar individuals or orga-nizations (e.g., “Here is how we are doing rela-tive to our best competitors.”).

❏ Goal standards, or comparing current perfor-mance to the publicly stated goals (e.g., “Hereis how we are doing compared to the goals wehave established.”).

❏ Improvement standards, or comparing cur-rent performance with improvements made inthe past (e.g., “Here is how we are doing com-pared to our improvement trends of the pastyear.”).

❏ Ideal standards, or comparing current perfor-mance with an ideal or perfect standard (e.g.,“Here is how we are doing relative to a zerodefect standard.”).

❏ Stakeholder expectations, or comparingcurrent performance with the expectations ofcustomers, employees, or other stakeholders(e.g., “Here is how we are doing in meetingcustomer demands.”).

Which standard of comparison is most appropriatedepends, of course, on what opportunities exist, whichstandard has the most legitimacy with organizationmembers, and which standard is perceived to bereachable. The purpose of these comparisons is tohighlight the opportunities available by finding ahigher level of performance and showing the possibil-ity of achieving it.

Identifying benchmark standards also helpsensure that new information, new ideas, and new per-spectives will be imported, and that standards not con-sidered possible before may become realistic. Studyingothers who may be doing the same job better than youmay be accomplished by sponsoring visitors, holdinglearning events (symposia and colloquia) or confer-ences, creating study teams, and scheduling visits toother sites. The objective is to unfreeze people from

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reliance on past practice by learning that there may bea better way.

Institute Symbolic Events

Leaders of positive change must signal the end of theold way of doing things and the beginning of a newway of doing things by means of symbols. This meansthat an event is used to signify a positive change or anew future. The symbolic event should be tangibleand clearly identified with the positive change.

For example, during the 1980s, Chrysler wasexperiencing very dark days. The company was bank-rupt, and no one knew for sure if it would survive. LeeIacocca was hired to be the new CEO. Tens of thou-sands of cars sat idle in the “sales bank” (Chrysler’sterm for cars parked in vacant lots) waiting to be sold.In his first closed-door speech to senior executives,Iacocca announced that the sales bank would be abol-ished. All cars in the sales bank would be sold at “dis-tressed prices.” “But,” he said, “I want to keep one.You know what people do when they pay off the mort-gage; they burn it on the front lawn. I want to burnthat last car on the front lawn of headquarters, so thewhole world knows it’s over!” (Cameron, 1985). Asymbolic event was held, in fact, in which the last carin the sales bank was burned, symbolizing a newfuture under Iacocca.

In that same speech, Iacocca asked all top man-agers to take out a piece of paper and write down allthey had achieved in Chrysler during the past 12months. After they had done so, they were instructedto tear up that paper and throw it away. They were totake out another piece of paper and write down all thethings they were going to achieve in the next 12months for the company. That was the documentIacocca instructed them to hang on their wall andexplain to their co-workers. Symbolically, Iacocca wascommunicating the message: “You may have suc-ceeded in the past, but the future is where we willnow put our emphasis.” The symbolic imagery com-municated that message far more powerfully thanmerely stating it in a speech. The point is, symbolicimages capture hearts as well as heads, and thatresource is required for positive change to occur.

Create a New Language

Another way to create readiness for change is to helporganization members begin to use different languageto describe old realities. When new language is used,perspectives change. For example, a key goal for the

theme park division at Disney Corporation is to pro-vide the best service in the world. The trouble is, mostof Disney’s theme park employees in the summermonths are college students working at temporary jobsand not particularly invested in being a park sweeperor concession stand cashier. Disney addresses this chal-lenge by making sure that all new employees atDisneyland are taught that they have been hired bycentral casting, not the personnel department. Theyare cast members, not employees. They wear cos-tumes, not uniforms. They serve guests and audiencemembers, not tourists. They work in attractions, notrides or arcades. They have roles in the show and playcharacters (even as grounds keepers), not merely workin a job. During working hours, they are onstage andmust go offstage to relax, eat, or socialize.

The intent of this alternative language is to changethe way these employees think about their work, toplace them in a mind-set that they wouldn’t have con-sidered otherwise. At Disney, summer employees arein show business—onstage, playing a role, performingfor an audience. Changing language helps unfreeze oldinterpretations and create new ones. Another exampleis CNN. When the network was first formed, employ-ees were fined $100 if they ever spoke the word “for-eign.” The reason: At a worldwide news organization,no one is foreign. Thinking globally requires that lan-guage change, and foreign became a forbidden word.Leading positive change requires that optimistic wordsreplace pessimistic words, and language that blocksprogress is shunned. Another company we know, forexample, forbids phrases such as “It can’t be done”; “Itwon’t work”; “It’s just like an idea we already tried”;“It will never get approved.” These phrases are all“creativity killers,” and they inhibit positive change,innovation, and improvement.

Bennis and Nanus (1984) observed that the mostsuccessful leaders in education, government, business,the arts, and the military are those who have devel-oped a special language. Most notable is the absence intheir vocabularies of the word failure. These individu-als simply haven’t allowed themselves, or othersaround them, to accept the possibility of failure.Alternative descriptors are used such as temporaryslowdown, false start, miscue, error, blooper, stumble,foul-up, obstacle, disappointment, or nonsuccess.These leaders use an alternative language in order tointerpret reality for their organizations, to foster a will-ingness to try again, and to foster an inclination towardpositive change. This language communicates the factthat failure is not an option. Success is just around thecorner.

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In sum, creating readiness is a step designed tomobilize individuals in the organization to activelyengage in the positive change process. It involves morethan merely unfreezing people. Making people uncom-fortable is a frequent prescription for getting peopleready for change, and it often works. Making peopleuncomfortable, however, usually involves creatingfear, crisis, or negative conditions. There is no doubt,of course, that change also creates its own discomfort.Interpersonal relationships, power and status, and rou-tine ways of behaving are disrupted by change, sochange is usually interpreted as anything but a positivecondition. Leading positive change, on the other hand,focuses on ways to create readiness that unlock posi-tive motivations rather than resistance, and providesoptimistic alternatives rather than fear. Benchmarkingbest practice, positive symbols, and new language arethree practical ways to do it.

Establishing positivity and creating readiness forchange does little good, of course, if there is not a clearidea of where the positive change is heading. That iswhy the third step in the framework refers to articulat-ing a clear, motivating vision of abundance.

ARTICULATING A VISION OF ABUNDANCE

Positive change seldom occurs without a leader articu-lating a vision of abundance (see Figure 1). By abun-dance we mean a vision of a positive future, a flourish-ing condition, and a legacy about which people carepassionately. This kind of vision helps unleash humanwellsprings of potential since it addresses a basichuman desire—to do something that makes a differ-ence, something that outlasts one’s own life, andsomething that has enduring impact. Visions of abun-dance are different from visions of goal achievement oreffectiveness—such as earning a certain percent profit,becoming number one in the marketplace, or receivingpersonal recognition. Rather, these are visions thatspeak to the heart as well as the head.

For example, the vision of Richard Bogomolny,the CEO of Finast Supermarkets in Cleveland, Ohio,was to improve the quality of life for residents ofblighted areas of Cleveland who would otherwisenever have access to a reasonably priced grocery store.He invested in new, state-of-the-art supermarkets inpoor urban neighborhoods, stocking shelves with eth-nic foods that were not popular in suburban stores,and providing an environment of safety and cleanlinesswhile offering prices competitive with suburban shop-ping centers. Finast stores have now become the social

gathering places for entire neighborhoods, have pro-vided training and employment for the chronicallyunemployed, and at the same time, have become ahighly profitable investment for the company (Bollier,1996). Without the leader’s clear statement of a visionof abundance, the overwhelming tendencies towardaddressing obstacles, problem solving, and negativefeedback drive out positive change.

Most organizations have some kind of missionstatement or have established goals, but a visionstatement is something different. Visions include theuniversalistic values and principles that will guidebehavior. They provide a sense of direction; they helpidentify what the future holds. They provide glimpsesof possibilities, not just probabilities. They evokedeeper meaning than mission statements or goals.They provide optimism and hope.

For example, goals that call for a 20 percentincrease in ROI, an improvement in product quality,more timely responses to customers, or lower costs areall valuable and important to organizations. Yet, theyare not visions. They are examples of targets that theorganization wants to achieve. Visions, on the otherhand, are focused on helping individuals think differ-ently about themselves and about their futures. Theypossess several important characteristics, several ofwhich were reviewed in the chapter on team buildingand teamwork. We reiterate some of those principleshere, however, since they are so central to the positivechange process.

Include Left-Brain and Right-Brain Features

Many years ago, neurosurgeons discovered that thebrain consists of two hemispheres that can actuallywork independently when surgically separated. Theleft hemisphere controls the right side of the body, butit also controls rational cognitive activities such as sequential thinking, logic, deduction, numericthought, and so on. Activities such as reading, solvingmath problems, and rational analysis are dominated byleft-brain thinking.

The right hemisphere, on the other hand, controlsthe left side of the body as well as nonrational cogni-tive activities such as intuition, creativity, fantasy, emo-tions, pictorial images, and imagination. Composingmusic, storytelling, and artistic creation are most likelytied to right-brained activity.

Of course, neither hemisphere operates autono-mously from the other, and both kinds of mental activ-ity are required in complex tasks. But that is precisely

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the point. Vision statements of leaders must containrational targets, goals, and action plans (left-brain com-ponents), as well as metaphors, colorful language, andimagination (right-brain components). Unfortunately,most managers and most organizations emphasize theleft-brain side in their mission statement or strategicplanning documents (they focus, for example, onincreased market share, becoming number one in theindustry, or raising quality standards). Fewer paint pic-tures of the future, use exciting language, and speak tothe imaginations of members. In the Skill Analysis sec-tion of this chapter, several corporate vision statementsare provided for you to analyze. Note the differencesamong them in the relative emphasis on right-brainversus left-brain thinking.

Articulating the left-brained side of the vision isfacilitated by answering the following questions:

❏ What are our most important strengths as anorganization? Where do we have a strategicadvantage?

❏ What major problems and obstacles do weface? What stands in the way of significantimprovement?

❏ What are the primary resources that we need?What information is required?

❏ Who are our key customers? What must bedone to respond to their expectations?

❏ What measurable outcomes will we accom-plish? What are the criteria to be monitored?

Articulating the right-brained side of the vision isaided by answering the following questions:

❏ What is the best we can achieve? What repre-sents peak performance?

❏ What stories or events can we tell that charac-terize what we stand for?

❏ What metaphors or analogies can we use thatwill identify what the future of our organiza-tion will look like?

❏ What symbols are appropriate for helping cap-ture people’s imaginations?

❏ What colorful and inspirational language canexemplify what we believe in?

The most motivating vision statements—forexample, Churchill’s “Never Give In” speech,Kennedy’s “Ask Not What Your Country Can Do forYou” speech, Mandela’s “A Dream for Which I AmPrepared to Die” speech, Martin Luther King’s “I Havea Dream” speech—all contain both left-brained and

right-brained elements. Leaders of positive change payattention to both in articulating their vision state-ments.

