From the Founding EditorO

ur choice of theme—‘‘The Devil’s in the Details’’—is especially relevant
when we review various aspects of change theory and practice. In discussing this issue with us, Peter Senge made the cogent remark that the trouble withmost change models is that they are not very practical. It is all well and good toform steering committees and to specify the relevant steps for a change program
to succeed, but rarely can the reader gure out just how to go about implementing any of it.
How to correct this state of affairs? One way, reected in this issue ofRe ections, is to give the reader both some tools for change management andsome stories that are very concrete, that tell the reader in detail what was done,
why, and how. Even at that level of concreteness, questions of ‘‘how do you dothat’’ will abound, but with enough cases and enough models and tools, wehope to provide suf cient detail so that readers can get a real feeling for theactual elements of a change process.
On another note entirely, I want to comment on my own piece in this issue,
a piece that pulls together the change tools that I have found most useful inplanning and implementing change. In the title, I have emphasized that change
and stability are two sides of the same coin, yet none of us give enough attention to thestability side. Kurt Lewin understood that it is human to want things in a state of equilibrium so that we can predict what will happen next. None of us want to live in a perpetuallychanging world, even though that is, in fact, what the world is. So we are all ‘‘strategic
improvisation’’ experts to keep things as stable as possible. But more than that, culture
as a stabilizing force is valued—things that have worked in the past become customs andtraditions that we want to hold onto.
So when the change agent encounters ‘‘resistance to change,’’ it is not always something bad to be overcome. Often it may be that what has been done in the past is, in fact,
better than what the change process proposes. To be speci c, when a manager calls fora new ‘‘culture of openness’’ or ‘‘teamwork’’ or ‘‘customer orientation,’’ we do not infact know whether the new behaviors to be learned would produce better results. When
we introduced sensitivity training into organizations in the 1960s in order to make themmore open, we found some very nasty consequences to openness, like telling the boss
what you really thought of him. Teamwork in many organizations causes so many new
meetings to be planned that ef cient work is undermined. At one point in its history,
Apple was so customer oriented and so responsive to anything the customer wanted that
it was in danger of going bankrupt from delivering too much service. In other words, itwould behoove the change agent to think of him- or herself as a stability agent as well.
What things should be preserved and why? And if certain changes are ercely resisted,
let’s at least  gure out why before we push harder to overcome the resistance. Culture,
the ultimate conservative force, would not be so powerful if it did not serve some usefulfunctions. The best kinds of change programs build on the strength of the culture rather
than ‘‘changing the culture.’’ Food for thought.

Ed Schein

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In This Issue
Edgar H. Schein and Karen AyasT2

his issue asks you to pay a little more attention to the details. Some of these articles
require careful reading.
While theories of change abound, most would be classi ed as espoused theories, nottheories in use. Chris Argyris’s seminal piece deserves thorough reading if you reallywant to look for the devil in the details. The defensive reasoning described in this classic
is still deeply rooted in institutions and organizations to date, as Argryris points out in his
comments 11 years later. Haridimos Tsoukas, in his insightful commentary, outlines
what it takes to engage in the kind of learning that would lead to productive reasoning
and profound change.
Jürgen Dormann, chairman of Aventis (formerly Hoechst), describes his theory in
use in an interview by C. Otto Scharmer. The case by Ariane Berthoin Antal and Camilla
Krebsbach-Gnath will give you a better understanding of the context that has seeded
Dormann’s views on leadership and change management in a company that employs morethan 90,000. As Marla Kameny points out, some of the details might still be missing, but
to those interested, the authors refer to an earlier case study. The important lessons to belearned from the fascinating transformation story of Hoechst are underscored in thethoughtful comments by Tom Durel, a consultant and former CEO. The authors respondto both commentators.
Next, the centerpiece of the issue puts the change process in proper perspective andoffers a toolkit for change, along with a complete manual. Ed Schein carefully details
when to strive for change and what works and why in an article based on his own theory
and practice over decades.
Three case studies of change with differing contexts and approaches, namely, communities of practice, appreciative inquiry, and planned change follow. Daniel Bobrow
and Jack Whalen describe the evolution of Eureka, a system for knowledge creation andsharing at Xerox to support the customer service engineers. Their account, rich in detail,is full of insights on the natural learning processes under way in communities of practice.
As Marleen Huysman highlights in her comments, this is a must read for those who arefamiliar with the seminal piece by John Seely Brown and Paul Duguid (Re ections, Winter1999, volume 1, issue 2).
Adrian McLean and Marsha George McLean add the appreciative inquiry process
to the toolbox for change. Their article is an account of change in the Inner London
Magistrates’ Courts Service. Carolyn Hendrickson and Deborah Reidy, both consultantsin the eld, comment on the power of dialogue as an intervention and on how to craft
organizational change efforts.
The  nal article is a more conceptual piece that focuses on accelerating change. William O. Lytle makes the case for planned change, dismissed by many in today’s highpace, high-tech environments. Some needed optimism is stressed by José Luis Alvarez
in his comments.
In his From the Chair column, Peter Senge examines the theme of this issue, suggesting that an appreciation for the ‘‘concrete particulars’’ de nes an effective CEO.
The photographs in this issue were contributed by:
Linda Cooper, a photographer based in Evanston, IL. ^ linda@wineantique.com&
Jonathan Liffgens, a freelance photographer and architect in Chicago. ^ jliffgens@
ixpres.com&
Emily Sper, a photographer, graphic designer, and author-illustrator in Boston, MA.
^ www.emilysper.com&
We welcome your reactions and comments. Please send your e-mail to pubs@solonline.org.

Volume 4, Number 2, REFLECTIONSTeaching Smart People
How to Learn
Chris Argyris

A

Chris Argyris
James Bryant Conant Professor
Harvard Business School4© 1991 Harvard Business Review.
Distributed by The New York Times
Special Features/Syndication Sales.

ny company that aspires to succeed in the tougher business environment of the 1990s
must rst resolve a basic dilemma: success in the marketplace increasingly depends
on learning, yet most people don’t know how to learn. What’s more, those members of
the organization that many assume to be the best at learning are, in fact, not very goodat it. I am talking about the well-educated, high-powered, high-commitment professionals
who occupy key leadership positions in the modern corporation.
Most companies not only have tremendous difculty addressing this learning dilemma; they aren’t even aware that it exists. The reason: they misunderstand what learning is and how to bring it about. As a result, they tend to make two mistakes in theirefforts to become a learning organization.
First, most people de ne learning too narrowly as mere ‘‘problem solving,’’ so they
focus on identifying and correcting errors in the external environment. Solving problems
is important. But if learning is to persist, managers and employees must also look inward.
They need to re ect critically on their own behavior, identify the ways they often inadvertently contribute to the organization’s problems, and then change how they act. In
particular, they must learn how the very way they go about de ning and solving problems
can be a source of problems in its own right.
I have coined the terms ‘‘single loop’’ and ‘‘double loop’’ learning to capture thiscrucial distinction. To give a simple analogy: a thermostat that automatically turns on theheat whenever the temperature in a room drops below 68 degrees is a good example ofsingle-loop learning. A thermostat that could ask, ‘‘Why am I set at 68 degrees?’’ and thenexplore whether or not some other temperature might more economically achieve the goalof heating the room would be engaging in double-loop learning.
Highly skilled professionals are frequently very good at single-loop learning. After all,they have spent much of their lives acquiring academic credentials, mastering one or anumber of intellectual disciplines, and applying those disciplines to solve real-world problems. But ironically, this very fact helps explain why professionals are often so bad at
double-loop learning.
Put simply, because many professionals are almost always successful at what they
do, they rarely experience failure. And because they have rarely failed, they have neverlearned how to learn from failure. So whenever their single-loop learning strategies gowrong, they become defensive, screen out criticism, and put the ‘‘blame’’ on anyone andeveryone but themselves. In short, their ability to learn shuts down precisely at the moment they need it the most.
The propensity among professionals to behave defensively helps shed light on thesecond mistake that companies make about learning. The common assumption is thatgetting people to learn is largely a matter of motivation. When people have the rightattitudes and commitment, learning automatically follows. So companies focus on creating
new organizational structures—compensation programs, performance reviews, corporate
cultures, and the like—that are designed to create motivated and committed employees.
But effective double-loop learning is not simply a function of how people feel. It is areection of how they think—that is, the cognitive rules or reasoning they use to design

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and implement their actions. Think of these rules as a kind of ‘‘master program’’ stored
in the brain, governing all behavior. Defensive reasoning can block learning even when
the individual commitment to it is high, just as a computer program with hidden bugs
can produce results exactly the opposite of what its designers had planned.
Companies can learn how to resolve the learning dilemma. What it takes is to makethe ways managers and employees reason about their behavior a focus of organizational
learning and continuous improvement programs. Teaching people how to reason about
their behavior in new and more effective ways breaks down the defenses that block learning.
All of the examples that follow involve a particular kind of professional: fast-track
consultants at major management consulting companies. But the implications of my argument go far beyond this speci c occupational group. The fact is, more and more jobs—
no matter what the title—are taking on the contours of ‘‘knowledge work.’’ People at alllevels of the organization must combine the mastery of some highly specialized technicalexpertise with the ability to work effectively in teams, form productive relationships withclients and customers, and critically reect on and then change their own organizational
practices. And the nuts and bolts of management—whether of high-powered consultantsor service representatives, senior managers or factory technicians—increasingly consistsof guiding and integrating the autonomous but interconnected work of highly skilled
people.

How Professionals Avoid Learning
For 15 years, I have been conducting in-depth studies of management consultants. I decided to study consultants for a few simple reasons. First, they are the epitome of thehighly educated professionals who play an increasingly central role in all organizations.
Almost all of the consultants I’ve studied have MBAs from the top three or four U.S.
business schools. They are also highly committed to theirwork. For instance, at one company, more than 90% of theconsultants responded in a survey that they were ‘‘highly
satised’’ with their jobs and with the company.
I also assumed that such professional consultants would
be good at learning. After all, the essence of their job is toteach others how to do things differently. I found, however,that these consultants embodied the learning dilemma. The
most enthusiastic about continuous improvement in theirown organizations, they were also often the biggest obstacle
to its complete success.
As long as efforts at learning and change focused on external organizational factors—
job redesign, compensation programs, performance review, and leadership training—theprofessionals were enthusiastic participants. Indeed, creating new systems and structures
was precisely the kind of challenge that well-educated, highly motivated professionals
thrived on.
And yet the moment the quest for continuous improvement turned to the professionals’ own performance, something went wrong. It wasn’t a matter of bad attitude. The
professionals’ commitment to excellence was genuine, and the vision of the company was
clear. Nevertheless, continuous improvement did not persist. And the longer the continuous improvement efforts continued, the greater the likelihood that they would produce
ever-diminishing returns.
What happened? The professionals began to feel embarrassed. They were threatenedby the prospect of critically examining their own role in the organization. Indeed, because
they were so well paid (and generally believed that their employers were supportive andfair), the idea that their performance might not be at its best made them feel guilty.
Far from being a catalyst for real change, such feelings caused most to react defensively. They projected the blame for any problems away from themselves and onto what
they said were unclear goals, insensitive and unfair leaders, and stupid clients.
Consider this example. At a premier management consulting company, the manager
of a case team called a meeting to examine the team’s performance on a recent consulting
project. The client was largely satised and had given the team relatively high marks, but

Professionals embody the learning
dilemma: they are enthusiastic
about continuous improvement—
and often the biggest obstacle toits success.

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6

the manager believed the team had not created the value added that it was capable of andthat the consulting company had promised. In the spirit of continuous improvement, hefelt that the team could do better. Indeed, so did some of the team members.
The manager knew how difcult it was for people to reect critically on their own
work performance, especially in the presence of their manager, so he took a number ofsteps to make possible a frank and open discussion. He invited to the meeting an outside
consultant whom team members knew and trusted—‘‘just to keep me honest,’’ he said.
He also agreed to have the entire meeting tape-recorded. That way, any subsequent confusions or disagreements about what went on at the meeting could be checked against
the transcript. Finally, the manager opened the meeting by emphasizing that no subject
was off limits— including his own behavior.
‘‘I realize that you may believe you cannot confront me,’’ the manager said. ‘‘But I
encourage you to challenge me. You have a responsibility to tell me where you think theleadership made mistakes, just as I have the responsibility to identify any I believe you
made. And all of us must acknowledge our own mistakes. If we do not have an open
dialogue, we will not learn.’’
The professionals took the manager up on the rst half of his invitation but quietly
ignored the second. When asked to pinpoint the key problems in the experience with theclient, they looked entirely outside themselves. The clients were uncooperative and arrogant. ‘‘They didn’t think we could help them.’’ The team’s own managers were unavailable and poorly prepared. ‘‘At times, our managers were not up to speed before theywalked into the client meetings.’’ In effect, the professionals asserted that they were helpless to act differently—not because of any limitations of their own but because of thelimitations of others.
The manager listened carefully to the team members and tried to respond to theircriticisms. He talked about the mistakes that he had made during the consulting process.
For example, one professional objected to the way the manager had run the project meetings. ‘‘I see that the way I asked questions closed down discussions,’’ responded the
manager. ‘‘I didn’t mean to do that, but I can see how you might have believed that I had
already made up my mind.’’ Another team member complained that the manager had
caved in to pressure from his superior to produce the project report far too quickly, considering the team’s heavy work load. ‘‘I think that it was my responsibility to have said
no,’’ admitted the manager. ‘‘It was clear that we all had an immense amount of work.’’
Finally, after some three hours of discussion about his own behavior, the manager
began to ask the team members if there were any errors they might have made. ‘‘After
all,’’ he said, ‘‘this client was not different from many others. How can we be more
effective in the future?’’The professionals repeated that it was really the clients’ and their own managers’
fault. As one put it, ‘‘They have to be open to change and want to learn.’’ The more themanager tried to get the team to examine its own responsibility for the outcome, the more
the professionals bypassed his concerns. The best one team member could suggest wasfor the case team to ‘‘promise less’’—implying that there was really no way for the group
to improve its performance.
The case team members were reacting defensively to protect themselves, even though
their manager was not acting in ways that an outsider would consider threatening. Even
if there were some truth to their charges—the clients may well have been arrogant andclosed, their own managers distant—the way they presented these claims was guaranteed
to stop learning. With few exceptions, the professionals made attributions about the behavior of the clients and the managers but never publicly tested their claims. For instance,
they said that the clients weren’t motivated to learn but never really presented any evidence supporting that assertion. When their lack of concrete evidence was pointed out tothem, they simply repeated their criticisms more vehemently.
If the professionals had felt so strongly about these issues, why had they never mentioned them during the project? According to the professionals, even this was the fault ofothers. ‘‘We didn’t want to alienate the client,’’ argued one. ‘‘We didn’t want to be seen
as whining,’’ said another.
The professionals were using their criticisms of others to protect themselves from thepotential embarrassment of having to admit that perhaps they too had contributed to theVolume 4, Number 2, REFLECTIONSARGYRIS·
Teaching Smart People How to Learn

team’s less-than-perfect performance. What’s more, the fact that they kept repeating theirdefensive actions in the face of the manager’s efforts to turn the group’s attention to its
own role shows that this defensiveness had become a reexive routine. From the professionals’ perspective, they weren’t resisting; they were focusing on the ‘‘real’’ causes.
Indeed, they were to be respected, if not congratulated, for working as well as they did
under such dif cult conditions.
The end result was an unproductive parallel conversation. Both the manager and theprofessionals were candid; they expressed their views forcefully. But they talked past eachother, never  nding a common language to describe what had happened with the client.
The professionals kept insisting that the fault lay with others. The manager kept trying,
unsuccessfully, to get the professionals to see how they contributed to the state of affairs
they were criticizing. The dialogue of this parallel conversation looks like this:Professionals: ‘‘The clients have to be open. They must want to change.’’
Manager: ‘‘It’s our task to help them see that change is in their interest.’’Professionals: ‘‘But the clients didn’t agree with our analyses.’’Manager: ‘‘If they didn’t think our ideas were right, how might we have convinced
them?’’
Professionals: ‘‘Maybe we need to have more meetings with the client.’’
Manager: ‘‘If we aren’t adequately prepared and if the clients don’t think we’re credible, how will more meetings help?’’
Professionals: ‘‘There should be better communication between case team members
and management.’’
Manager: ‘‘I agree. But professionals should take the initiative to educate the manager
about the problems they are experiencing.’’
Professionals: ‘‘Our leaders are unavailable and distant.’’
Manager: ‘‘How do you expect us to know that if you don’t tell us?’’
Conversations such as this one dramatically illustrate the learning dilemma. The problem with the professionals’ claims is not that they are wrong but that they aren’t useful.
By constantly turning the focus away from their own behavior to that of others, the professionals bring learning to a grinding halt. The manager understands the trap but does
not know how to get out of it. To learn how to do that requires going deeper into the
dynamics of defensive reasoning—and into the special causes that make professionals so
prone to it.

Defensive Reasoning and the Doom Loop
What explains the professionals’ defensiveness? Not their attitudes about change or commitment to continuous improvement; they really wanted to work more effectively. Rather,
the key factor is the way they reasoned about their behavior and that of others.
It is impossible to reason anew in every situation. If we had to think through all thepossible responses every time someone asked, ‘‘How are you?’’ the world would pass us
by. Therefore, everyone develops a theory of action—a set of rules that individuals use
to design and implement their own behavior as well as to understand the behavior ofothers. Usually, these theories of actions become so taken for granted that people don’teven realize they are using them.
One of the paradoxes of human behavior, however, is that the master program people
actually use is rarely the one they think they use. Ask people in an interview or questionnaire to articulate the rules they use to govern their actions, and they will give you what
I call their ‘‘espoused’’ theory of action. But observe these same people’s behavior, andyou will quickly see that this espoused theory has very little to do with how they actually
behave. For example, the professionals on the case team said they believed in continuous
improvement, and yet they consistently acted in ways that made improvement impossible.
When you observe people’s behavior and try to come up with rules that would makesense of it, you discover a very different theory of action—what I call the individual’s‘‘theory-in-use.’’ Put simply, people consistently act inconsistently, unaware of the contradiction between their espoused theory and their theory-in-use, between the way they
think they are acting and the way they really act.

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What’s more, most theories-in-use rest on the same set of governing values. Thereseems to be a universal human tendency to design one’s actions consistently according
to four basic values:

8

1. To remain in unilateral control;
2. To maximize ‘‘winning’’ and minimize ‘‘losing’’;
3. To suppress negative feelings; and4. To be as ‘‘rational’’ as possible —by which people mean de ning clear objectives andevaluating their behavior in terms of whether or not they have achieved them.
The purpose of all these values is to avoid embarrassment or threat, feeling vulnerable
or incompetent. In this respect, the master program that most people use is profoundly
defensive. Defensive reasoning encourages individuals to keep private the premises, inferences, and conclusions that shape their behavior and to avoid testing them in a truly
independent, objective fashion.
Because the attributions that go into defensive reasoning are never really tested, it isa closed loop, remarkably impervious to con icting points of view. The inevitable response to the observation that somebody is reasoning defensively is yet more defensive
reasoning. With the case team, for example, whenever anyone pointed out the professionals’ defensive behavior to them, their initial reaction was to look for the cause insomebody else —clients who were so sensitive that they would have been alienated if theconsultants had criticized them or a manager so weak that he couldn’t have taken it had
the consultants raised their concerns with him. In other words, the case team members
once again denied their own responsibility by externalizing the problem and putting it on
someone else.
In such situations, the simple act of encouraging more open inquiry is often attacked
by others as ‘‘intimidating.’’ Those who do the attacking deal with their feelings about
possibly being wrong by blaming the more open individual for arousing these feelings
and upsetting them.
Needless to say, such a master program inevitably short-circuits learning. And for anumber of reasons unique to their psychology, well-educated professionals are especiallysusceptible to this.
Nearly all the consultants I have studied have stellar academic records. Ironically,
their very success at education helps explain the problems they have with learning. Before
they enter the world of work, their lives are primarily full of successes, so they have rarely
experienced the embarrassment and sense of threat that comes with failure. As a result,
their defensive reasoning has rarely been activated. People who rarely experience failure,
however, end up not knowing how to deal with it effectively. And this serves to reinforce
the normal human tendency to reason defensively.
In a survey of several hundred young consultants at the organizations I have been
studying, these professionals describe themselves as driven internally by an unrealisticallyhigh ideal of performance: ‘‘Pressure on the job is selfimposed.’’ ‘‘I must not only do a good job; I must also be
the best.’’ ‘‘People around here are very bright and hardworking; they are highly motivated to do an outstanding
job.’’ ‘‘Most of us want not only to succeed but also to do
so at maximum speed.’’
These consultants are always comparing themselveswith the best around them and constantly trying to better
their own performance. And yet they do not appreciate being required to compete openly
with each other. They feel it is somehow inhumane. They prefer to be the individual
contributor—what might be termed a ‘‘productive loner.’’
Behind this high aspiration for success is an equally high fear of failure and a propensity to feel shame and guilt when they do fail to meet their high standards. ‘‘You must
avoid mistakes,’’ said one. ‘‘I hate making them. Many of us fear failure, whether weadmit it or not.’’
To the extent that these consultants have experienced success in their lives, they have
not had to be concerned about failure and the attendant feelings of shame and guilt. But
to exactly the same extent, they also have never developed the tolerance for feelings offailure or the skills to deal with these feelings. This in turn has led them not only to fear

The very success of professionals
at education helps explain the
problems they have with learning.

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failure but also fear the fear of failure itself. For they know that they will not cope with
it superlatively—their usual level of aspiration.
The consultants use two intriguing metaphors to describe this phenomenon. Theytalk about the ‘‘doom loop’’ and ‘‘doom zoom.’’ Often, consultants will perform well on
the case team, but because they don’t do the jobs perfectly or receive accolades from their
managers, they go into a doom loop of despair. And they don’t ease into the doom loop,
they zoom into it.
As a result, many professionals have extremely ‘‘brittle’’ personalities. When suddenly faced with a situation they cannot immediately handle, they tend to fall apart. They
cover up their distress in front of the client. They talk about it constantly with their fellow
case team members. Interestingly, these conversations commonly take the form of badmouthing clients.
Such brittleness leads to an inappropriately high sense of despondency or even despair when people don’t achieve the high levels of performance they aspire to. Such
despondency is rarely psychologically devastating, but when combined with defensive
reasoning, it can result in a formidable predisposition against learning.
There is no better example of how this brittleness can disrupt an organization thanperformance evaluations. Because it represents the one moment when a professional mustmeasure his or her own behavior against some formal standard, a performance evaluationis almost tailor-made to push a professional into the doom loop. Indeed a poor evaluation
can reverberate far beyond the particular individual involvedto spark defensive reasoning throughout an entire organization.
At one consulting company, management established a
new performance-evaluation process that was designed tomake evaluations both more objective and more useful tothose being evaluated. The consultants participated in thedesign of the new system and in general were enthusiastic because it corresponded totheir espoused values of objectivity and fairness. A brief two years into the new process,however, it had become the object of dissatisfaction. The catalyst for this about-face wasthe rst unsatisfactory rating.
Senior managers had identi ed six consultants whose performance they consideredbelow standard. In keeping with the new evaluation process, they did all they could tocommunicate their concerns to the six and to help them improve. Managers met witheach individual separately for as long and as often as the professional requested to explain
the reasons behind the rating and to discuss what needed to be done to improve—but tono avail. Performance continued at the same low level and, eventually, the six were let go.
When word of the dismissal spread through the company, people responded with
confusion and anxiety. After about a dozen consultants angrily complained to management, the CEO held two lengthy meetings where employees could air their concerns.
At the meetings, the professionals made a variety of claims. Some said theperformance-evaluation process was unfair because judgments were subjective and biased and the criteria for minimum performance unclear. Others suspected that the realcause for the dismissals was economic and that the performance-evaluation procedure
was just a  g leaf to hide the fact that the company was in trouble. Still others argued
that the evaluation process was antilearning. If the company were truly a learning organization, as it claimed, then people performing below the minimum standard should betaught how to reach it. As one professional put it: ‘‘We were told that the company did
not have an up-or-out policy. Up-or-out is inconsistent with learning. You misled us.’’
The CEO tried to explain the logic behind management’s decision by grounding it in
the facts of the case and by asking the professionals for any evidence that might contradictthese facts.
Is there subjectivity and bias in the evaluation process? Yes, responded the CEO, but‘‘we strive hard to reduce them. We are constantly trying to improve the process. If you
have any ideas, please tell us. If you know of someone treated unfairly, please bring it
up. If any of you feel that you have been treated unfairly, let’s discuss it now or, if you
wish, privately.’’
Is the level of minimum competence too vague? ‘‘We are working to de ne minimum competence more clearly,’’ he answered. ‘‘In the case of the six, however, their

Performance evaluation is tailormade to push professionals into
the doom loop.

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performance was so poor that it wasn’t difcult to reach a decision.’’ Most of the six had
received timely feedback about their problems. And in the two cases where people had
not, the reason was that they had never taken the responsibility to seek out evaluations—and, indeed, had actively avoided them. ‘‘If you have any data to the contrary,’’ the CEO
added, ‘‘let’s talk about it.’’Were the six asked to leave for economic reasons? No, said the CEO. ‘‘We have morework than we can do, and letting professionals go is extremely costly for us. Do any ofyou have any information to the contrary?’’
As to the company being antilearning, in fact, the entire evaluation process was designed to encourage learning. When a professional is performing below the minimum
level, the CEO explained, ‘‘we jointly design remedial experiences with the individual.
Then we look for signs of improvement. In these cases, either the professionals werereluctant to take on such assignments or they repeatedly failed when they did. Again, if
you have information or evidence to the contrary, I’d like to hear about it.’’
The CEO concluded: ‘‘It’s regrettable, but sometimes we make mistakes and hire thewrong people. If individuals don’t produce and repeatedly prove themselves unable toimprove, we don’t know what else to do except dismiss them. It’s just not fair to keep
poorly performing individuals in the company. They earn an unfair share of the  nancial
rewards.’’
Instead of responding with data of their own, the professionals simply repeated theiraccusations but in ways that consistently contradicted their claims. They said that a genuinely fair evaluation process would contain clear and documentable data about performance—but they were unable to provide rsthand examples of the unfairness that they
implied colored the evaluation of the six dismissed employees. They argued that people
shouldn’t be judged by inferences unconnected to their actual performance—but theyjudge management in precisely this way. They insisted that management de ne clear,
objective, and unambiguous performance standards—but they argued that any humane
system would take into account that the performance of a professional cannot be precisely
measured. Finally, they presented themselves as champions of learning—but they neverproposed any criteria for assessing whether an individual might be unable to learn.
In short, the professionals seemed to hold management to a different level of performance than they held themselves. In their conversation at the meetings, they used manyof the features of ineffective evaluation that they condemned— the absence of concrete
data, for example, and the dependence on a circular logic of ‘‘heads we win, tails you
lose.’’ It is as if they were saying, ‘‘Here are the features of a fair performance-evaluation
system. You should abide by them. But we don’t have to when we are evaluating you.’’
Indeed, if we were to explain the professionals’ behavior by articulating rules thatwould have to be in their heads in order for them to act the way they did, the rules would
look something like this:
1. When criticizing the company, state your criticism in ways that you believe arevalid—but also in ways that prevent others from deciding for themselves whether
your claim to validity is correct.
2. When asked to illustrate your criticisms, don’t include any data that others could use
to decide for themselves whether the illustrations are valid.
3. State your conclusions in ways that disguise their logical implications. If others pointout those implications to you, deny them.
Of course, when such rules were described to the professionals, they found themabhorrent. It was inconceivable that these rules might explain their actions. And yet indefending themselves against this observation, they almost always inadvertently conrmed the rules.

Learning How to Reason Productively
If defensive reasoning is as widespread as I believe, then focusing on an individual’s
attitudes or commitment is never enough to produce real change. And as the previous
example illustrates, neither is creating new organizational structures or systems. The problem is that even when people are genuinely committed to improving their performanceand management has changed its structures in order to encourage the ‘‘right’’ kind of
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Until senior managers becomeaware of the ways they reason
defensively, any change activity
is likely to be just a fad.

