Best Practives in Leadership Development & Organization Change 29

would be invited to what appeared to be redundant events. Others wondered whether opinion leaders were like union committeemen—people whom employ- ees could take their gripes to and who, in turn, would be expected to be their voice with management. Formal leaders dealt with initial resistance by downplaying the opinion leader list, citing the fact that it was not a perfect process and that involvement of opin- ion leaders is only one way to create change. Senior managers pointed out that half of the opinion leaders were also managers. They also reminded them that the list came directly from employee input, not from them. Coordination conflicts were worked out by the opinion leaders themselves; they chose the events or issues that they felt were appropriate for them to participate in. Our intention from the beginning was to have opinion leader involvement slightly lag involvement of the chain of command. This is important for two rea- sons: first, because it is the formal leaders’ job to lead change—and engaging opinion leaders too soon absolves them of that responsibility. And second, because giving opinion leaders advance information about change provokes jealousy—and therefore resistance—from members of the chain of command. But good intentions don’t always fit reality. Reality at Lockheed Martin was that many of the senior leaders dragged their feet month after month in implement- ing actions to involve the chain of command. So here we sat with a few willing executives like Bill Andersen ready to roll with their opinion leaders while chain-of-command strategies were caught in a traffic jam. We decided to ignore our better judgment and get opinion leaders moving. In retrospect we’re not sure what would have been best. Change got rolling. Some formal leaders got their feathers ruffled. And in some ways preemptively involving opinion lead- ers put pressure on lagging executives to get the chain-of-command strategies off dead center. Whatever we should have done—we clearly advocate that the chain of command should get significant attention prior to involving opinion leaders. As we’ve worked with opinion leaders we’ve found them to be very sensi- tive to the possibility of being manipulated. Trust and credibility are essential currency in this relationship. With these, opinion leaders become powerful allies that help move the rest of the organization toward productive change. Without trust and credibility, we believe that any time spent with opinion leaders just makes them more credible opponents to change efforts. Since the rest of the organization will know that formal leaders have attempted to influence them, their opinions about the relevance and desirability of change will carry even more weight. It is important, therefore, to realize that opinion leaders might walk away from an exchange more negative and cynical, and, if so, they will carry that message to the rest of the organization. In the case of Hancock’s company, the challenge of building trust with opin- ion leaders was particularly vexing. What Hancock wanted to see change was 250 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE cart_14399_ch10.qxd 10/19/04 12:25 PM Page 250 behavior. Opinion leaders, in response, made it clear that unless and until they saw that their formal leaders were willing to change themselves, they would be less willing to spend their credibility helping to influence others. As senior lead- ers learned to work with opinion leaders, a virtuous cycle was created in which leaders demonstrated more openness and trust while opinion leaders practiced greater directness and candor. THE IMPACT? The most important impact of opinion leaders is not in the headlines, it’s in the cafeteria lines. Opinion leaders reach into every conversation, every meeting, and every decision made in an organization. The question is: Are they influ- encing these interactions positively or negatively? Although survey results dra- matically improved after the leader-as-teacher and opinion leader engagements took hold, we believe the best way to understand how opinion leaders drive change is through specific anecdotes. A classic example of how opinion leaders exert influence led to a company- wide acceptance of the president’s leader-as-teacher concept. Initially, his senior staff was ambivalent about this approach and began to slow-roll, the idea. Many below them, however, were more vocal in their concern. One detractor summed up what others felt when he said: “We’re managers, not trainers!” While executives deliberated, the operations area moved ahead to pilot the concept. As it turned out, the most frequently nominated opinion leader in the company was in the first operations pilot. He came away convinced that the training was crucial but that the leader-as-teacher concept was deeply flawed. After receiving the preparatory training, he reluctantly began to train others. As he did, his attitude changed, as did his remarks about the leader-as-teacher approach. In fact, he became such a vocal advocate that he even offered to sub- stitute for his peers when they needed coverage. While his journey from oppo- sition to zealot was encouraging, what was more important was the influence it exerted on the dozens of others who witnessed it. Although we expected this peer effect, what surprised us was the