Make Vision Statements Interesting

Murray Davis (1971) published a now classic articleon what causes some kinds of information to be judgedinteresting while other information is uninteresting.The truth or veracity of the information has little to dowith that judgment, according to Davis. Rather, whatpeople find interesting depends on the extent to whichthe information contradicts weakly held assumptionsand challenges the status quo. If new information isconsistent with what is already known, people tend todismiss it as common sense. If new information is obvi-ously contradictory to strongly held assumptions, or ifit blatantly challenges the core values of the organiza-tion’s members, it is labeled ridiculous, silly, or blas-phemous. Information that helps create new ways toview the future, that challenges the current state ofthings (but not core values), is viewed as interesting.New insights are created and people are drawn to theinformation because it makes them think, or it uncov-ers a new way to think.

Inspiring vision statements are interesting. Theycontain challenges and prods that confront and alterthe ways people think about the past and the future.They are not outlandish or cavalier in their message,just provocative. For example, Ralph Peterson, CEO ofCH2MHill (a large environmental and engineeringfirm), indicated that “corporate immortality” was theultimate objective of the company, meaning that thefirm was in business to create outcomes that wouldlast well beyond the lifetime of any individual. JeffreySchwartz, CEO of Timberland, the shoe and clothingcompany, espoused a vision related to doing good inorder to do well—organizational virtuousness isequally important to organizational profitability. TomGloucer, CEO of Reuters, espoused the vision thatReuters would become the fastest company in theworld. Ross Perot, while serving on the board of direc-tors at General Motors, articulated what his vision ofthe new GM would be if he were at the helm. “Fromthis point forward, GM’ers will fight in the market-place, not with each other. Starting today, GM’ers willwork together using brains, wits, creative abilities, andinitiative as substitutes for money. Starting today, asGM goes through a transformation, all sacrifices willstart at the top” (1988).

These examples are not intended to illustrate thebest vision statements, of course, nor even vision

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statements that energize you personally. But, in eachcase, they carried a strong and motivating message forthose in the organizations mentioned. They helpedpaint a mental picture. One of the chief reasons is thatthese vision statements are interesting. They identify amessage that people care about but which challengesthe normal perception of things. The statements con-front the status quo and provide a new way to thinkabout what people do in the organization every day.The fact that they are interesting is what capturesattention and positive energy.

Ensure Source Credibility

Articulating a vision can be off-putting to people if theydon’t believe in the leader or don’t have a sense thatthe leader is believable. Kouzes and Posner (1988)identified characteristics that followers expect in effec-tive leaders and found that the most important charac-teristic is (1) honesty, integrity, or truthworthiness.Leaders must be trusted by followers—that is, main-tain a consistent set of principles and standards—oth-erwise talking about a vision is just puffery. The otherthree characteristics of effective leaders in Kouzes andPosner’s research were (2) competence, knowledge, orskillfulness; (3) enthusiasm, inspiration, or energy; and(4) vision or a sense of direction. Without the firstattribute (credibility based on integrity), however, theknowledge, passion, and vision were not effective andhad little positive impact.

This finding is not surprising since it is almostidentical to the attributes associated with “sourcecredibility” in the research on communication. Thatis, when individuals are exposed to information, theymake judgments about the extent to which the infor-mation can be believed. They accept what they hear ifthe source of the information has credibility. The threeattributes of source credibility are (1) trustworthiness,(2) expertise, and (3) dynamism (Kouzes & Posner,2003). Note that these three attributes match exactlythe characteristics followers expect of leaders. In otherwords, when leaders articulate a vision, the extent towhich followers believe it and are willing to accept itdepends a great deal on the credibility of the leader.For leaders to be believed, they must demonstrate hon-esty and integrity, knowledge and expertise, and pas-sion and enthusiasm for the vision. When vision state-ments possess these attributes, they are credible(Kouzes and Posner, 1988).

Three specific hints for articulating crediblevisions include:

❏ Ensure that the vision statement reinforcescore values about which you feel strongly.Instead of focusing on end results such as profitgrowth, expanded market share, higher share-holder returns, or customer satisfaction mea-sures, for example, the vision statement shouldrelate to something fundamental about whichpeople can feel passionate. This is likely to beassociated with human flourishing, interper-sonal relationships, or an ultimate good—thatis, things that make life worth living. Outcomessuch as assistance to mankind, helping to makelife or work more rewarding, increasing thefreedom of individuals, or improving the qual-ity of life are all more attractive and motiva-tional than instrumental outcomes. Peoplebelieve in these kinds of aspirations.

❏ The vision statement must be straightforwardand simple. A common error of leaders is to betoo complicated, too lengthy, or too multifac-eted in their vision statement. Most great lead-ers acknowledge that they have only three orfour major objectives in mind. Their visionshelp people focus. Ronald Reagan, MichaelEisner (Disney), Jack Welch (GE), Bill Gates(Microsoft), Jim Hackett (Steelcase) are allwell-known examples of leaders who publiclyespoused a simple and straightforwardvision—usually with only three or four keyparts. Contrast that with the former CEO andchairman of Whirlpool Corporation, whowrote a 15-page document outlining his visionfor the company. Employees complained thatthey couldn’t understand exactly what hewanted or where the company was going. Itwas difficult to sign up for 15 pages! Onesenior manager dismissed the document bystating, “He simply has too much vision!” Itwas only when the vision statement was con-densed to four key points that it became credi-ble in the organization.

❏ Credibility doesn’t mean an absence of ex-citing and energizing language. Effective, be-lievable vision statements use superlatives.Language makes a difference in the way peo-ple perceive and think. Language that exudespassion, excitement, and encouragement ismore credible and motivating than passive orunenthusiastic language. Notice the differencein how you feel about the following compar-isons: “exceptional performance” compared to

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Figure 6 An Example: A Symbol ofPositive Organizational Change

“acceptable performance”; or “passionatelyengaged” compared to “committed to”; or“explosive growth” compared to “substantialgrowth”; or “awesome products” compared to“good products.” The former phrases engen-der more enthusiasm and commitment thando the latter phases. Note the extent to whichinspiring phrases are included in the visionstatements in the Skill Analysis section of thischapter.

Attach the Vision to a Symbol

Effective vision statements are associated with a sym-bol. This is more than a symbolic event that helps cre-ate readiness for change. Rather, people must associatethe vision with something tangible they see or hear.Not only does the vision identify expectations anddirection for individuals in their day-to-day activities,but they should be reminded of it regularly by the pres-ence of a symbol. That symbol may be a logo, a phrasefrom a speech, a flag, a physical structure, or any num-ber of things that can serve as a reminder of where thevision is taking the organization.

The turnaround at Ford Motor Company afterWilliam Clay Ford took over was symbolized by theresurrection of the blue Ford oval on the headquartersbuilding. Chrysler returned to the classic Chrysler logoinstead of the five-pointed star. Maulden Mills recon-structed a plant that had been devastated by fire on thesame property to symbolize human commitment andcorporate compassion. The replacement structures forthe World Trade Center towers are targeted specifi-cally to symbolize a positive and uplifting future afterthe devastating tragedy. Logos such as the goldenarches, Nike Swoosh, or Mickey Mouse are carefullypublicized, even protected, because of the symbolicmessages that they communicate about the companiesthey represent.

One of us served as a dean in a midwestern busi-ness school for a time, and a key responsibility was toarticulate a motivating and energizing vision in orderto set new direction for the school. The vision beingarticulated was focused on enhancing the school’s rep-utation, engendering a spirit of entrepreneurship andinnovation, and building a sense of pride in scholarlyexcellence. Speeches were made about these aspira-tions—we have all heard these kinds of talks—butspeeches seldom if ever have lasting impact. A symbolwas needed to make the vision real and to serve as aconstant reminder. That symbol ended up being the

construction of a new building, designed by theworld’s most famous architect. The new building sym-bolized a best-in-class, one-of-a-kind structure, and itsignified that the school would be an innovative, entre-preneurial, out-of-the-box kind of place. Pride in beingunique in the entire world was an important symbolicmessage. To get a sense of how a building could serveas a symbol of such things, look at the final buildingmodel in Figure 6.

You can see that this design can communicatestrong messages to both internal and external con-stituencies. It was interpreted as representing thetwenty-first century rather than the eighteenth ornineteenth centuries (which are more typical of mostivy-covered college campuses in America). It was usedto represent innovation and the entrepreneurial spirit.It communicates humaneness, comfort, and interac-tion; it symbolizes movement, fluidity, and dynamism;it epitomizes best-in-class. The building was designedto foster lots of interaction, representing the fact thatlearning is mainly a social activity. It touches the wholeperson, emotions and spirit as well as intellect. It stim-ulates extraordinary thinking (Cameron, 2003b).Speeches about a vision, in other words, were notnearly as powerful as a visible symbol that could beexperienced every day by the people who saw it.

GENERATING COMMITMENT TO THE VISION

Once this vision of abundance has been articulated,it is necessary for leaders to help organization mem-bers commit to that vision, to sign up, to adopt thevision as their own, and to work toward its accom-plishment. The whole intent of a vision is to mobi-lize the energy and human potential of individualswho are to implement and be affected by it. Among

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the ways to generate commitment to a vision are thefour discussed next. Others are discussed in depth inthe chapters on motivation, empowerment, andteamwork.

Apply Principles of Recreation

An interesting truism was identified by ChuckCoonradt (1985): “People will pay for the privilege ofworking harder than they will work when they arepaid.” Think about that for a minute. “People will payfor the privilege of working harder than they will workwhen they are paid.” In other words, under certain cir-cumstances, individuals are more committed to doingwork that actually costs them money than they are todoing work for which they receive remuneration.Sometimes people will pay to work when they will notwork when they are paid. How can that be? In whatcircumstances might that be the case?

Consider the following hypothetical example.Suppose you live in Utah in the winter and, as youarrive at work, you find that the furnace is out of order.As the temperature falls to 65 degrees you put on acoat. At 60 degrees you complain that it is too cold towork. At 55 degrees you leave, confident that no onecould expect you to perform in such adverse condi-tions. Then you put on your $300 ski outfit, grab your$750 skis and boots, and the race off to the slopes inorder to pay $75 for a lift ticket, $25 for gas, and $30for a junk-food lunch. You will spend all day long in10-degree weather working much harder skiing thanyou would have worked at the firm where you couldhave been paid. If this sounds unusual, consider theskyrocketing absenteeism rates in companies andschools when the first big snow falls in ski areas, whenthe surf is up in cities close to the beach, or the firstday of hunting or fishing season. People regularlychoose to pay to work harder than they would con-sider working when they are paid.

Well, you say, that’s because it’s fun. It’s recre-ation. And you’re right. But there is no reason why thework performed in a regular job cannot be character-ized by the same principles that characterize recre-ation. In other words, what causes people to want toengage in recreational work can also be what causesthem to be equally committed to their occupationalwork. At least five characteristics are typical ofrecreational work (Coonradt, 1985).