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Teaching Smart People How to Learn

behavior, people still remain locked in defensive reasoning. Either they remain unawareof this fact, or if they do become aware of it, they blame others.
There is, however, reason to believe that organizations can break out of this vicious
circle. Despite the strength of defensive reasoning, people genuinely strive to produce
what they intend. They value acting competently. Their self-esteem is intimately tied up
with behaving consistently and performing effectively. Companies can use these universal
human tendencies to teach people how to reason in a new way—in effect, to change themaster programs in their heads and thus reshape their behavior.
People can be taught how to recognize the reasoning they use when they design andimplement their actions. They can begin to identify the inconsistencies between theirespoused and actual theories of action. They can face up to
the fact that they unconsciously design and implement actions that they do not intend. Finally, people can learn how
to identify what individuals and groups do to create organizational defenses and how these defenses contribute to anorganization’s problems.
Once companies embark on this learning process, they
will discover that the kind of reasoning necessary to reduceand overcome organizational defenses is the same kind of‘‘tough reasoning’’ that underlies the effective use of ideas in strategy,  nance, marketing,manufacturing, and other management disciplines. Any sophisticated strategic analysis,for example, depends on collecting valid data, analyzing it carefully, and constantly testing
the inferences drawn from the data. The toughest tests are reserved for the conclusions.
Good strategists make sure that their conclusions can withstand all kinds of critical questioning.
So too with productive reasoning about human behavior. The standard of analysis isjust as high. Human resource programs no longer need to be based on ‘‘soft’’ reasoning
but should be as analytical and as data-driven as any other management discipline.
Of course, that is not the kind of reasoning the consultants used when they encountered problems that were embarrassing or threatening. The data they collected was hardly
objective. The inferences they made rarely became explicit. The conclusions they reachedwere largely self-serving, impossible for others to test, and as a result, ‘‘self-sealing,’’
impervious to change.
How can an organization begin to turn this situation around, to teach its members
how to reason productively? The  rst step is for managers at the top to examine criticallyand change their own theories-in-use. Until senior managers become aware of how theyreason defensively and the counterproductive consequences that result, there will be little
real progress. Any change activity is likely to be just a fad.
Change has to start at the top because otherwise defensive senior managers are likely
to disown any transformation in reasoning patterns coming from below. If professionals
or middle managers begin to change the way they reason and act, such changes are likely
to appear strange—if not actually dangerous—to those at the top. The result is an unstablesituation where senior managers still believe that it is a sign of caring and sensitivity to
bypass and cover up difcult issues, while their subordinates see the very same actions
as defensive.
The key to any educational experience designed to teach senior managers how toreason productively is to connect the program to real business problems. The best demonstration of the usefulness of productive reasoning is for busy managers to see how it
can make a direct difference in their own performance and in that of the organization.
This will not happen overnight. Managers need plenty of opportunity to practice the newskills. But once they grasp the powerful impact that productive reasoning can have on
actual performance, they will have a strong incentive to reason productively not just in a
training session but in all their work relationships.
One simple approach I have used to get this process started is to have participants
produce a kind of rudimentary case study. The subject is a real business problem that the
manager either wants to deal with or has tried unsuccessfully to address in the past.
Writing the actual case usually takes less than an hour. But then the case becomes the
focal point of an extended analysis.
For example, a CEO at a large organizational-development consulting company was
preoccupied with the problems caused by the intense competition among the various

11

ARGYRIS·
Teaching Smart People How to Learn© Emily Sper12business functions represented by his four direct reports. Not only was he tired of having
the problems dumped in his lap, but he was also worried about the impact the interfunctional conicts were having on the organization’s exibility. He had even calculated thatthe money being spent to iron out disagreements amounted to hundreds of thousands ofdollars every year. And the more ghts there were, the more defensive people became,which only increased the costs to the organization.
In a paragraph or so, the CEO described a meeting he intended to have with his direct
reports to address the problem. Next, he divided the paper in half, and on the right-handside of the page, he wrote a scenario for the meeting— much like the script for a movieor play—describing what he would say and how his subordinates would likely respond.
On the left-hand side of the page, he wrote down any thoughts and feelings that he would
be likely to have during the meeting but that he wouldn’t express for fear they would
derail the discussion.
But instead of holding the meeting, the CEO analyzed this scenario with his direct
reports. The case became the catalyst for a discussion in which the CEO learned several
things about the way he acted with his management team.
He discovered that his four direct reports often perceived his conversations as counterproductive. In the guise of being ‘‘diplomatic,’’ he would pretend that a consensus
about the problem existed, when in fact none existed The unintended result: instead offeeling reassured, his subordinates felt wary and tried to gure out ‘‘what is he reallygetting at.’’
The CEO also realized that the way he dealt with the competitiveness among department heads was completely contradictory. On the one hand, he kept urging them to ‘‘thinkof the organization as a whole.’’ On the other, he kept calling for actions—department
budget cuts, for example—that placed them directly in competition with each other.
Finally, the CEO discovered that many of the tacit evaluations and attributions he
had listed turned out to be wrong. Since he had never expressed these assumptions, he
had never found out just how wrong they were. What’s more, he learned that much ofwhat he thought he was hiding came through to his subordinates anyway—but with theadded message that the boss was covering up.
The CEO’s colleagues also learned about their own ineffective behavior. They learned
by examining their own behavior as they tried to help the CEO analyze his case. They
also learned by writing and analyzing cases of their own. They began to see that they too
tended to bypass and cover up the real issues and that the CEO was often aware of it but
did not say so. They too made inaccurate attributions and evaluations that they did not
express. Moreover, the belief that they had to hide important ideas and feelings from the
CEO and from each other in order not to upset anyone turned out to be mistaken. In thecontext of the case discussions, the entire senior management team was quite willing todiscuss what had always been undiscussable.
In effect, the case study exercise legitimizes talking about issues that people havenever been able to address before. Such a discussion can be emotional—even painful.
But for managers with the courage to persist, the payoff is great: management teams andentire organizations work more openly and more effectively and have greater options forbehaving  exibly and adapting to particular situations.
When senior managers are trained in new reasoning
skills, they can have a big impact on the performance ofthe entire organization—even when other employees arestill reasoning defensively. The CEO who led the meetings
on the performance-evaluation procedure was able to defuse dissatisfaction because he didn’t respond to professionals’ criticisms in kind but instead gave a clear
presentation of relevant data. Indeed, most participants
took the CEO’s behavior to be a sign that the company
really acted on the values of participation and employee
involvement that it espoused.
Of course, the ideal is for all the members of an organization to learn how to reason productively. This has
happened at the company where the case team meeting
took place. Consultants and their managers are now able
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to confront some of the most difcult issues of the consultant-client relationship. To geta sense of the difference productive reasoning can make, imagine how the original conversation between the manager and case team might have gone had everyone engaged in
effective reasoning. (The following dialogue is based on actual sessions I have attended
with other case teams at the same company since the training has been completed.)First, the consultants would have demonstrated their commitment to continuous improvement by being willing to examine their own role in the difculties that arose during
the consulting project. No doubt they would have identied their managers and the clientsas part of the problem, but they would have gone on to admit that they had contributed
to it as well. More important, they would have agreed with the manager that as they
explored the various roles of clients, managers, and professionals, they would make sure
to test any evaluations or attributions they might make against the data. Each individual
would have encouraged the others to question his or her reasoning. Indeed, they would
have insisted on it. And in turn, everyone would have understood that act of questioning
not as a sign of mistrust or an invasion of privacy but as a valuable opportunity forlearning.
The conversation about the manager’s unwillingness to say no might look something
like this:Professional #1: ‘‘One of the biggest problems I had with the way you managed thiscase was that you seemed to be unable to say no when either the client or your superior
made unfair demands.’’ [Gives an example.]
Professional #2: ‘‘I have another example to add. [Describes a second example.] But
I’d also like to say that we never really told you how we felt about this. Behind your backwe were bad-mouthing you—you know, ‘he’s being such a wimp’—but we never cameright out and said it.’’Manager: ‘‘It certainly would have been helpful if you had said something. Was there
anything I said or did that gave you the idea that you had better not raise this with me?’’Professional #3: ‘‘Not really. I think we didn’t want to sound like we were whining.’’
Manager: ‘‘Well, I certainly don’t think you sound like you’re whining. But two
thoughts come to mind. If I understand you correctly, you were complaining, but thecomplaining about me and my inability to say no was covered up. Second, if we had
discussed this, I might have gotten the data I needed to be able to say no.’’Notice that when the second professional describes how the consultants had covered
up their complaints, the manager doesn’t criticize her. Rather, he rewards her for being
open by responding in kind. He focuses on the ways that he too may have contributed tothe cover-up. Re ecting undefensively about his own role in the problem then makes it
possible for the professionals to talk about their fears of appearing to be whining. The
manager then agrees with the professionals that they shouldn’t become complainers. At
the same time, he points out the counterproductive consequences of covering up theircomplaints.
Another unresolved issue in the case team meeting concerned the supposed arroganceof the clients. A more productive conversation about that problem might go like this:Manager: ‘‘You said that the clients were arrogant and uncooperative. What did they
say and do?’’Professional #1: ‘‘One asked me if I had ever met a payroll. Another asked how long
I’ve been out of school.’’
Professional #2: ‘‘One even asked me how old I was!’’Professional #3: ‘‘That’s nothing. The worst is when they say that all we do is interview people, write a report based on what they tell us, and then collect our fees.’’Manager: ‘‘The fact that we tend to be so young is a real problem for many of ourclients. They get very defensive about it. But I’d like to explore whether there is a way
for them to freely express their views without our getting defensive.
‘‘What troubled me about your original responses was that you assumed you wereright in calling the clients stupid. One thing I’ve noticed about consultants—in this company and others—is that we tend to defend ourselves by bad-mouthing the client.’’
Professional #1: ‘‘Right. After all, if they are genuinely stupid, then it’s obviously not
our fault that they aren’t getting it!’’Professional #2: ‘‘Of course, that stance is antilearning and overprotective. By assuming that they can’t learn, we absolve ourselves from having to.’’13

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Teaching Smart People How to Learn

Professional #3: ‘‘And the more we all go along with the bad-mouthing, the more we
reinforce each other’s defensiveness.’’
Manager: ‘‘So what’s the alternative? How can we encourage our clients to express
their defensiveness and at the same time constructively build on it?’’Professional #1: ‘‘We all know that the real issue isn’t our age; it’s whether or not weare able to add value to the client’s organization. They should judge us by what we
produce. And if we aren’t adding value, they should get rid of us—no matter how youngor old we happen to be.’’Manager: ‘‘Perhaps that is exactly what we should tell them.’’
In both these examples, the consultants and their manager are doing real work. They
are learning about their own group dynamics and addressing some generic problems inclient-consultant relationships. The insights they gain will allow them to act more effectively in the future—both as individuals and as a team. They are not just solving problems
but developing a far deeper and more textured understanding of their role as members of
the organization. They are laying the groundwork for continuous improvement that istruly continuous. They are learning how to learn.

Commentaryby Chris Argyris

14

We are inundated with examples of the defensive reasoning and organizational defensive routinesthat this article describes. There is Enron, Arthur Andersen, the CIA, the FBI, the Catholic hierarchy,
and the administration of school systems.
Several questions come to mind that I think are relevant. Enron and Andersen have received
awards for leadership and enlightened human resource programs. In both organizations, the top
management genuinely championed these programs. Yet the same top executives violated the tenets of the old programs. Do we have theories that will not only explain the ip-ops, but predict
when they will occur and how to prevent them?
How is it that the church hierarchies, which espouse trust and honesty, skillfully produce
cover-ups and cover-up of the cover-ups? How do we explain that educational leaders cover upteacher incompetence by giving answers to students so that they can pass prociency tests?
Finally, how do we explain that the ‘‘local’’ levels of the FBI feel free to assign responsibility
for problems, when later they admit that they create the same problems at the local level andcovered up that this is the case?
Another question focuses on the fact that most organizational change programs are based onemulating best practices. The Achilles heel of this strategy is that what creates the best practices
can also harbor processes that eventually bring them down. For example, 3M has for years been
touted as an innovative company. We now learn that this is no longer the case. How did this happen? Could the deterioration have been avoided?
Finally, there is the question about our competence to produce the claims that we espouse. In
a recent inquiry, I found that many professionals, when being challenged, respond with the same
behaviors for which they criticized line managers. Moreover, many of the programs were not implementable, and their creators appeared skillfully unaware of the inconsistencies (Argyris, 2000).

Reference
Argyris, C. Flawed Advice and the Management Trap (New York: Oxford University Press, 2000).

Commentary
by Haridimos Tsoukas
Vulnerability, Moral Responsibility, and Reexive Thinking
When Chris Argyris published his now classic article, the terms ‘‘knowledge work’’ and the‘‘knowledge-based organization’’ had not yet fully entered public discourse to the extent that they
have today. Argyris, however, was prescient enough to realize that the kind of ‘‘smart people’’ he
was writing about were not the exception: in the advanced economies, they were becoming theVolume 4, Number 2, REFLECTIONS

References
Barley, S. The New World of Work (London: British-North American Committee, 1996): 59.
Bateson, G. Mind and Nature (Toronto: Bantam, 1979).
Giddens, A. Modernity and Self-Identity (Cambridge, UK: Polity Press, 1991).
Heckscher, C. and A. Donnellon. The Post-Bureaucratic Organization, (London: Sage, 1994).
Hirschhorn, L. Reworking Authority (Cambridge, MA: MIT Press, 1997).
Orr, J. Talking About Machines (Ithaca, NY: ILR Press/Cornell University Press, 1996).
Wenger, E. Communities of Practice (Cambridge: Cambridge University Press, 1998).
Zuboff, S. In the Age of the Smart Machine (Oxford: Heinemann, 1988).
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Teaching Smart People How to Learn

norm. Knowledge workers, or symbolic analysts, have been the fastest growing group of employees(at least, in the US; Barley, 1996).
Argyris’s argument about the inherent difculty smart people have in engaging in double-loop(or reexive) learning is particularly relevant today, as we are moving from the classic Weberianbureaucracy to post-bureaucratic forms of organization or, to use a different language, from themodern to the post-modern rm (Heckscher and Donnellon, 1994). Here is, I think, how Argyris’s
insights enrich those of other organizational psychologists, such as Larry Hirschhorn (1997), and ofsociologists, such as Shoshana Zuboff (1988) and Anthony Giddens (1991). For Hirschhorn, what isparticularly distinctive in the shift to the post-modern organization is a change in the very conceptof personhood: individuals increasingly rely less on internalizing organizational authority as represented by the boss; instead, they rely more on internalized images of themselves, on their own
personal authority.
What this means is that, in the post-modern organization, individuals bring more of themselves (their ideas, their feelings) to their work. In Hirschhorn’s (1997: 9) terms, ‘‘they are more
psychologically present.’’ A post-modern rm—a rm that is rich in information and relies heavily
on the daily choices of its knowledgeable employees —is a place that, unlike the modern rm,
thrives on doubt and challenge. As organizational ethnographers, such as Julian Orr (1996) andEtienne Wenger (1998), have shown, daily work in information-rich companies is more decision
intensive — more loci for decision making by employees are created. The more ‘‘informated’’ (to use
Zuboff’s term) a workplace is, the more decisions employees will have to make. Or, to put it differently, the more informated a workplace is, the more reexive the organization is capable of becoming (what Giddens calls ‘‘institutional reexivity’’); it has the opportunity to feed back, andreect on, the information about its modus operandi and the outcomes it brings about.
In such organizations, individuals need to be able to ask critical questions of others and ofthemselves if they are to be effective in fully reaping the potential benets reexivity brings about.
Individuals, therefore, no longer need to uphold the ‘‘masculine ideal’’—that is, to suppress doubt
and ambivalence. On the contrary, doubt, debate, and reexivity are the very qualities needed topromote learning. A knowledge-intensive workplace thrives on the exchange of ideas and experiences in the interest of enhancing the collective pool of knowledge and of generating new ideas.
But, as we know from academic life, for ideas to ourish, debate is needed; hence, the importanceof criticism, learning, and reexivity.
Throughout his work, Argyris has pointed out the difculties practitioners have in engaging inreexive thinking —in his terms, in ‘‘double-loop thinking.’’ This is particularly so in the case ofknowledge workers because, to the extent they are more psychologically present at work, they expose more of themselves to others; hence, they are more vulnerable. Argyris documents this vulnerability in his article, showing the defensive reasoning it brings out in knowledge workers. Morethan that, however, he shows what individuals need to do in order to stop being defensive when
the spotlight is turned on themselves— how to engage in productive reasoning. The message Argyris is getting across, it seems to me, is not only how productive reasoning may be achieved but,also, the importance of constantly challenging yourself, of expanding your horizons, of ‘‘knowing
thyself.’’
In other words, Argyris invites knowledge workers to undertake a primarily moral, not justtechnical, task: to be open to criticism, to be willing to test their claims publicly against evidence,to accept that they too are partly responsible for the problems they are confronted with. The client
may or may not be ‘‘stupid,’’ but the real question, if a consultant is really keen on learning, is‘‘what can I do to improve the relationship with the client (or my boss, or anyone else)?’’ It allcomes down to individual responsibility, and this is, essentially, a moral issue. In that sense, as well
as being an inuential organizational psychologist and an implicit moral philosopher, Argyris is asystemic theorist, not too different from his own hero Gregory Bateson (1979): we partly create
the problems we face, he says, and we have a responsibility for this. An excellent point.

Haridimos Tsoukas
George D. Mavros Research
Professor in Organization andManagement
ALBA, Greece
Professor of Organization Theory
and Behavior
University of Strathclyde
Graduate School of Business, UK
htsoukas@alba.edu.gr

15

Leadership Is about Setting
the Tone: An Interview
with Jürgen Dormann
C. Otto Scharmer

In the spring of 1994, Jürgen Dormann became CEO of Hoechst, a Frankfurt-based multinational company with 172,000 employees working in 120 countries across diverse businesses ranging from cosmetics to dyes,  bers, and pharmaceuticals. Today, the former
Hoechst campus near Frankfurt hosts 40 separate spun-off companies. The pharmaceuticaldivisions have been transformed with a European partner into a new French legal entity,
Aventis SA, headquartered in Strasbourg, France. With a market capitalization of some 70
billion euros, Aventis ranks as the second most valuable company on the German DAX.
On July 12, 2001, C. Otto Scharmer interviewed Jürgen Dormann in his of ce of the
new Aventis headquarters in Strasbourg, France. The conversation began with Dormann
taking Otto Scharmer to the roof of the new Aventis headquarters in Strasbourg, pointing
out the mountains, villages, and buildings around this beautiful part of Alsace.

Jürgen Dormann
Chairman
Aventis16

C. Otto Scharmer
Lecturer, Massachusetts Instituteof Technology
Visiting professor, Helsinki Schoolof Economics
scharmer@mit.edu© 2002 by C. Otto Scharmer.

C.O. Scharmer (COS): A few weeks after you took over as CEO of Hoechst, you called
for unprecedented change throughout the entire company. What happened in the weeks
before that Aufbruch speech?
Jürgen Dormann (JD): To really answer that question, we would have to talk about thehistory of the company, but we can’t do that in the short time we have. We wouldn’t
even be able to limit ourselves to the postwar period. Hoechst was founded in 1863. I
joined the company in 1963 when I was 23. Over the decades, I went through what you
could call ‘‘socialization’’ or ‘‘getting to know’’ the company from many aspects, including the international ones. Above all, I came to know and understand many key people.
I got to know the company from various perspectives —commercial, regional, functional
areas, and staff positions —by having business responsibility for many departments. Thisis important for how you approach the problems and issues as we did then. You have tohave some idea about what you want to do and how to bring it about. The idea didn’t
just arise in the preceding weeks and months, but rather has developed gradually overtime.
I recognized in 1987 that I had a real option to become CEO. The CEO then, inagreement with the chairman of the supervisory board, asked me whether I was ready tomove beyond the experiences I so far had had and become CFO, which would includenance and accounting and everything associated with this functional area in a classicalGerman industrial conglomerate. I really didn’t think I was prepared, as I had no trainingor education in this area. But I saw the unusual step of handing me this position as ahidden sign that it could be a sensible move for me in order to round out my background.
So you see, one can’t talk about 1994 without seeing 1963 as a starting point, and without
recognizing the various steps up to that point, for example, that I had integrated the large
American company Celanese into the Hoechst organization.
From then on, I began slowly and cautiously to talk about the changes that werenecessary in order to rise to the challenges Hoechst faced. I did this rst within a small

Volume 4, Number 2, REFLECTIONSCOS: You said that this circle developed gradually. Exactly how did this come about?
JD: In retrospect, for too long I worked in the central coordination unit of the company
as the head of the corporate staff department and its predecessor organizations. The people I’m talking about are still active and in a variety of interesting positions; they had beenworking closely with me since the beginning of the 1980s. Then, a new element arrived
with the Celanese acquisition. From there, I was able to build up my management or
talent pool. I had to do so through external growth, because among the team members,
the American or Anglo-Saxon element was not sufciently represented in our team.
For the feasibility of the approach and its progression, many factors have to cometogether. It’s more than just the team, the people, and the common philosophy or thetargeted technical and cultural direction. There also needs to be a sound feeling for what
is feasible, for timing and execution, including a feeling for what has to be done, when,and in what order. This doesn’t mean doing things in a dogmatic fashion by intellectuallysorting them, one, two, and three. It means keeping your eyes open for a possible opportunity, which may throw off your planning. You have to have the courage to move outof the planned sequence and leapfrog from step two to step  ve. The Clariant transaction
is an example: we took the chance to divest our specialty chemicals business to Clariant,which had just been spun off by Sandoz.
If you want to bring about change, and you also have the support for it, then there
are unavoidable moments when you have to resolve conicts. This has to happen when
the conicts, if left unresolved, threaten the achievement of
the goal. The introduction of new structures at Hoechst led
to some pretty strong reactions. For example, when wechanged the pharmaceutical R&D structure at the Hoechst
site, there were several thousand people —Hoechst employees but also politicians and people from the neighborhood—marching by the corporate center with banners and signs,
protesting and chanting, claiming that we were endangering
our strong academic tradition. The consequence was thatpoliticians, the media, and all types of functionaries said, ‘‘Hey, that’s not right what thatguy is doing. It’s just not acceptable. He’s going against the principles of the consensus
model.’’
Of course, you can’t start such changes every two weeks or so, but where it is decisive,
you have to take clear actions. We’re deluding ourselves if we think that until then, we’dbeen doing a good job here. The products that we have today are the result of changes.
Otherwise, we would have stayed on the academic track with new titles, lectures, andnew molecules. We also changed the name from ‘‘research and development’’ to ‘‘druginnovation and approval’’ to express that we moved our focus from mainly academic
interests toward bringing excellent and useful products to patients and doctors. This wasan important shift.
In 1994, I had to make some key personnel decisions. As a rule, these were madetogether with the people affected; they moved into new positions, left the company, or
took early retirement. In this early phase, the team members weren’t supposed to justhandle the abstract portfolio. They also had to play a part in the implementation of change
at decisive points. Having people able to foster change was, of course, very important at
this decisive phase. This decision can be carried out in a socially sustainable way, but it
has to be carried out.

SCHARMER·
Leadership Is about Setting the Tone

circle of people, which turned into a ring, which began to radiate outward slowly at  rst,
then faster to the worldwide organization. Later when I put my team together, I took
people from Brazil, America, and elsewhere, but predominantly Hoechst people who had
broad experience in other cultures. In their management positions overseas, they had
experienced the entrepreneurial freedom to make decisions, more than they would have
had in Frankfurt.

You have to have the courage tomove out of the planned sequenceand leapfrog from step two
to step ve.

COS: In the case study [see ‘‘Internal Outsiders Transform Tradition-Bound Organizations’’ on page 23 of this issue], the authors point out that one quality that differentiates
you from others is that you have an ‘‘eye’’ for these people, that you have the ability to

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SCHARMER·
Leadership Is about Setting the Tone

sense their capabilities. What is it that you’re looking for and what do you see when
you’re considering people for your ‘‘dream team’’?
JD: This process can’t be understood in only rational terms. I’ll make the connection backto 1963 when I joined this hierarchical, internally oriented, and very German organization
to the development within it and the outside world. I’ve always had an extremely strong
external orientation, and I’ve never been satised unless I’ve had an eye or an ear outsideof the company. This has nothing to do with loyalty, but rather with the necessary externalorientation with regard to culture, science, technology, sociology, societal development,
political development, and so on.
You develop an eye for people in their diversity, but probably more with regard totheir values and the consistency in their basic stands on certain issues. You can see their
willingness to acknowledge change, but also the ability to hold the line where it counts
and show character, whatever that is. The ability to see these things becomes more acuteover time. I have rarely brought people into top positions whom I didn’t know well. In
the end, I really don’t know what the ‘‘eye’’ is. But it has resulted in a low error ratemeasured against how well we did in achieving our common goals. Of course, you makemistakes; of course, you can misread people, but overall I believe that I have picked upsome experience along the way.
COS: So it’s not just rational ‘‘seeing’’ alone, but basically more of a feeling, sensing, andintuition?

18

JD: Many people like to think of me as coolly calculating or a strategist. Yes, that’s what
I am, but no, that’s not what I am! I control my emotions, but if someone thinks that I
have no emotions, then they’re seriously misjudging me. Whether it’s appropriate orreasonable to show your emotions or preferences is a completely different question. Talking about personnel decisions, you need the right mixture; there are different levels to
consider. First, you assess who can help you here. Then, there are the natural instinctsor the emotions, where only this or that person comes into consideration. Different typesof people bring different inuences. For example, a person who has lived for 20 years in
Brazil has been shaped differently from someone who has lived in Asia for 10 years. You
may have two or three people in mind, and you ask, is there a signi cant difference inthe rational, in the learnable, in the skills? No? Then you choose the person who is closest
to you emotionally. I’m not so moved by the emotional side that I would bring just anybody into a position without considering: Can this person help us to reach our goals? Does
he or she have the right skills? It is the right combination of the emotional and the rational.
Here I’ve rarely been completely off the mark.
When I did go wrong, I needed one or two years to notice it or admit that I had madethe wrong decision. Then I was fairly clear and quick in correcting the situation. Thenthe rational or the primary goal was very much in the forefront. The personal relationshipdoesn’t have to suffer as a result, but it invariably does.
COS: In our  rst discussion in the company’s old brick headquarters building in Frankfurt,in 1996, you said, ‘‘Actually I’m not the CEO here, but rather the Generaldirektor. That’s
how the people see me.’’JD: In the negative sense of someone who comes in and ‘‘gives the orders’’?
COS: Yes. Back then you said that one of the main challenges you were facing was how
to transform the then quite hostile atmosphere among the various groups within the company. Was there a time when you saw that something had changed in the atmosphere,that the Herr Generaldirektor had changed into someone different?
JD: This position, this function, has such a strong effect on you and makes such an
impression that even if the new CEO is a different type of person from his predecessor,
he’s still in the system, in history, with that ‘‘walled in’’ feeling. Not because of the bricks
in the building, but because of the walls in people’s heads. You also have to consider thedifferent groups of people. There are, of course, different layers in a company, like therings of an onion. Should you peel it from the inside out or from the outside in? In such

Volume 4, Number 2, REFLECTIONSCOS: And in the process, there was the one factor of bringing in the experience and key
players from the periphery. The other element that stands out is that you are just as awareof the things you don’t do as you are of those that you do. Can you comment on this?
What does leadership have to do with the things one does not do?
JD: Oh, quite a bit. Again, this can’t be removed from the historical context. If, in acompany of this strength and dynamism, the chairman of the board insists that the approval for every new computer that is purchased has to go across his desk, how motivated
are his service people?
What am I not doing? I’m not doing a thing, and maybe that’s the point. I haveconsciously shown you the mountains and the landscape. My job is—besides setting thetone—to impart the principle of competition, bring in values, and exert an in uence on
important personnel and strategy decisions. Beyond this, I try to keep out of the business.
For most issues, there is someone in the company who can do what has to be done better
than I can. When in doubt, when someone thinks they’re going beyond their competence,

REFLECTIONS, Volume 4, Number 2

SCHARMER·
Leadership Is about Setting the Tone

large structures, which have grown with success over decades, there are attitudes and successfully practiced behavioral patterns such as, ‘‘We’ve made it through so much;
we’ll make it through this as well; we won’t bump ourheads on anything.’’
Success came fastest, though, when I quickly established a competitive, market-driven orientation. Those closest to the market reacted more quickly and were in
sympathy with this direction. There were those far from themarketplace—central departments for R&D, engineering,purchasing, and so forth—far from the business side until
their functional structures were affected by the ‘‘shining
beacon’’ of the market economy. These people reported tothe board of management, and their overhead costs were
dished out to those on the business side, accompanied by
the attitude of, ‘‘You’re the businessmen. Show us yourprots.’’ The poor business managers who reported to theboard—there was one board member responsible for eachdepartment—had to deal with these cost structures.
An introduction to values is an introduction to principles, with the competitive system testing alternatives, internally and externally, offering no pardon. I would saythe  rst visible signs probably came after 12 to 24 months.
After that, though, they came increasingly faster. This happened after the  rst walls began falling, and the probability
grew that our productivity wouldn’t disappear or the teamwouldn’t disappear. You have to wait during the initial
phase for visible success in terms of change, but then, allof a sudden, it happens like the ‘‘domino effect.’’ If you
went back today to the Hoechst campus or the Hoechst industrial site, there are around 40 or so companies that have
moved there because they saw business opportunities among the other companies. Oncethe system began to show signs of improvement and resistance to change began toweaken, the process of change started to become self-enforcing and accelerating. It
shouldn’t be underestimated that all I did was just add the spirit of competition to ourways of doing things. The spirit was added to ideas and people.
I brought many people back into the leading inner circle—people who had belonged
to the company for a long time but hadn’t grown up in the ‘‘inner realm’’ because they
managed country businesses far away from the German headquarters. I put them into key
positions at the corporate level. The introduction of competition and the disbanding offunctional areas have inuenced other German companies, regardless of whether they’ll
admit it. If you look around at the structures found in Germany today, the basic concept
is for the most part identical with or based on what we have done.

© Jonathan Liffgens

19

SCHARMER·
Leadership Is about Setting the Tone

they invite themselves to have a cup of tea with me, and the person says, here’s where
we stand; this is the question facing us. They may also have operational questions, but
important ones. It’s an incredible education for an organization to allow people to do this.
In the meantime, I have developed a certain respect and consistency for this, something I didn’t have 20 years ago. If someone comes to me for the third or fourth time
expecting me to give a decision, I tell them they can drop by again any time, but I ask ifthey’ve thought about this or about that and talked with this or that person.
There used to be the corporate staff department to which all investment proposals
over $200,000 were sent for approval. My intimate knowledge of the company comesfrom my time serving there as the gatekeeper for this whole bureaucratic process. Whyon earth should I be dealing with decisions about whether to spend one or two million?
This is a corporation with a market capitalization of some 60 billion euros!
So back to my point: doing nothing is an excellent decision —declining to make decisions, acting as a discussion partner who is always available and willing to talk withanyone who wants to see him. But it is also part of the system, the educational process,and the belief in the system. At the beginning, we had a system in which the managers,
starting with engineering, purchasing, and accounting, or the scientists and research management would have to rst agree before the managers in the marketplace were free todo what they wanted. As the director of the corporate planning department, the interfaceof all these con icting interests, with direct access to the CEO, I had no real power.
There were more internal issues. There was the change in research, and the line-upof new key people like Frank Douglas, for example, who is one of several Americans on
our senior executive management team. We’re in the position we are today because
Hoechst was always very good in scientic research. In the past, our approach was basedon arrogance, assuming that we had these great products that sold themselves. We didn’t
think we needed marketing or an organization in America. The changes we made in
research were based on changes in people. When I brought these people in, for example,
Frank Douglas and Dick Markham, there was resistance from all sides, including employees and the supervisory board.
COS: What made you so sure of what you were doing then?