1. goals are clearly defined;2. scorekeeping is objective, self-administered,

peer-audited, and compared to past perfor-mance;

3. feedback is frequent;4. personal choice is present; rules are consistent

and don’t change until the season is over;5. a competitive environment is present.

Consider the game of (American) football. Eachyear the University of Michigan averages about106,000 fans per game, every one of whom knowsexactly what the goal is—to score more points thanthe opponent. There is no need for a periodic perfor-mance appraisal system, because the score changesonly when a team crosses the goal line or kicks a fieldgoal. There is no guessing about how to get ahead.Feedback is not only frequent, it is continuous. If theclock goes down, they stop the game. No one wouldconsider playing if the time and the score were notkept continuously. Within the rules of the game, everyparticipant and fan has personal choice. Players can gofull speed or not; fans can cheer or not; the team canrun the ball or pass. No one forces people to perform arole that they don’t want to perform. Coordination andcontrol occur because everyone knows the rules, andthe rules don’t change. Off-side is off-side, a first downis a first down, and a touchdown is a touchdown.When a receiver is wide open and makes an easy catchin the end-zone, no one could imagine an NCAA com-mittee deliberating about how many points the score isworth. No one would say, “Easy catch; wide open;worth only 4.5 points.” No one would stand for that,and 106,000 people would go crazy. The rules simplydon’t change in recreation. Plus, the environment isone of competition—both against an opponent andagainst personal past performance. The stimulation ofcompeting against something is fun. Playing against anopponent that is markedly less skilled—beating it 100to 0, is not as much fun.

Despite the inherent motivation and commit-ment associated with these principles, many leadersbehave inconsistently with them. Their vision is notstated clearly and precisely. There is no objective, self-administrated evaluation system. The scorekeepingsystem is controlled hierarchically, by managers onestep above, instead of being peer-audited and continu-ous, as in recreation. Criteria of evaluation are vagueand inconsistently administered. Organization feed-back often comes only when quarterly earnings state-ments are tabulated, and then it is often focused onwhat went wrong. Personal freedom is too often con-strained, as evidenced by the elaborate bureaucraticstructures that typify most large organizations. It isnot unusual to have the criteria of success change inthe middle of the game, especially if a new managertakes over. And, most employees never see how what

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they do makes any difference at all in obtaining theultimate goal, or winning against a competitor.

The point is, one way for leaders to generate com-mitment to the vision is to identify clear, consistentgoals associated with the vision; identify the criteriathat will indicate progress toward reaching the vision,which each organization member can monitor; pro-vide mechanisms for frequent feedback to organiza-tion members; give individuals personal choice andthe maximum discretion possible; maintain a consis-tency and stability of the rules of the game and expec-tations; and identify a competitive standard againstwhich performance can be evaluated. Like commit-ment to recreation, commitment to visions, if basedon similar principles, will also become strong andlong-lasting.

Ensure Public Commitments

Another well-documented way to enhance commit-ment to a vision is to have people state their commit-ments aloud, in public. Individuals are motivated tobehave consistently with their public declarations(Salancik, 1977). The internal need for congruenceensures that public statements will be followed by con-sistent actions. After making public pronouncements,individuals are more committed, and more consistentin their behavior, to that which they have espoused(Cialdini, 2000).

For example, during World War II good cuts ofmeat were in short supply in the United States. Lewin(1951) found that a significant difference existedbetween the commitment level of shoppers whopromised out loud to buy more plentiful but less desir-able cuts of meat (e.g., liver, kidneys, brains) com-pared to those who made the same promise in private.In another study, students in a college class weredivided into two groups. All students set goals for howmuch they would read and what kinds of scores theywould get on exams. Only half the students wereallowed to state these goals publicly to the rest of theclass. By mid-semester, the students who stated theirgoals publicly averaged 86 percent improvement. Thenonpublic goal-setting students averaged 14 percentimprovement.

When the Tennessee Valley Authority (TVA) wasattempting to build a dam in the late 1940s, it foundthat local farmers vehemently resisted the effortsbecause of the land that would be flooded. To over-come this resistance and elicit farmers’ commitment tothe project, the TVA made local farmers members ofthe board that would supervise the constructionefforts. These local farmers began to make public state-

ments on behalf of the TVA project and, over time,became strongly committed to it (Selznick, 1949).

This point is, leaders of positive change look foropportunities to have others make public statements infavor of the vision or to restate the vision themselves.Assigning individuals to represent the vision to outsidegroups or to other employees, or forming discussiongroups so that others can help refine or clarify thevision, are examples of how opportunities for publicstatements can be fostered in order to enhance com-mitment.

Institute a Small-Wins Strategy

People become committed to change when they seeprogress being made or success being achieved. We areall more committed to winners than to losers. Fansattend more games when the team has a good recordthan when it has a poor record. The number of peopleclaiming to have voted for a winning candidate alwaysexceeds by a large margin the actual number of votesreceived. In other words, when we see success, orprogress being made, we are more committed torespond positively, to continue that path, and to offerour support.

Leaders of positive change create this kind of sup-port by identifying small wins—changes that are easyto implement and that build momentum (Weick,1981). For example, we have observed leaders, whenbeginning a major change initiative, starting with smallthings such as a new coat of paint, abolishing reservedparking spaces, adding a display case for awards, flyinga flag, holding regular social events, instituting a sug-gestion system, and so on. Each of these small changes(and hundreds more) are designed to create commit-ment to the visualized change. A small-wins strategy,in other words, is designed to create a sense ofmomentum by creating minor, quick victories. Thebasic rule of thumb for small wins is: Find somethingthat’s easy to change. Change it. Publicize it, or rec-ognize it publicly. Then, find a second thing that’seasy to change, and repeat the process.

Small wins create commitment because (1) Theyreduce the importance of any one change (“It is no bigdeal to make this change”); (2) They reduce demandson any group or individual (“There isn’t a lot to do”);(3) They improve the confidence of participants (“Atleast I can do that”); (4) They help avoid resistance orretaliation (“Even if they disagree, it’s only a smallloss”); (5) They attract allies and create a bandwagoneffect (“I want to be associated with this success”); (6)They create the image of progress (“Things seem to bemoving forward”); (7) If they don’t work they only

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create a small flop (“No major harm is done and nolong-lasting effects occur”); (8) They provide initiativesin multiple arenas (“Resistance cannot be coordinatedor organized in a single area”) (Weick, 1993).

Communicate the Vision Frequently

Effective leaders of positive change communicate thevision, then they communicate it again, then again,and then again. If leaders stop communicating thevision, or if they change themes as they address orga-nization members, the members tend to think that thevision isn’t important anymore. Unless leaders contin-ually and consistently articulate and rearticulate thevision, it loses its power and commitment erodes.Being accused of repetition is much less serious thanbeing accused of neglect. Persistent and continuousdelivery of the vision message is required, but surpris-ingly, it is a frequent shortcoming of leaders. They givea speech or hand out a sheet on which the vision iswritten; then they think their job is complete. In real-ity, it has only begun. No one ever heard NelsonMandela speak in South Africa, for example, withouthearing him rearticulate his vision of human dignityand equal treatment for all persons.

Communicating the vision must also occur using avariety of methods. This means referring to the vision inpublic statements, newsletters, celebrations and cere-monies, speeches, memos, and everyday interactions.Leaders model the vision in their personal behavior.There should be no questions, in observing and listen-ing to leaders, as to what the vision is. For example, JanCarlzon, the former president of Scandinavian Airlines(SAS), took control of the airline when it was losing $20million a year. In the first year he increased revenues by$80 million and led his company to being voted “thebest airline in the world” by Fortune magazine. Here iswhat he said about communicating his vision.

Good leaders spend more time on communi-cation than anything else. From my first day atSAS I’ve made communicating, particularlywith our employees, a top priority. In fact, dur-ing the first year I spent exactly half my work-ing hours out in the field talking to SAS peo-ple. The word going around was that any timethree employees gathered, Jan Carlzon wouldprobably show up and begin talking withthem.

When we began reorganizing SAS, ourcritics scoffed at our efforts as mere promo-tional gimmicks. They claimed we hadbecome too marketing oriented, but in fact we

hadn’t increased our marketing budget onecent. Rather, we were spending our moneymore effectively on messages that were easilyunderstood. (Carlzon, 1987: 88, 92)

Creating commitment is enhanced, in otherwords, by applying principles of recreational work,providing opportunities for public statements of com-mitment, instituting small wins, and communicatingthe vision frequently, consistently, and broadly. Inessence, leaders will achieve commitment to thatwhich they say, that which they do, and that whichthey reward, but without consistency and frequency,not necessarily to that which they want.

INSTITUTIONALIZING THE VISION

The final challenge for leaders of positive change is tomake the change a part of ongoing organizational life.General officers in the U.S. Army refer to this step as“creating irreversible momentum,” that is, ensur-ing that the positive change gains such momentum thatit cannot be thwarted (U.S. Army, 2003). The chal-lenge is to separate the vision from the visionary, to getothers to own and become champions of the change, tocreate processes that reinforce the positive changewithout having to continually rely on the leader. Theobjective is to ensure that even if the leader leaves, thepositive change will continue because of the sustain-able impetus put in place. If Bill Gates was incarceratedfor unfair business competition, Jan Carlzon was in anairplane crash, Lee Iacocca was run over by a car, orJack Welch was electrocuted by a faulty refrigeratorwire, Microsoft, SAS, Chrysler, and General Electricwould not have missed a step. The positive changeschampioned by these leaders would still have been pur-sued, because they had become embedded in theirorganizations’ cultures. They were institutionalizedand had gained irreversible momentum.

Institutionalizing change doesn’t happen quickly,of course, and the four previous steps in positivechange—establishing a climate of positivity, creatingreadiness, articulating a vision, and generating com-mitment—must all be successfully accomplished first.However, institutionalization is the necessary final stepif the organization is to successfully achieve positivechange. How do leaders institutionalize their positivechanges? Three hints are provided.

Turn Students into Teachers

Most of the time we assume that it is the leader’sresponsibility to articulate the vision of abundance,

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Learning Retention

Average retentionrate

10%

20%

30%

50%

75%

5%Lecture

Teaching others90%

Coachingzone

supportReading

Audio-Visual

Demonstration

Discussion groups

Doing

Figure 7 The Learning Stairs (from the NTL Institute)

Source: The Learning Stairs; NTL Institute; Bethel, ME.

and everyone else listens to it and accepts it. Teachersteach what students need to know and students learnit for the exam. The chief gives direction and the restof us follow.

The most effective leaders, however, provide anopportunity for everyone in the organization to articu-late the vision, or to teach others about the desiredpositive change. This process requires that every per-son develop “a teachable point of view” (Tichy, 1997).Developing one’s own teachable point of view meansthat individuals come to believe in something, andthey can clearly explain what it is and why. In otherwords, people get to the point where they can articu-late the vision in their own words. They are givenopportunities to teach others what they understandthe positive change to be. They are required to developtheir own perspective on the positive change in a waythat it can be explained and illustrated to someoneelse. They are transformed from students or listenersinto teachers or visionaries.

Researchers at the National Training Laboratoriesin Bethel, Maine, developed a “learning stair” (seeFigure 7). Their studies found that people rememberonly 5 percent of what they hear in a lecture, 10 per-cent of what they read, 20 percent of what they viewin a video, 30 percent of what they observe beingdemonstrated, 50 percent of what they discuss in agroup, 75 percent of what they apply, and 90 percent

of what they teach to others. That is, by teachingsomeone else about the vision or the intended posi-tive change, individuals remember it, become com-mitted to it, and make it a part of their own personalagenda.

One manifestation of this principle was at Xeroxunder Rex Kern, a remarkable leader who turned thatcompany around in the late 1980s and early 1990s.Kern’s focus was on rapidly institutionalizing a posi-tive change process by turning students into teachers.He spent time sharing his vision of positive changewith his top leadership team. Then these leaders wererequired to apply what they heard, that is, to imple-ment personal action agendas and make personalchanges. Then, most importantly, they were requiredto teach the positive change vision to someone else.Who would they teach? They taught the next level ofleaders in the firm. They were also required to assessor monitor the positive change. This was in order toidentify measurable indicators, milestones, and harddata to ensure that the positive change was really tak-ing place. It was a way to guard against lip servicewith no real substance. What did they assess? It wasthe action agendas and managerial experiments imple-mented by the leaders they taught. The process con-tinued down through all the organizational levels.Each person, in other words, was exposed to thevision four times: when they learned it from their

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leader; when they applied it; when they taught it; andwhen they assessed it. Within a year, Xerox achievedstunning results. It is widely acknowledged that thisprocess was key in turning Xerox around as a com-pany and in labeling Rex Kern as one of the great cor-porate leaders of the twentieth century.

This is similar to the process used by certain divi-sions within Hewlett-Packard. These divisions requireengineers to spend time recruiting on college cam-puses. Having engineers actually recruit students—from disciplines in business, mathematics, physical sci-ences, arts and humanities, as well as engineering—ishighly risky since engineers are not trained recruiters.However, the strategy pays off because H-P engineersare required to articulate the vision, publicly praiseHewlett-Packard, and teach interested job candidatesabout the company. Former H-P “students” arerequired to become the “teachers.” These engineersmay not convince many rookie recruits, but by articu-lating the H-P Way, they internalize it themselves.They become inoculated. As a result, Hewlett-Packardhas the lowest turnover rate in the industry amongengineers, one of its stated core competencies.

Build Human Capital

For positive change to have staying power, for it to lastbeyond the lifetime of the leader, people throughoutthe organization must have developed the capability to lead the vision themselves, to institute positivechange, and to carry on under their own initiative. Inother words, well-developed human capital is alwaysthe chief predictor of growth in financial capital. Theskill set of the people is the bedrock upon which orga-nizational success is built. No company can makemoney over time without well-developed humancapital—meaning capable and skillful employees.Institutionalizing positive change occurs as individualsthroughout the organization develop the capacity tolead positive change themselves. This can happen inmany ways, of course, but a good example of the coreprinciple is illustrated by a large Asian company inwhich we conducted research.

This particular company required that each time asenior manager was promoted, he or she was requiredto take a three-month leave of absence. The personhad to actually leave work for three full months. Forone of the months the manager was required to inten-sively study religion or ethics, and then document it,usually with a written report. For another month theindividual was required to study history or a major his-torical figure, and then document it. The third month

had to be spent studying business, broadly defined. So,at the end of three months, three documents had beenprepared. If, after the three months, the business hadrun smoothly with no major hitches, then the promo-tion occurred. That is, the promotion occurred at theend of the three-month leave, not before. Why woulda large company implement such a strange promotionsystem at substantial risk and expense? Why not justsend the manager to a week-long executive educationprogram at a university? The reason is that this waspart of the process for institutionalizing the vision ofthe company. A key value in the company related todeveloping human capital, in addition to financial capi-tal and physical capital. It knew that human capital isthe key driver of long-term success. The three-monthleave of absence, of course, provided a chance for self-development, personal enrichment, and broadenedperspective. Senior managers were required to studyreligion or ethics because all business decisions arebased on some set of values or standards. The firmwanted to make certain that these people had spenttime intelligently thinking through their own value sys-tems. To avoid the trap of becoming short-term in ori-entation, studying history helped broaden viewpointsand helped assure that the mistakes of the past werenot repeated. Studying business principles helpedexpand the knowledge base and competence of themanagers. Most importantly, however, the leave ofabsence was really a test. The key value in this com-pany was that human capital must be developed if suc-cess was to be achieved, so the leave of absence servedas a test of whether the manager had really developedhis or her employees. If the organization performedless well when subordinates were in charge, then themanager was not prepared to be promoted. All man-agers had the responsibility to help develop others tobe as competent as they were in leading positivechange, and managers were held accountable for thatdevelopment.

The point is, a key to ensuring that positivechange continues is to have capable people in place.Providing organization members with developmentalopportunities—that is, chances to increase their ownskill set—is an investment in the long-term future ofthe organization and in the continuous success of posi-tive change.

Metrics, Measurement, Milestones

A third aspect of institutionalization is the establish-ment of metrics (or specific indicators of success),measures (or methods for assessing levels of suc-

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cess), and milestones (or benchmarks to determinewhen detectable progress will have occurred). Thesethree factors help ensure accountability for change,make it clear whether or not progress is being made,and provide visible indicators that the change is suc-cessful. The adage, “You get what you measure” is anillustration of this principle. Change becomes institu-tionalized when it becomes a part of what people areheld accountable to achieve. When it is clear whatthe measures are, people tend to respond to thosemeasures. If I am measured on my test scores in aclass but not on the extra reading I do, I will likelyspend more effort and time studying for the examsthan reading extra materials. It is only when I ammeasured on different criteria that I shift my focus.Consequently, institutionalizing positive changemeans that clear metrics are identified, a measure-ment system is put into place, and a milestone isidentified for when the change must have beenaccomplished.

An illustration of these points is Jan Carlzon’s(1987; 108–109) approach to institutionalizing hisvision in the once-struggling Scandinavian Airlines:

Employees at all levels must understandexactly what the target is and how best toachieve it. Once the frontline personnel . . .have taken on the responsibility of makingspecific decisions, these employees musthave an accurate feedback system for deter-mining whether the decisions they are mak-ing are, in fact, the ones that will accomplishthe company’s overall goals. . . . The neces-sity of measuring results is particularly crucialfor those employees who affect customer ser-vice but don’t have face-to-face contact withthese customers. Ticket agents get immediatefeedback on their job performance hundredsof times a day from the customers they serve.However, other workers such as baggagehandlers have no such advantages. In fact,loading and unloading cargo is probably themost thankless job we have at SAS. . . . Thebaggage handlers never come into contactwith the passenger, and so they never getpositive or negative feedback from them.Lacking this, they need clear targets andother means of measuring how well they aremeeting their goals.

The keys to establishing effective metrics, mea-sures, and milestones for positive change are: (1)

Identify two or three metrics or indicators that spec-ify the result that is to be achieved. (A common mis-take is to measure too many things. The key is tofocus on a few core items.) These should not be met-rics associated with effort or methods, but theyshould focus on results or outcomes. Specifically,they should address the outcomes desired from thevision of abundance. At SAS, one metric includes theelapsed time between the plane pulling up to the gateand the first bag being delivered on the carousel. (2)Determine a measurement system. Data should becollected at certain time intervals in particular ways.This may be reports, surveys, or face-to-face meet-ings. At SAS, daily logs are kept of baggage handlerperformance. These measures do not focus on hoursworked or how many bags are handled. They focuson the key outcomes desired, namely, speed andaccuracy of delivery. (3) Milestones are specified,meaning that at a certain point in time, a measurableamount of progress will have been achieved. Forexample, by the end of the month baggage handlertimeliness will have improved 1 percent. By the endof the year, it will have improved 15 percent. Mile-stones simply create a time frame for keeping track ofreal progress.

SUMMARY

Institutionalizing a vision of abundance and positivechange, in sum, depends on making it a part of dailylife and the habitual behavior displayed by individualsthroughout the organization. No positive change cansurvive if it depends solely on the leader. Therefore,helping people develop a teachable point of view aboutthe positive change and providing opportunities forthem to teach; building human capital through devel-oping others’ leadership skills; and instituting metrics,measurements, and milestones to ensure accountabil-ity all are actions that can help ensure successful insti-tutionalization of positive change.

BEHAVIORAL GUIDELINES

Figure 8 summarizes the skill set involved in leadingpositive change. Because change is so pervasive inorganizations, every leader must manage changemuch of the time. However, positive change cutsacross the grain and goes against the tendencies ofmost leaders. Negative, problem-focused concernsconsume most leaders and managers. Leading positivechange requires a different skill set. The following are

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Institutionalize the vision—Create

irreversible momentum• Turn students into teachers• Build human capital• Establish metrics, measures, and milestones

Generate commitment• Apply principles of recreational work• Ensure public commitment• Institute a small-wins strategy• Communicate the vision frequently

Establish a climate of positivity• Create positive energy networks• Ensure a climate of compassion, forgiveness, and gratitude• Build on strengths and strongest self

Articulate a vision of abundance• Focus on positive deviance• Include left- and right-brain images• Make the vision interesting• Ensure source credibility• Attach the vision to a symbol

Create readiness• Benchmark best practices• Institute symbolic events• Create a new language

Positive change,

positive deviance,

exceptional

performance


Figure 8 A Framework for Leading Positive Change

the behavioral guidelines for achieving positivechange:

1. Establish a climate of positivity by:A. Creating positive energy networks.

1. Place positive energizers in places whereothers can interact with them and beinfluenced by them.

2. Model positive energy yourself.3. Recognize and reward positive energizers.4. Provide opportunities for people to form

friendships at work.B. Ensuring a climate of compassion, forgive-

ness, and gratitude.1. Enable collective noticing of human con-

cerns.2. Enable the expression of collective emo-

tion.3. Enable the collective responding to diffi-

culty, pain, or distress.

4. Publicly and personally acknowledgetrauma and harm.

5. Identify higher-purpose outcomes thatpeople can point toward.

6. Maintain high standards and look towardthe future after mistakes.

7. Provide personal support to people whohave been harmed.

8. Pay attention to language so that virtu-ous words are acceptable.

9. Express gratitude frequently and conspic-uously, even for small acts.

10. Keep track of things that go right (notjust that go wrong).

C. Identifying and giving people feedback ontheir strengths and unique competencies.1. Implement a reflected best-self feedback

process.2. Spend the most time with the strongest

performers.

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3. Work to capitalize on strengths ratherthan focusing on overcoming weak-nesses.