20

JD: My ‘‘eye,’’ which we were talking about earlier. I said that I’m not budging one inch.
If you want to dismiss me from this position, you can do so, but right now this is my job,
not yours. With these people and the organizational changes we made, we brought ourselves and our technologies into the international scientic network. Today we are highly
valued partners, whether our people are on the East Coast, in San Francisco, in England,or here in France or Germany. We are reliable, we respect our partners, we seek mutuallybene cial arrangements, and we are fully part of the give and take of the network.
We no longer think we know everything or see Frankfurt as the center of the universe.
I put a lot of emphasis on distinguishing between individual actions that had an impact
and the systemic aspects, such as introducing competition and opening to the outside.
Look at the people we’re getting now! During the past two years, Frank Douglas has
been able to bring on board top people from the competition. He’s also getting young
people, fresh out of college, regardless of whether they’re from here or abroad. We neverwould have gotten these people before. Bringing about this integration into the larger
network has been part of my inuence. I see and match people with challenges andopportunities. I cast what you called my ‘‘magic eye’’ on the people I am interacting within order to sense whether he or she is the right person for the respective constellation ofchallenges and opportunities.
But I’m not calling the shots on how to run a particular business. How could I? Thereis de nitely a difference between whether you have been prepared and trained to workin our core business —pharmaceuticals—and whether you are able to lead a large company, as I am. The skills, the abilities, and the traits, including the negative ones, and all
the things that I can’t do but have tried to compensate for with my team, are not the same
management criteria that you would need to run a pharmaceutical company.
COS: You said that one of your main functions is to set the tone in the company.

Volume 4, Number 2, REFLECTIONSJD: First, you live out your values in your immediate environment. Second, you locateand eradicate any areas that are in permanent con ict with the tone and values you want
to set. This is the point I mentioned earlier. If you’ve made a mistake, you’ve got to correct
it right away. A top manager can be as efcient as he or she wants to be in the short term,
but if he doesn’t align himself with the values, he doesn’t have a chance in the long term.
So, the process of setting the tone and living the values is never complete. It’s a long,never-ending process and a continuous striving for improvement.
COS: When you look at the overall transformation process, what happened to Hoechst?
Did the old Hoechst end? Or is it living on here in some other form?
JD: No, it is something completely new. We know our roots, the learning processes that
we’re talking about, and the change processes that I’ve just tried to describe. We encountered so many things along the way, which makes questions about legal entities or
new corporate bodies of much less importance. It was a huge undertaking to structure all
the legal issues and control everything. I was only in it here with ideas and during thenegotiations. I was able to make a contribution that others might not have been able to
make. But the team carried it out and dealt with the legal structures and the necessary
steps that had to be taken.
About a year or 18 months before the Celanese divestiture, I told Claudio Sonder that this was something we should
do. I told him to get himself ready to lead this thing without
telling the others. He wasn’t even responsible for that business at the time, but in my view —and here we’re back tothe ‘‘eye’’—I knew he had the potential, the personality, andthe ability to be the CEO of this kind of company. The spinoff was carried out in close coordination between him andthe CFO and a number of other people. But here, as elsewhere, I always had a ‘‘champion’’ in place. When something didn’t work out, the champion had to be replaced.
Can you imagine, though, what kind of energy and power is set free in someone when
he or she knows, ‘‘This is my turf; I can shape it and mold it, and when it’s done, I’m theone who can take responsibility’’? Incredible emotional, intellectual, and psychic powers
are released, and people act like a power source radiating out to the immediate circle
around them.

SCHARMER·COS: How do you set the tone?

Leadership Is about Setting the Tone

JD: Dening the values, setting the tone, and nding the right people.

The process of setting the tone
and living the values . . . is a long,never-ending process and acontinuous striving for
improvement.

COS: What have you learned over the years about what makes up the company as awhole?
JD: I learned that success is the beginning of failure if you don’t stay open and able tochange. Since large corporations like Hoechst or others have stood so well for so long
without being forced to gradually adapt themselves to changing conditions, a more dramatic acceleration process becomes necessary. So, this inability to adapt was conditioned
to some degree by the company’s past success. When I look at where we are now, and I
see our initial successes, I have to say that I’m still very aware that they are only ‘‘initial’’successes. This is because the world around us is changing, particularly in our area of
focus. The health sector is experiencing rapid change, which underscores our need tointegrate into our environment. A company has to adapt to its social context and to thewider world in which it operates. We exist as part of social and political systems, and wehave to adapt to their structures. This is especially true of the subject of health, which
affects all of us. It shapes health care systems, societies, and overall political systems andis a eld in which Hoechst faces major challenges.
The other side of the story is the continuing process of opening to the outside. We’ve
come a long way in 10 years. We’re witnessing the accelerated application of new technologies and knowledge, whose interrelationships and linkages are becoming incredibly

REFLECTIONS, Volume 4, Number 2

21

SCHARMER·
Leadership Is about Setting the Tone

complex. The shift in the relationship between the ‘‘inside’’ and the ‘‘outside’’ is resulting
in the ever greater importance of information technology. I’m trying to reach out, beyond
where we are now, to bring into the present the networking and the research structuresof 10 years in the future. We have to be able to see things from a wider, larger perspective.
But with regard to your question about what makes up a company and the issues
related to introducing the market orientation and linkages with social issues, I would saythat there are no xed points or xed cost areas that are untouched. Everything is alterable; it’s all a function of time and place. Take the example of research and production.
What used to be the most important things on our balance sheet were the xed assets or
tangible things. Most important now is goodwill and the people we have to motivate. In
other words, they are our real capital assets, and they can get up and walk away if we
don’t set the right tone and the right values.
We try to anticipate the future by understanding that you can’t regard as certainties
things that appear to be ‘‘givens.’’ You have to operate with this knowledge when setting
priorities and selecting product areas to enter into. The health sector involves many therapeutic areas, so we have to decide where we want to be and whether we want to ght
or seek the path of least resistance. While certain things may look secure and promising
for the future from today’s perspective, they may look completely different 10 years fromnow. You have to maintain an openness to the outside within the context of social, political, and scientic systems, and you have to have the courage to carry out the necessarychanges quicker than the others.
COS: When I visited you last time in Frankfurt I was struck by that Greek phrase over theentrance to the main lobby, panta rhei: ‘‘Everything is in ux.’’ Do you still believe inthat view of the world?
JD: Absolutely. Everything is in ux. That is the reality we live in and have to cope with.
COS: What does it take to operate in this kind of environment?
JD: You must learn to organize using ‘‘tents’’ rather than ‘‘palaces.’’ With tents, you aremuch more likely to organize around emerging opportunities. With palaces, you are condent and comfortable. But when you nd yourself out of sync with your social andbusiness context, the palace walls will start to crumble, regardless of how thick they may
have been.
COS: And the leader in this kind of environment is the one who ‘‘isn’t doing a thing,’’ as
you said.
JD: Right. But I was using my ‘‘eye,’’ seeing what was going on, and sensing which people
had the potential to rise to the occasion.

22

COS: Maybe that’s what leadership is about.
JD: Maybe, yes.

Volume 4, Number 2, REFLECTIONSInternal Outsiders
Transform Tradition-Bound
Organizations
Ariane Berthoin Antal and Camilla Krebsbach-GnathT

he people at the casting agency must have made a mistake! Are they really serious?
How could they have selected such a quiet guy, a German who joined the company
as a trainee straight from the university, to play the lead in this production? He has nevereven been posted abroad! How can such a person credibly ll the role of a CEO who willtransform a diversi ed, bureaucratic, tradition-bound German company into a global
player in biotechnology with a small head ofce located in France?
A proper director would surely have explained to the casting agency that it would
have to nd someone who could step onto the stage as a visionary leader, an expert, anda charismatic communicator. At the very least, he or she would have to be a chemist witha track record in the lab; it is inconceivable that someone with no scientic expertise
could head a major German chemical-pharmaceutical company. All the previous leaders
had doctorates and brought the authority that comes with the title professor. ‘‘Just a Mr.’’is clearly not enough for this role.1
A proper director would never have permitted the leader to move the stage aroundeven before taking the job. The corporate center is in Frankfurt, so the designated leader
in the play certainly can’t shift a signi cant part of the action to the US. But this is precisely
what the man did, to the consternation of many.
A longstanding member of the German top team described the shift as a huge culturalchange: ‘‘The traditional way of doing business at Hoechst was that Frankfurt is the central
power, we are satellites around the world, and we have to take good care of the satellites.
The businesspeople were used to going to their area of responsibility twice a year, rstclass, to visit their empires. . . . After the merger, things completely changed because
people were, I think, forbidden from going to the US to check out the US operations. There
was a huge cultural change. . . . The center of gravity, the center of power, was no longer
in Frankfurt for these activities, but in Dallas or Charlotte. . . . German managers had toreport to Americans residing across the Atlantic in the US.’’Who is crazy enough to transfer power from the head ofce to a company acquired
abroad? And this person is supposed to play the role of CEO?

Ariane Berthoin Antal
Senior Fellow and Program Leader
Organizational Learning
and Knowledge
Social Science Research Center
Berlin (WZB)
Professor, Technical University of
Berlin
ABAntal@wz-berlin.de23

A German company that had operated internationally for more than 100 years was crazyenough to disregard the commonly accepted approach to achieving radical change. Insteadof replacing its top management with people from the outside and engaging the supportof armies of consultants in order to bring fresh perspectives and revamp the organization,‘‘internal outsiders’’ conceived of and implemented the transformation of Hoechst. This
tradition-bound company, often characterized as rigid, was nevertheless home to a suf cient number of querdenker (nonmainstream thinkers or, more precisely, across-thegrain thinkers) to change signi cantly the culture, structure, and focus of the company
within a mere six years. How did the company nd these people? How did they work

REFLECTIONS, Volume 4, Number 2

Camilla Krebsbach-Gnath
Partner
KG&D Consultancy
Kronberg, Germany
KGDKronberg@t-online.de© 2002 by the Society for Organizational Learning and the Massachusetts
Institute of Technology.

BERTHOIN ANTAL AND KREBSBACH-GNATH·
Internal Outsiders

together to make such a transformation possible? What can we learn about the design
and realization of dramatic organizational change from the Hoechst experience?2

How to Find ‘‘Internal Outsiders’’
In 1993, the supervisory board of Hoechst AG selected Jürgen Dormann to succeed Professor Wolfgang Hilger as chairman of the management board in 1994. At the time, Dormann was the member of the management board responsible for  nance. At  rst glance,
he was no outsider. To the contrary, he had always been based at headquarters, where
he had moved up the ranks. He had, however, gained experience in the US market while
masterminding the acquisition of Celanese, and the business press reported that the success of that process was widely attributed to him (Der Spiegel, 1993: 105). He was nevertheless an unusual choice for the position of Hoechst CEO. Unlike all his predecessors,
he was not a chemist, but an economist with international  nancial expertise. So why did
the board choose such a ‘‘very different kind of insider,’’ as a long-standing observer
characterized him? It is likely that members of the supervisory board shared Dormann’s
sense that the tradition-bound company, which he described as ‘‘German-rooted, strongly
science-based, not very market-oriented, very introverted, very academic,’’ needed to be
shaken up. The catchy German phrase that Dormann coined to convey his intentions,‘‘entfrosten und entrosten’’ (unfreeze and unfetter), was soon heard from Hoechst managers around the world. (See the interview with Dormann on page 16 of this issue.)
The choice of a CEO with totally different quali cations from those of his predecessors
was only the beginning of leadership changes at Hoechst. No top manager can singlehandedly transform an organization. Dormann needed help, but where would he nd thepeople to bring fresh ideas and perspectives to such a traditional company? Its culture
was ‘‘very chemical-driven, centralist; when you wanted to make a career, you had tostay in the center,’’ a senior German manager noted. The role of an internal outsider is
not a comfortable one, and it is likely that querdenker are repressed in such an organization. As Warren Bennis points out:
The fact that the organizational deviant, the individual who sees things differently, may be
the institution’s vital and only link with some new, more apt paradigm does not make theorganization value that person any more. Most organizations would rather risk obsolescencethan make room for the nonconformists in their midst (1989: 124).

24

Dormann immediately looked for allies and sought them  rst on the periphery. He
looked in the international subsidiaries and among the foreign managers that Hoechst had
brought in with its acquisitions abroad. Just before taking ofce in 1994, for example, he
asked Claudio Sonder, who was responsible for Hoechst do Brazil, to join the new task
force that he charged with developing the company’s new structure and strategic orientation. The two men had met in 1974 at the central ofce. Sonder, like several othermanagers, had consciously chosen to pursue a career outside headquarters. Dormann had
reached him by phone in Mexico saying, ‘‘Look, I am going to form a task force. Do you
want to be part of this? It’s going to be eight guys. You will have to be exible; we needhalf of your time during half the year. And you can think and do what you want.’’ That
prospect excited Sonder, so he agreed to come on board.
Other managers drawn from the periphery were Ernie Drew and Bill Harris from theUS. Drew had been group vice president of Celanese when Dormann was negotiating theacquisition of the company, and the two men had worked closely together during thatprocess. Drew then became president and chief operating ofcer of the new company,
Hoechst Celanese. He recalled how Dormann had invited him to chair the new task force:‘‘He said, ‘I need you, Ernie. I need you over here to help with change.’’’ Drew smiledwryly, ‘‘Dormann ‘conned’ me into it.’’ The other task force members recruited from theperiphery were Germans, such as Thomas Hofstaetter, who was running the pharmaceutical division in Japan at the time. Dormann also found some allies for his transformation
process inside corporate headquarters, people such as Rainer Handte and Bernd Sassenrad, who knew the internal procedures and could  nd the right levers and channels in
the company to communicate ideas and generate change.

Volume 4, Number 2, REFLECTIONSThis combination of insiders fromthe periphery and insiders from thecenter stimulated the developmentof ideas and plans and proved very
effective for the implementation
process.

Someone who sees a truth that contradicts the conventional wisdom of the institution —andremains loyal to both entities, to the institution and the new truth. Heretics are not apostates;
they do not want to leave the ‘‘church.’’ Instead they want the church to change, to meet thetruths they have seen halfway (1996: x).

Dormann and his colleagues questioned old truths because they believed the company was endangered, and they were willing to take risks together to encourage change.
Dick Markham, another American manager Dormann had brought into Hoechst throughan acquisition, described their approach quite simply, without the hubris characteristicof many top managers at the helm of major change processes: ‘‘It wasn’t some stroke ofbrilliance on our part; it was the way we grew up. We couldn’t understand why you
would do it any other way.’’
As important as internal outsiders were, bringing them on board is not enough toactually achieve change. What did the querdenker do to transform Hoechst in such a short
time?

REFLECTIONS, Volume 4, Number 2

BERTHOIN ANTAL AND KREBSBACH-GNATH·
Internal Outsiders

All the internal outsiders on the task force came from second- and third-level management. Dormann wanted to get the ideas and support generated at this level of theorganization rather than limiting the strategic thinking to the very top. As diverse as themembers were, they had one characteristic in common; as one of them remarked, ‘‘Noneof these people were narrow.’’ This combination of insiders from the periphery and insiders from the center stimulated the development of ideas and plans and proved very
effective for the implementation process. Dormann chose only one real outsider to workwith the team, Wilhelm Rall from McKinsey Germany. Everyone involved emphasizedthat this was a personal invitation: ‘‘It was not a McKinsey project. . . . Rall was a memberof the team whom we could use as a sounding board . . . and he helped us understandsome of the other German companies that had gone through change.’’ Asked about what
had driven his selection, Dormann responded simply, ‘‘I looked for complementarities.’’
Gradually, Dormann achieved a change of leadership at the very top of the organization too. Little by little, he placed internal outsiders on the Hoechst management board.
For example, Horst Waesche, who had sworn to himself that he would never work inheadquarters again, let himself be talked into returning from Japan. Klaus Schmieder,
who had been exposed to the nancial analysts of Wall Street earlier than his Germancolleagues, was also brought on board. Drew became the  rst
non-German member of the management board, although hespoke very little German and felt that many ways of doing
things in Germany were ‘‘crazy.’’ Two years after Dormann
took ofce, the management board had been completely revamped, partly due to the openings created when several
older members retired.
The business press also credits Dormann with engineering a signi cant shift in the leadership at yet another level of
Hoechst, the supervisory board. Traditionally, the former
chairman of the management board had moved into the chairof the supervisory board. However, when Dormann became
CEO, it was not his predecessor, Professor Hilger, but Eberhard Bouillon, a former management board member with many years of experience in human resources and industrial
relations at Hoechst, who became the chairman of the supervisory board. The strategicchanges Dormann and his management team were to introduce in the coming years would
require that the chairman of the supervisory board be able to negotiate with multiple
stakeholders. The fact that Bouillon was not a chemist like Hilger also made it easier forthe supervisory board to envisage a future for Hoechst in which chemicals would no longer
be central.
What did Dormann and the managers he brought together have in common? Theylooked at the company and at market developments from a perspective that was different
from the one that had dominated Hoechst; this made them very concerned about thecompany’s future. They were the kind of internal outsiders that Art Kleiner aptly describes
as heretics:

25

BERTHOIN ANTAL AND KREBSBACH-GNATH·
Internal Outsiders

How Do Internal Outsiders Transform an Organization?
1. Name the Problem and Create a Sense of Urgency
Dormann did not outline a brand new vision when he became CEO. Instead, he convinced
people that the company faced problems and needed to radically transform. Such change
processes are usually initiated only after a crisis has already hit. But Dormann intended
to avoid the crisis that he saw looming on the horizon. He gave a speech that shook up
the company and introduced a new German term to the Hoechst managers around theworld: Aufbruch 94, meaning ‘‘new beginnings.’’ Rall commented, ‘‘There was a hugefeeling in the organization that they had to catch up again. Hoechst had been quite highying in the 1960s and 1970s, and then it went down. Somehow, change was overdue inthe mid-1990s.’’ Dormann warned, ‘‘We have little time to lose. The opportunity can slip
away too fast, and high expectations for change can rapidly turn into an even deeper
feeling of disappointment.’’ When he outlined the key issues that he intended to tackle,
the clear and high goals were invigorating. ‘‘It was the rst time that anybody in Hoechst
had said that we had to be among the top three in whatever business we pursued,’’reported a manager who had heard Dormann’s speech.
Dormann signaled that he intended to achieve a radical change in norms, which one
manager characterized as moving ‘‘away from optimizing the existing business toward
the development of something completely new.’’ His message sent shock waves throughout Hoechst. A Japanese manager captured the feeling well: ‘‘Since I entered Hoechst inJapan, for more than 30 years I have been told that general chemicals is the key tocompetitiveness. . . . When Mr. Dormann became president, he proclaimed that precisely
the fact we were a general chemicals company was the symbol of weakness. . . . To behonest, that was a shock. This change in values took a long time for me to understand.’’

2. Give Querdenker Space to Work on Key Strategic Issues

26

Dormann’s creation of a task force to review the structure and strategy of the company
was in itself not a particularly original step. However, the composition of the group andthe broad scope of its task were unusual. ‘‘This group had lots of space to analyze Hoechst
and to develop a vision for the company,’’ recalled a member. The task force soon became
known as the ‘‘dream team,’’ probably because it had the freedom to dream of a different,
better Hoechst. A member of the supervisory board speculated later that this openness
would not have been possible earlier because ‘‘the other CEOs had all been chemists, andchemists don’t dream, do they?’’
Unlike jesters, who challenge the traditional ways of seeing and doing by playing atcourt, the dream team members fullled their role by traveling around the world. They
broke a longstanding Hoechst norm by looking beyond the two large German chemicalpharmaceutical companies with which Hoechst had always compared itself, BASF andBayer. Instead, they started benchmarking Hoechst against
highly respected multinationals such as General Electric,
ABB, Royal Dutch/Shell, Dow, and Ciba Geigy. They explored the structures and processes to nd what Hoechst
could learn from them.
Usually, strategic task forces are quite closely monitored to ensure that they do not come up with undesirable
results. But the dream team did not have to report on its
work until the end of its six-month assignment. The communication style was very informal. ‘‘There was no reporting requirement,’’ said Dormann. ‘‘I am always available, and some people feel that this is the more effective wayof exchanging ideas.’’ It was typical of Dormann that he had not clearly indicated to theteam what he wanted, other than to seek models for change. This leadership style left it
up to the team members to work out their own ideas and be responsible for making themhappen. A close associate notes, ‘‘What you will notice when you talk with Dormann isthat he leaves a lot of space for initiative. He does not tell people what to do.’’This leadership style left it up to
the team members to work out
their own ideas and be responsible
for making them happen.

Volume 4, Number 2, REFLECTIONS

4. Change the Parameters for Decisions
Dormann had observed an effective assessment procedure at Celanese that he wanted
Drew to introduce to Hoechst as a way to implement the recommendations of the task
force and achieve the thorough transformation of Hoechst management processes. He
established a committee to introduce the strategic management process under the sharedleadership of Drew and Günter Metz. Metz was a long-standing Hoechst manager withextensive experience at the head ofce, a German who could handle the delicate task ofbuilding a bridge between the cultures and the generations during the transformation.
The results of the rst round of reviews with the strategic management process were evenworse than expected. One senior manager recalled, ‘‘We went through the whole analysis.
We discovered that a lot of the businesses were not up to speed, were too small, did not

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Two things were clear to the task force from the beginning:they would have to deliver their recommendations within
six months, and they would then be responsible for delivering the changes. ‘‘For lifelong Hoechst employees, thiswas very exciting,’’ said a member of the team. ‘‘If we haveideas, they are going to be implemented. And so it was a
new start. A new CEO, new opportunities, and the supportof senior management in implementing changes.’’ But it
was no easy task, and the responsibility for delivering on
their recommendations entailed some uncomfortable situations. For example, the new structure, based on the workof the dream team, meant that some managers heading subsidiaries around the world would lose a great deal of theirpower. Sonder remembered how painful the job had been:‘‘I was in charge of informing all the European subsidiaries
of Hoechst that the country heads would essentially be administrative functions. You can imagine what this meant,because I was considered the traitor, the guy who camefrom outside, and I was changing and diluting the power ofthe country kings.’’
As the only non-German on the management board of
the German-based multinational company that Hoechst wasat the time, Drew’s role as an internal outsider required atricky balancing act. He had to learn about the Hoechst culture while maintaining enough distance to change it. To
contribute to policy making and decision making, he hadcome to understand the German system of corporate governance, something he found very difcult. At the same time, his responsibility was tochallenge the traditional ways in order to instigate changes in the corporate culture.
By drawing on his industry experience in the pace-setting US market, Drew was
supposed to help transform Hoechst management thinking and processes from theGerman-based culture to that of global players. A colleague commented: ‘‘Drew became
the bull in the china shop. Dormann ew him down to Frankfurt and had him wander
everywhere in Hoechst with his elbows out, breaking things. Which is what he did. Hequestioned why things were done in a particular way. He insisted that people be held
accountable for performance. He insisted that when they said that they were going to dosomething, it was later checked to see whether they had done it or not. And Dormann,rather than being as demanding a boss as I am sure he is capable of being, was able tobe more statesmanlike because Drew was breaking all the china for him.’’ Dormann’srole was to provide space and support so Drew could work against the grain of the corporate culture and bring in his ideas and techniques to focus on the market, strategy, andspeed.

·

3. Make Querdenker Deliver© Emily Sper

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have enough technology or critical mass, and the cost base was too high. We had stretchedourselves too much in the past, so we were mediocre in a lot of things but not good or
top in even a few things.’’
The process was painful because the Hoechst managers realized that they had to makesome tough decisions. It would not be possible to invest in all the businesses in order tobring them up to the desired level, so some would have to be sold. ‘‘In the process, weessentially de ned which were the core businesses and which were more on the periphery,’’ Schmieder explained. Managers with experience in the US advised, ‘‘Focus, focus,
focus!’’ It was not too difcult to give up the cosmetics businesses because they wererelatively new and peripheral to Hoechst. The decision not to pursue the  bers business
was much more painful, because some senior managers had dedicated much of theirprofessional lives to developing successful products such as Trevira. The most dramatic
decision was to sell the bulk chemicals business, because dyes had been the company’srst product in 1863, and several generations of employees’ families identied with it.
This decision had a huge impact. When the Swiss company, Clariant, bought the  bers
business, it took with it a quarter of the Hoechst employees in Germany.

5. Create a New Knowledge BaseA new strategy cannot be based solely on the identication of core activities and theseparation from those designated as ‘‘noncore.’’ An organization has to build the competencies and especially the knowledge base required for leadership in its chosen eld.
Hoechst needed new outsiders to help do this and decided, in 1995, to acquire Marion
Merrell Dow in order not only to strengthen its position in
the US but also to bring in new skills that Hoechst lacked.
Dormann had set his sights on two senior managers in thatcompany, Dick Markham and Frank Douglas, whom hesaw as a strong tandem to develop a new knowledge baseand working methods in the pharmaceutical division of
Hoechst. He asked Markham to head the pharmaceuticals
business, and he put Douglas in charge of corporate research and development.
The two men introduced signi cant structural and cultural changes in order to generate new knowledge and skills. They established an interdisciplinary project structure in
research, doing away with the old functional silos separating chemists from biologists andtoxicologists. ‘‘The role of function is to supply the best technologies, the best people, thebest expertise to support teams,’’ Douglas explained. And they shifted from a regional toa global structure, assigning a signi cantly larger role to the labs in Bridgewater, New
Jersey, where a competence in biotech research had been established. Both Markham andDouglas sought to introduce a strong market sense into the business, even in the researchlabs.
When the two American managers arrived in Frankfurt, they found that, ‘‘People
were very focused on science. They were focused on doing experiments. But they were
not focused on asking the question, ‘Will this experiment tell me whether this compoundor this project is likely to lead to a drug?’’’ Douglas renamed the research and development
function ‘‘drug innovation and approval’’ to re ect the orientation he sought to instill. He
explained, ‘‘I wanted people to understand that they should operate differently. We arein research to innovate drugs.’’ He also wanted to provoke the researchers ‘‘to startthe dialogue.’’ Douglas recognized that knowledge creation is more a matter of dialogue
than of technology: ‘‘If indeed the competitive advantage is being able to share knowledge rapidly and sensibly integrate new technologies, where better to do that but in ateam that has a clear problem, a clear project, or a clear focus and a community ofpractice? . . . We want them to talk together and to get the tacit knowledge out.’’
Douglas encountered enormous resistance at the outset. The researchers even demonstrated publicly in front of the Hoechst gates. But Douglas did not break off the dialogue.
Several factors contributed to the success of his approach. Support from top management
was key: ‘‘If Mr. Dormann and Mr. Waesche did not support what I was trying to do, did
not believe in what I was trying to do, this was not going to be possible.’’ A second crucial

An organization has to build thecompetencies and especially theknowledge base required forleadership in its chosen eld.

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Internal Outsiders

factor in achieving change was Douglas’s leadership style,including his ability to walk the talk about change itself. He
realized, ‘‘I was going to be asking my colleagues to change
the way they did things, to do things differently, and to dosome things that were difcult for them. Therefore, I needed
to show them that I was prepared to do something that isnormally considered difcult for Americans. So I said, ‘I am
going to learn German, and I’ll do it very publicly and openly.
Perhaps I will succeed, perhaps not, but you will see metrying.’ We had a lot of laughs along the way. After a few
months, I went to a two-week intensive, in-depth course, andsuddenly it clicked. In about nine months, I was uent.’’
Douglas chose a surprising metaphor to explain a further
key concept in his leadership philosophy, namely, the ability
to maintain his sense of direction while listening to others.
‘‘When you are trying to implement change,’’ he explained,‘‘you are going to hear a lot of noise, a lot of complaints.
What a leader has to do is to be calm enough and still enoughto hear the birds chirping. . . . When the birds are no longer
chirping, it’s like in the coal mines, there’s danger. And you are dead. So listen to thebirds chirping. They are the ones who will lead you to the success.’’ Douglas leads as aninternal outsider by placing himself on the sidelines: He provides a sense of direction andthen enables others to establish self-managed processes in their project teams.

6. Treat Change as Constant
Change processes in organizations rarely have a clear beginning or end. The Hoechst
employees had only just digested the integration of Marion Merrell Dow when they started
hearing new rumors about further changes. The business press reported weekly about
new international mergers and acquisitions. In order to remain a key player in the industry, companies had to keep growing rapidly. No company could grow fast enough on its
own, so Hoechst, too, had to look around. In an environment dominated by the fear of‘‘eat or be eaten,’’ Hoechst faced the options of being gobbled up or of slipping down theranks to the status of a medium-sized company.
In December 1998, Hoechst announced its decision to pursue a ‘‘merger of equals’’
with the French multinational pharmaceutical company, Rhône Poulenc. The new company was to be headquartered in the European city of Strasbourg and would take on a
new name, Aventis. The merger would create a powerful life-science company and position it at the top of pharmaceutical companies worldwide and second in agriculture.
(Just a few months later, the merger of GlaxoSmithKline moved it to the top of the rankings.)
Dormann had made his approach to change explicit in 1993. He warned people not
to build palaces but instead to set up tents because tents can easily be taken down andput up somewhere else. True to this metaphor, Hoechst was almost completely dismantled
in 1999, and the new Aventis tent was set up quickly in Strasbourg. Then, in early 2001,
the company announced another major organizational and strategic change: agriculture
would be moving out of the tent, and Aventis would focus on the pharmaceuticalbusiness.
Transformation is ongoing.