4. Use five positive comments for everynegative comment in your interactionswith others.

2. Create readiness in others to pursue positivechange by:A. Benchmarking best practice, and comparing

current performance to the highest standards.1. Use comparable others as standards.2. Use stated goals as standards.3. Use past improvement as a standard.4. Use an ideal as a standard.5. Use others’ expectations as a standard.

B. Instituting symbolic events to signal the posi-tive change.

C. Creating a new language that illustrates thepositive change.

3. Articulate a vision of abundance by:A. Focusing on creating positive deviance rather

than correcting negative deviance.B. Including left-brain images by asking ques-

tions such as:1. What are our most important strengths

as an organization?2. Where do we have a strategic advan-

tage?3. What major problems and obstacles do

we face?4. What stands in the way of significant

improvement?5. What are the primary resources that we

need?6. What information is required?7. Who are our key customers?8. What must be done to respond to their

expectations?9. What measurable outcomes will we

accomplish?10. What are the criteria to be monitored?

C. Including right-brain images by asking ques-tion such as:1. What is the best we can achieve?2. What represents peak performance?3. What stories or events can we tell that

characterize what we stand for?4. What metaphors or analogies can we use

that will identify what the future of ourorganization will look like?

5. What symbols are appropriate for helpingcapture people’s imaginations?

6. What colorful and inspirational languagecan exemplify what we believe in?

D. Making the vision interesting by challengingweakly held assumptions.

E. Ensuring credibility of the vision throughdemonstrating:1. Integrity in demonstrating a consistent

set of principles.2. Knowledge regarding the implications of

the vision.3. Enthusiasm and personal passion for the

vision.4. Association with core personal values.5. A straightforward and simple message.6. Exciting and energizing language.

F. Attaching the vision to a symbol to constantlyremind people of the vision.

4. Generate commitment to the vision by:A. Applying principles of recreation to the work

associated with the vision.1. Clearly define goals.2. Ensure that scorekeeping is objective,

self-administered, peer-audited, and com-pared to past performance.

3. Ensure frequent (or continuous) feed-back.

4. Provide opportunity for personal choice.5. Ensure that rules are consistent and

don’t change.6. Provide a competitive environment.

B. Providing opportunities for people to publiclycommit to the vision.

C. Instituting a strategy of small wins by findingsomething easy to change, changing it, andpublicizing it; then repeating the process.

D. Communicating the vision frequently.5. Institutionalize the vision, or create irreversible

momentum by:A. Turning students into teachers by providing

opportunities for people to develop a teach-able point of view and to articulate the visionthemselves.

B. Building human capital by ensuring trainingand development opportunities for others tobe leaders of positive change.

C. Identifying metrics, measures, and milestonesto maintain accountability for success of thepositive change.

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SKILL ANALYSIS


CASES INVOLVING LEADINGPOSITIVE CHANGE

Corporate Vision Statements

Here are examples of four vision statements for well-known companies with head-quarters in the United States—Apple, Ford, General Motors, and Johnson &Johnson. Analyze these statements in light of the principles discussed in the SkillLearning section of this chapter. How effective are each of these vision statements?

Apple’s Identity and Goals

John Sculley, Chairman, President and CEO

Towards shared values . . .

We are all part of the journey to create an extraordinary corporation. The things we intend todo in the years ahead have never been done before by any other company on such a largescale. Many of us believe that Apple is poised to take off and the purpose of this documentis to give everyone at Apple as clear a vision as we can as to where we are going. We expectthe world ahead to be filled with changes but we need the stability of a clear corporate iden-tity and a set of directional goals to give us a framework against which to judge how well weare doing. Our identity and directional goals also provide the foundation for establishing ashared set of values which we hope Apple people will also feel very good about.

Apple’s Identity:

Apple’s identity can be described using three important ideas. The first relates to whatApple does, the second to why it seeks to do that, and the third to how it goes aboutaccomplishing it. First, with regards to “what:”

I. We create great personal computer products.

One person, one computer is still our dream. Apple is an applied technology company.The purpose is to bring high-technology to individuals by making the power and controlreadily accessible to the individual. Apple creates products that people really want touse and enhances their knowledge and ability. These can be thought of as tools whichempower people and whose elegance is brought about through simplicity.

With regards to “why” Apple wants to do this:

II. We have a passion for changing the world.

Apple wants to make personal computers a way of life in work, education, and thehome. Apple wants to be a catalyst for change by improving the way people think, work,organize, communicate, and learn. There is a commitment to action and to changing theway things are done in the world.

The third aspect of Apple’s identity is the “how”:

III. We build an exciting environment.

At Apple, there is an opportunity to do and to be your best and to make a difference. Inaddition to being a fun, exciting and rewarding environment, it’s one where there’s an

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openness and a shared vision. Learning and growth are the norm, not the exception.However, it’s discipline that sets us free, and we recognize both individual and teamcontributions.

Apple people are paradigm shifters . . .

We offer the world alternative viewpoints on critical issues of productivity and learning.The traditional perspective on productivity focuses on institutions. It systemizes workflow using large scale data processing technology. Productivity is expected to increaseby giving institutions the means to do complex work faster. Apple’s alternative view-point on productivity focuses on people. We are a company that wants to be a catalystin the process of discovering new ways for people to do things. We believe thatincreased productivity will result as people invent better ways to work with the enablingtools of better personal computer systems.

The traditional viewpoint on education focuses on institutions as the primary place oflearning. Education is seen as a structured rule-bound process. The goal has been toprepare students for a life in the industrial economy. Apple’s viewpoint on education isdifferent. We see learning as a growing lifetime experience. Learning should be an inter-esting interactive process unbounded by rules and open to experimentation. We areinterested in enabling people to turn information into knowledge and to prepare themfor the information economy.

Apple Directional Goals:

We have established seven key directional goals which will be important in strengthen-ing Apple’s identity in the years ahead.

1. Independence

We believe we can best achieve our identity if we have the freedom of being an indepen-dent company. We are therefore not interested in acquisitions or mergers on only theirfinancial merits. Innovation will be required across every area of our company and wemust have the uncompromised commitment to take risks and try new things. This is hardto do if we were to become part of a different culture with a different identity and set of val-ues.

2. High Market Capitalization

Market capitalization is the total value of a company as determined by the marketplace.It summarizes investor’s assessment as to profitability, technology, growth, assets,management and competitive position. In today’s era of takeovers, a high market capi-talization is one of the few ways we have of protecting our independence.

3. Superior Customer Value

We want to set an expectation for customer satisfaction that is vastly different and bet-ter than any of our competitors. Apple’s way starts with a passion to create awesomeproducts with a lot of distinctive value built in. Then we must learn to do new kinds ofthings in the future which will keep users satisfied after they have bought our products(e.g., ease of use, reliability, installation and service, etc . . . ).

4. Exceptional Growth

We want Apple to consistently grow faster than the rest of the industry. To accomplishthis we must make real strides in improving the functionality of our personal computersystems. We see ourselves in the role of creating phenomenal enabling tools which willstimulate people to learn new and better ways of doing things. We believe that mean-ingful differences, not better sameness will be what drives our long-term growth.

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5. 21st Century Model Company

In the second wave of management, large size was considered a strategic advantage.We believe that in the future, diversity and flexibility will be more important than corpo-rate size in determining the winning companies.

We have a passion to make quality a building block in every area of our company.

We believe that outstanding individuals if given the charter, resources and right environ-ment can personally make a difference in the success of our enterprise.

In the process of pursuing Apple’s identity and directional goals we believe we will pio-neer many exciting new ways of doing things which may be adopted by the best com-panies in the 21st century. We are excited by the prospect of learning and expermentingwith new ideas.

6. Dynamic Global Company

We have a passion to change the world, not just the USA. The parameters of theworld’s economy have shifted and we expect Apple to be leading the way as a power-ful innovator for the future.

7. Grow Extraordinary People

Apple has always believed in attracting most talented people to the company, and thenproviding them with an extraordinary environment in which to grow. Consequently, it’sincumbent on us to provide comprehensive management training to the presentemployees who will run the company in the years ahead.

Let the journey be the guide . . .

We have chosen directions for Apple that will lead us to wonderful ideas we haven’t asyet dreamed. Yet, how successful we are in making progress towards our directionalgoals will be the evidence of how well we are doing towards living up to the vision ofour corporate identity. In other words, our directional goals are consistent with our iden-tity yet do not set limits on our creativity.

Our overall corporate strategy is to use innovation to create growth by enabling peopleto create new ways of doing things. Innovation will be the basis of the meaningful dif-ferences which we believe should be sustainable over the long term.

Ford Motor Company

Henry Ford II

VALUES

How we accomplish our mission is as important as the mission itself. Fundamental tosuccess for the Company are these basic values:

• People – Our people are the source of our strength. They provide our corporate intel-ligence and determine our reputation and vitality. Involvement and teamwork are ourcore human values.

• Products – Our products are the end result of our efforts, and they should be the bestin serving customers worldwide. As our products are viewed, so are we viewed.

• Profits – Profits are the ultimate measure of how efficiently we provide customerswith the best products for their needs. Profits are required to survive and grow.

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GUIDING PRINCIPLES

• Quality comes first – To achieve customer satisfaction, the quality of our productsand services must be our number one priority.

• Continuous improvement is essential to our success – We must strive for excel-lence in everything we do: in our products, in their safety and value – and in our ser-vices, our human relations, our competitiveness, and our profitability.

• Employee involvement is our way of life – We are a team. We must treat eachother with trust and respect.

• Dealers and suppliers are our partners – The Company must maintain mutually ben-eficial relationships with dealers, suppliers and our other business associates.

• Integrity is never compromised – The conducts of our Company worldwide must bepursued in a manner that is socially responsible and commands respect for its integrityand for its positive contributions to society. Our doors are open to men and womenalike without discrimination and without regard to ethnic origin or personal beliefs.

Vision for General Motors

Ross Perot—1980(market share: 45%)

• Starting today, GM will become the finest car company in the world.

• Every GMer must understand that there are too many car plants in the world.

• From this point forward, GMers will fight in the marketplace, not with each other.

• Starting today, the power struggle between the financial staff and car builders will notbe tolerated.

• Starting today, GM’s relationship with the UAW will be a team relationship, not anadversarial one.

• Starting today, GM will listen to its customers, listen to its dealers who sell the cars tocustomers, listen to the men and women who build its cars in the factories, and listento the engineers who design its cars.

• Starting today, any commitment made to GM people and customers will be kept.

• The first priority will be to fix every single substandard item on the existing cars beingsold today.

• Starting today, GMers are going to work together, using brains, wits, creative abilities,and initiative as substitutes for money.

• GM will eliminate all waste, starting at the top and working through every level of thecompany.

• A new state of outside directors will be prepared, who must have substantial stock inGM, for approval by stockholders.

• GM leaders will resign from any activity that takes them away from their responsibili-ties at the company.

• Starting today, words like management, labor, bonus-eligible, salaried, and hourly willno longer be used.

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• As of today, people who manage in an authoritarian way will be fired.

• All bonuses and financial incentives will be determined by a single set of rules.

• From this point forward, the primary financial incentive offered will be GM stock.

• Starting today, as GM goes through a transition, all sacrifices will start at the top.

• Starting today, the word management will be replaced by the word leadership at GM.

• The leaders of GM, starting today, will accept full responsibility for the design andengineering of all GM cars.

• Starting today, most committees will be scrapped.

• No longer can a person rise to the top at GM by not doing anything wrong. The futurebelongs to people who are willing to step out front, take risks, and accept responsibil-ity for their mistakes.

• Starting today, all copies of Sloan’s book My Years at General Motors will be thrownaway.

Johnson & Johnson

Our Credo

James Burke, CEO

We believe our first responsibility is to the doctors, nurses and patients, to mothersand all others who use our products and services.

In meeting their needs everything we do must be of high quality.We must constantly strive to reduce our costs in order to maintain reasonable prices.

Customers’ orders must be serviced promptly and accurately.Our suppliers and distributors must have an opportunity to make a fair profit.

We are responsible to our employees, the men and women who work with us throughout the world.

Everyone must be considered as an individual.We must respect their dignity and recognize their merit.

They must have a sense of security in their jobs.Compensation must be fair and adequate, and working conditions clean, orderly

and safe.Employees must feel free to make suggestions and complaints.

There must be equal opportunity for employment, development and advancement forthose qualified.

We must provide competent management, and their actions must be just and ethical.

We are responsible to the communities in which we live and work and to the worldcommunity as well.

We must be good citizens - support good works and charities and bear our fair share of taxes.

We must encourage civic improvements and better health and education.We must maintain in good order the property we are privileged to use, protecting the

environment and natural resources.

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Our final responsibility is to our stockholders.Business must make a sound profit.

We must experiment with new ideas.Research must be carried on, innovative programs developed and mistakes paid for.

New equipment must be purchased, new facilities provided and new products launched.

Reserves must be created to provide for adverse times.When we operate according to these principles, the stockholders should realize

a fair return.

Discussion Questions:1. Which of the vision statements would motivate you personally?2. Which do you think represents the best leadership?3. What are the strengths and weaknesses of each statement? What’s positive, and

what’s not?4. To what extent are these statements consistent with the principles of leading pos-

itive change?5. What advice would you give these leaders if you were called upon to coach them?

Lee Iacocca’s Transformation of Chrysler—1979–1984

This is a transcription of speeches by Chairman Lee Iacocca to Chrysler’s top man-agement team from the time he became CEO and Chairman in 1979 until the dra-matic transformation was completed in 1984. The previously confidential videotapeswere compiled and edited by Professor Kim S. Cameron at the University of Michiganand are used to exemplify the leadership of change. These speeches were intended byMr. Iacocca only for an internal and confidential audience, not for the press, stock-holders, or the general public. Duplication without permission of the University ofMichigan Business School is strictly forbidden.

The transcript begins with the new president of Ford, Paul Bergmoser, explainingthe state of the company and of the economy in 1979. He then introduced Mr.Iacocca to the top management team for the first time. The entire transcript fromthat point on is from Mr. Iacocca.

1979Paul Bergmoser, President:I don’t have to tell you that we are meeting at a very critical time in the Corporation’s his-tory. You don’t need a recitation of the problems that are facing us. At the same time thatthe volumes and penetrations are down, we are up against the most costly product pro-gram in Chrysler history. There is no margin for error as we plan for next year 1980. Ourfirst slide today gives you a perspective of the current situation. It shows how we aredoing thus far in 1979. I said thus far—the year isn’t over yet. In our presentation to thegovernment, we predicted we would lose a billion seventy-one million. That is aboutwhere we will come out if we move the sales bank, move the imports, get our manufac-turing efficiencies, and meet all the commitments between now and December 31. Insome areas we are coming in on target, others we are off. For example, our market sharewas less than we expected largely because the market went haywire. Consumers begin tolose confidence when our problems hit the headlines. We are looking at a sluggish econ-omy, double-digit inflation, high interest rates that put a lot of pressure on both dealersand retail customers. Much has been written and much has been unspoken about theChrysler crisis and its causes. A considerable amount of the rhetoric has dealt with pastmanagement as being one of the primary causes of that situation. Let me tell you how I

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stand on the matter at the moment. All of you fellows have survived personnel reductionsand corporate reorganizations. You are, in the eyes of the outsider, now the new man-agement. That goes for me, I am new, but every one of you is just as new in terms of theNew Chrysler Corporation. We will be judged by what we do in 1980 and ’81. We havestated to the government and to the world at large that those will be the years whenChrysler will recover from its current record loss position. We will not live to see 1981 ifwe don’t do the job in 1980. So, in my view, it no longer serves any purpose to look backand reference your problems to the past management. Let Mr. Iacocca and let me handlethe past. You will be a success or you will be a failure on the basis of what you do in 1980.

It is going to be a real tough year, a very tough year, perhaps, the toughest in the his-tory of your corporate life! If you don’t feel like being on my team in this fight, you hadbetter come and see me very soon now, because I am counting on each and every one ofyou to do the job better than it has ever been done before. If the objectives are too tough,too hard, and too disciplined, come and see me now, because I need the help of everyone of you. I am confident that we can carry it through. Now, fellows, in time, I think peo-ple are going to look back on this management team with respect and admiration for thejob they have done. This is the New Chrysler Corporation. And I want to introduce theman who is providing the leadership and direction for all of us to carry out our day-to-daytasks, Chairman Lee Iacocca. Lee!

Lee Iacocca, CEO and Chairman:As I said in my opening statement to Congress, this has not been a vintage year for me,for Chrysler, for the auto industry, or for the whole damn country. And, I guess that someof you must feel the same way. As Paul said, we lost a lot of money. Over a billion dollarsis a lot of money. Our market penetration at the moment is down to what you might calldeplorable levels. Some of our customers, or maybe I should say, some of our former cus-tomers, aren’t really that confident that we are going to make it. Still, there are somegood things to say about 1979. I believe it has been a year in which we did more than justsurvive. We reduced our fixed cost. We did proceed to put in place a product plan thatwill help us return to profitability. We took steps to improve our profit margins. In short,we invested a lot of time and money in our future.

First, I would like to give you an assessment of what is happening with our requestfor the loan guarantees* In Washington, and then second I want to expand on the con-cept of the “New Chrysler Corporation” mentioned by Paul in his presentation. There hasbeen a lot of talk about our chances for getting legislation out of the Congress in time tohelp the Chrysler Corporation. Well, I want to tell you first hand that things, as of thisafternoon at least, do look good. The energy picture is muddled and threatening as ever.I just saw in the paper this afternoon that Saudi Arabia is going to go for six dollars a bar-rel increase. That means the rest will go for seven or eight, and that’s got to be bad news.The continuing crisis in Iran; production cut backs by other OPEC nations, Libya, Iraqand these way-out guys; and the lack of a sound, reasonable national energy policy righthere; all of those put together are really what you would call bad news, not good news.But, what we have to do is survive, and more than survive, become profitable as soon aswe can. And as Paul said, it won’t be real easy. In fact, the first six months of 1980 will bepure hell, in my opinion, and I might as well tell it to you that way. There will be demand-ing challenges facing all of you, and me, in the months ahead. So this brings me to mysecond point today that I want to cover briefly.

When I say these are challenges facing us, I want you to know that the “us” is youand me. And, it is the new Chrysler Corporation. From the day that President Carter

*Chrysler had appealed to the federal government to guarantee its bank loans, becausethe amount to be borrowed was more than the value of the company at the time.

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signs into law the Chrysler Loan Guarantee Program, a new era begins at Chrysler. Anddon’t make any mistake about it, there will be a great deal to accomplish from that dayforward. Much will be asked of you, and much will be expected of you. To begin with, wewill have to re-launch Chrysler. We have to rebuild confidence, first amongst ourselves,then the rest of the Chrysler family, and most important with our customers. And this willnot be easy. But, the early signals clearly show that it can be done. In spite of a dismalmarket this year, we have achieved some significant and positive results. We did take ahundred and thirty thousand orders for vehicles in November. We did move twenty thou-sand out of our sales bank.** And, I have to mention sales bank one more time, becauseit may be the last time you will hear me say it. That thing is in its death throes. I got tothinking on the way over here that we have plans to move those last ten thousand at dis-tressed prices, and forget that we ever built them. And, I thought, I want him to keepone. And I want to do what they do when you finally pay off the mortgage, you burn it onthe front lawn. I want to burn that last damn one on the front lawn of headquarters, so,the whole world knows it is over!

For the next ninety days each of you in this room has to play salesman. And, to dothat, all you have to do is get in one of our cars, and expose it, and demonstrate it to some-body. Those are our four new cars, and that market still is pretty good, even though it isdown a little. And, those four cars — if you have driven them lately — are not just com-mercial, they are fine cars that everybody in this room should be proud of. They are goodlooking cars. They’ve got good features, and they don’t rattle and leak as much as their pre-decessors the year before. At the new Chrysler Corporation we will build them better, andwe will back them better. If we don’t, nothing else is going to matter anyway, and we willhave no one to blame but ourselves. What will be required to do these kind of things, tokeep them as promises and not let them become just sales gimmicks, is hard work anddedication and, most of all, the realization that the new Chrysler Corporation is a team. Ateam that openly discusses its problems and freely exchanges ideas on how to improve ourefforts and willingly accepts responsibility for performance. What will be required torebuild confidence in this company is an active participation in its survival effort.

Over the next months the new Chrysler Corporation will be engaged in efforts toraise a lot of capital. But, with the products we have, with the improvements we havemade, with the plans for the future, being as exciting as I believe they are — that moneyis going to be available to us. Count on it. In fact, what is happening with this corporationright now is unprecedented in the history of our industry and maybe the whole country.Just think of it. The UAW is willing now to reopen its contract settlement in order to par-ticipate in the effort of the new Chrysler Corporation and to make it profitable. MayorColeman Young has indicated that Detroit is willing to offer a hundred and fifty milliondollars in Chrysler support. We expect a minimum of three hundred million dollars fromCanada. I say three hundred million, but it could be as much as a $1.2 billion forCanadian operations so that we can go first class in a couple of programs we haveplanned. Other states with Chrysler plants and operations have expressed a willingnessto help and their commitment comes up to about a hundred million dollars. We are con-fident that the Japanese banks will restore our letter of credit agreement under which wecan continue to import vehicles from Mitsubishi. We are also offering right now, or will bevery shortly I should say, a preferred stock offering to Chrysler suppliers and dealers. If weare as good as we think we are, we will sell four hundred million dollars of equity stock toour family, suppliers and dealers. If we are not good salesman, we sell two hundred. Sothe number is two hundred to four hundred million dollars. By mid-January we will dis-cuss the role of the suppliers and the dealers in this offer. Our dealers’ lobbying efforts in

**The sales bank simply refers to the excess inventory of unsold cars.

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Washington in our behalf were nothing short of sensational, and I think that they will bea big part of turning this Congress around.