Who Can Learn from the Transformation of Hoechst to Aventis?
Many global companies have to undergo cultural and structural change in order to maintain their competitiveness. Many, like Hoechst, have extensive international experiencebut have to recon gure themselves signi cantly to operate as truly global players. Possibly
the most positive message from the Hoechst experience for these companies is that thepotential pool of heretics capable of conceiving and leading change among their ranks istremendous. If a tradition-bound company such as Hoechst can  nd enough internal outsiders to achieve a comprehensive transformation of its culture and structure, then almost

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every other company will also be able to discover an equivalent potential among its managers. They are located in diverse functions, units, and levels. They may be in subsidiaries,
headquarters, and recent acquisitions. It is just a matter of seeking them out and giving
them the space and responsibility to envision and achieve change. Decision makers must
dare to deviate from traditional pro les when lling positions, starting with those at
the top.
The Hoechst transformation conrms Jim Collins’s ndings: ‘‘People generally assume that transforming companies from good to great requires larger-than-life leaders—
big personalities like Iacocca, Dunlap, Welch, and Gault, who make headlines and becomecelebrities’’ (2001: 68). Dormann and many of the internal outsiders he chose to lead thetransformation in Hoechst shared the paradoxical combination of features of ‘‘humilityand erce resolve’’ that Collins observed in his US sample.
Internal outsiders are necessary but insufcient for effective transformation. A cultureof cooperation is crucial because loners cannot put enough in motion to achieve truly
signi cant change. A wide, diverse network provides the possibility for identifying allies
and drawing them together cooperatively. Every company must therefore enable networks
to develop across functional and business unit boundaries. Rotation programs, international postings, project teams, and management development seminars with a diverse mixof participants are all ways to give employees opportunities to get to know and appreciateeach other. Such activities also permit employees to examine their organization criticallyfrom different perspectives and to discover useful connections and possible dysfunctions(Berthoin Antal, 1991). Ideally, they can thereby identify problems early and act on themin a timely manner.
The Hoechst example illustrates the importance of a combination of perspectives.
Managers from headquarters and those from the periphery bring together different waysof seeing and addressing the organization’s problems. The intimate knowledge of theorganization and its often bureaucratic systems that managers from the center have isessential to achieving change effectively. Dormann stressed that he did not shy away fromusing his ability to ‘‘play on the traditional keyboard’’ of
Hoechst in order to create space for his new ideas. The inclusion of managers from the periphery is also simply a matter of clever power politics. When structural and culturalchanges entail a loss of power in parts of the organizationthat have been relatively autonomous, it makes sense to
draw some people in from the periphery to take new responsibilities for implementing the changes that they mightotherwise use their power base to resist.
An inclusive strategy that seeks to turn potential resistance ghters into allies canwork only on the basis of trust and if all the participants believe that they are acting in
the interest of the organization. Few people are willing to support a self-serving querdenker. Many may, however, be willing to sacri ce their short-term interests if they see
a signi cant positive effect for the community with which they identify. In order for querdenker to attract allies, people must perceive that a deep-seated commitment to the goodof the organization is the central value and driving force for change.
The credibility of leaders purporting to act in the interests of the community rather
than for their own good depends largely on how they are seen to generate and distribute
power. The central functions of Hoechst were dramatically reduced, and their power was
shared across the organization. Not only Dormann, but also members of his leadershipteam, consistently initiated processes and opened spaces for others to implement ideas.
The common buzzwords of ‘‘empowerment’’ and ‘‘delegation’’ do not adequately capture
the essence of this process. Both terms are associated with a hierarchical view of power
and organization: bosses delegate downward, they may—and in modern management
should—allow ‘‘their’’ employees to share in ‘‘their’’ power. Rather than conceiving of
power as something that is ‘‘given’’ or ‘‘taken’’ in more or less explicit hierarchical processes, an alternative view is based on the assumption that power is something that cangrow in different places across the organization. The possibilities and limits of such an
approach to power have not been thoroughly tried in practice or investigated by research,but seeds of it are to be found in Aventis and probably in other organizations.

Decision makers must dare todeviate from traditional proles
when lling positions, starting withthose at the top.
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Possibly the most important lesson to be drawn from the transformation of Hoechst
to Aventis relates to the role of visions. Dormann did not have a clear, precise vision of
the company’s future when he became CEO, or later. He did have a certain sense of
direction and some consistent goals, but he had yet to work out the route and altered it
several times in the transformation process. This contradicts the dominant view that managers should have a clear, long-term vision to which they can gain the enthusiastic commitment of their employees. Piers Ibbotson, of the Royal Shakespeare Company, comescloser than management scholars to capturing the nature of Dormann’s approach. He
speaks of the importance of ‘‘misty vision,’’ which must be claried and worked out
collaboratively over time, rather than being the outcome of one or a few top minds. Sucha management approach requires many people in the organization to participate in interpreting the future and formulating ways to get there. Perhaps there is a greater similarity
between what goes on in companies and what happens on stage than is generally assumed.

Acknowledgment
This article is based on a longer chapter in German by the authors entitled, ‘‘Auf derSuche nach ‘internen Außenseitern,’’’ in Wo wären wir ohne die Verrückten? Zur Rolle
von Außenseitern in Wissenschaft, Politik und Wirtschaft, eds. Ariane Berthoin Antal and
Camilla Krebsbach-Gnath (Berlin: edition sigma, 2001): 165–203.

Notes
1. Quotations are drawn from the research interviews, unless otherwise indicated.
2. The research project on the transformation of Hoechst to Aventis was conducted by Ariane Berthoin Antal, Meinolf Dierkes (project leader), Camilla Krebsbach-Gnath, and Ikujiro Nonaka. Kate
Nattrass, Casey Teele, and Sari Yli-Kuahaluoma helped with desk research and data analysis.
Patrick Reinmoeller and Ryoko Toyama assisted in conducting interviews in Japan. The researchhas been published as a two-part business school case study with full teaching notes and a video.
These can be obtained from the European Case Clearing House (order numbers 302–031–1; 302–
031–3; 302–031–8; and 302–032–1).

References
Bennis, W. Why Leaders Can’t Lead (San Francisco: Jossey-Bass, 1989).
Berthoin Antal, A. ‘‘Gehör schaffen für Verrückte. Von Querdenkern lernen.’’ gdi impuls 2 (1991):
3–11.
Collins, J. ‘‘Level 5 Leadership—The Triumph of Humility and Fierce Resolve.’’ Harvard Business
Review 79 (January 2001): 66–76.
Der Spiegel ‘‘Feine Witterung.’’ 44, no. 24 (1993): 105.
Kleiner, A. The Age of Heretics: Heroes, Outlaws and the Forerunners of Corporate Change (New York:
Currency Doubleday, 1996).

31

Commentary
by Marla Kameny
Ariane Berthoin Antal and Camilla Krebsbach-Gnath outline six steps for how internal outsiders
transform an organization that can be almost ubiquitously applied to some degree in organizations
seeking to bring about major change. However, one step in particular deserves a more critical lookand further justication. Establishing teams and reorganizing the research and development department is only one aspect of ‘‘creating a new knowledge base.’’ It is one thing to create a culture
and structural shift in order to improve a company’s products, but at the same time, products are
not a company’s sole source of competitive advantage. What about the knowledge base of those
who sell the products? And that of those who support these individuals? Knowing more about how
the company’s overall knowledge base is affected, through its people and infrastructure, would be
helpful, especially for those organizations not necessarily in the pharmaceutical business.

REFLECTIONS, Volume 4, Number 2

Marla Kameny
Research Associate, Institute ofManagement
Executive Director, International
Study Program
University of St. Gallen
Marla.Kameny@unisg.ch

BERTHOIN ANTAL AND KREBSBACH-GNATH
Internal Outsiders·

The authors alluded to the subjects of power and politics, which caused me to cringe. Undoubtedly, power and politics exist and are most likely unavoidable, but in keeping with the morepositive lessons to be learned in this context, they could write another whole article on this subject
and its complicated realities.
The path taken by Dormann and his team in creating Aventis was ultimately successful. In his
interview, when posed with a question regarding leadership and what he does or does not do,
Dormann commented that his response can’t be removed from the historical context. Berthoin Antal and Krebsbach-Gnath provide a wonderful, rich description of what Hoechst did right that canserve as a model for other organizations, but such a story could have been helped further by providing more of a ‘‘before’’ picture, rather than only a ‘‘during’’ and ‘‘after’’ perspective. Such a
glimpse could have addressed issues relating to exactly why Hoechst had to change its traditional
way of doing business by asking just where, within the current structure, did problems lie? In decision making? In innovation? There were several allusions to certain reasons, but hearing repeatedlythat the way of doing things in Germany essentially was ‘‘crazy’’ was not convincing.
With continuing globalization, companies and their CEOs can repeatedly learn from the ambitious transformation efforts of organizations such as Hoechst. The supervisory board at Hoechst
ultimately selected Dormann as the new chairman of the management board. Can Hoechst then beconsidered lucky? If Dormann had not been chosen, would someone else have brought about suchchange? Wouldn’t it have been fascinating to be a y on the wall during the supervisory board’s
selection process?

Commentaryby Tom Durel

Tom Durel
Account executive
Provider HealthNet Services
tdurel@durel.net

32

The story of Hoechst’s transformation brings home three important lessons. The rst is that a combination of related actions are needed to create change. Ariane Berthoin Antal and Camilla
Krebsbach-Gnath point out that, as important as internal outsiders were, bringing them on board
was not enough to actually achieve change. Dormann and Hoechst had to create an environment
in which change could occur. In forming his task force, Dormann sought the power gained throughdiversity of experience from the periphery— from Brazil, Japan, and the US. But he also sought people with broad thinking and a common purpose aligned with his own. He found inside outsiders
who naturally not only thought out of the box, but executed plans and produced results.
Dormann was masterful in creating an environment of urgency coexisting with reection. The
members of the task force had to converge their thinking within six months, design what was tobe done, and execute the changes. The insider-outsiders at Hoechst had the discipline to not allow
the urgency of the situation to rush them to execution and the haziness of their direction to trap
them in their reections. They created a harmony allowing for creativity and bottom-line production. They took what, in many companies, are considered opposing behaviors and integrated theminto a powerful force of generative change. It brings to mind a little wisdom from my mother as
I struggled to succeed in my early school years: ‘‘The more you slow down, the faster you’ll
catch up.’’
The second lesson is the impact of structure on enabling change or, for that matter, on stiing it. The lesson is that it is not only what you say, how it is said, and what you do that drives
change but also, and more powerfully, the structure within the organization that enables thechange. All are important and all must be aligned, or change indeed will occur, but not the changethat was desired.
Alignment is the third lesson. It is intriguing how change in a community fosters the opportunity for growth and change in individuals, and vice versa. Many organizational learning sessions
end up becoming more about individual learning. Our desire for alignment and integration moves
us to consider not only the organization but also ourselves as we embrace or resist change. At any
given moment, we humans exist in multiple, intertwining spheres. We are individuals; we are members of communities; we are members of communities of societies. In all our spheres, there areforces that center us, such as purpose and values. There are also forces that shape, such as policies,
habits, and language. And there are forces that create, such as knowledge and skills. We seek consistency and alignment through these forces within ourselves, within communities, and withinsocieties.

Volume 4, Number 2, REFLECTIONS

by Ariane Berthoin Antal and Camilla Krebsbach-Gnath
Marla Kameny’s reminder that knowledge resides in so many different people is certainly important
for the readers to keep in mind, and we are glad that she emphasized the importance of looking at
the period before Dormann became CEO. We have already written a case about the transformationfrom Hoechst to Aventis, in which we specically covered the history that led up to the situation
Dormann faced when he took over. We are currently working on an article about the power andpolitics issues in change processes, particularly because the topic is so neglected in organizational
learning theory.
Kameny’s image of being a y on the wall during decision-making processes is one we canidentify with. When one conducts as many interviews as we had the good fortune to be able to do
for this study, one is always tempted to keep going and discover ever more.
We enjoyed Tom Durel’s comments, sensing that we share a similar wavelength. The way hebrought out certain points from our study and supplemented them with his experience and reections helps communicate our messages that much more powerfully.

BERTHOIN ANTAL AND KREBSBACH-GNATH·

Response

Internal Outsiders

As Berthoin Antal and Krebsbach-Gnath found, in order for the querdenker to attract allies,
people must perceive that a deep-seated commitment to the good of the organization is the central value and driving force for change. People must perceive an alignment between their centering
forces and those of the organization. Likewise, Frank Douglas, in learning to speak German, gainedalignment with the community. He did not ask the community to adopt his language. In so doing,
he showed how change within community requires change within self, to create the alignment for
performance. Dormann and Hoechst did not depend on clear vision but did begin with common
purpose and broad thinking, while providing an environment in which not only change but alsoalignment would work out over time.

33

REFLECTIONS, Volume 4, Number 2

Models and Tools
for Stability and Change
in Human Systems
Edgar H. ScheinIn this article, I will  rst differentiate types of change that occur in human systems andwill then provide a model that makes it possible to understand not only the nature ofchange but, equally important, the nature of stability. Change and stability are two sidesof the same coin. Hence, consultants and managers have to be concerned about the management of both processes. Within the framework of stability and change, I will thenexamine what we mean by learning, especially as we apply that term to groups, organizations, and larger social systems. As we will see, learning is a perpetual process and oneof many types of change that occur in human systems all the time. If such learning did
not occur, such systems would not survive. But the learning that creates stability andculture is different from the learning that enables organizations to innovate as they encounter changing conditions in both their external and internal environments.

Edgar H. Schein
Sloan Fellows Professor ofManagement Emeritus
MIT Sloan School of Management
Scheine@mit.edu

34© 2002 by the Society for Organizational Learning and the Massachusetts
Institute of Technology.

Types of Change
As managers and consultants, we need to distinguish three basic types of change that
occur in all human groups and organizations:
1. Natural evolutionary changes
2. Planned and managed changes
3. Unplanned revolutionary changes
The phrase ‘‘natural evolutionary changes’’ refers to all the myriad learning processes
that occur throughout any given organization as its various parts adapt to its various
environmental conditions. Every employee is learning all the time and is making changes
to adjust to his or her local conditions. Some of those changes bene t the organization
and would be called part of the organization’s capacity to learn. But as we have learned
all too often, under many circumstances what the individual employees learn is not how
to enhance what the organization is trying to do but, rather, to use ingenuity to maketheir own lot easier at the expense of the organization. Informal systems of ‘‘a fair day’s
work for a fair day’s pay’’ evolve, or, if management is sufciently repressive, moreelaborate creative systems to sabotage or undermine management’s intentions evolve. In
other words, as has been noted, evolution is not necessarily progress from the organization’s point of view.
It is managers’ discovery that natural evolution is not necessarily progressive or benign that leads them to think about planning and managing change, the second maincategory. Whether we think of that as steering the evolutionary processes or as more
actively controlling the direction of change and learning, what is implied is the assumptionthat one can control to some degree what is learned and the direction that change will
take. At the same time, it is implied that managers can stabilize those processes that need

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Human Systems as Quasi-Stationary Equilibria of Multiple Forces
In order to understand any kind of change, we must rst have a model of a ‘‘system’’ ina steady state, what Kurt Lewin so aptly called a ‘‘quasi-stationary equilibrium’’ (Lewin,
1952; Schein, 1985, 1987). A ‘‘system’’ can be an individual, a group, or an entire organization, and any given system is usually composed of a number of subsystems. When
any kind of change is being contemplated, it is helpful at the outset to decide what system
we are focusing on. Who is to be changed?
Any living system is always in a state of some change (growth, metamorphosis, ordecline), but all systems are homeostatic in that they always tend toward some kind of
equilibrium, and all systems have some subsystems thatchange more slowly than other subsystems. We tend to callthose that change at the slowest rate the ‘‘structure’’ of thesystem, such as the skeleton or the organization chart re ecting authority channels. But even those subsystems
change, and they are subject to the same homeostaticforces. The tendency toward equilibrium is achieved by abalance of forces pushing in different directions. But, if
some of these forces are altered and if no compensating
forces arise, the equilibrium will move to a new level. In
this sense, the equilibrium is only ‘‘quasi-stationary.’’
Because all systems are always in some state of change, the change agent should
locate those forces that are already acting to produce change. If those forces are not acting
fast enough or are acting in a direction other than what the change agent desires, the rst
stage in the change process is to alter the force  eld, or what Lewin (1952) called ‘‘unfreezing.’’ Before we can unfreeze the system, we must rst identify, with respect to ourchange goal, what the relevant forces are that are acting on the target system. This process,called ‘‘force-eld analysis,’’ is then a  rst step in any managed change program. If theanalysis reveals that the unit being changed is composed of a number of interconnectedsubsystems, then we have to analyze each subsystem. We cannot assume that the sameforces apply across all the subsystems.

Because all systems are always insome state of change, the change
agent should locate those forcesthat are already acting to producechange.

Analysis as Intervention
Though it is important to analyze and decipher the state of the system, it is even more
important to recognize that if the change agent asks questions, observes, gives questionnaires, or in any other way engages members of the system, he or she is intervening.
There is no such thing as pure diagnosis, but the change agent can do the diagnosis in amanner consistent with the change goals and with the full involvement of the target/clientsystem. Change models that separate the diagnostic from the intervention stage are ignoring the powerful impact that different forms of diagnosis have on the system being
diagnosed. Ignoring this step in the presumed interests of getting ‘‘valid’’ data by minimizing the ‘‘in uencing’’ of the data is clearly unethical and borders on unprofessional
when working with human systems.
Everything we do when we interact with any part of the target/client system is anintervention and must be guided by principles and ethics of intervention. Hence, theanalytical tools I will suggest can be thought of as ‘‘diagnostic interventions,’’ unless they
are done by the change agent alone as part of a planning process. However, as the philosophy of process consultation argues, it is more likely that the change goals will bereached if the target system becomes a client and begins to own the diagnostic interventions as well (Schein, 1999a).

REFLECTIONS, Volume 4, Number 2

SCHEIN·
Models and Tools for Stability and Change in Human Systems

to be preserved because they are working adequately. When managers speak of ‘‘changing
the culture of their organization,’’ they typically mean they want to make some changes
in what is currently going on, but then they want to stabilize the new ways of working if
they produce better results for the organization. In this scenario, organizations experience‘‘change programs’’ between periods of ‘‘stability.’’35

SCHEIN

Stages of the Change Process

Models and Tools for Stability and Change in Human Systems·

Any change process can be conceptualized as consistingof three stages or phases, based on the model of quasistationary equilibria —a stage of unfreezing, a stage ofchanging, and a stage of refreezing. No change will occur
unless the system is unfrozen, and no change will lastunless the system is refrozen. Most change theories tend
to focus only on the middle stage and then cannot accountfor inability to produce change in the rst place, or inability to maintain the changes that have been achieved.
The stages and the underlying processes that have to occur
in each stage are outlined in table 1.

Unfreezing© Emily Sper36

By far the most dif cult and important stage is that of unfreezing, the creation of a motivation to change. This isaccomplished by changing the forces acting on the systemsuch that: (1) the present state is somehow discon rmed;(2) some anxiety or guilt is aroused because some goals
will not be met or standards or ideals will not be maintained; (3) enough ‘‘psychological safety’’ is provided tomake it unnecessary for the target individuals or groups
to psychologically defend themselves because the disconrming information is too threatening or the anxiety or
guilt is too high.
The essence of an effective unfreezing process is abalancing of enough discon rmation to arouse an optimallevel of anxiety or guilt, without arousing so much learning anxiety as to cause denial, repression, projection, orsome other defense mechanism. Most analyses of unfreezing limit themselves to discon rmation and the creation of pain, and fail to note thatunless the pain is connected to something the members of the system care about, andunless they feel safe enough to do something about it, they have not really been unfrozen
at all.
How the unfreezing occurs will vary with the circumstances. Often we nd changeeasy to manage because we encounter a system that is already unfrozen. For example,
the turnaround manager who takes over a company that knows it is in great economic
dif culty unless it changes has a much easier time making changes than the farsighted
company president who tries to initiate change in a successful company.
Systems can exist in a partially unfrozen state because they received discon rming
information at some earlier time in their history, but they will not have changed because
there was not enough psychological safety to allow the individual or group to consciously
Table 1 Stages of the change process
Stage 1. Unfreezing: Creating the motivation to change
Discon rmation
Creation of survival anxiety or guilt
Creation of psychological safety to overcome learning anxiety
Stage 2. Changing: Learning new concepts, new meanings, and new standards
Imitation of and identication with role models
Scanning for solutions and trial-and-error learning
Stage 3. Refreezing: Internalizing new concepts, meanings, and standards
Incorporating into self-concept and identity
Incorporating into ongoing relationships and groups

Volume 4, Number 2, REFLECTIONS

Managers as ‘‘Unfreezers’’
If the system is not already unfrozen, the manager as change agent has to develop a way
to surface discon rming information, a process that is sometimes difcult and time consuming. And then the information has to be developed in a way that is not too threatening.
The role of the change agent in unfreezing systems is, therefore, one of the most importantand also one of the most difcult. When strong discon rmation is needed, the person in authority is often in the best
position to provide it but is often also the person most likely
to be too threatening and thus arouse defensiveness. In suchsituations, managers often use outside consultants to provide the strong discon rmation, on the theory that it iseasier to accept negative information from a presumably
objective outsider. But such outside information is often
easy to discount on the grounds that the consultant ‘‘did
not really understand our situation.’’What the effective manager acting as a change agent must try to convey simultaneously is: (1) your present behavior or attitude is unacceptable (disconrmation); (2) it
is violating some of our standards or is causing us to fail in getting the job done (inductionof guilt and/or anxiety); but (3) I understand that learning something new is itself anxiety
producing, so I will help you to change and make you feel safe while you learn a new
behavior or attitude (creation of psychological safety).
One reason it is important for people who become targets of change to be involved
early in the change process is that we cannot assess whether and how they might bethreatened by the discon rmation or what problems they will have in making the change
unless we explore what help they will need to make the change. Thus, paradoxically, inthe process of unfreezing the system, we must often take a very open, inquiring role so
as not to produce premature threat. Genuine inquiry in the service of helping the changetarget to accept and make the change is the most crucial aspect of creating psychologicalsafety, and probably the most difcult to manage interpersonally (Schein, 1988, 1999a,
1999b). The manager as change agent can be quite open and blunt in the discon rming
information if he or she manages steps two and three adequately and sensitively.

Paradoxically, in the process of
unfreezing the system, we must
often take a very open, inquiringrole so as not to produce
premature threat.

An Information Technology (IT) Example
In a study of 76 CEOs, we found that a number concluded that executive workstations
operated by the manager (not the secretary or staff assistant) could be a useful executive
tool for e-mail, word processing, management information and control, and various kindsof spreadsheet analysis and modeling. The problem they faced was how to get their various subordinates to accept the workstations and learn to use them.
The discon rmation typically came when the CEO announced to his subordinatesthat he would start to monitor some of their division or unit performance in terms ofregular reports that appeared directly on the CEO’s terminal and would ask them questions
about it. Past systems of reporting and monitoring would no longer be acceptable. Or hemight say that he would start to communicate with them by means of e-mail only andwould put important messages into the system by this means. The subordinates foundout that their routine behavior would no longer work, and they clearly felt anxious about
their boss either nding out things they did not themselves know or providing criticalinformation that they might otherwise miss. We can also assume that many felt guilty
about not using ‘‘modern’’ technologies and highly touted executive support systems.

REFLECTIONS, Volume 4, Number 2

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Models and Tools for Stability and Change in Human Systems

accept the necessity of change at that time. We see this most clearly in individual psychodynamics where, in adulthood, we ‘‘ nally’’ deal with criticisms or feedback that we
may have received from parents or peers as children but have repressed until we felt
secure enough to change. The observer may be surprised at what seems to be a change
without unfreezing, because he or she may be unaware of the prior discon rmation that
had taken place. When we speak of systems as being ‘‘ready to change,’’ we often meanthat they have had strong discon rmation in the past but have not felt secure enough to
do something about their situation.

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Models and Tools for Stability and Change in Human Systems© Emily Sper38

How was psychological support handled? The most important message was to givethe subordinates some freedom to determine how they wanted to learn the new system.
They could not participate in setting the goal, but they could participate in controlling
their own learning. So the effective CEOs not only provided the necessary terminals but,
more important, created a variety of training programs and provided coaches to make iteasy for the subordinates to learn and to help them overcome their insecurities. The CEOs
set realistic time targets and supported what often turned out to be a very slow learning
process. They were sympathetic to resistance but did not change the target of learning to
use the system.
If the degree of threat or basis of the insecurity was more fundamental, which would
have been revealed in a force-eld analysis, then additional unfreezing would have tooccur. For example, some managers were afraid that if they were forced to use the terminal
themselves, the fact that they could not spell or used bad grammar would be revealed.
The sensitive CEO in that instance would accept the rationalization that it was more‘‘efcient’’ for the subordinate to dictate messages to a secretary as before and have thesecretary enter it on the terminal. The trick is simultaneously to be supportive and to beinexible on the change targets.

Changing through Cognitive Redenition
What unfreezing does is to motivate the change target to look for new solutions that willbring things back into equilibrium and that will once again produce conrming information that things are ‘‘okay.’’ Once someone is unfrozen, he or she is more likely to pay
attention to information, ideas, suggestions, or even orders that were previously ignored.
Once unfrozen, people become active problem solvers because they are uncomfortable.
They become motivated to change.
If the change is a simple behavioral one, people make the change. However, withcomplex attitudinal change or changes in shared basic assumptions (culture), there is the
additional problem that the change targets may initially not even understand the newattitude or assumption. They know ‘‘something’’ is wrong with the way they are thinking,but they cannot conceive of any alternative way of thinking. For this kind of situation,either or both of two change mechanisms have to be considered:

Volume 4, Number 2, REFLECTIONSIn either case, the new information causes change by allowing ‘‘cognitive redenition’’ to occur. For example, when PCs are introduced into the executive suite, somepeople will simply learn a new skill that will not require any cognitive redenition. But
for some managers, the dilemma will be that they see themselves as working primarily
with and through people, that they gather complex multifaceted information through faceto-face contacts, that they rely on their gut feelings and intuition to process information,and that they trust their ability to be persuasive in interpersonal encounters only when
they can see the other person’s immediate reactions. Working on a PC simply will notmake sense unless they can rede ne in their own heads the nature of managerial work.
Some managers will have developed the assumption that numerical data of the sort processed in information systems are not good enough to act on in the rst place, and that
communicating via e-mail makes it impossible to determine what the other person is reallythinking. It is therefore inconceivable to them that IT can be an executive tool.
Such managers may be partially unfrozen in that they have been strongly discon rmed by their own bosses and feel ready to change, but they truly do not know what to
do and feel very threatened because the assumptions on which they have built their selfimage of effectiveness are being challenged. If the CEO presses hard enough, they may
scan the environment for various kinds of partial solutions, looking for PCs and softwarethat might be more versatile or user friendly, until they nd something that seems to
work.
Or, more likely, they will nd a fellow executive who is enough like them to be a rolemodel and who has learned to use the IT tools. They will identify with that person andtry to learn to see the world through his or her eyes. As they do this, they will cognitively
redene the managerial job, gradually changing some of their assumptions about theirown intuitive style and learning some of the new assumptions underlying the IT solutions.
Most likely, this will involve cognitive broadening in the sense that they will learn
how to use IT to enhance their intuitive style and how to use e-mail to supplement theirface-to-face encounters. The nature of managerial work will be gradually rede ned andbroadened in their heads. Cognitive rede nition will also involve a change in the scaleon which things are evaluated and the standards or anchors that de ne the scale. For
example, the executive who thought that working on the computer was ‘‘beneath’’ himor her and not executive work at all may  nd that not only does such work  t into the
executive-work category, but that it is of higher value than he or she may have thought.
When a learner chooses a role model, there are several possible choices with different
consequences. A ‘‘parent gure’’ is someone much older and more advanced occupationally or in status. An ‘‘older sibling’’ has more recently gone through what the learner isabout to go through. The parent  gure may provide more accurate data on what ultimately
is to be learned but may be too removed to identify with; the older sibling gure may beless accurate but more accessible and easier to learn from. Change managers should consider this issue when they provide role models for the learners and not simply choose themost expert person as teacher or coach.

Refreezing
Once the person or group has achieved a new set of cognitions and attitudes, and has
begun to express these in new daily behavior, there remains the stage of refreezing. For
the new behaviors to last, they must  rst t into the personality of the individual or theculture of the group that is being changed. Otherwise, the behavior will be only a temporary adaptation to the pressures of the change situation and will erode once the change
agent has ceased to discon rm the old behavior. Refreezing at this level can be thoughtof as ‘‘personal integration.’’Even if such personal integration has taken place, new behaviors may not remain
stable unless they also t into the ongoing relationships and the work context of the person

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Models and Tools for Stability and Change in Human Systems

1. Scanning the environment until a new formulation is found and trying out various
kinds of new behavior until something that works is found.
2. Finding a role model and learning a new viewpoint through psychological ‘‘identi cation’’—learning by seeing the world through the eyes of the role model.

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Models and Tools for Stability and Change in Human Systems

Change Management Process
1. Why change?
Is there really a need?
Is change really possible? Do we have a choice? Do we see insurmountable constraints?
What is our motivation for wanting a change?
What is the system’s need for change: What problems or goals require change?
What is the system’s readiness for change—degree of unfrozenness, amount of energy available
for change, location of energy for change?
How can we gather information through ‘‘diagnostic’’ interventions so as to support our change
goals? How can we gather information without arousing resistance?
2. What is the desired future state?
What new way of working do we envision?
What values are needed for the new way of working?
Do we need analytical tools to specify a desired future state?
· Scenario analysis· Open systems planning· Future search
3. What is the present state? How do we determine it?
What is the present way of working?
What values does the present way rest on?
What cultural assumptions support the present state and what cultural assumptions would facilitate or support the desired future state?
Given what we have learned about the present state, is the desired future state feasible? Whatkind of change program will be needed to achieve it? Do we need to reexamine the originalchange goals?
4. Gap analysis
What is the gap between the present state and the desired future state?
What kind of change program would begin to close that gap?

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or group that has changed. We see this most clearly when changes that have occurred
during ‘‘off-site’’ training programs do not last once the trainees are back in their work
context. The trainees come back full of enthusiasm only to nd that their reference group
culture does not support the new attitudes and behavior.
They are now being discon rmed all over again and thus
will start a new change process that may well lead back to
the original behavior.
One reason for on-site training and for change programs that involve the entire system, such as ‘‘team building,’’ is that whatever changes occur will be acceptable to
the whole system and are thus more likely to last. In otherwords, for change to stick, it has to be integrated into thetotal psychic framework or personality and has to be supported by others whose opinions
and perceptions the person cares about.
In the example of the CEO and his subordinates, if a given manager learns to use theterminal and nds himself transferred to a new group that disdains such use, he will likely
unlearn and revert to his old attitude. Or, if he nds that his thinking style is genuinely
incompatible with what the IT systems require of him, he will make a surface adaptationthat will last only as long as the boss coerces him. In the extreme, he may leave the grouprather than make the change. Early-user involvement is so critical in the introduction of
IT systems because it insures that only behaviors that are personally and culturally acceptable will be learned and thus will remain stable, once learned.

For the new behaviors to last, theymust rst t into the personality of
the individual or the culture of thegroup that is being changed.

Scanning versus Identi cation
For any change to be managed effectively, the change agent must plan for all three stages
and must insure that each stage is successfully traversed. Of particular relevance is the
choice of change strategy, once the target has been unfrozen. If we provide role models
and thereby increase the likelihood of rapid new learning through imitation and identiVolume 4, Number 2, REFLECTIONSSCHEIN·
Models and Tools for Stability and Change in Human Systems

5. Making the transition plan
Who will manage what?
How will we assess progress? Establish timetable and criteria for progress.
Who will take what action, bearing in mind that diagnostic inquiry is itself an intervention?
Therefore, such inquiry should be viewed as part of the implementation plan, not the diagnostic
phase.
How often will the team meet to check signals, share information, and retool the plan?

A map of the change management
process
Adapted from R. Beckhard and R.T. Harris.
Organizational Transitions: Managing
Complex Change, 2nd ed. (Reading, MA:
Addison-Wesley, 1987).

cation, we also risk that people will learn things that do not really t their personality andwill give them up once the role models are no longer available. In other words, imitationand identication provide a quick but not necessarily lasting solution.
Scanning that leads to trial and error is a much slower method of learning that canbe stimulated by the change agent’s deliberate withholding of advice, suggestion, rolemodels, or other cues of what to do. But by forcing the learners to develop their own
solutions, the change agent insures that whatever is learned will, by de nition, t into
the personality and the group. Scanning is thus a slower and possibly more painful way
to learn, but it increases the probability of successful refreezing.
The choice of whether or not to ‘‘model’’ behavior is especially relevant in situations
where the boss is the change agent, because there are already predispositions operating
to identify with him or her. Superiors who want lasting learning must, therefore, learn
how to force the learners to develop their own solutions to the change dilemma and must
make themselves relatively unavailable as role models.

Change as a Perpetual Process
I have depicted the change process as a set of stages that imply a kind of orderly chronological progression. In reality, we are constantly bombarded by various kinds of unfreezing forces, are scanning and imitating in areas where we are already unfrozen, andare experiencing the new conrmations or discon rmations that will determine what getsrefrozen. This is a perpetual process and can be analyzed into discrete stages only for
purposes of planning a change program. Once into the change process, the change agent
 nds himself or herself working simultaneously on all the stages, reconceptualizing what
is going on as new data surface, discovering areas that are not unfrozen, and so on. The
analytical tools provided in this article thus should be used to sort out what is going on,
but they are not an accurate model of what is happening in real time, moment to moment.

REFLECTIONS, Volume 4, Number 2

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42

Role Set (Stakeholder) Analysis
The purpose of role set analysis is not only to better understand the target system and its interconnections but also to develop insight and empathy for the people who are your change targets. This
exercise should help you gure out their world so that you do not make premature assumptions
about what is or is not possible for them to change.
1. Select the person or system that will be your change target. This person may not eventually
be your target, but for analytical purposes, start where you think the key change has to occur.
Put this person or system in the center of a ipchart page.
2. Brainstorm about who has expectations of this target system. You can think of these as
stakeholders or as ‘‘role senders’’ who have expectations of what this person or system will do in
the future.
As you think of various role senders such as superiors, subordinates, family, peers, and so on,
draw each on the ipchart page with an arrow between the role sender and the target. The sizeor thickness of the arrow can represent how strong you think the expectations are.
In identifying stakeholders or role senders, think broadly in terms of (1) members of the organization, (2) family, (3) community, and (4) self (we have expectations of ourselves in a given role).
The chart is likely to become quite complicated as you try to t in all the role senders, but try to
be as complete as possible.
3. Identify the relevant role dynamics. As you examine the role map, you will realize several
things. Most of us deal with multiple expectations, forcing us to set priorities and deal with potential conicts. Such ‘‘role dynamics’’ can be broken down into three main categories:· Role ambiguity—with respect to some of the arrows, you may conclude that what the target
expects is not clear. In other words, some stakeholders may have clear expectations of the target
but what those expectations actually are may be unclear or ambiguous. You will be unable toinfer this without gathering some data, but it is important to recognize that you will sometimes
not know exactly what is expected of you.
· Role overload—it will become obvious to you that everyone suffers from role overload. The
sum total of the expectations of all the stakeholders and role senders exceeds what anyone in thetarget position could possibly do. That leads to the question of how role recipients handle theiroverload: Whose expectations do they respond to?
· Role conict—it will also become obvious to you that what one set of role senders expects
may differ from what another set expects. The most common version of such conict is between
some stakeholder expectations and what the role occupant expects of him- or herself. How does
the target person/system then respond?
4. Identify linkages between the stakeholders or role senders to get even more insight into
the dynamics of the whole role system in which you will have to work. Analyze what you
think might be some of the interconnections between role senders. For example, a given professor
might be expected to do certain things by her department chair and dean. What might be theconnection between the chair and the dean, and how might this inuence expectations? The dean
might be a close friend of the target’s spouse. How might this inuence expectations?
The importance of analyzing all the linkages in the total system is to reassess whether or not
the target you chose is, in fact, the best target to work on. Once you see the linkages, you may
identify other possible targets that are more accessible, more amenable to change, and yet linked
to your original target in such a way that change will occur there. The linkage analysis tool helps
you to analyze the different criteria for choosing an initial change target and, in the process, also
alerts you to the complexity of the choices that change agents have to make in planning theirchange.

Planning the Change Process
The most useful model for planning any change process is the ‘‘map’’ provided by Beckhard and Harris (1987). Before the change agent intervenes in any way, the change teamshould go through as many of the steps outlined in the gure and sidebar, ‘‘ChangeManagement Process,’’ as feasible, and identify what additional information is needed
and how to get it. It is especially important to have credible answers to the various questions in step one, even if one has to guess at the answer because gathering information
is premature.

Planning the Diagnostic Interventions
The answer to many of the questions in the process map will require getting informationfrom the target/client system. Therefore, before launching a major change intervention,
you can often interview or survey members of the target system in order to gather infor-

Volume 4, Number 2, REFLECTIONSCriteria for Analyzing Whom to Target
1. Accessibility. You will want to develop a relationship with your change target, so you must initially pick someone in the role set to whom you have access or to whom you can gain access. For
example, in an academic setting, you, as a student change team, might decide to create somechanges in some portion of the curriculum. You might have easy access to the current professor
teaching it but might not have access to the department chair or head of the curriculum committee.
2. Leverage. You will want to pick as a target someone or some system where you believe you havesome leverage in the sense that they will at least pay attention to you initially. That often means
starting with someone who is lower in the hierarchy or in status or who is motivated to listen toyou. In the curriculum example, you might decide to start by inuencing student attitudes toward
the curriculum because you believe you have more leverage with the students. Or you might go
to the accessible professor if you think he or she would listen to you, but avoid the curriculum
committee chair because you believe you would have less leverage there.
3. Linkage. You will want to make a change in some part of the system that is well linked to otherparts of the system so that any change you succeed in making is likely to proliferate. Note that
this criterion is, in a sense, the opposite of the ‘‘leverage’’ and ‘‘accessibility’’ criteria because thepeople to whom you have most access and who are lower in status are often less well linked thanpeople higher in the hierarchy or more powerful by virtue of their status. It then becomes a complex planning issue of whether it is better to aim for an accessible target with whom you haveleverage but is less well linked or to try to gain access to a better linked target.
In the curriculum change example, you would have to weigh whether it is better to change
student attitudes, knowing this might have less ultimate impact on the larger system, or tochange the attitude of the curriculum committee, where you have less access, but if you succeeded their linkage would automatically make the change more stable.
4. Vulnerability. You will want to consider how vulnerable a given target is to being inuenced andchanged. You may have identied a target that is accessible, with whom you have leverage, and
who is well linked in the system, but that person or system may be known for resistance tochange. That resistance may, in fact, be the result of the placement of that system in relation
to other systems, so you may need to draw another role map for each possible target system to
examine how vulnerable to change it might be.
For example, in the curriculum change case, you might identify the department chair as someone accessible, well linked, and with whom you have some leverage, only to discover when you
map that role that his or her connection to the dean’s ofce and his or her position on thecritical curriculum committee would make the person unable to change. You would then have torethink possible targets to nd some potential vulnerability to change.
5. Appropriateness. You have to examine from both a practical and an ethical point of view todetermine whether the change you want to make in a given target is ultimately appropriate. Suppose you had the power and inuence to change the department chair’s attitude toward the curriculum, but you also knew that the faculty in that department would oppose it vehemently,
causing the chair to lose credibility and power. Not only would this undermine the longer range
success of your change program, but it might cause some unnecessary damage to the changetarget that you initially selected.
These ve criteria need to be considered at many stages in a change program. In the preceding
example, I have focused on the ‘‘ultimate’’ change target, but it is equally important to apply thesecriteria to the initial targets you select at the start. Everything you do is an intervention, so when
you start making inquiries, getting connected with someone in the target system, choose that person
carefully to build relationships and connections that will help you in the long run in achieving yourgoals.

mation critical to the planning of the later ‘‘major’’ interventions. It is critical that thechange agent be aware that this process of inquiry is itself already an intervention andshould be conducted to enhance the change goals (Schein, 1987, 1988, 1999a).
For example, whom you choose to interview and what questions you ask should
be determined both by your diagnostic needs and by considering who should become

REFLECTIONS, Volume 4, Number 2

SCHEIN·The purpose of this analysis is to determine which of a number of possible change targets/clients will
give you the best chance of making a connection that would lead to the kind of change you ultimately desire. This analysis builds directly on the stakeholder/role sender analysis you have just done.
It highlights the fact that there are many possible targets for launching the change project, not justthe one you initially chose as your target for the role analysis. The essence of this analysis is toweigh various criteria against each other so that you make a wise choice of where to begin and how
to proceed with your change project.

Models and Tools for Stability and Change in Human Systems

Linkage Analysis

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Models and Tools for Stability and Change in Human Systems

Force-Field Analysis
The essence of this diagnostic technique is to analyze, for any given system, what forces are keepingthat system in its quasi-stationary equilibrium. The assumption is that all human systems tend toward equilibrium, but that it is achieved only through the multiple actions of many forces, some ofwhich push toward change and some of which constrain or resist change. And these forces are notlinear or aligned in terms of any given direction of change. As the role map should have revealed toyou, any given person or system is subject to expectations (forces) from many role senders, and thesemay push in many different directions.
Once you have identied through the Beckhard-Harris change map the direction of your change
effort, you can use force-eld analysis to help you understand the forces that would help or hinder
your change effort. Using a blank piece of paper or a ipchart page, follow these steps (see thegure for a sample):
1. Draw a vertical line down the center of the page representing the present state of the system.
2. On the top of the upper right-hand side, describe the desired state.
3. On the left-hand side of the line, using brainstorming, begin to identify the driving forces, thoseforces that are already pushing the system in the direction you desire. Think about all kinds offorces— economic, technological, organizational, political, interpersonal, structural, cultural, social,
psychological, and so on. For each force you identify, draw an arrow that hits the center line, andmake the arrow as thick or as thin as you want to represent your view of how strong this force is.
Above the arrow, write what the force is. You may end up with a long list of such forces that are
already working in your favor.
4. Now, on the right-hand side, begin to identify forces that oppose the direction of change you
desire, the restraining forces. In some cases, these will be directly related to the driving forces. For
example, if a driving force is ‘‘supervisory pressure to increase production,’’ that might immediately
be countered by a restraining force, ‘‘group norms against rate busting.’’ Use the same categories
for identifying various types of restraining forces as you used in identifying the driving forces.
5. Now examine the force eld and ask yourself which forces can be altered to ‘‘unfreeze’’ the system—to cause a disequilibrium that will create motivation to change. You will discover that you
have three basic options:· Increase one or more of the driving forces.
· Decrease one or more of the restraining forces.
· Do both.
Increasing driving forces is generally easier because you are likely to have more access to themthan to the restraining forces. However, if increasing the driving forces also increases comparable
restraining forces, all you have accomplished is to increase the total tension in the system. For example, if management tries to increase production just by increasing supervisory pressure, which causes

44

involved in thinking about the change issues at the earliest stages. Diagnostic interventions are the best way to involve members of the target system in the change program.
By asking them relevant questions about the present state of the system, you not only
learn relevant facts about possible resistance to change, but you also begin to in uence
their thinking and get them involved in the planning.
Diagnostic interventions should focus on ‘‘inquiry’’—on  nding out what is really
going on—and should deemphasize confrontation, making suggestions, discussing
possible solutions, or in other ways putting pressure on the target. At the same time, thechange agent must recognize that no matter how neutral and innocent the questions may
be, they will inuence the thinking of the target and will, therefore, be an intervention
whose consequences must be considered. You cannot launch a survey to decide whether
or not to start a change program. Once you are conducting the survey, you have launched
the program because you have in uenced the thinking and expectations of the people you
are surveying.

Analytical Tools for Planning
The several planning tools presented here are designed to help the change team analyze
the components of complex human systems (see the sidebars on role set analysis, linkage
analysis, and force-eld analysis). Each introduction explains when and how to use thetool. The rst diagnostic dilemma is to sense how the target system is embedded in othersystems. Before we can diagnose the forces acting on the target system, we need to know

Volume 4, Number 2, REFLECTIONSSCHEIN·
Models and Tools for Stability and Change in Human Systems

more group resistance, one ultimate outcome of the increasing tension may be a strike. Decreasing
restraining forces is more likely to work because there are already driving forces in the system, butsuch forces are often more difcult to manage. For example, you may realize that productivity will
increase if you can change the group norm of a fair day’s work for a fair day’s pay but realize how
hard it is to change such norms. Analysis of the force eld makes you aware of the complexity ofchange dynamics and of the many choices for proceeding.
The most likely outcome of this analysis will be some further diagnostic interventions that will reveal the strength of some of the forces. A second outcome may be the discovery that there are one
or more critical forces that require a new analysis. For example, if group norms are the key restraining force, draw a new force-eld diagram with the present state of those norms as your center line
and the direction of change on the right-hand side, and identify all the driving and restraining forces
pertaining to those group norms.

A sample force-eld
analysiswhat other systems connect to the target system and how they in turn are interconnected.
For this purpose, an adaptation of open systems planning called ‘‘role set’’ or ‘‘stakeholder
analysis’’ is essential.
None of the tools described will by themselves answer all the change questions. Oncethe change group has identied its broad change goals and targets, it is highly desirable
to do each analysis quickly to identify broad insights and then recycle through them withmore rened questions and goals. Alternatively, any one of the tools may reveal the needfor diagnostic interventions, which will then lead to further analysis by the change team.
These tools in combination also help a team in getting ‘‘unstuck.’’ Inevitably, thechange team will nd itself not knowing what to do next in relation to some change goal.
At that point, doing another role-map, force-eld, or linkage analysis often clari es how
to proceed.

The Change Process in Perspective
All the processes and tools described are to be used in a given project, most of themsimultaneously. It is desirable at the beginning of the change project to take the time todiagnose as much as possible without involving the client, so that you can make the initialinterventions in the most helpful way; but often the change agent must involve the clientin order to get the most basic diagnostic information.
Again, Lewin, in his wisdom, had it right. He said, ‘‘In order to understand a system,
you should try to change it.’’ The implication is that you cannot fully understand all the

REFLECTIONS, Volume 4, Number 2

45

SCHEIN·
Models and Tools for Stability and Change in Human Systems

forces acting until you elicit some of them through diagnostic interventions. What you
then learn should encourage you to reask the fundamental questions: Why change? Howappropriate is this change? Am I approaching it in the right way? What do I need to dodifferently based on what I learned in the last round?
Even if the change is being induced from a position of power, it is essential for thechange agent to learn the even greater power of being helpful and supportive. People
must be unfrozen to change; they must hurt somewhere. But that is not enough. Equallyimportant is their sense of psychological safety that it is okay to try something new andto give up something old and familiar. The smart change agent will make targets feelsecure by  nding a way to turn them into clients. Only then will their resistance genuinely
give way.

References
Beckhard, R. and R.T. Harris. Organizational Transitions: Managing Complex Change, 2nd ed. (Reading, MA: Addison-Wesley, 1987).
Kahn, R.L., D.M. Wolfe, R.P. Quinn, et al. Organization Stress: Studies in Role Con ict and Ambiguity(New York: Wiley, 1964).
Lewin, K. ‘‘Group Decision and Social Change,’’ in Readings in Social Psychology, rev. ed., eds. G.E.
Swanson, T.N. Newcomb, and E.L. Hartley (New York: Holt, 1952).
Schein, E.H. Organizational Culture and Leadership (San Francisco: Jossey-Bass, 1985, 2nd ed.,1992).
Schein, E.H. Process Consultation Vol. 2: Lessons for Managers and Consultants (Reading, MA:
Addison-Wesley, 1987).
Schein, E.H. Process Consultation Vol. 1 (Rev.): Its Role in Organization Development (Reading, MA:
Addison-Wesley, 1988).
Schein, E.H. Process Consultation Revisited (Reading, MA: Addison-Wesley, 1999a).
Schein, E.H. The Corporate Culture Survival Guide (San Francisco: Jossey-Bass, 1999b).

46

Volume 4, Number 2, REFLECTIONSCommunity Knowledge
Sharing in Practice:
The Eureka Story
Daniel G. Bobrow and Jack WhalenAn organization’s most valuable knowledge —its essential intellectual capital—is not
limited to the information in of cial document repositories and databases, such as
scientic formulae, ‘‘hard’’ research data, computer codes, codi ed procedures,  nancial
 gures, customer records, and the like. It also includes the largely undocumented ideas,
insights, and know-how of its members (see, for example, Nonaka and Takeuchi, 1995;
Stewart, 1997; Davenport and Prusak, 1997; Senge et al., 1999).
This informal (often tacit) knowledge is deeply rooted in individuals’ experiences andthe culture of their work communities. It commonly originates as practical solutions—through everyday inventions and discoveries —to the problems they must solve and thus
serves as the critical resource for ordinary work practice (see, especially, Brown andDuguid, 1991, 2000). Much of this knowledge often remains embedded in practice. Small
circles of colleagues and work groups commonly share crucial steps in a new practice andfresh solutions to recalcitrant problems through conversations and stories, with members
 lling in the background and gaps from their own experience. These groups and communities use the local vernacular to express these instructions and stories.
Organizations face the challenge of somehow converting this valuable but mainly
local knowledge into forms that other members of the organization can understand and,perhaps most important, act on. Here we present a detailed account of one organization’s
effort to encourage inventiveness, capture new ideas, and use technology to then share
the best of this knowledge beyond a local work group.
Our account is based on our experiences during seven years with the design, development, deployment, and evaluation of the Eureka system at Xerox Corporation. Xerox
uses Eureka to support the customer service engineers (CSEs) who repair the copiers andprinters installed at customer sites. In four iterations, the system went from an experimentthat researchers at the Xerox Palo Alto Research Center (PARC) designed to measure thevalue of codi ed eld experience to a system deployed to 20,000 CSEs worldwide. By
focusing on communities and how they share knowledge in ordinary practice, we developed a set of questions and a methodology that we hope will enable others to build similar
community knowledge-sharing systems. However, deploying any knowledge system involves pushing changes within a corporate culture; understanding the Eureka experienceand the problems facing all knowledge systems to be deployed in the real world requires
equal focus on these challenges.
Our narrative covers the history of this project, carefully detailing the fundamental
interrelationships between the social and the technical. We include a framework for building these kinds of community systems (see the sidebar) and our reections on the barriers
to organizational change that their proponents confront.

Breaking the Frame
Xerox has more than 20,000 technicians worldwide who help to ensure that Xerox machines are performing as customers expect. As Orr (1996) pointed out, this is a triangular

REFLECTIONS, Volume 4, Number 2

Daniel G. Bobrow
Research Fellow
Systems and Practices Laboratory
Palo Alto Research Center
bobrow@parc.com

47

Jack Whalen
Principal Scientist
Systems and Practices Laboratory
Palo Alto Research Center
jwhalen@parc.com© 2002 by the Society for Organizational Learning and the Massachusetts
Institute of Technology.

BOBROW AND WHALEN·
Community Knowledge Sharing in Practice

Building Community Knowledge Systems
How much of the Eureka story can be generalized to other organizations that want a similar, sociotechnical system for knowledge creation and sharing? Answering these questions can help build sucha system.

Community: Who and Where· Who are the members of the work community? Shared identity and practices dene ‘‘community.’’ Because members share practices, communication between them can draw on backgroundunderstanding or knowledge that doesn’t have to be explicitly stated. It is easier to build aknowledge-sharing system based in community life that stays within the community than one thatcrosses distinct boundaries. Moreover, community membership is the basis for trust, and effective
knowledge sharing depends on trusted information. In the case of Eureka, technicians write tips forother technicians, so the information is not only understandable in context but also trustworthy.
· Do members work in close proximity to each other? Working shoulder to shoulder supports
continuous apprenticeship learning in which people can share knowledge that has not yet been
articulated and documented. For people working primarily in separate locations, documents are especially important for sharing and learning. Moreover, when a community is large, documents help
scale knowledge more rapidly across numbers, time, and distance. For example, Xerox service technicians spend most of their time alone in the eld at customer sites. Extensive community knowledge sharing requires digital documents that they can read on a laptop.

Knowledge: What and Why· What constitutes valuable knowledge for the community? Observation of how people do theirwork will reveal what kind of information they most often share because they value it. For example, we saw that technicians valued not only diagnostic tips but also hints about making certain
tasks easier and corrections or improvements to documentation.
· Why do members share particular kinds of knowledge? Understanding the motivations forsharing is important for grasping the natural incentives within the community. Successful
knowledge-sharing systems should build on this structure. External rewards can encourage sharing,48

relationship among the technician, the customer, and the machine. On many service calls,
the technician needs to repair or adjust the machine; on some, the technician needs tohelp the customer adjust his or her expectations, procedures, or knowledge of the machine. In the early 1980s, because technicians trained by the armed services to debug
complex equipment became increasingly unavailable, Xerox decided to use less skilled,
less experienced service people. It moved away from the documentation and training that
described the principles of product operation, which required skilled technicians to determine the appropriate repairs. It moved toward ‘‘directive’’ repair and adjustment procedures or documented instructions in a decision tree. Each decision step was in the formof ‘‘do the following setup and test; make the following measurement (or observation);
if the result is A, do X; or else do Y.’’ The intuition embodied in this form of documentationis that technicians need only be trained how to use the documentation correctly to diagnose and repair any machine failure.

The Rapper Project
Our group at Xerox PARC has a background in articial intelligence and in modeling
electromechanical systems. In particular, we have expertise in building programs that
diagnose machine faults given an abnormal symptom and the ability to observe or getmeasurements from the machine (de Kleer and Williams, 1987). As a test of our technology, we decided to build a model of one complex module of a particular photocopier anddemonstrate how a program could guide a technician in diagnosing and repairing problems in this module. Our hypothesis was that if we were successful, a model-based expert
system on a laptop that technicians carried in the eld could replace the documentationand support a work process for isolating faults. In addition, this approach could improve
Xerox’s speed in bringing supported products to market, because the need to create documentation inhibited deployment. Models could be created in parallel with design. Moreover, newer machines often used the same or similar subassemblies, making models
reusable.
Volume 4, Number 2, REFLECTIONS

Implementation: What and How· What constitutes effective technological support for work practice? Our experience strongly
suggests the value of bringing a prototype to a pilot group in a community for participatory design
and rapid turnaround in response to suggestions. The initial prototype provides something to which
community members can react, which can indicate how the technology should change. Inventive
community members will use the technology fruitfully in unexpected ways.
· How can people learn the new system? Learning to share knowledge involves learning what isvalued, how to express it, how to nd the knowledge, as well as learning about the technology perse. It is also involves having the incentive in the right context for learning. Learning should become
a common, everyday activity in using the system, rather than an initial training activity separated
from the work.

We succeeded in building Rapper (Bell et al., 1991), an expert system that used amodel of the recirculating document handler to guide in isolating faults in that module.
The model captured all the faults found when using the standard documentation. We
asked technicians if a complete model for the machine would be useful. ‘‘Not really,’’
they said, ‘‘though it is amazing, rather like a bear dancing. It is surprising to see it do itat all.’’We probed further for the issues behind their negative response. First, to them, small
improvements in the time required to isolate a fault were not worth much. Only a relatively
small portion of their average two-hour call was actually devoted to diagnosis. Second, they usually knew the procedures for the common faults and so required no guidance.
For many products (those produced by our Japanese partners), however, there were no full descriptions of operation.
Additionally, the diagnostic documents were produced by inserting faults in the machines in a laboratory and then recording the symptoms. So the hardest problems were not those
covered by the documentation; they were new problems.
We decided to spend more time observing what technicians actually did day to day. We started with US technicians, accompanying them on
their service calls. Most of the time, they would look at the machine, talk to the customer,
and know exactly what to do to put it in good working order. Occasionally, they ran into
a problem that they hadn’t seen before and for which there was no documented answer.
They would try to solve these problems based on their knowledge of the machine. This
often worked, but sometimes they were stuck. They might call on a buddy for ideas, using
their two-way radios, or turn to the experts—former technicians now serving as eld
engineers— who were part of the escalation process. When they solved unusual problems,
they would often tell stories about these successes at meetings with their coworkers. The
stories, now part of the community, could then be used at similar gatherings and further
modied or elaborated (see Orr, 1996; Brown and Duguid, 1991).

A model-based expert system on
a laptop that technicians carriedin the eld could replace thedocumentation and support a work
process for isolating faults.

REFLECTIONS, Volume 4, Number 2

BOBROW AND WHALEN· How does sharing occur in the community every day? An effective knowledge-sharing systemshould honor natural sharing practices and the style people follow to exchange information, seek
and give advice, and otherwise support each other. Service technicians tell stories of particular machines and their problems to share their learning and experience. The style of the tips, although
they are written documents, tends to follow this narrative structure.
· In what different work contexts does sharing commonly occur? When a technician nds a particularly recalcitrant problem, he or she will tell the story at the next work-group meeting. This
volunteering is often ‘‘just in time,’’ because when a problem crops up in one machine, it may
come up in others. On the other hand, when people come to the group to help, they bring up oldstories. Then they use the story to suggest possible unexpected linkages between symptom andcause.

·

Sharing: How and When

Community Knowledge Sharing in Practice

but there may be a danger in assuming that nancial payoff is a naturally effective way to get
quality information and participation. The service technicians felt that getting their job done more
effectively and building a reputation for competence was a signicant incentive.

49

BOBROW AND WHALEN·
Community Knowledge Sharing in PracticeThis practice pointed to the importance of noncanonical knowledge generated andshared within the service community. It suggested to us that we could stand the articial
intelligence approach on its head, so to speak; the work community itself could become
the expert system, and ideas could  ow up from the people engaged in work on theorganization’s frontlines (cf. Doubler [1994: 58]); quoted in Ambrose [1997: 67]).