Before you go home for the holidays, I would like to ask you to do this. In just a fewshort minutes, I want you to ask yourselves, honestly, what have you done to help thiscompany, your company, during the last twelve months. Put it down. Don’t fight with it.Just put it down. Then throw it away. If you want to read it to your wife or your kids, finebut then throw it away. Then, after you have done that the more important part is getanother piece of paper, a clean sheet of paper. Put down the things that you plan to do foryour company, and for yourself, in the next twelve months, the year 1980. We will get thevote of confidence we need from the government. That is, I think, assured. It will then beup to all of us in the new Chrysler family to share that confidence, first amongst ourselvesright in this room, then to spread it through all the family members, and eventually to thebiggest family of them all, our customers out there. What I am saying to you is that wehave all of the essentials in place. The basics are here. And more important, we have gotthe people, the team, to do it. Let me make it clear that this new Chrysler is not a mixedbag of hanger-ons mixed in with a little new talent from some other corporations. It is notthat at all. It is a new, unified team that starts a new decade. Remember, on New Year’sEve January 1st, we start a new ten-year look.

One final thought to all of you. Somebody wrote a hit song called, “We Are Family,”and Willie Stargle picked it up as a model to inspire his team to win the World SeriesChampionship. Well, the reason that I mentioned it to you is that we, the new ChryslerCorporation, are Family. Else, how is it possible to raise a billion and a half dollars fromour own constituents? We do have a lot to do, and it is going to be tough. But because weare family, we can do it. So, that is all we have to say to you today except, have a niceChristmas all of you, and let’s start the New Year with a Bang!

1980While the economy was coming down around our ears, we put together a financing pack-age to raise better than two billion dollars in non-guaranteed funds. We put together anoperating plan that showed we can continue as a growing concern without any govern-ment help after 1983. Secretary Miller and Mr. Volker said, it was by a long shot, the mostcomplicated package in the entire history of American business. It involved the govern-ments of five nations, local governments, more than four hundred lenders, and all theconstituents of a very big industrial company — suppliers, dealers, employees, and theshareholders. We put the package together in record time. Within two weeks of the dead-line that we set for ourselves, the Treasury Department, the Loan Guarantee Board, andsome hardnosed consultants have scrutinized — and believe me they have scrutinized —all of our plans, every aspect of our business. And the hardheads, and the hard noses,came out and said they liked what they saw. No matter what your read in the press, thatis what they ended up saying. They said that our operating plan code was realistic andfeasible. They said that we demonstrated that we can continue as a growing concern, andthat, simply stated, is why they gave us a guarantee. The guarantees give us a fightingchance we need to complete our rebuilding program.

In the meanwhile, we need to keep on doing right all of the other things that are soessential to our future. We talked about what that involved last December here, and Iwould like to take just a minute to look at the report card and see how we faired since welast met as a group. First, we talked about people. That is the strength of any businessorganization. We have kept almost, not all, but almost all of our top-flight people. We havebeen able to move some into key spots like Jack Withroe in engineering. We haveattracted some very impressive new people at the organization to supplement our pres-ent staff. Don Dellerosa came on board as Vice President of Design. I worked with him fora long time. He is the best designer of small cars in the world. Dick Dow came on board

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as Executive VP of Diversified Operations. Dick has been in charge of production at VW-America, and before that he was at GM, where he was the youngest plant manager intheir history. Dave Platt came on as Vice President of Procurement and Supply. He isexperienced. He will make sure all of our suppliers meet their quality targets. I could goon and on, but the management, I am trying to say, is strong.

We have the plans and programs to meet our objectives, so I hope that everybody inthis room knows and understands them. We have a great management team. I think it’sthe best in the business. We have the sales program. We are improving quality. Ford andGM will have to catch us from now on. We have the innovations to set us apart from thecompetition. We have the products that deliver the value that customers want today. So,in spite all of the difficulties created for us, and all the obstacles put in our way, our plansare finally starting to come together. We see some real daylight.

The Loan Guarantee Board looked at a lot of factors when they considered our appli-cation — cost projections, industry volume, the debt load, the product plans. But when Italked to them privately, the most important consideration of all was whether thisChrysler Team had the guts, and the capacity, and the ability to see this program throughto the end and to bring Chrysler back to profitability. The guy who asked me that most isa guy I admire a lot — Paul Volker, of the Federal Reserve. He asked, “Are you really sureyou have got the right people to stick it out?” They looked hard at us, at you really. Theylooked at what you have accomplished so far, and what’s left to do. They must have seenwinners in some of you because they decided to put the country’s money on you. Whichis a big gamble. They put a billion and a half on the line.

1982Good evening. We announced our 1981 results this morning. For the total year we lostfour hundred and seventy-six million. That is a little less than the analysts said that wewould lose. They said that we would lose, for sure, five hundred million. One year ago —if you just stop to think about what was in the news four months ago — all of the smartmoney on Wall Street was betting that Volker’s scandalous interest rates, the advent ofGM’s new competition the ‘J’ car, and the total collapse of the car and truck marketwould certainly wipe out Chrysler in 1981. This was their year to die. The smart moneywas wrong again, because we not only survived this worse depression in the history ofthe automobile industry, but I think that you will agree we have come through as astronger and more competitive company.

We continued our program to cut costs and become even more productive in theyear ’81. We performed major surgery to bring our cost under control. We looked at all ofour operations, plant-by-plant and job-by-job, and over the last two years we have consol-idated these operations. We have now closed a full twenty plants. We have cut our fixedcost by well over a half billion dollars in the last four months. And we have reduced oursalaried employees by half, from about forty thousand to twenty-one thousand. Our breakeven is now half of what it was two years ago. We twenty thousand are doing the work ofthose forty thousand, but we are selling more cars and building more cars. What the hellwere we doing wrong? Since the first of this year—we have taken several importantactions to build an extra cash cushion to ride out the recession and protect our futureprograms. Last Friday we reached an agreement to sell Chrysler Defense, that is the tankbusiness, to General Dynamics for three hundred and forty-eight point five million dol-lars. I have to say to you; gentlemen and ladies, that decision was a tough call. ChryslerDefense is a strong subsidiary with some great people, a lot of whom worked for thiscompany for a lot of years. We have forty years of history tied up in the tank business. Wewere part of the Arsenal of Democracy in World War Two. I can tell you, our guys diddesign and build the best damn battle tank in the entire world. They had some very excit-ing and profitable new products on the drawing board, and we had some of the best

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talent in this organization running that place. Nobody wanted to give all of that up. But, intoday’s economic climate, we had to balance our attachment to that company against theneed to build a substantial cash cushion with which to ride out this very serious economicdepression that we are in. Our charter is to concentrate on cars and trucks. That is why wegot the Loan Guarantees, and that is why we are here. Our job is to build the best cars andtrucks, and take on the Japanese, even if just to be patriotic, but that’s our job.

Here is our problem put as simply as I know how to put it. Today, it costs us exactlyseventy-nine hundred dollars to build the average Chrysler car, and we sell them on anaverage for seventy-five hundred. We make our money today on Chrysler Financial, onMexico, and on parts sales. We had better start to learn how to make money on cars andtrucks, because that, again, is our business. We have to live within our budgets in ’82, astight as they are with no cost overruns, and that’s nobody!

Now let me end with this note. We have all come through a hellish couple of years.I know we all feel that way, I do. But together, we have established Chrysler as a leader inthe rebuilding of the American auto industry, and maybe of the entire American Industry.Together, we have set an example of what determined Americans can accomplish in theface of great adversity. We are on the edge of success. We are not quite there, but we areon the real sharp edge of success. If the management, the Union, all of our employees,and the dealers and the suppliers—all continue to work together towards our commongoals, we can put the finishing touches on maybe the greatest chapter in the history ofAmerican Business.

1983We really are poised, no matter what the economy throws at us, no matter what theJapanese or Ford or General Motors throw at us, not only to stay in business but to pros-per and do very, very, well. I also said to you late in July in a meeting with PresidentCarter, that we now own our company again. I announced that we were paying off theloans, and that means that we are all alone now, and we can make our own decisions andwe can make our own mistakes.

We have got to get this quality thing behind us. We have come a long, long, way.Warranty is down thirty eight percent the last couple of years, and our quality is up, butthe track is fast, as you know. Ford is doing better on things gone wrong, and GM and weare a little worse than they are and Japan is still out-doing us all. So, we can have five andfifties, and we can have good power trains, and we can have five year warranties, andthink about ten year warranties, but we have got to get rid of some of this crap we aredoing. We’ve got some problems, but they are not big problems, I don’t think.

I like to think that the officers, the first team, lets call it, the varsity, is good enoughthat each of us in the top senior management has ten charges out there. I can lookaround the room, and I feel that ten of you are my protégés. I watch to see what you aredoing. I look at your future, and I get to know you well, and I take care of you, becauseyou take of the company and me. At our level, this level, everybody is on the team.Everybody has gotten the message. Nobody believes there is an old way of doing it. Well,you have got your work cut out for you, and here is your assignment. It is a very generalone, but it is the only thing that will make this company click. Out of the three hundredodd of you in here, each of you must accept as your charges ten subordinates. Ten timesthree hundred is three thousand, and that’s the group we are looking at. The next threethousand has got to get the word. That is the only way we are going to continue to buildon the progress that we have made, and we have made some fantastic progress. I hopethat you are feeling that you are a big part of it, because you are. Every one of you, look toyourself, and look within yourself. When you manage, a good manager is a multiplier anda motivator. That is all he is. He can multiply himself, every day, wherever he is. Peoplelook up to him, and people work, because they know what their objective is, and they go

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out and hustle, and they do it because the boss is leading them and motivating them.Now, if you would just do that, we have got a big year ahead of us. While we are countingthe two billion dollars back home, you will be really putting the seed corn in where itcounts. Multiply yourselves times ten and nothing will stop us.

When the press asked me, what is the greatest thing you got out of the last fiveyears, I say: “Hot a hell of a lot. It got tiring.” But I did take one thing. It is the realizationthat six hundred thousand people, pulled in the same directions. Pulled the oars in thesame way. Everybody felt they were getting the fair shake, the old equality of sacrifice. Itis amazing how we can move a mountain. So, if you see anybody pulling apart, or theydon’t want to be on a team, you have got to straighten them out. I will end on this note.I will assure you that just as we are paying you for having reduced warranty costs, lessengineering changes, and better market share, the new barometer will be how you aredoing with your little nest of ten people. Some of you, I know, have twenty or thirty, butstart with ten. I can settle for that right now if everybody in the room signed up for it.