The Colombus Experiment
A member of our group, a French national who worked at PARC, spent time with Frenchtechnicians to see if their practices were similar to those in the US. At the time we started
this research, Xerox France was competing for the Malcolm Baldrige National Quality
Award. According to local doctrine, quality service meant uniform service. When rst
asked, the CSEs all said they followed the manual religiously, but when they found outthat the PARC researcher was not from management, they shared their notes on their own
clever solutions (see Bell et al., 1997). For example, many technicians carried cheat sheetsof solutions their work group had invented to solve hard, undocumented problems. Technicians working on a new machine often asked more experienced technicians for copiesof the cheat sheets.
At a series of workshops in France, when we asked technicians whether they had
valuable knowledge to share beyond their work group, they were not sure, though theyshared some stories about how they repaired difcult ‘‘problem’’ machines. Another CSE,
hearing the story, commented, ‘‘If I had known that, I could have saved  ve hours lastweek.’’ We asked the technicians what the issues were if
they shared hard-won knowledge. Some feared that theywould then lose their performance advantage in benchmark
comparisons to other groups. Others wondered if it would
be worth the time and effort to document the local knowledge just so it could travel beyond the con nes of the local
work group.
But they (and we) believed that this knowledge could
have signi cant value. The French service organization, including management and the ‘‘tigers’’ (the expert eld engineers who played a key role in the escalation process), gave us the backing toexperiment. We required three things: an initial knowledge base of tips, a way to distribute
this knowledge that would be easy for technicians to use, and an experimental design on
which we could conduct a valid test.
We developed the initial case base by having the tigers edit and validate the stories
that technicians had shared at the workshops, adding more tips that the tigers themselvesused. The result was 100 to 200 tips, structured simply by symptom, cause, test, and action.
We used a standard laptop running Colombus, a software package that our group wrote,
to distribute the tips. A simple search using descriptive terms (such as copy quality or
fault 10–200) would bring up, on an integrated ‘‘dashboard’’ interface, any material containing these terms, both from the tips database and from the standard documentation,
which was also included on the laptop.
We worked interactively with the tigers in France to improve the software, often
responding overnight; this transformed Colombus from our idea to their tool. This interaction became standard to our design methodology throughout the Eureka project: wecodesigned everything with the user community, making necessary changes on a rapid,
recurrent basis in response to suggestions and criticisms.
The experimental design for Colombus tried to account for the diverse technicians
who serviced the target machine—whether they were dedicated to repairs of only thismachine, whether they worked in rural or urban areas (city technicians drive less andtake more calls per month), and how much experience they had in photocopier repair.
We chose 40 technicians to participate in the experiment and gave them laptops andapproximately three hours of training in the software. We chose another 40 as a control
group, who were matched closely to the rst group. We tracked all service calls made byboth groups using the standard Xerox metrics, including cost of parts, service time, number of unscheduled maintenance calls, interrupted calls, and callbacks.

Would it be worth the time andeffort to document the local
knowledge just so it could travel
beyond the connes of the local
work group?

50

Volume 4, Number 2, REFLECTIONSFrench Minitel Eureka
To offer the technician-invented solutions to the entire French service force, we faced two
problems: a method of distribution that would support technicians’ work practice and asocial process by which the database would have continuing value. We worked with thetechnicians to understand how to promote their ongoing participation and ensure continual updating of the knowledge base.
We could not continue to use laptops for distribution because funding was limited
and, at the time, laptops were unavailable in France. In addition, in 1994, communication
via phone lines or the Internet was too expensive. A printed booklet of tips was deemed
ineffective: it would make existing information available but would not be an ongoing,growing resource.
We chose the French Minitel system for distribution, which Xerox France techniciansalready used for call management. Minitel, nationally deployed by the French telephonecompany, consisted of a small keyboard connected to the phone line and to a local display
monitor (initially a television). Minitel was a general service with easy connectivity toprivate databases for commercial use.
We worked with the CSEs, the tigers, and the technical support hot-line specialists
to gure out how to encourage contributions to the tips database, without seeming tothreaten people’s jobs. The hot-line specialists, who could have seen our effort as an
attempt to cut positions in their organization, instead saw it as a way to potentially ease
their workload. They could then spend more time thinking about common issues andgenerating their own tips. The tigers could have viewed it as ‘‘stealing’’ their knowledge,
but they felt there were so many new problems that it would be advantageous to quickly
disseminate new solutions. The CSEs liked the idea that their hard-won knowledge could
travel beyond their own work group. They worried about four things, however. If theysubmitted a tip, would it disappear into a black hole? Would they get credit? How would
they know they could trust all the tips? And how would they get the right tips at the righttime? In workshops and meetings with all the different community members, people cameup with solutions to each problem:
1. Quality. To ensure quality, a validator known for expertise on the particular productline warrants each tip. At Xerox France, the validators are product specialists for eachfamily of products in every district or ‘‘customer business unit’’ (CBU). The tigers
oversee the process.
2. Bottlenecks. When a new tip is submitted on the Minitel, a message goes to therelevant group of validators, one of whom picks up the new tip within a few days.
The validator converses with the submitter to ensure that the tip both captures theappropriate information and is written clearly. The CSE can edit and improve the tip,learning in the process.

REFLECTIONS, Volume 4, Number 2

BOBROW AND WHALEN·© Jonathan Liffgens

Community Knowledge Sharing in PracticeDuring the test, technicians responded positively. For
example, those technicians not in the experimental groupwould borrow laptops to help them with difcult problems.
Although this was encouraging, the metrics after twomonths were startling. The experimental group had an approximately 10% lower parts cost and 10% lower average
service time than did the control group, without differingsigni cantly in the other service metrics.
However, the test did not last long enough to convince
Xerox’s Worldwide Customer Services (WCS)—responsible
for service strategy and technology throughout the corporation—of the value of  eld knowledge and the need toinvest resources in a Colombus-like system for the entire
service force. The results convinced our team at PARC,
however, and Xerox France service management. One  eld
engineer commented, ‘‘This is the rst time people have truly paid attention to the eld,
to our knowledge.’’ We decided to search for a way to extend the use of the knowledge
base to all French technicians.

51

BOBROW AND WHALEN·
Community Knowledge Sharing in Practice

3. Incentives. When we asked community members if they thought management should
pay for each tip submitted, they said no. One tiger said, ‘‘This would make us focus
on counting the number of tips created, rather than on improving the quality of thedatabase.’’ The suggestion was to include the submitter’s name on each tip to act as
a positive reinforcement for good tips and a negative one for badly awed ideas.
4. Integration with work practice. Because the tip database was on Minitel, we added
new information pages to the call handling to allow CSEs, when they faced a difcult
call, to search the database for key symptoms taken from the call record. They could
search the database from a customer’s site if they could have access to the local
Minitel.

Implementation and Deployment
Because implementing this system was not in WCS’s plans, and money for  eld service
was limited, WCS declined to nance the countrywide experiment. A partnership of PARC
and Xerox France paid for the system. The software was ready in about four months. A
champion from the French tiger group and one of us talked with each group about service
problems and how the CSEs could use the system. They met with more than 60 productleaders and helped train 1,300 French technicians. We carefully tracked participation by
how many times the technicians referred to the database and how many new tips they
entered. There were strong differences among workgroups. While one region might havehigh usage, another of the same size might have low usage rates. By revisiting the latterregions and training and reintroducing the purpose of the system, we encouraged broader
participation. The strategy, then, can best be described as ‘‘hands-on, participatory implementation,’’ a marked contrast to a top-down, cascade model.
Experience with Use
The Minitel system began with databases for only three products. By the end of the rst
year, CSEs had opened more than 40 databases encompassing products from convenience
copiers to high-end printers. Also by the end of the rst year, more than one new tip was
being added to the database each day. Participation was extraordinary; more than 20%of the CSEs had submitted a validated tip, and CSEs were consulting the tip database an
average of two or more times a week.
What did the technicians get from these tip documents? What did they consider important to share? The tips included some crucial diagnostic information, but also much
more varied content. For example:

52

Diagnosing unusual, costly failures—Bimetallic corrosion builds up on A and causes intermittent failures that seem to be B. Replacing B makes the problem seem to go away because A is
moved in installation. First clean A, and later replace by new gold-plated AA, available asPart #1234.
Workarounds —Paper curl in a dry environment causes excessive jams on bafe Q. Putting
Mylar tape from tool kit on edge will ease problem.
Easing the job— To make it easier to adjust M, paint white-out on the back wall near M.

Xerox France, compared to the rest of Europe, went from being an average or below
average performer in service to a benchmark performer. The French service metrics weresoon better than the European average by 5% to 20%, depending on the product. On a
more qualitative basis, we have seen many different ways in which Eureka has affected
the service process in France. In preparing for a call, technicians have found Eureka
helpful in ensuring that they pick up a part likely to be causing failure before going to thecustomer site. On site, Eureka accelerates and improves diagnoses. It also reduces thenumber of calls that have to go to the next level, reducing the load on the technical support
hot-line for recurrent calls about the same problems. It also signi cantly reduces the learning curve for new-product introduction.

Spreading Eureka to Canada
In June 1996, we decided to bring Eureka to another community and to intersect directlywith laptop introduction (only France had a system like Minitel to use as an alternative).

Volume 4, Number 2, REFLECTIONS

· Those who had the laptops did not use them. Although Xerox was committed to using
the computer to dispense technical information and manage work processes in theeld, technicians depended on their traditional skills and practices and were skeptical
about the new technology.
· CD-ROMs or oppies were used to distribute information to the laptop, so dissemination was sporadic and slow.
Separate applications were used for call management (dispatching and tracking all customer service requests), for the now electronically presented documentation, and for parts
inventory and ordering management. Thus, there was no easy way to leverage these
independent applications.
We couldn’t directly solve the laptop acceptance problem, but we hoped that Eureka
would prove to be so valuable that technicians would want to use the computers. Our
local champion from Dorval took existing technical information databases that had been
distributed in paper form and converted them to the Eureka tip format. The techniciansalready valued this information, but it was hard to use or even track in paper form.
To address the distribution problem, we built a local client system that afforded rapid
access to tips. This laptop client would be able to update the local knowledge base any
time the technician was able to dial in to a central server. We still had to decide whatkind of communication and server to use. The common communication infrastructure fortechnicians at that time was a dial-in telephone connection to a bulletin board service(BBS). Some technicians used the BBS regularly to discuss problems and share ideas. This
familiarity could work to our advantage as a platform for knowledge sharing in Eureka.
For accessing the knowledge base on the laptop, the technicians’ work practices dictated that our search engine had to be extremely fast and easy to learn and use. A software
engineer in Xerox’s Printing Systems Group (PSG) had designed SearchLite, a programthat had evolved through community feedback from a technical support group and now
met all these requirements. Its integration with service applications on the laptop would
have been both useful and technically possible. However, a central organization distributed and maintained the laptop software and documentation. Eureka was just an experiment operating on the periphery and had to remain a separate application. This peripheral
status also meant that our Canadian champion had to perform his main job as a tiger,
while simultaneously solving problems from technicians. Validators were also volunteers
who were not relieved of their ordinary duties.
We had to adapt the tip authoring, submission, and validation methods developed in
France to the Canadian context:· Product specialists did all validation in France, with  eld engineering overseeing theprocess. Would this same division of responsibilities work well in Canada? Validation
had turned out to be such an important aspect of the system’s success and value inFrance that managing this process for each different community was essential.
· The French had rejected any  nancial incentives for authoring tips. In Canada, however, there was an existing nancial incentive program for submitting service suggestions. Should this same system be applied to Eureka?
· Because French technicians were using Minitel, they always had the most recent
information when they searched the knowledge base. The Canadian process would
require technicians to explicitly download the latest information to update their database. How often would they want or need to do this to make the system effective?
Because the organizational structures were similar in Canada and France, with product specialists in each CBU, it was natural to make the Canadian product specialists thevalidators, just as in France. However, Canadian service management did not want to

REFLECTIONS, Volume 4, Number 2

BOBROW AND WHALEN
Community Knowledge Sharing in Practice·

A senior manager who wanted to ensure the success of a new advanced color copierencouraged us to work in Canada. At that time, some 6,000 laptops had been deployed
to Xerox CSEs, including all of the 1,200 in the Canadian service force—comparable insize to the French. We teamed up with a tiger from the Dorval Technical Support Center,near Montreal, who became a local champion for its development and deployment. The
challenge was to adapt what we learned in France to the Canadian service environment.
We initially confronted some critical, nontechnical issues:

53

BOBROW AND WHALEN·
Community Knowledge Sharing in Practice

give up the nancial incentive program that they believed contributed to signi cant improvement in service performance. Consequently, technicians received the same small
nancial reward for tips as for any other service suggestion. Later, the reward procedure
was changed to compensate technicians only for validated tips, rather than for all submitted tips.
Updating the laptop knowledge base proved to be a problem. Not all technicians used
the BBS, and many found the process cumbersome. Moreover, the fact that Eureka wasa separate application from call management created further complications and obstacles
to frequent, easy use. As a result, when we checked after two months, many technicians—roughly 40%—rarely or never updated their knowledge base. To try to improve the situation, the Canadian champion visited each CBU to encourage updating and provide
additional training.
Upgrading the software when we made changes was even more complex. We distributed oppy discs to everyone in the eld and hoped that they were able to use themin a timely manner. This created so many problems that we eventually put a system inplace for downloading the software components from the BBS.
Eureka was now an ofcial, management-sponsored program, with certain expectations for improving service performance and with some  nancial support from a Xerox
business division. Management had never dealt with a program in which the requirements
emerged from experiments with pilot users, iterated until the users felt the program warranted large-scale deployment. Managers would try to set deadlines for us to get things
done, independent of our process for rapid prototyping and debugging with extensive
community involvement. The clash of these two different design and deployment methods
had negative results. Some higher level managers lost some faith in the ability of the
Eureka team to deliver.
Despite these conicts, we successfully launched Eureka for 20 products in only six
months, beginning in early 1997. The Canadian champion extensively trained productspecialists, and the specialists then trained CSEs. We created a training video distributedon CD-ROM, reducing the need for more direct training. After six months, the Canadian
Eureka really took hold and became the technicians’ tool.

Eureka Moves to the US

54

While Eureka had proved successful in less populous countries such as France and Canada, it was not clear how it would work in the US where 10,000 technicians are spreadout over a huge area. More important, the dynamics are quite different in the US organization, which is much more bureaucratic and hierarchical, because of its size and complexity.
The US and Canadian technicians shared a common laptop/BBS infrastructure, so the
only issue was to adapt the process to a differently shaped organization and to the scaleof the US service force. US service management decided that validation would take place
locally, with local groups selecting a validator for each product family. As in Canada, thevalidators would need to take on the task without reducing the rest of their workload.
Eureka was launched in the US in 1997 with pilot programs in several locations. The
pilot took hold, however, only where there were local champions in the service force, as
was the case in both France and Canada. Beginning in June 1998, Xerox Worldwide
Customer Service (WCS) distributed Eureka CD-ROMs to the eld managers, who werethen expected to distribute them to technicians in their work groups. The CD included a
computer-based training module; no hands-on training or direct engagement with technicians around the program was planned. This cascade strategy had been designed formass distribution of software or documentation, but it was less effective with a sociotechnical system like Eureka. In places where people became champions or where we
engaged the local group, it was quickly adopted. In other places, it became just one of adozen company-distributed programs that somehow had to be implemented over the next
quarter, and adoption was correspondingly slow.
We had originally suggested to WCS management an alternative ‘‘participatory deployment’’ strategy in which the pilot champions, technicians, and managers most knowledgeable about Eureka would go to other locations in the US service community and talkabout their experiences and ideas. Because these people were peers, the technicians would
Volume 4, Number 2, REFLECTIONSBOBROW AND WHALEN·
Community Knowledge Sharing in Practicetrust them. This would have created more local champions and knowledgeable users,
who could then have gone to still more locations to share information. During a relatively
short time, Eureka would have spread across the entire country.
The up-front cost in time and travel for participatory deployment would have been
greater than for the cascade distribution. But we believed that this cost would have been
recouped because more technicians would have used the program quickly, resulting in ashorter learning curve and better performance. The results from France and Canada support this argument. But WCS management in the US did not understand the requirementsof combining the social with the technical and did not approve this plan, so Eureka use
spread slowly in the US.
Nevertheless, US technicians, once they learned about Eureka, were enthusiastic. One
technician remarked, ‘‘In all my years in Xerox, the two best things ever given to us are
the radios and Eureka.’’ In fact, although the original plan was to complete rollout in the
US before moving to any other Xerox organizations in Europe, Latin America, or Asia,
demand from technicians in these countries was so intense that the corporation had tobegin distributing Eureka worldwide.
In 1999, US technicians authored approximately 2,000 tips. There were more than
9,000 ‘‘solves’’ using Eureka in the US and Canada in the fourth quarter of 1998 alone.
The knowledge base for these problem resolutions included more than 30,000 records.
By the rst quarter of 2001, the size of the database had grown considerably as the numberof countries using Eureka increased, with close to 50,000 technician-authored tips andmore than 300,000 records.

Eureka in Practice
How have users responded to their experiences with Eureka? How have they adapted it
to their work practice? What barriers to more effective use have they noticed?
After Eureka had been in the  eld in the US for six months, a member of our researchgroup talked to technicians in San Francisco, concentrating on a particular work group.
He and other members of our group also visited four CBUs around the country. We asked
technicians if Eureka was worth using, and if so, how they used it and how we could
make it better. When they learned that we had designed and launched Eureka, they maderemarks such as:
Best reason for having a laptop. I use it on probably 50% of the calls where I don’t walk inthe door and immediately go, ‘‘Well, this sensor’s broken,’’ or something like that. Anytime
something doesn’t immediately jump out at me, it’s the rst thing I turn to. Most of the time
before I get to a site, I look around in Eureka and see what’s there so that I know what I’m
gonna do.

When  rst designed, Eureka was conceived primarily as a tool to use when routine
 xes fail to resolve a problem and past experience doesn’t point to an answer or line of
attack. Many technicians use Eureka only that way, whether with machines they are
working on or for suggestions to give colleagues who ask for help. But some technicians
use Eureka in other interesting ways. They use it as a tool of  rst rather than last resort.
For example, one technician who works on high-volume copiers uses Eureka in combination with product documentation:
Before I go on a call, I like to look at some possible  xes in Eureka. If I feel that there isn’t
anything in Eureka that jogs my memory, then I go to the documentation. Keeping that footprint of some of the  xes and then just going through the repair procedures in the documentation accelerates things.

Thus, even before seeing the machine, this technician tries to develop several solid
leads about the source of the problem, the likely repair procedures necessary, and needed
parts. Another technician reported similar patterns in using Eureka and the documentation:
Eureka isn’t so much an end, as a beginning. Someone will call over the radio with a fault
code like, ‘‘I’m having 12–142s,’’ and I can look it up in Eureka and scroll through common
causes. It’s faster to nd it in Eureka than it is to go in and re up the documentation CD forthe repair procedures there.
REFLECTIONS, Volume 4, Number 2

55

BOBROW AND WHALEN·
Community Knowledge Sharing in PracticeThis technician also reported that he felt Eureka was useful even when the tip didn’t
provide the precise solution, because it allowed the team to rule out certain sources oftrouble, thus narrowing the search.
Technicians also use Eureka as an informal learning tool. One who services midvolume machines browses through the tips to see what has worked for others: ‘‘WheneverI download new Eureka data, I like to see what guys are doing. I look through the tips
and bulletins. It teaches me a lot.’’ By reading the tips and service bulletins somewhat
casually, divorced from an actual repair situation, this technician uses Eureka as an instructor who offers a new set of lessons each week.
We also identied some barriers to effective use. Laptops have a long boot-up time,
limited battery life, and an unstable operating system, and they complicate the updatingof the database. In addition, many technicians simply mistrusted, were unfamiliar with,and resented computers, so didn’t use the laptop except when absolutely necessary. Other
technicians felt the laptop added time and work to their daily routine. One technician
remarked:
Half my team is basically uncomfortable on a computer, no matter what’s on it. They use thelaptop as little as they can. They clear calls [using the call management function] and that’s
about it. The real problem is getting them to adopt the laptop generally, not Eureka.

Another barrier was that technicians had to do independent searches in the Eureka
knowledge base and the documentation, which required them to enter information several
times. The integration of all the tools and databases was the biggest request from ourfeedback meetings and was a primary design criterion for the next-generation laptop.
Technicians wanted to move more easily between tasks.
Technicians not only used Eureka in creative ways, but regularly thought about making it more effective. This is exactly the kind of inventiveness that Eureka was meant tocapture, and it stands as further evidence of the pervasive importance of working withusers to make a system  t their needs—to artfully integrate the technology with theirenhanced practice.

Eureka II

56

The advent of cost-effective communication on the Internet allowed us to implement a
new web-based Eureka—Eureka II—worldwide. To bring together everything that technicians need to do when connected, Xerox deployed a global service network with multiple servers. As technicians log on to the call management system to get their next service
call, the Eureka web server downloads any updates to the knowledge base. This samemechanism updates the documentation and, if necessary, updates the software on thelaptop.
All the information sources are accessible through a single search mechanism basedon SearchLite. So when technicians have a problem, they can see where they may nd
helpful information in their ‘‘hit list’’ references to tips and to multiple places in the formal
documentation. In addition, they can make annotations on already existing documentation, keeping such ‘‘post-its’’ in a private knowledge base or, if desired, submitting themas tips. When validated and shared, an annotation appears not only in the hit list directly,
but as a link on the page where the annotation was made.
Eureka II was so successful that it became a mainline program, and requirements
poured in from many places. We constantly tried to balance our belief in simplicity withcorporate managers’ beliefs that if Eureka were the answer, they wanted to generate thequestion. For example, one manager felt that a big cost of the system was in training
technicians. He wanted to simplify the training by embedding the Eureka application ina standard Internet browser (in this case, Internet Explorer). We thought this would complicate the implementation signi cantly because the software would then be dependent
on each computer’s version of the browser, operating system, and service packs. The
manager felt this was less important than the simplicity of the training. Unfortunately,
there were far more implementation and deployment complications than even we
had imagined, and the delay in deploying Eureka II was signi cant. Our point here is notthat the manager was wrong, but rather that decisions made in a standard softwaredevelopment process contrasted with the bottom-up approach with which we had started.
Volume 4, Number 2, REFLECTIONSOrganizational Barriers to Change
After seven years, the Eureka story is a tale of how the development and deployment ofa system for sharing knowledge from the front lines became a vehicle for organizationalchange. However, our story also reveals that this change was not without conict andchallenges. These messy details are rarely included in writings on knowledge management
or organizational learning, so it is worthwhile to expand on their larger meaning forknowledge sharing.
In the initial stages of the project in France, few people in Xerox management believedthat there was much value in what the technicians learned on their own in the  eld. In
addition, they could not see how a tip system was much different from previous suggestion
systems, all of which were highly centralized and controlled. And although technicians’
tips quickly proved valuable, people in different parts of the company felt that it was more
important to supply the technicians with centrally produced documentation than to support them in creating new knowledge. This different way of doing business made themnervous, for example, when a single awed tip eventually slipped through.
Getting support for the project in the form of organizational resources naturally
proved dif cult. Time and again, as the Eureka story makes clear, we ended up relying
on local champions who somehow managed to cobble enough resources together to do
the job. Moreover, in the initial stages, we sometimes had to operate like a guerrilla group
because opposition was enough to kill the project if we openly challenged deeply entrenched convictions. We conducted our  rst experiment in France partly because it wasout of sight of the central Xerox organization. After the French experiment, only by convincing one product manager in a business division to give us the funds for the Canadianexperiment were we able to gather data that would convince the nonbelievers. (Later,
WCS awarded one of our research group members, who had led the French effort, a plaquethat read, ‘‘Despite the resistance of Worldwide Customer Service.’’)We recognized at the start that the service organization would not accept informal
responses to the collection of tips or the users’ informal assessments. We knew we had
to show hard bottom-line data. In some ways, resistance to making a wide-scale change
like Eureka in just one step allowed us to gather better data. For example, we could put
out a product with only minimal diagnostic documentation and then use the eld force
to help us understand where and how it needed improvement, that is, to construct thediagnostic documentation in the  eld.
Once Eureka became a major corporate program, the project ran into a different sortof problem, perhaps resulting from its success. Why was this a problem? In France andCanada, because we had been conducting guerrilla experiments, we could involve theusers in the decisions on adapting Eureka to local needs and practices. Moving to thecentral WCS organization, however, engendered a change of philosophy, and WCS mandated a uniform, worldwide solution. Management had a policy of distributing corporate
programs in a cascading fashion. Eureka works better when peers mentor each other on
the uses of the system. Unfortunately, the rollout in the US was not done this way.
While the US deployment was eventually successful, the problems that developed because technicians weren’t closely involved in the process hindered the project’s achievements.
WCS and Xerox Corporation emphasize cost savings in  eld service and view theservice organization as a cost center. As a result, they discourage signi cant investment
in service, unless it is matched with equivalent cost reductions. This had consequencesfor Eureka deployment and how the program now operates. Although the president of
Xerox saw Eureka as a key program, we could not get sufcient support from operatingorganizations for building the kind of process infrastructure—such as training resources
and time—to make it more successful. Xerox expected technicians to author tips and
REFLECTIONS, Volume 4, Number 2

BOBROW AND WHALEN
Community Knowledge Sharing in Practice·

In addition, because the project now had top management’s attention, we sometimes
had to set schedules based on managers’ desires for certain goals, rather than on thenecessary work to achieve a nal state. Although we understood the pressures on the
managers, their schedules often could not be realized, leading to internal battles andslipped schedules. We became very aware of the difference between singing in the spotlight and singing in the shower.

57

BOBROW AND WHALEN·
Community Knowledge Sharing in Practicevalidators to provide rapid turnaround and validation of submitted tips without any relief
from their current workloads.
Did Xerox become a better learning organization as a result of the Eureka project?
One answer would be the impact on  eld service performance and the degree to whichmost technicians use the program regularly, especially for learning new ideas and approaches to machine repair. The whole service organization has also been transformed
to some degree by the bottom-up Eureka approach, which has had an impact on operational philosophy.
Despite these signi cant achievements, the corporation has not yet taken full advantage of the possibilities of a knowledge-sharing program like Eureka. For example, although many organizations use the Eureka knowledge bases informally, no formal processincorporates Eureka’s information back into the documentation. Engineering could, butdoesn’t regularly, mine the Eureka knowledge base for ideas on continuous improvement.
And manufacturing could use Eureka to augment the information  ow needed to adjust
rapidly at the initial launch of a new product.
The current Eureka process, which is dedicated to technicians authoring tips for fellow technicians, obviously cannot address all these areas or solve the interorganizational
knowledge-transfer problem. It does point the way, however, to the need for collecting
knowledge on the corporation’s frontlines for use throughout the corporation.
At the same time, the ‘‘spirit’’ of Eureka has had some interesting effects on Xerox
as a whole. We have many requests to help create a ‘‘Eureka-like’’ knowledge system forother operational units. Currently, we have deployed LinkLite, a simpler infrastructure,
to support the Eureka process in a Xerox sales organization. Salespeople share knowledge
about ‘‘customer solutions’’ (special congurations of machines and services that help
customers solve important business problems), their successes, and other sales material.
Perhaps the belief in and spread of this ‘‘spirit’’ has become the most important legacy of
Eureka at Xerox.

Acknowledgments
We would like to thank Olivier Raiman, the original Eureka champion in our group, andBob Cheslow, the principal architect and implementer of Eureka. We are also grateful tomembers of the extended team: David Bell, Mark Shirley, Eric Delanchy, Michel Boucher,and the many technicians worldwide who graciously shared their experiences. We also
appreciate the support of PARC management, particularly John Seely Brown and Johande Kleer, and the people in Worldwide Customer Service, Bernie Colligan and Tom Ruddy.
To others who have helped us along the way but whom we have not named explicitly,
we thank you.
58

References
Ambrose, S.E. Citizen Soldiers: The U.S. Army From the Normandy Beaches to the Bulge to the Surrender of Germany, June 7, 1944–May 7, 1945 (New York: Simon and Schuster, 1997).
Bell, D.G., D.G. Bobrow, B. Falkenhainer, M. Fromherz, V. Saraswat, and M. Shirley. ‘‘RAPPER: The
Copier Modeling Project’’ (International Logic Programming Symposium, San Diego, CA, October 1991).
Bell, D.G., D.G. Bobrow, O. Raiman, and M. Shirley. ‘‘Dynamic Documents and Situated Processes:
Building on Local Knowledge in Field Service,’’ in Information and Process Integration in Enterprises: Rethinking Documents, eds. T. Wakayama, S. Kannapan, C.M. Khoong, S. Navathe,
and J. Yates, eds. (Norwell, MA: Kluwer Academic Publishers, 1997): chapter 17.
Brown, J.S. and P. Duguid. ‘‘Organizational Learning and Communities-of-Practice: Toward a Uni ed View of Working, Learning, and Innovation.’’ Organization Science 2 (1991): 40–57.
Brown, J.S. and P. Duguid. The Social Life of Information (Boston: Harvard Business School Press,
2000).
Davenport, T.H. and L. Prusak. Working Knowledge: How Organizations Manage What They Know
(Boston: Harvard Business School Press, 1997).
de Kleer, J. and B.C. Williams. ‘‘Diagnosing Multiple Faults.’’ Arti cial Intelligence 32 (1987): 97–
130.
Doubler, M.D. Closing with the Enemy: How GIs Fought the War in Europe, 1944–1945 (Lawrence,
KS: University of Kansas Press, 1994).

Volume 4, Number 2, REFLECTIONSBOBROW AND WHALEN

Commentary
by Marleen Huysman
There probably is no living organizational learning researcher who hasn’t read or at least heard of
the article on communities of practice by John Seely Brown and Paul Duguid (1991). They refer toJulian Orr’s study in which he analyzed the day-to-day learning, working, innovating activities ofphotocopier repairmen at Ranx Xerox. The story is so inspiring because it offers a refreshing look at
normal daily activities: social learning in communities of practice.
Since this seminal article was published, I hadn’t heard much about the Xerox repair people,
which I had begun to interpret negatively. I was thus happily surprised to read Daniel Bobrow andJack Whalen’s article. The authors tell yet another story of the lives of Xerox copier and printerrepair people. What was missing in Brown and Duguid’s article, namely, the consequences of IT
support, is now explicitly addressed. The authors give an excellent account of the life of a sociotechnical system used by the reps to support their learning and working processes. Because of thedetail and time frame covered, the story offers a multidimensional collection of do’s and don’ts for
introducing sociotechnical tools for knowledge sharing. For example, the authors illustrate the necessity of a bottom-up approach and the use of local champions. They show us how cultural differences can completely alter previous lessons learned and why top management approval has its
downsides. They tell us about the process of appropriation and the new meanings attached to thetool the moment it is used in various local practices.
In addition to these and other requirements of sociotechnical systems, the story gives a niceexample of the conditions for successful computer-supported knowledge sharing. Especially interesting is the possibility that Eureka offers in authoring, submitting, and validating tips and theabsence of a need (at least in France) to nancially reward tips. I agree (again) with Brown who
sees this authoring and tipping process as contributing to the social capital of the organization:‘‘The author attaches his or her name to the resulting story or tip, thus creating both intellectualand social capital, the latter because tech reps who create really great stories become local heroes
and hence more central members of their community of practice’’ (Brown, 2000: 17).
The story provides insight into how to challenge the general lessons from the rst generationof knowledge management, which often fail because the technology doesn’t match the informalbottom-up collective knowledge-sharing needs and practices. The story also shows that there is noneed to fall into the opposite trap of approaching all knowledge-sharing technologies as negative.
In fact, when we are able to create a sociotechnical match between technology and the opportunities, abilities, and motivations (or degree of social capital) to share knowledge within communities,
there are many possibilities. With this, the authors provide a valuable example of Boland and Tenkasi’s (1995) claim: ‘‘Information systems aimed at knowledge management need to maintain the
integrity of the social communities in which knowledge is embedded.’’References
Boland, R.J. and R.V. Tenkasi. ‘‘Perspective Making and Perspective Taking in Communities of Knowledge.’’ Organization Science 6–4 (1995): 350 –372.
Brown, J.S. ‘‘Growing up Digital, the Web and the Learning Ecology.’’ Change, The Magazine of Higher Learning
32 (March/April 2000): 11–22.
Brown, J.S. and P. Duguid. ‘‘Organizational Learning and Communities of Practice: Toward a Unied View ofWorking, Learning, and Innovation.’’ Organization Science 2/1 (1991): 40– 57.

REFLECTIONS, Volume 4, Number 2

Marleen Huysman
Associate Professor
Vrije University,
Amsterdam, The Netherlands
mhuysman@feweb.vu.nl

Community Knowledge Sharing in Practice·Nonaka, I. and H. Takeuchi. The Knowledge-Creating Company: How Japanese Companies Create
the Dynamics of Innovation (New York: Oxford University Press, 1995).
Orr, J.E. Talking About Machines: An Ethnography of a Modern Job (Ithaca, NY: Cornell University
Press, 1996).
Senge, P., A. Kleiner, C. Roberts, R. Ross, G. Roth, and B. Smith. The Dance of Change: The Challengeof Sustaining Momentum in Learning Organizations (New York: Doubleday, 1999).
Stewart, T.A. Intellectual Capital: The New Wealth of Organizations (New York: Doubleday, 1997).

59

New World Winein Old World Bottles?
Adrian McLean and Marsha George McLean

I

Adrian McLean
Director
McLean & George Ltd.
mclgeo@dircon.co.uk

n the middle of a dinner party, the host invited his guests to sample a new wine. Inturn, they inspected its color, swirled the dark liquid, and inhaled its ‘‘nose’’ before
tasting it, allowing it to linger on their taste buds. ‘‘Well, what’s the verdict?’’ inquired
the host. ‘‘Where is it from?’’ asked one guest, a self-styled wine buff. ‘‘It’s from the newvineyard in the village, just across the lake,’’ offered the host. ‘‘Hmm,’’ said the guest,‘‘doesn’t travel well, does it?’’As a European-based consulting company with strong North American links, we nd
ourselves intrigued by debates concerning the culture-bound nature of appreciative inquiry (AI). Is AI’s evident popularity in North America as an approach to organization
change and growth attributable to its North American origins? In this article, we describe
the introduction and use of AI in a UK organization, the Inner London Magistrates’ Courts
Service (ILMCS). The magistrates’ courts are local courts that are primarily concernedwith misdemeanors. They also refer criminal cases to the higher courts. The courts service
provides administrative and legal support to the individual courts that are located throughout London. We describe the challenges and dilemmas associated with introducing the
New World wine of AI into a setting that embodies the Old World.

The Courts Service

60

Marsha George McLean
Director
McLean & George Ltd.
mclgeo@dircon.co.uk© 2002 by the Society for Organizational Learning and the Massachusetts
Institute of Technology.

The ILMCS, populated predominantly by lawyers, places a premium on rationality, logic,
and precedent and, at the time of this case, demonstrated an open suspicion amounting
to hostility toward ‘‘soft, touchy-feely’’ approaches. Legislative changes had drasticallyreduced workloads, resulting in closures and consolidations of courts and a swath oflayoffs. Many staff people felt that those who performed the worst were rewarded themost. All in all, an inauspicious venue for our introduction of AI.
The central government’s drastic pruning of budgets ensured that the courts service
would no longer be able to improve continuously. For a service with a close-knit, closed
culture, making the required changes was the real challenge. People frequently used theterm ‘‘family’’ to describe the comradeship among the staff in the courts. Once people
were established within the service, they felt they had few transferable skills to otherindustries. This all resulted in a traumatized, demoralized work force with high averagelevels of service and little experience in other organizations and cultures.
To try to mitigate the damaging effects of the changes, the director of human resources
instigated an initiative called the New Ways program for staff members. The term ‘‘New
Ways’’ perfectly described the situation facing the staff. How could they create, discover,or design new ways of managing and running the service that would enable it to operate
within stringent budget restrictions and demanding new service standards? The director’s
brief speci ed that the program be delivered in three segments of two days each. In thisarticle, we concentrate on the early stages of the program.1

AI in a Demoralized System?
We felt the challenge of introducing AI into a system in which controversial changes were
continuing. We were mindful of the often-asserted belief within the AI community that

Volume 4, Number 2, REFLECTIONS

whole system involved?
In many ways, the initiative was inspired and timely, because the service was undersuch strong pressure to change. From a systems perspective, however, we were concernedthat many important stakeholders were not part of our target population. This included
the corporate management team (CMT) composed of the justice’s chief clerks, the directors of human resources and  nance, the justice’s chief executive (JCE), and the magistrates’ courts committee (MCC). The MCC ratied policy decisions and was the overallmanager of the service.
How could we involve the senior managers in the process of renewal and change?
Their active support of both the process and the outcome was essential for speci c operational innovations. We felt that any changes that would transform the service would
include changes in the belief system, the epistemology of the service. If people were to
shift their perceptions of themselves, each other, and the service as a whole, then thesenior managers would need to participate.

MCLEAN AND GEORGE MCLEAN·· How would the spirit of appreciative inquiry  t in a demoralized, cynical system?
· How could we engage the senior managers of the service in the process, getting the

New World Wine in Old World Bottles?

the rst steps of an intervention are fateful. How could we invite people to inquire into
the life-giving, generative experiences of their careers within the service when everyone
faced unprecedented levels of uncertainty, insecurity, and anxiety?
Coupled with these feelings was the fact that the cutbacks and layoffs had signi cantly
increased staff workloads, so people were feeling stressed and stretched. We concluded
that it was necessary to create a climate in which the people in such circumstances would
be prepared to engage in an AI process. We had rst to acknowledge and validate thenature of their current perceptions of the service.
Within this broad framework, we needed to answer key questions:First Challenge
Our rst steps were particularly fateful. We saw the purpose of the initial two-day workshop as the need to build a sense of a group or community of inquirers who saw themselves as active participants in the necessary changes. We also wanted to introduce theparticipants to AI so they would be able to interview others during the period between
the rst and second workshops.
To achieve rapport with the participants as individuals and as a group, we followed
a four-stage process: describing reality, pacing and leading, issuing the invitation, andrede ning relationships.

1. Describing Reality
We invited each of the 14 participants to list on a sheet of  ip-chart paper all the changes
within the service of which they were aware or that they had experienced. We asked
groups of three or four to write the changes on the left-hand side of the paper and theconsequences of the changes, as they saw them, on the right. We then asked them to use
a different color marker and write down words that described their feelings about thesechanges. Invariably, they chose red markers. We then invited them to lay their charts onthe oor in a circle and review all the charts, ask questions for clari cation, and comment
on what they noticed, such as similarities, themes, surprises, and so on. We gently encouraged the process, permitting and encouraging people to speak. We were mindful toensure that their views and especially their feelings were heard and received as legitimate.
We refrained from commenting ourselves, except to seek clari cation or themes and connections between comments. We noticed participants were tentative; we later discovered
they were uncertain how far they could go in speaking their opinions. Could they trust
us and each other?
Next we asked them, as small groups, to imagine themselves as journalists writing afeature story on change in the magistrates’ service. What would be the headline and thestory line with subheads? What photo or illustration would they include? This playful
device further encouraged them to express their feelings. A buzz of conversation during

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MCLEAN AND GEORGE MCLEAN
New World Wine in Old World Bottles?

·

the coffee break followed this exercise. At some level, we had energized the group, andwe felt con dent to proceed to the next stage.
From an AI perspective, this exercise validated our observation on the use of neutral
questions to invoke negative, critical responses. The vast majority of comments and expressions revealed the participants’ strong feelings of anger, powerlessness, uncertainty,
and unfullled promises. The newspaper headlines typically revealed their fears for the
future of the service and themselves and portrayed senior managers in an unattering
light. In fairness, all was not unremittingly critical; there was also acknowledgment ofsome changes that had been favorable.

2. Pacing and Leading
We were curious about how participants saw their own involvement in the changes. We
invited them to reect on their part in the change process, rather than thinking of change
as a series of events. A simple exercise intended to help them was based on a continuumof involvement in change (see the sidebar). The continuum sets out ve levels of involvement: victims, consumers, interpreters, participants/shapers, and cocreators.
We asked them to decide which description most closely resembled their experience.
We then placed  ve sheets of paper on the oor, each representing a level in the continuum and asked people to stand in the position that they had recorded on their own sheet.
In this way, everyone could see the whole of the information. The majority had placed
themselves as either victims or consumers, one or two considered themselves interpreters,
and one participant, from the head of ce, saw himself as somewhere between participant/shaper and cocreator.
We asked why they had placed themselves in their chosen positions and what it felt
like. People spontaneously responded, and a natural dialogue developed. We asked what
the overall pattern said about the service and recent changes in particular. The conver-

Assumptions about Change
Victims
I have no control or any say. My fate is in the hands of others. I could end up worse off as a result of
this change.

Consumers
My job is to do as I am directed by more senior members of the organization. They have explained thenature and benets of the changes and given me appropriate training. It is not up to me to question
their thinking.
62

Interpreters
I am clear about the direction and spirit of the changes and recognize the constraints within which I
need to operate in the new scheme of things. I feel as though I have some freedom in terms ofprecisely how I satisfy the overall requirements.

Participants/ Shapers
I have been consulted and involved in thinking through what changes are needed and how they need
to be introduced. My views are encouraged and taken seriously. I can point to specic ways in which
I have inuenced the change process.

Cocreators
I have been fully involved in all aspects of the change. I am closely identied with both the need forchange and how the organization has chosen to respond. The process has meant working closelywith people from all levels and sections of the organization over a sustained period. We have found a
new way forward together.

Questions
Where would you place yourself in this continuum right now?
Where would you like to be?
What can you do that might help you move closer to your desired position? Give three suggestions.

Volume 4, Number 2, REFLECTIONSThe conversation revealed feelingsof powerlessness, exclusion, and ofthings being imposed without
consultation.

MCLEAN AND GEORGE MCLEAN·
New World Wine in Old World Bottles?

sation revealed feelings of powerlessness, exclusion, and of things being imposed without
consultation. A distinction emerged between how people felt about changes that occurred
to the service as a whole and their feelings of involvement in change locally. The consensus was that they felt more involved at the local level. The position of the participant fromthe head ofce—a senior member of the  nance department—attracted both interest andwry comment and prompted a discussion about levels of consultation between the headofce and the courts.
Until now, all the exercises might be considered pacing activities, through which wepatiently encouraged participants to describe and express their reality using various descriptive and expressive methods. We had gradually shifted
the focus from discussing changes in the service in a generalized, distanced way to encourage them to see themselves
as personally subject to and involved in changes. Increasingly, rapport developed between ourselves and the groupand within the group. At this point, we moved from pacing
to leading. We asked participants to think about where theywould most like to be on the continuum and, when ready,to move to that place, paying attention to the experience ofmoving positions. With the exception of the representative from the head ofce, they all
moved and generally clustered between the levels of interpreters and participants/shapers. No one moved to the cocreator position; a small number hovered between the consumers and interpreters positions.
Once again, we asked why they had chosen their new position and what it felt liketo have moved. Again, the level of energy and attention within the group was high. A
discussion developed about the extent to which they were partly responsible for feelingpowerless. They speculated on how their senior managers would position themselves on
the continuum; they were at rst shocked to discover that the senior managers had distributed themselves in similar fashion at their brie ng before the program had started.
This led to a conversation about how the service as a whole was subject to a number ofexternally driven changes. The exercise helped them to entertain the possibility that things
could be different. We closed by asking each person to process his or her thoughts withanother member of the group and to re ect on what to do to move closer to the desired
position.

3. Issuing the Invitation
We had invited three senior managers to join the group for an informal working lunch.
Our intent was to give participants direct contact with those whom they considered theorganization’s leaders (the CMT). We suggested a broad topic for conversation—the future of the service. How did people see the challenges to the service? What were their
aspirations? We had briefed participants about the lunch at the beginning of the day, andwe had given them time to prepare for the conversations, clarifying what they might want
to discuss with the managers.
Lunch was an informal buffet; three separate tables were arranged. During an hour
and a half, we encouraged participants to spend time at each table to hear different perspectives. The director of human resources, the nance director, and one of the justice’s
clerks—the legal and administrative head of one of the courts—attended. Our intention
was to create an opportunity for natural conversation and dialogue and for participants
to hear their senior managers directly. In this way, we hoped both groups would be partof the change efforts within the service.
The conversations were lively, and once visitors and participants moved into a discussion of the broader issues, the conversations seemed to gain in energy and momentum.

4. Redening Relationships
After lunch, we were anxious to hear participants’ reactions. How did they interpret theviews of the managers? We were in for a shock. Participants were critical of the managers,
particularly the director of human resources and the  nance director, who were newcomers. They saw them as centralist bureaucrats, outsiders who were more interested
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MCLEAN AND GEORGE MCLEAN·
New World Wine in Old World Bottles?

© Emily Sper64

in numbers than in the organization, who couldn’t provide
much desired certainty about the future. The group expressed appreciation for the justice’s clerk who, they felt,
seemed to be doing his best in dif cult circumstances.
Once again, alarm bells sounded. Far from engaging in
dialogue with the managers, it seemed that participants
had engaged in collective scapegoating. The de cit discourse we had observed informally was demonstrated infull-blown Technicolor. We allowed the discussion to develop. Someone pointed out that participants were placing
the managers in a double bind. On the one hand, they
criticized them for being too directive and autocratic,
while, on the other, they were admonishing them for weakleadership.
One major message that participants had heard wasthat the managers were looking to them to generate ideas
and possibilities for how the service might cope with diminishing resources and increased expectations. While
many were indignant, some began to express the opinion
that perhaps senior managers were asking for help. How
could they ask for help if they already know the answers?
People began to use the terminology from the earlier exercise, looking at forms of involvement in change. A junioradministrative staff person suggested that, by blaming senior managers for not coming up with satisfactory solutions, they were maintaining a position as victims. She
argued forcibly that both by committing to the New Ways
program and by participating candidly in the lunchtime conversation, the senior managers
were in effect inviting them and, by implication, all staff to more actively participate in
the change process. Hadn’t they all agreed that this was what they preferred? Her comments proved to be a turning point. Some grudgingly, and others more enthusiastically,
acknowledged that she had a point. We called a tea break.
We realize now how critical this dialogue was to the success of the process. In effect,in the course of the dialogue, participants were constructing a new meaning. Promptedby the earlier exercises, they were not only able to articulate their feelings about current
and past changes but also had an image and vocabulary to describe a preferred alternative.
And they also began to question their expectation that even the most senior managers
should have all the answers. They expected managers to lead but also acknowledged the
double bind in which they had placed them. Naming this double bind allowed for arede nition of relations between staff and senior managers.
The dialogue over lunch and the post-lunch discussion addressed an issue at the heartof the dynamics within the service. In transaction analysis terms, there was a chance toshift from a parent-child pattern toward an adult-adult transaction. The luncheon became
an invitation from senior managers to participants to take part more fully in the changes
required in the service. Were they prepared to accept this invitation? While many were
now openly enthusiastic, it was clear that a signi cant minority were prepared to go alongwith it for the time being. They were prepared to test whether behavior matched rhetoric.
The real test would be whether they saw senior managers sustaining the newly rede nedpattern of relationships in their behavior. Would the enactment match the rede nition?
At this point, we felt it was time to introduce them to the philosophy and methodsof AI. We sensed the group’s feelings of relief as we talked about now focusing on thosetimes when the service had been doing its best work. In our view, we had achieved ourrst goal. The group was ready to engage in both the AI philosophy and its practical
implications.

Second Challenge
We saw that getting the whole system into the process would be the second major challenge to the success of our initiative. If the program did indeed succeed, there would need
Volume 4, Number 2, REFLECTIONS

Before launching the rst workshop, we invited corporate management team members toa brieng to set out the program objectives, review the overall design, and explain what
we would ask their staff to do. We wanted to set their expectations and introduce themto the philosophy underpinning AI. While we intended this mostly as a courtesy, theyexpressed interest in the design and wanted to participate in the ‘‘involvement in change’’
exercise. The results were illuminating. They clustered mostly around the positions ofinterpreters and consumers. The ensuing discussion revealed their feelings that they wereon the receiving end of many government-initiated changes and found it hard to copewith successive changes while conducting business as usual in their courts. For the mostpart, they saw themselves as victims of events beyond their control.
The intention of the luncheon dialogue, which we’ve already described in some detail,was to compare perceptions between senior managers and staff. In our experience, signicant differences in perception can invite all kinds of projections and speculations byboth parties. We wanted to create a forum that encouraged dialogue and required everyone to hear each other’s views. The buffet lunch was intended to foster an informal
atmosphere. We prepared all parties before the encounter, emphasizing the need to set
personal agendas aside and concentrate on the broader challenges facing the whole service. We were only partially successful, although ultimately we believe that the encounterplayed a crucial part in the parties’ rede nition of their relationship.
Between the rst and second workshops, we had asked participants to interview
colleagues from other courthouses within the service (there were 12 courthouses thatserved inner London). In addition, they interviewed people in other organizations that
had innovative practices and high standards. These visits proved useful, not only in terms
of practical ideas and possibilities for new ways of organizing and managing but also at
the more fundamental level of assumptions and values. Family and community values
were reafrmed during the visits, but aspirations to new values such as transparency andteamwork also emerged. New links across the courts and relationships across hierarchicallevels emerged.
At the last of the three workshops, participants had a sense of the innovations thatthey wanted and that their colleagues would support. Here, we invited key stakeholders—members of the CMT and MCC —to hear the group’s discoveries and suggestions. We
intended to foster a climate of discussion and dialogue. We used a marketplace format at
the request of participants because it generated good dialogue and made the encounter
with senior managers less daunting.2
Participants had become adept at creatively representing their ideas and patently
enjoyed the opportunity to be both innovative and playful. Some presented ideas in theform of an interactive quiz, while others adapted the format of a Monopoly game. A thirdgroup took the senior managers on a fantasy tour of the future service and gave themsmall gifts as symbols of their messages: a clear balloon to symbolize transparency, aminiature chocolate bar to embody a culture of recognition, and a toy car to indicate
working from home.
The response of the senior managers was encouraging. They welcomed not just theideas but also the spirit of possibility and innovation. They especially enjoyed the opportunity to debate and share their views. They commented on the participants’ creativity
and enthusiasm and accepted the fact that participants were not expecting them to takeresponsibility for the implementation of the ideas. One member of the MCC commented,‘‘It is so refreshing to come to an event where we are not having more problems dumped
on us.’’ This encounter proved highly enlightening in other ways. The managers discovered that the staff did not want to be protected from the adverse effects of changes. Their
practice had been to shield the staff from information regarding such developments until
REFLECTIONS, Volume 4, Number 2

MCLEAN AND GEORGE MCLEAN·

Intentional Efforts

New World Wine in Old World Bottles?

to be broad-based systemwide support for any changes that would have an impact on thewider organization. How could we achieve this when the senior managers and key stakeholders were not formally involved in the program and did not see themselves as its
consumers? We needed to involve them naturally in the course of the three workshops.
This happened in different ways, some an intentional part of our design and some thatemerged spontaneously.

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New World Wine in Old World Bottles?

66

the changes were unavoidable. The managers were surprised to hear that participantsemphatically preferred to be informed of unpleasant news as early as possible.

Spontaneous Inclusion
As the initiative gathered momentum, the most senior managers were drawn into theprocess in natural and unplanned ways. Program participants often chose to interview
the heads of court (JCs), which stimulated the JCs’ curiosity and interest and left them
intrigued and wanting to learn more. Who had been interviewed and who hadn’t becamea favorite topic of informal conversation in management team meetings. A number ofservicewide initiatives emerged. Members of the CMT offered to be organizational sponsors and champions of the initiatives. And, participants reported that the JCs had expressed interest in what was happening in the course of everyday business. In these ways,
senior members became part of the program. As their interest gradually grew, their attitudes toward the program became more positive and enthusiastic.

The Verdict
Many change initiatives came about as a result of the New Ways program. Perhaps mostimportant was a change in the mind-sets of people in this traditional service organization.
They had opened their boundaries to discovering difference, had started to acknowledge
the tremendous amount of innovative practice within the courts, began to move awayfrom the ‘‘protective parent’’ culture to a more inclusive adult-adult culture, and weregrowing positive relationships up and across the organization. Senior managers describeda sense of renewed energy within the service and commented on signi cant changes in
the attitudes of staff previously regarded as hardened cynics.
The launch of a new IT system represented not only a dramatic manifestation of a
key element in all the course participants’ dreams for the service, but its introduction,with increased staff involvement, was a signi cant shift in style, attributed in large measure to the New Ways program. Of equal signi cance was the attitude toward the dramaticnews, halfway through the series of workshops, that the service was to be combined with
the Outer London Service. The clear message from New Ways participants to the CMT
and the MCC was, ‘‘How can we position ourselves at the heart of the change process
and inuence it, rather than opposing it and marginalizing ourselves?’’ This alone illustrated a major shift of mind-sets.
Among the many practical initiatives coming from the program directly and indirectly
were:· An employee-recognition scheme set up in individual courthouses.
· A totally new IT system linking courthouses by e-mail.
· A new ideas forum.
· Reintroduction of a performance-appraisal system.
· Reconsideration of a long-term service award.
· Team-development initiatives.
· Introduction of ‘‘Magnet,’’ a cross-service staff newsletter.
There were ve iterations of the New Ways program. Interest and support continued todevelop, and the representatives of the program held regular meetings to inform eachother of progress and developments.

Reection
We realize that systemic involvement of major groups and individuals can occur in anatural or organic fashion. It is not necessary to have all stakeholders participate at thefront end of the process. The natural energy and enthusiasm generated by appreciative
processes seem to have a contagious quality that senior managers welcome, and thatdraws them into the process.

Volume 4, Number 2, REFLECTIONSMCLEAN AND GEORGE MCLEAN

We believe that this case offers a resoundingly afrmative response to the question
we posed at the beginning. The Old World bottles of the ILMCS proved to be surprisingly
receptive vessels to the New World wine of AI. However, the time we spent at the beginning of the program was essential to creating the climate of readiness for engaging in sucha process. Once participants had expressed and acknowledged feelings of suspicion andcynicism and accepted the invitation to participate, the staff of the ILMCS demonstrated
an unlimited capacity for innovation and change. The cork was truly out of the bottle.

·

Notes

New World Wine in Old World Bottles?

1. For a description of the full design of the program, please contact the authors at mclgeo@dircon.co.uk.
2. The marketplace format is a device to encourage rich conversations. Groups set up a ‘‘market
stall’’ where they invite visitors to review their displays and engage in dialogue. Visitors canmove freely between stalls in a way that simulates marketplaces in European villages.

Commentary
by Carolyn Hendrickson
The power of dialogue as a profound change intervention of its own is being increasingly recognized around the world. The creation of shared meaning through conversation and the resulting
shift in identity from individual to contributing member of the whole has signicant impact onorganizational performance.
Adrian McLean and Marsha George McLean’s case demonstrates the power of dialogue
through the appreciative inquiry (AI) process. Their central question, ‘‘how to invite people to inquire into life-giving, generative experiences when faced with unprecedented levels of uncertainty,
insecurity, and anxiety,’’ is relevant in many organizations. The case shows that the success or failure of AI is not bound by national culture or by the degree of negativity and cynicism present. As
long as adequate work is done in advance to create the conditions necessary for AI, this dialogic
approach delivers results.
In addition to the climate-related conditions McLean and George McLean address, it is important to recognize that strategic context is also essential for AI to be effective in the long term.
Frequently, in a demoralized system, the most sustainable solution is to shift people’s focus to acommon adaptive challenge. An adaptive challenge is one that requires completely different waysof operating from the past (Heifetz, 1994). In this context, AI is viewed as a critical tool for addressing the challenge. The adaptive challenge serves as an essential attractor in the system tosustain the energy, momentum, and dialogue over time. In the absence of a signicant businesschallenge, AI can come dangerously close to becoming a ‘‘process for process’s sake.’’ As consultants and practitioners, it is essential we spend our energy helping our clients frame and commit
to an adaptive business challenge and resist the temptation to become overly focused on process.
Noticing and understanding the shifts in conversation that take place around the business context
are as important as the shifts in relationship that occur.
Clearly, dialogic approaches to change hold signicant promise, especially when used in thecontext of an unprecedented business challenge. As Margaret Wheatley says, ‘‘There is no more
powerful way to initiate a signicant change than to convene a conversation’’ (2002: 22). As ourunderstanding of the world continues to evolve, AI and other approaches to inquiry and dialogue
need to be a signicant part of our collective toolbox for change.

References
Heifetz, R.A. Leadership Without Easy Answers (Cambridge, MA: Belknap Press, Harvard University, 1994).
Wheatley, M.J. Turning to One Another: Simple Conversations to Restore Hope to the Future (San Francisco:
Berrett-Koehler, 2002).

REFLECTIONS, Volume 4, Number 2

Carolyn Hendrickson
President, Tandem Group, Inc.
SoL Council Member
clh@tandemgroupinc.com

67

MCLEAN AND GEORGE MCLEAN

Commentary

New World Wine in Old World Bottles?

·

by Deborah Reidy

Deborah Reidy
President
Reidy Associates
djreidy@krypto.net

Go to the people
Learn from themLive with themLove themStart with what they know
Build with what they have.
But of the best leaders,when the job is done,
when the task is accomplished,
The people will all say,‘‘We have done it ourselves.’’—Lao Tzu, 604 B.C.

68

At the heart of this article is the premise that people desire to play a more active role in shaping
their organizational life and that, given such an opportunity, exciting new developments will
emerge. This result is well documented in every discipline relating to human behavior. Most often,
the challenge has been to bring about conditions within organizations that enable people to playsuch roles.
A second proposition the authors address is that the most senior people in an organization do
not have to be actively engaged in the change process from the outset but, instead, can be swept
along by the enthusiasm and energy of their constituents. This proposition seems to have beenborne out by the results of the initiative described. The authors write about creating a chance toshift from ‘‘a parent-child pattern toward an adult-adult transaction’’ and describe a number of
instances where senior managers were drawn into the process naturally and organically.
Engaging in such a change process without the complete investment of those most senior is areal test of the rst premise. Instead of structuring a linear, hierarchically driven intervention, theauthors have put their faith in the power of constituent-driven change and in the energizing potential of appreciative inquiry.
When I rst read the article, I had strong misgivings about the senior managers’ lack of formal
involvement. I feared that it signaled a weak mandate for the initiative and would have a modest
chance of producing the kinds of results desired. I was gratied to read about the emergence ofgrassroots leadership, such as the junior administrative staff person who suggested that participants could and should be more actively involved in the change process. At rst, I thought the
emergence of such leadership was an accident, unrelated to the lack of direct involvement of thesenior managers. But perhaps the two were related: An opening was created for grassroots leadership to ll. And I also realized that I had initially made the mistake of equating ‘‘leadership’’ with‘‘position’’ in this story, a mistake I teach others to avoid.
As we craft organizational change efforts, perhaps a rst step—even before the selection anddesign of the methodology —is to identify the real organizational leaders, regardless of the positions they occupy. I dene leadership as ‘‘the activity of mobilizing people to work toward a desired future that not only meets people’s needs but elevates them.’’ With the focus on leadershipas an activity rather than as a title or set of personal traits, a very different sort of leadership canemerge. Thus, in addition to the ‘‘New World wine of AI,’’ the authors also helped to create a space
for the emergence of new leadership. Perhaps it was the combination of the two that produced
the results described.
Much of my work over the past quarter century has focused on creating opportunities forpeople who are oppressed and stigmatized to play valued roles within their communities. By itsvery nature, this work has necessitated the identication and development of grassroots leaders. I
have seen parents of children with disabilities grow to play strong leadership roles in large government agencies, in their school systems, and in other places in the community. Such people did notseek out leadership roles; instead, the issues sought them out. Supporting the leadership journeysof such people has convinced me that focusing on leadership as activity rather than as position or
personality is the only way to sustain signicant change.
Years ago, I had the honor to spend a week with Myles Horton, founder of the legendary
Highlander Center, an adult education center in Tennessee founded in 1932. Highlander Center has
served as a powerful resource for education and leadership development used by virtually everysocial movement since its founding. During my visit, I shared some wonderful meals with Hortonand his colleagues, and grilled them on their experiences developing grassroots leaders for morethan 60 years. Horton was warm, wry, and exceedingly generous with his time and wisdom. At theend of my visit, he handed me a tattered piece of paper with the Lao Tzu quote typed on it. It has
served as my touchstone ever since, in whatever arenas I have worked. The results described in thisarticle provide yet another example of what can happen when you go to the people, start withwhat they know, and build with what they have.