1984I would think that in the next five years, we start a new era. We have got to talk innova-tion in product, and we have got to talk innovation in service, and in manufacturingprocesses. I think that is going to be key to how well this corporation does. I think thatwe are on the threshold of doing great things together. I think that anytime any company,for whatever the reason, reports the one and a half plus billion dollars in six months, youshould all be damned proud. As one of the reporters already said, “That is their peak.”Two analysts followed it up, yesterday, and said “Chrysler will never make over eight hun-dred million dollars again in a three month period.” They make it sound like I was a fluke.Well, we are going to show them that it is no fluke. True, it has been driven by volume,driven by rich mixes, but it has been driven by productivity improvements, and qualityimprovements, and having the right products for the market—rich convertibles andT–115s [minivans] that are a smash.

But the two areas that are not market driven but are management driven are the twoyou are not doing hot on. That is quality and market share. Market share, if you includeT–115s, is doing pretty damn well. But we are not going to get to twelve percent. Andquality is a disappointment. GM has caught up with us. The Japanese are way beyond us.And Ford is losing us in their dust right now. I take nothing from you or this managingteam, but you have got to look at the whole cart now. Why is it, on the two toughies, com-peting head to head every day in the market, even with voluntary restraints on the part ofthe Japanese, against GM and Ford, we can’t seem to meet our quality objectives, and inmarket share we are flunking out. Now, when I say it that way, we have come a long wayfrom three years ago. Were shipping crap, frankly. And now you can be proud of what youare shipping. I am glad to hear it, I hope we don’t do it every day, but I am glad to hearfrom time to time we shut a line down to get the message across that quality is not onlythe first priority but it could well be in the next twelve to twenty-four months our only pri-ority.

We are going to have to join up with new technology, and we are going to have tocut out a position for ourselves at Chrysler in electronics, certainly new materials andcomposites of all kinds. That is on our strategy list. I asked one of our top people whycan’t I just order on a requisition tomorrow, a sports car, and I would like to do it intwenty-four months. You say, I can’t do that. I say why? You say, we don’t know how. But,what the hell, it is a car, and they’re selling like hotcakes. We don’t know how? Well, youhave got to ask yourself, why not? You can’t just claim that it’s money. We’ve got plenty ofmoney if we want to do something like that. While they are all reacting on our T–115, wehave got to react back to them in some of these markets. Those aren’t little niche mar-kets. That may be the market of the future for young people.

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Discussion Questions:1. In 1979 with the company in such bad shape and the economy so dismal, how

does Iacocca create a climate of positivity? What symbols are used? What smallwins were identified? What is interesting about his language?

2. In 1980, how did Iacocca ensure credibility? Who is the enemy? What was inter-esting about his language?

3. In 1982, how did Iacocca maintain positivity? What is the vision for the com-pany? What symbolic events are used? How is commitment developed?

4. In 1983, how is the vision institutionalized? How does Iacocca personally exem-plify the principles he espouses?

5. In 1984, given the dramatic turnaround of the company, why doesn’t Iacocca cel-ebrate? What is his motivation? Why does he mix confrontation and challenge inhis positive message?


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SKILL PRACTICE

EXERCISES IN LEADING POSITIVE CHANGE

Strongest-Self Portrait

In the Skill Assessment section of this chapter you were asked to identify 20 people whocould provide feedback to you regarding when you were at your very best. Now that youhave obtained that feedback on your strengths, you will want to analyze that data to cre-ate a best-self portrait. Read all of your feedback and take notes on the key insights. Lookfor commonalities across the individuals who provided you with feedback. Create themeswhere you find commonalities, and link the examples to it. You may find it useful to usea table such as the following.

Now, create a portrait of your strongest self that captures the themes in your data. Here aresome reflective questions that you may want to consider as you craft your strongest-selfportrait.

❏ Who provided the data? What did you learn about them?❏ What does your best-self portrait look like?❏ What have you learned about your own key strengths and uniquenesses?❏ What was surprising to you about your feedback?❏ What circumstances bring out your best?❏ How do you intend to follow up or capitalize on this feedback?❏ What career or life implications does this feedback hold?❏ What has changed as a result of obtaining this feedback?

COMMONALITY/THEME EXAMPLES GIVEN MY INTERPRETATION

1. Creative 1. Innovative builder of new My ideas tend to be bold projects at work and creative. I tend to

bring a new vision to people. I am innovative and a builder.

2. Found new solutions for old problems

3. Guided the company in transforming itself

2. 1.

2.

3.

3. 1.

2.

3.

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You will want to actually write up your conclusions and your commitments as a result ofreading through the feedback. Writing will have a clarifying and focusing effect, and youare not likely to get this kind of data very often in your life. Don’t miss the opportunity tocraft something meaningful to yourself.

Positive Organizational Diagnosis

Select an organization that you can diagnose. Your objective is to identify the strengthsand peak experiences in the organization rather than the problems and challenges. Thesekinds of data are seldom gathered in organizations, and people are not often asked thesekinds of questions. However, in every organization, something works well. When cued todo so, people can always identify things that are spectacular about their organization. Inaddition, the questions we ask and the language we use help determine our vision of thefuture. People are more comfortable moving into the unknown future when they carryparts of the past forward. That is, when they have experienced success in the past, theyare more willing to pursue a vision of the future, knowing that they have achieved extra-ordinary success sometime in the past. They are confident that they can do it again.

Here are some examples of questions you should ask in diagnosing the positiveaspects of an organization, a group, or even your own family.

Best-in-Class: Put yourself in clients’ or customers’ shoes. What would they saymakes this organization the best there is?Careers: What do you love about this organization that makes you want to cometo work each day?Leadership: Who are the leaders in your organization you admire the most, andwhy? What do they do?Communication: When did you have an extremely satisfying and productiveinterchange with someone you care deeply about?Teamwork: When have you experienced delight at extraordinary cooperation andteamwork that emerged in this organization?Culture: What is especially fun, energizing, revitalizing about your culture? Whatturns you on?Aspiration: What are your highest aspirations for this organization? What do youreally hope for?Work: What is the best you have ever seen accomplished in the work here? Whatwas achieved that exceeded everyone’s expectations?

When you ask these kinds of questions, you will detect more enthusiasm being displayedby the person responding, and you will note an unleashing of positive energy. This is incontrast to more typical questions used in organizational diagnosis:

What are your major problems and challenges?Where are your deficits?What is troublesome to people in this organization?What needs fixing?In what areas are you missing your targets?Who is doing better than you are, and why?

Craft your own interview format for conducting a positive diagnosis of an organization, agroup, or a family. Use the positive questions above as a guide. Interview a representativesample of people in that organization (or all the members of your family). Now, write up

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the equivalent of a best-self portrait for the organization. Address these questions regard-ing the organization.

What are its strengths and unique qualities?In what ways can it capitalize on its competencies?What is the vision that drives the organization?What recommendations do you have for positive change?

A Positive Change Agenda

Write out a detailed plan for leading positive change in an organization in which you areparticipating. You need not be the formal leader of that organization, since most realchange is initiated from places within the organization rather than the leader’s office.Most great leaders simply capitalize on the ideas and agendas of their people.

In crafting your plan, address the following questions with very specific and action-able ideas. Do not simply say something like: “I’ll treat people better.” That is not specificenough and does not identify an action. Instead, say, “I will compliment someone everyday.” That’s more doable and measurable.

1. In what ways will you work to create a positive climate? What will you do?2. In what ways will you create readiness in others to pursue positive change?3. What is your specific vision of abundance? How will you communicate it so that

it is acceptable and energizing to people?4. How will you generate commitment to that vision among others?5. What will you do to create irreversible momentum for your positive change?

Now, identify the specific things you will need to do personally to exemplify and modelyour positive change. How will you enhance your own credibility?

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SKILL APPLICATION

ACTIVITIES FOR LEADING POSITIVE CHANGE

Suggested Assignments

1. Find someone you know well who is working in an organization. Teach him orher the principles of leading positive change. Use the concepts, principles, tech-niques, and exercises provided in this chapter. Describe what you taught andrecord the results in your journal.

2. Give genuine positive feedback on a regular and consistent basis to one or more ofyour colleagues. Do it at least daily. Observe the extent to which your relationshipchanges over the next month.

3. Do a systematic analysis of the things that occur in your life for which you aregrateful. What is going right, and what makes life worth living? Consider yourjob, family, school, and social life. Keep a “gratitude journal” for at least a semes-ter (a three-month period). Make an entry in it at least once a week. Note whatelse changes in your life compared to before you began the journal.

4. Identify at least one person in your circle of acquaintances who is positively ener-gizing to you. When you get around this person, you simply feel better. Make cer-tain that you interact with that person on a frequent and consistent basis.

5. Identify an example of best practice. That is, find someone or some organizationthat is unique in being the best there is at something. Try to identify what it is thataccounts for that extraordinary performance. What factors could be generalized toothers or to other settings?

6. Establish an abundance agenda that you aspire to accomplish this year. Make itcompatible with the top priorities in your life. Specify the behavioral action steps,the reporting and accounting mechanisms, and the criteria of success that youwill implement. Share this plan with others you know so that you have an incen-tive to pursue it even after you finish this class.

7. Identify a symbol that can serve as a constant reminder of your own—or yourorganization’s—vision of abundance. Select something that is positively energiz-ing and that can remind you every time you see it that you are pursuing a mean-ingful, uplifting vision.

8. Establish a close mentoring relationship with someone with whom you work orgo to school. Your mentor may be a professor, a senior manager, or someone whohas been around longer than you have. That relationship should build your self-esteem and be energizing to you. Make certain, however, that the relationship isreciprocal, not one-way.

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Application Plan and Evaluation

The intent of this exercise is to help you apply this cluster of skills in a real-life, out-of-classsetting. Now that you have become familiar with the behavioral guidelines that form thebasis of effective skill performance, you will improve most by trying out those guidelines inan everyday context. Unlike a classroom activity, in which feedback is immediate and oth-ers can assist you with their evaluations, this skill application activity is one you mustaccomplish and evaluate on your own. There are two parts to this activity. Part 1 helps pre-pare you to apply the skill. Part 2 helps you evaluate and improve on your experience. Besure to write down answers to each item. Don’t short-circuit the process by skipping steps.

Part 1. Planning

1. Write down the two or three aspects of this skill that are most important to you.These may be areas of weakness, areas of strength, or areas that are most salientto a situation you face right now. Identify the specific aspects of this skill that youwant to apply.

2. Now identify the setting or the situation in which you will apply this skill.Establish a plan for performance by actually writing down a description of the sit-uation. Who else will be involved? When will you do it? Where will it be done?

Circumstances:Who else?When?Where?

3. Identify the specific behaviors in which you will engage to apply this skill.Operationalize your skill performance.

4. What are the indicators of successful performance? How will you know you havebeen effective? What will indicate you have performed competently?

Part 2. Evaluation

5. After you have completed your implementation, record the results. What hap-pened? How successful were you? What was the effect on others?

6. How can you improve? What modifications can you make next time? What willyou do differently in a similar situation in the future?

7. Looking back on your whole skill practice and application experience, what haveyou learned? What has been surprising? In what ways might this experience helpyou in the long term?

04-014 Ch10 pp4 3/12/04 5:43 PM Page 533

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