Volume 4, Number 2, REFLECTIONS

Accelerating
the Organization
Design Process
William O. Lytle

W

ith the demands and opportunities in the business environment changing at an everincreasing pace, senior managers are seeking ways to rapidly recon gure their company’s strategies and structure. The search for faster and more effective ways of organizing
and functioning has become imperative. One critical need is for an organization design
process in which the rapid reconguration of key elements enables the achievement of
exceptional business and human results.
Senior managers are well aware that the fast expansion of internal capabilities cangive their organization a true competitive advantage in the marketplace. At the same time,they know that to achieve this, they must avoid the difculties that have diminished anddelayed previous change efforts, such as the use of inappropriate design concepts, thelimited scope of piecemeal designs, the opposition of employees, and worst of all, thedrawn-out—even haphazard—implementation of sound design features. In addition, senior managers realize that the internal resources of time, people, and funds are becoming
less available for prolonged change efforts. What these leaders want is an accelerated
design approach that averts the problems of past design processes, copes with limited
resources, and produces rapid and superior business results.

William O. Lytle
William O. Lytle & Associates
wolytle@aol.com

Organization Design and Its Phases
Organization design, as I use the term here, is a deliberately planned process that concurrently recongures key elements of an organization’s work processes, structure, people,
and culture. A successful design must satisfy the disparate requirements of the businessenvironment, work processes, and human systems. The new organization must be able
to shape the work of employees so they produce the results that meet the objectives ofthe business strategy.
The process of organization change occurs in  ve phases, with the rst four of limited
duration and the  fth of indeterminate length. These phases are exploration, planningand preparation, analysis and design, implementation, and renewal (Lytle, 1998). Accelerated organization design reduces the aggregate time for planning, design, and implementation, with no sacrice of quality.
In this article, I describe four approaches to accelerated organization design and include a case example to clarify each. I also present the factors that determine which approach to use and the implications of accelerated design for the organization’s leadership.

69

Four Options for Accelerating the Design Process
Organizations are using four accelerated design approaches:
1. The modi ed design-team approach relies on a traditional steering committee to oversee the change effort and a design team to create the new organization, but it uses avariety of techniques to speed up the conventional design process.

REFLECTIONS, Volume 4, Number 2© 2002 by the Society for Organizational Learning and the Massachusetts
Institute of Technology.

LYTLE
Accelerating the Organization Design Process·

2. In the cascading, macro-design approach, a steering committee assumes, in addition
to its normal planning responsibilities, the role of a design team and determines thebroad, macro-features of the organization, such as unit boundaries, team structure,and information systems. It cascades or passes these speci cations down to the individual units that then develop both their micro-design and the plan for its implementation in their respective areas.
3. In the sequenced, multiple-conference approach, large cross-sections of people fromthe organization develop the vision, design the new organization, and plan its implementation in a series of short conferences in a compressed time period.
4. The hybrid approach combines features from the other three. For example, a designteam may hold conferences to collect data and test alternatives for a macro-design,with individual units then responsible for the micro-designs.
These four accelerated design approaches can speed up the organization design process
in various ways. Each approach produces one or more of the following process outcomes:· Increases the number of people who support the need for rapid change.
· Enlarges the scope of the design effort.
· Focuses the design work on the most essential tasks.
· Expands the number of high-quality design ideas.
· Tests design options against the requirements of multiple stakeholders.
· Develops broad support for the implementation of the new design through employees’
direct participation.

· Shifts the culture in a direction that supports the new design.
· Uses the resources of people, time, and funds prudently.
An organization must understand the outcomes associated with each option andchoose the approach that best ts the requirements of its design effort. In the next section,
I describe these four approaches in more detail, along with case examples that illustrate
their application. I was one of two external consultants who worked with the organizations described.

1. Modied Design-Team Approach© Emily Sper70

To appreciate the modied design-team approach, it is  rst necessary to understand the
traditional design-team method; this claries what is being modied and why.
In the traditional approach, two temporary groups—a steering committee and a design team—play key roles in the effort. Sometimes an additional high-level group sponsors
and promotes the change. The steering committee is a group of senior leaders—management and union (where present)—that addresses key planning issues, commissions thedesign effort, provides necessary resources, develops support among stakeholders, approves proposals, and oversees the change process fromstart to nish (Lytle, 1993; Kotter, 1996). The design team,typically six to ten people representing a cross-section of
the organization, meets for four to six months to analyze
the current organization (its business environment, work
processes, and people), create a blueprint for the new one,and develop a plan for implementing the proposed features. When the steering committee approves the proposal, the organization implements the design, and thenew organization begins to operate, with ne-tuning asnecessary.
For many years, this approach has produced examples of improved processes, structures, and relationships,
which, in turn, have contributed to superior business andhuman results. However, certain problems tend to slow
the change process and diminish the quality of the results.
For example, design teams are often overwhelmed by thecomplex tasks and lose their sense of direction. Some get

Volume 4, Number 2, REFLECTIONSThe Case: A Composite of Companies
In one company, the steering committee saved the design team time by prescribing certain
proven organization features, including self-managing work teams and a pay-for-skill system. The steering committee in another organization commissioned the simultaneous
design of two units whose work was closely linked.
The design team in one company divided itself into three subgroups, with each assigned to analyze concurrently the business environment, the work processes, and theemployees. A design team in another organization commissioned task groups to work out
speci c changes, for example, new training needs and alterations to facilities. Other teams
held large group meetings to collect information from their peers about how the current
organization was working; they found this method more efcient than individual or groupinterviews.
In another company, the steering committee commissioned activities that supported
anticipated changes before the design was completed. For example, the company taught
employees to understand and use business information and trained them both in needed
technical skills and in new ways of working together. In addition, managers at all levels
began preparing for their new roles. Several other organizations implemented certain
features that everyone agreed were appropriate before nal design approval.
Often, organizations starting their rst design effort use this modi ed design-teamapproach. It gives leaders a great degree of control over the change process and the resources committed. In addition, this approach allows groups with a history of disagreement to proceed cautiously while  nding common ground.

LYTLE·
Accelerating the Organization Design Processcaught up in excessive detail and miss their deadline. Team members often  nd it difcult
to stay well connected to the steering committee, their peers, and other key persons.
Frequently, other employees don’t fully understand what the design team is doing andfeel that it has become isolated, elite, and unable to represent their interests. To overcome
these difculties, organizations have developed the modied design-team approach.
In the modi ed approach, the organization uses various methods to alter the traditional approach in order to speed up the change process and build support for the new
design. In the composite case that follows, I describe some typical modications thatseveral companies made, customized to t their particular situations. Some companies
built on practices already in place, for example, employee involvement.

2. Cascading, Macro-Design Approach
In the cascading, macro-design approach, the steering committee is responsible for theusual planning activities, but also assumes the task of designing the broad features of thetotal organization. This macro-design establishes the higher
level structure and systems that may include, for example,
new unit boundaries, the team structure, information systems, human resources systems, and the like. This macrodesign is then ‘‘cascaded’’ or handed down to individual
units within the larger organization, with each responsiblefor deciding how to implement the prescribed features in its
respective area (the micro-design).
For this approach to succeed, the steering committee
must be able to meet for extensive periods of time, and its
members must be able to hand off their normal day-to-day
responsibilities to others. Employees must see the steeringcommittee as the legitimate body for establishing the broad
design parameters. In addition, the steering committee must focus only on the essential
organizational issues and design features, a true application of the minimum critical specications principle (Cherns, 1976).

In the macro-design approach, thesteering committee is responsible
for the usual planning activities
and the task of designing
the broad features of the totalorganization.

The Case: Miller Brewing
Miller Brewing Company is one of the largest producers of beer in the US. In response to ahighly competitive environment, the company has focused on driving down its production

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71

LYTLE·
Accelerating the Organization Design Process© Linda Cooper

costs while introducing new brands of beer to the market.
Five years before this case began, Miller had opened a
new team-based facility in Ohio, which, because of its low
costs, was allocated more of the production from other
Miller plants, especially the one in Milwaukee. At thetime of this case, the Milwaukee brewery, the largest andoldest of the company’s production facilities, employedapproximately 1,200 people; six different unions represented the production workers and skilled trades. Unionmanagement relations were cordial, but there was no
signi cant history of employee involvement or special
union-management cooperation. The plant was divided
into three interdependent production departments—
brewing, packaging, and shipping —and included engineering, maintenance, nance, and human resources
functions.
Senior plant managers in Milwaukee negotiated an agreement with corporate management and the unions that authorized them to establish a team-based organization.
They set aside a substantial budget to support the change effort, and a committee of senior
management and union leaders, including the plant manager, agreed to devote signi canttime to the planning. With the addition of several new members, the steering committee
was composed of the plant manager and his  ve department heads, leaders of the six
unions, one engineer, one supervisor, and one trainer.
The steering committee visited other companies and learned that some of their change
efforts took up to ve years to complete, which it felt was much too long. It decided touse the cascading, macro-design approach to speed up the plant’s change process. The
group met from four to ve days a week and completed its macro-design and implementation plan in two months. The macro-features included revised department boundaries,
speci cations for self-managing work teams, special coordinator positions, role expectations for managers and team members, a new maintenance-planning system, new shiftchangeover procedures, new training requirements, and a new training system. The groupthen handed off this macro-design to all departments for their local micro-design andimplementation. Within four months, the micro-designs were completed, and their implementation was well under way throughout the plant.
With this cascading, macro-design approach, the plant accelerated the design process
for its new organization. In only two months, the steering committee developed the primary characteristics of the new organization and established the expectations for thevarious units. The vision and the macro-design were clear enough so that each unit could
create and implement its micro-design in a short time.

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3. Sequenced, Multiple-Conference Approach
In the sequenced, multiple-conference approach, large groups of volunteers (50–150),
who make up a cross-section of all units and levels in the organization, develop the vision,
analyze data, design the new organization, and plan its implementation in a series oflinked conferences in a short time (Axelrod, 2000, 2001; Dannemiller, James, and Tolchinsky, 2000; Emery, 1993; Weisbord et al., 1992). Key external stakeholders, such as
customers, are invited to contribute.
Typically, each carefully structured conference lasts from two to three days with three
to four weeks between conferences, so people can absorb the results of one conference
and prepare for the next. The group of participants varies for each conference, with someoverlap from one session to the next. Each conference focuses on one of the design steps
and builds on the work of the previous sessions. Conference participants work both insmall groups and in the total community. The overall macro-design for a sizable organization can be developed in four conferences over a four- to  ve-month period. Steeringcommittee members attend all conferences to stay informed about the process and progress, contribute their knowledge and experience, and make some decisions on the spot
without the usual long delays of more conventional methods.

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at the same time and place. Key outside stakeholders participate, which keeps theconference work closely connected to the realities of the business environment. Whenparticipants exchange ideas face to face, they come to understand and appreciatevarious viewpoints, reduce their misconceptions of each other, and nd common
ground.
· Conference activities follow a logical process that sharply focuses discussions andmoves participants along so they produce the needed output in the time allotted. The
conference structure creates channels of communication that give all participants thesame information and encourage extensive open dialogue. High-quality work resultsfrom the rich diversity of knowledge and experiences that participants share in devising innovative solutions.
· The importance of the change effort, the high level of participation, the diverse activities, and the continuous sense of accomplishment create excitement and enthusiasm
among all participants. To maintain momentum after each conference, all membersof the organization are briefed on its activities and results. As a consequence, thewhole organization validates the change process and its outcomes.

The Case: First Union
First Union is one of the largest banks in the US. Its consumer credit division, at the timeof this case, was an organization of 500 people headquartered in Charlotte, North Carolina,
with 60% of its employees located in Roanoke, Virginia. The division’s products wereboth secured and unsecured personal loans and home equity loans. The division supported loan ofcers in branches in the southeastern US by originating and servicing loans
and collecting loans in default.
Banking is a highly competitive and fast-changing business with rapid shifts in products, markets, technology, regulations, and ownership. With this in mind, the senior vicepresident of the division and his staff decided that the bankneeded to improve customer service, cut the time and costof making loans, and provide better support to the branchbank lenders. In addition, they wanted to increase the levelof internal teamwork and make the division an even better
place for employees to work. Although the division was in sound condition, they wanted
to prepare for the future by developing new capabilities throughout.
The senior managers, functioning as a steering committee, became convinced thatthe needed changes would require a signi cant shift in the organization’s culture plus afull redesign of its processes and structure. They also knew that the division would haveto shift as a whole, with a simultaneous changeover to a new way of working. They
decided that the new organization had to be designed and operating within a year, andthey wanted people at all levels to be heavily involved in the change process. Since twoother divisions in the bank had successfully used the sequenced, multiple-conference
approach, the committee chose this method. Top management supported the change effort
and made suf cient resources available.
After considerable planning, the steering committee sponsored four separate conferences, each lasting two to three days, one month apart, with a cross-section of about 90
employees participating in each. The rst conference focused on developing a sharedvision of the future organization; the second determined what was needed to attain a highlevel of customer satisfaction; the third explored ways to improve the core work processes;
and in the fourth, participants created the broad macro-design for the new organization.
About 60% of the division’s employees plus a few customers participated in one or moreof the conferences. The new design took the original functional organization and recon gured it into four regional groups, with each servicing the local banks in a speci c groupof states. Each region contained a number of teams that together were responsible for all
the steps in processing new loans in their area. Several centralized support groups wereretained.

LYTLE·· Representatives from all parts of the organization work together on the new design

Accelerating the Organization Design ProcessThis sequenced, multiple-conference approach succeeds because:

High-quality work results from therich diversity of knowledge andexperiences that participants sharein devising innovative solutions.

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LYTLE·
Accelerating the Organization Design Process

The steering committee then devoted the next six months to preparing for the implementation of the new design. It required all management members to bid on new jobs
and allocated employees to teams in the new regional groups. The organization also
trained employees in hard and soft skills, developed new human resources policies, installed new information and telecommunications systems, and prepared new facilities for
those working in Charlotte. In the month or so before start-up, the members of eachregional group met separately for a two-and-a-half-day conference during which they
developed the micro-design and a detailed implementation plan for the teams in their unit.
Then, over one weekend, the organization implemented a seamless and successful switchover from the old to the new. It spent the following several months ne-tuning the neworganization, including realigning some responsibilities and further training managers andteam leaders.
Only 15 months had elapsed from the senior staff’s rst discussion about change until
implementation. This rapid change was accomplished through the design conferences,followed by the implementation-planning conferences for each new unit. The keys to thissuccess were the broad scope of the design effort, the carefully designed conferences,
employees’ availability and widespread participation, the extensive preparation for implementation, the steering committee’s steady support, and the meticulous managementof all aspects of the change effort.

4. Hybrid Approach
The hybrid approach to organization design combines various elements borrowed fromthe other three approaches. For example, a design effort might involve a design team,multiple task groups, several conferences to create a macro-design, unit micro-designs,
and early training for employees. This hybrid approach accelerates the design process bymixing and matching components from the other methods.

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The Case: Scott Paper
At the time of this case, the Winslow, Maine, mill of the former Scott Paper Company
employed 500 people in the manufacture and distribution of paper, towel, and tissue
products.1 In order to remain competitive and attract capital, the mill was under greatpressure to lower its production costs. During the previous two years, corporate management had reduced the mill’s headcount, and a number of employees had recently left thesite. Five unions represented the production workers, trades, ofce workers, and guards.
The mill manager, his staff, and the union leaders, serving as the plant steering committee for the design process, established macro-design guidelines and then commissioned
nine parallel design efforts in the production, distribution, support, and ofce areas. (Thetrades groups elected not to participate in this effort.) Initially, the committee speci ed
the use of the traditional design team approach to create team-based work systems forthe mill. After many months of protracted design effort, corporate management unexpectedly demanded that the teams complete the designs, the unions approve them, andthe plant begin implementation within the next four months. The challenge for the steeringcommittee was to quickly nish up the work of the nine design teams, pull the results
together into a coherent proposal that also included a new pay system, gain a positive
vote from the union members, and begin implementation.
To meet this schedule, the committee decided to hold two back-to-back conferencesof two days each within the next month. During the rst conference, participants focusedon completing and integrating the nine separate unit designs. In the second conference,
participants developed the implementation plan for the site. Participants in both conferences were the members of the steering committee and the nine design teams, about 55
people. When they resolved all the planning issues, they rolled out the new design andimplementation plan to the entire organization. After the union members voted for thedesign, implementation began, with extensive training as the  rst step. By using components of the various accelerated approaches, this hybrid approach sped up the design
process at this site and enabled it to meet corporate management expectations.

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1. Level of agreement among key stakeholders on the need for rapid change.
2. Scope of the design effort.
3. Quality of the current relationships in the organization.
4. Degree of employee involvement in the design process.
5. Amount of direct control that management will exercise over the change effort.
6. Resources required and available.
7. Organization’s past experience with organization design.
8. Readiness of the senior leaders to meet the personal requirements of the respective
approaches.

Accelerating the Organization Design Process

Once senior leaders understand the alternative approaches for accelerating organization
design, they must carefully assess their current situation and then choose the right approach for their effort. Their decision will be sharpened by using the following eight factors
to determine the appropriate approach. Each organization, of course, will weigh thesefactors differently.2

·

LYTLE

Choosing the Appropriate Accelerated Approach

The different accelerated approaches chosen by the companies in the cases illustrate
the application of these eight determining factors. Each organization was able to speed
up its design process by using the approach most suitable for its requirements.

· The companies in the composite case for the modied design-team approach had
successfully used the traditional design-team method in earlier change efforts. But as
the business environment became more demanding, they began devising ways tospeed up the process by prescribing certain design features, building more support
among employees, making early changes, and so on. These and other such modi cations have come to de ne the modi ed design-team approach. No organization
today would use a purely traditional approach.
· The Miller Milwaukee plant selected the cascading, macro-design approach after management and the unions agreed on the need for rapid improvement in the organization’s capabilities. The leaders also decided to commit the considerable personal timethey knew this method required. This approach gave both the unions and management control over the content, process, and outcomes of the design effort, a necessity
given that this was the  rst major change on which they had collaborated. Although
this was the rst time any Miller facility had used this approach, it proved successfulin accelerating the design process in the Milwaukee plant.
· The consumer credit division of First Union chose the sequenced, multiple-conference
approach after key managers agreed that an accelerated schedule depended on thecontribution and support of all employees. Given theinterdependence of the units, management also knewthat the organization would have to be designed andimplemented as a whole. In addition, the fact that otherdivisions in the company had used this method successfully was reassuring. The approach enabled the division to meet its aggressive timetable for change.
· The Scott Paper Winslow plant’s use of an accelerated
approach was driven by the unexpected need to complete its traditional design effort quickly. Leaders created a hybrid approach by deciding to hold two conferences to complete the design teams’ work and plan for the
implementation of the new organization. The historically good working relationships
among management and the unions supported their decision to switch methods
quickly. The Winslow plant successfully used the hybrid approach to meet the tightschedule imposed on its change effort.

Each accelerated design approachhas the potential to push theculture of the organization in aparticular direction.

Each accelerated design approach has the potential to push the culture of the organization in a particular direction. For example, the modied design-team approach demonstrates the merits of involving a cross section of employees in the analysis and designof their organization, including its human dimensions. The cascading, macro-design

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LYTLE·
Accelerating the Organization Design Process

approach supports the idea of building a partnership among senior leaders as they work
together on the design. The sequenced, multiple-conference approach reinforces the valueof a high level of employee involvement and information sharing. Leaders may elect touse the accelerated method that embodies the qualities of the preferred future culture,providing there is not too large a gap between it and the current culture.
As an organization moves from the modied design team to the sequenced, multipleconference approach, the number of employees directly involved in the design processincreases signi cantly. The more people who participate and take responsibility for creating the new organization, the better the design, the greater the commitment to its success, and the faster its implementation. Rapid implementation is a major reason why theseapproaches are able to accelerate the change process.

Implications for Leaders
Managers tend to underestimate the difculty of change and therefore underplan, understructure, underresource, and undermanage even conventional change efforts. Since accelerated approaches are more demanding, leaders must be clear about the newrequirements and prepare the organization accordingly. Leaders who are considering theuse of accelerated design methods must also understand that these require their extensive
personal involvement in all phases of the change effort. Regardless of the option theychoose, it will take a great deal of their time, subject them to pressures from many sources,
challenge their tolerance for ambiguity and limited control, make their leadership stylehighly visible, and demand a process of personal change that sets the example for othersin the organization.
The four approaches I describe here were built on design experience gained over the
past several decades, and they have pro ted from the successful evolution of employee
participation in diverse situations. These accelerated approaches work. They are available
to all leaders courageous enough to welcome them as a cornerstone for change in theirorganizations.

Notes
1. Scott Paper is now a part of the Kimberly-Clark Corporation.
2. For the description of a method for choosing the appropriate approach, see: W.O. Lytle, ‘‘Accelerating Organizational Design: Choosing the Right Approach,’’ to be published in the forthcoming
book, The Collaborative Work Systems Fieldbook: Strategies for Building Successful Teams (SanFrancisco: Jossey-Bass/Pfeiffer, 2003).

76

References
Axelrod, R.H. Terms of Engagement: Changing the Way We Change Organizations (San Francisco:
Berrett-Koehler, 2000).
Axelrod, R.H. ‘‘Why Change Management Needs Changing.’’ Re ections 2 (Spring 2001): 46–57.
Cherns, A. ‘‘The Principles of Sociotechnical Design.’’ Human Relations 29 (1976): 783–792.
Dannemiller, K., S. James, and P.D. Tolchinsky. Collaborating for Change: Whole Scale Change (SanFrancisco: Berrett-Koehler, 2000).
Emery, M., ed. Participative Design for Participative Democracy, rev. ed. (Canberra, Australia: Centre
for Continuing Education, Australian National University, 1993).
Kotter, J.P. Leading Change (Boston: Harvard Business School Press, 1996).
Lytle, W.O. Starting an Organization Design Effort: A Planning and Preparation Guide (Plain eld,
NJ: Block Petrella Weisbord, 1993).
Lytle, W.O. Designing a High-Performance Organization: A Guide to the Whole-Systems Approach(Plain eld, NJ: Block Petrella Weisbord, 1998).
Weisbord, M.R., et al. Discovering Common Ground: How Future Search Conferences Bring People
Together to Achieve Breakthrough Innovation, Empowerment, Shared Vision, and Collaborative
Action (San Francisco: Berrett-Koehler, 1992).

Volume 4, Number 2, REFLECTIONSLYTLEby José Luis Alvarez
William Lytle’s article produces a paradoxical effect. It is an optimistic case for change in generaland, more particularly, for planned change. Furthermore, it is an invitation to planned acceleratedchange, an important topic on which Todd Jick wrote an excellent article (Jick, 1995).
The article contrasts with a good deal of the literature on change in high-speed industries(none of the examples provided in the article are really within those sorts of activities), which has
become skeptical about planned or designed change and adopted a more market-oriented orloosely coupled design or Darwinian approach: Let’s facilitate the blooming of initiatives. The world
is so complex that we cannot manage it (at least, in a deliberate, proactive, centralized manner).
Good change initiatives will survive, while the less adapted will fade away (see, for instance, thework of Brown and Eisenhardt [1998], and others).
At the same time, the article seems a bit old-fashioned. Lytle is no skeptic about change andprovides four no-nonsense, reasonable ways of accelerating change, supported by examples of notvery glamorous companies in non-high-tech sectors. These will t the experience of anyone consulting in the difcult domain of change and constitute a useful reminder of how to do things. In
fact, the article contains more common sense in helping companies to accelerate the timing oftransformations than new approaches to change.
The article lacks some references to the new literature on the topic of change (to the skeptical
literature). I would have also liked to nd more contingency logic (when the processes Lytle proposes work and do not work and in which industries).
In sum, the article is good, optimistic common sense that is worth reading.

José Luis Alvarez
Professor, General Management
Department
IESE Business School
Barcelona, Spain
ALVAREZ@iese.edu

Accelerating the Organization Design Process·

Commentary

References
Brown, S.L., and K.M. Eisenhardt. Competing on the Edge: Strategy as Structured Chaos (Boston: Harvard Business School Press, 1998).
Jick, T. ‘‘Accelerating Change for Competitive Advantage.’’ Organizational Dynamics 24 (Summer 1995): 77–82.

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REFLECTIONS, Volume 4, Number 2

From the Chair
T

Peter M. Senge
Senior Lecturer, MIT
Founding Chair, Council of Trustees
Society for Organizational Learning78© 2002 by the Society for Organizational Learning and the Massachusetts
Institute of Technology.

he theme of this issue, ‘‘the devil’s in the details,’’ harks back to old ideas about
success and failure. As the saying goes, ‘‘For want of a nail, the battle was lost.’’ Afterall the grand plans and all the brilliant strategizing, victory and defeat often turn on the
cumulation of many small matters, each by itself easy to miss. Yet, as timeless as thisadvice may be, it seems to go against the current of prevailing sentiment.
In the face of daunting complexity and uncertainty, it is not difcult to appreciate thedemand for ‘‘seven step’’ programs of change. But the basic problem with ‘‘how to’’management  xes is that they aren’t very practical. Life is much too contextual and circumstances much too unpredictable to allow us to work things out in advance. Worse,
formulaic change strategies expose their adherents to wholesale neglect of what reallymatters. By reinforcing faith in the plan, they shift attention away from developing thecapabilities that contribute most to successfully leading change—clarity on guiding principles and aims and being awake to what is happening here and now.
In my experience, a rich feeling for the ‘‘concrete particulars’’ is what comes acrosswhenever successful practitioners re ect on their experience. For example, Aventis’s Jürgen Dormann, in his interview with Otto Scharmer in this issue, responds to Scharmer’s
query about having an ‘‘eye’’ for the right people, by saying, ‘‘This process can’t be
understood in only rational terms. . . . You develop an eye for people . . . [especially]
with regard to their values and the consistency in their basic stands on issues . . . [their]character . . . [and] ability to see these things.’’
Dormann gives several other examples of the devil in the details—like having a sensefor ‘‘what has to be done, when, and in what order’’ in a complex change process, or
knowing where to draw the line around what a CEO does and does not do. The signals
sent by a CEO who makes a decision that could be left to a line or operational manager
travel widely. Dormann believes it is important to ‘‘keep out of [running] the business’’
and points out that ‘‘it is an incredible education for an organization to allow people to[sort out their own thinking on complex issues].’’ But what issues, speci cally, should a
CEO stay out of and when should he or she intervene? This de nes the craft of the effective
CEO. Dormann also points out that it has taken him many years to develop consistencyin ‘‘doing nothing’’ in particular types of situations. This consistency, in turn, is whatsignals the people in the rest of the organization that they do indeed need to assume
responsibility. Inconsistent CEO interventions will produce the opposite: people waiting
for the boss’s next move.
None of these matters are the domain of strategy as consultants and experts usually
write about it. Yet they illustrate the types of issues that really matter—those that separate
managers who are successful at creating environments for real learning and change fromthose who are not. Maybe this is part of the problem. So much of what we use to learn
about strategy and change comes from what observers write. To paraphrase learningtheorist Michael Polyani, masterful practitioners in any domain ‘‘know far more than they
ever say.’’ Tacit knowledge always comes down to knowing what to do in concrete,particular situations. This sort of knowledge is extraordinarily difcult to reduce to wordsof any sort, let alone succinct accounts suitable for busy people.
So, where does that leave us? What can be done to accelerate and deepen learningfor creating change if so much depends on wisdom about concrete particulars? It is important to appreciate the difference between concrete particulars and detailed plans orobsession with detailed control. Appreciating the importance of concrete particulars isreally about cultivating awareness and  rst-hand knowledge. So, how can this be done?
For one, through encouraging those engaged in deep change to help each other. In our

Volume 4, Number 2, REFLECTIONSSENGE·
From the Chair

experience with the SoL community, again and again we nd that there is no substitutefor rich peer networks to accelerate learning—through honoring ‘‘organizational elders’’
and creating the space for them to mentor and through developing managers’ inquiry
skills so they can then support continual curiosity about what we know and do not know,rather than propounding simplistic solutions. And, paradoxically, through lightening theload of management-imposed numerical targets, the virtual sine qua non of managementdriven change efforts—as in ‘‘our goal in this change process is to cut our costs or cycle
time by 50%.’’ Accounting theorist H. Thomas Johnson, the coinventor of ‘‘activity based
costing,’’ and Anders Bröm point out in Pro t Beyond Measure that Toyota achieves unmatched, long-term nancial performance with no standardized, central cost-control system. Instead it has a rich array of cost and performance improvement disciplines that
operate locally because only those in the middle of a process can actually appreciate its
concrete particulars and thereby make the best use of numerical performance data.
Forcing people to focus their attention on numerical performance targets set by management actually forces them to focus on abstractions. This may come as a bit of a shockin our numerical, results-oriented cultures in which no belief is more sacrosanct than‘‘that which is most measurable is most real.’’ But nobody has ever seen a ‘‘prot.’’ And,
as we have all been learning painfully in recent months, many so-called pro ts can disappear in the icker of an eye with revised accounting practices. Driving change throughmanagement-imposed numerical targets can be a powerful force against real learning—as W. Edwards Deming used to say, ‘‘If management sets the targets and makes people’s
jobs depend on meeting them, people will do whatever is needed to hit the targets, including destroying the company to get there.’’Mastering concrete particulars starts with creating a management culture that values
human judgment and learning on a par with numerical results and sees the latter as avehicle for achieving the former.
Peter M. Senge

ReferenceJohnson, H.T., and A. Bröm. Pro t Beyond Measure (New York: Free Press, 2000).

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