influence he wielded upward. In one session in which the senior staff deliberated, once again, on whether to make a companywide commitment to leader-as-teacher, Russ Ford, the vice president of operations, described this man’s journey. At the first mention of his name, those who had been shuffling papers and holding side conversations stopped. Executives also respected him, and they knew he was no pushover. As the VP told the story, previously skeptical staff members began asking genuine questions. At the conclusion, opinions had changed. Although not even present during the discussion, this opinion leader had exerted powerful influence. LOCKHEED MARTIN 251 cart_14399_ch10.qxd 10/19/04 12:25 PM Page 251 Beyond anecdotes, it is always hard to disentangle cause-and-effect in large- scale organizational change efforts. This case is no different. A large number of discrete change initiatives were implemented in cascading and overlapping ways throughout the organization. However, it is possible to examine data that speak to all change efforts to see whether results are consistent with the timing of particular interventions. In this case, the regular survey results provide some insight into the impact of the change effort (see Exhibit 10.3 for survey findings). Survey results over the first year and half of the change initiative (measured in April and September of 1998 and February and June of 1999) indicated no meaningful change in the critical behaviors. This changed on the December 1999 survey, where statistically significant (p Ͻ .001) and meaningful shifts in those results were observed companywide. Although the first opinion leader engagement began in the late spring of 1999, it was during the last six-month period that most activities involving opin- ion leaders and leader-teacher efforts were carried out. We believe this is more than coincidence. Other evidence also pointed to change efforts having their desired impact. The surveys provided employees with an opportunity to write about recent changes they noticed at work. These comments did not show evidence of change consistent with the Workforce Vitality initiative until the leader-as- teacher and opinion leader efforts were under way. A shift in the tone and num- ber of positive-change comments started to occur on the fourth survey. Even more positive changes were noted on the last survey, but this time, they were specifically attributed to the Workforce Vitality effort. Thus, the timing of employees’ reports of change matched the changes in the numerical survey results. YOU CHANGED THE CULTURE. SO WHAT? Although it’s always nice to succeed at what you set out to do, sometimes suc- cess isn’t worth the cost. So, the ultimate question should not be merely, Did what you do actually change the culture? Unless changing the culture also made a clear business difference, scarce resources should probably have been put elsewhere. After all, Hancock wasn’t pursuing culture change for philosoph- ical or intrinsic reasons. He was convinced that critical behaviors had to change for the company to survive—to both win the JSF contract and be able to deliver on that contract. From this perspective, the key questions are both Did the behavior change? and Did the changed behaviors lead to improved business performance? With good engineering discipline, Hancock arranged from the beginning for good research to help answer these questions. The culture change survey was 252 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE cart_14399_ch10.qxd 10/19/04 12:25 PM Page 252 administered approximately every five months. This survey tracked changes in the critical behaviors. Movement on this metric was an indicator that the culture had started to shift. We were able to address the second key question by following changes in performance in each of eighteen F-16 production units. In this case, we were able to see whether improvement in these performance metrics was associated with greater success in holding the targeted crucial conversations (see Exhibit 10.4). These results indicate that units that are seen as better able to engage in crucial conversations are more efficient and productive, and produce higher-quality work. Although statistical methods can never finally answer the questions about causality (that is, did improved performance lead to behavior change or did behavior change lead to improved performance?), the story here is pretty com- pelling. First of all, leaders announced an intention to influence specific critical behaviors. Second, they implemented interventions designed to influence these behaviors. Measurable behavior change followed the implementation of these interventions. And performance improvement followed change in behavior. In fact, research with follow-up focus groups indicated that there were no examples of performance improvement in any unit studied where there was not also significant improvement in the critical behaviors. An interesting anecdote: as the evidence of culture change was becoming clear, LMTAS was going through an assessment for the coveted Shingo prize for manufacturing excellence. In the end, not only did LMTAS win that prize, but in awarding the prize, evaluators specifically applauded the breakthrough approaches to increasing employee involvement described in this chapter. Did culture change help with the JSF win? There is no concrete way of answering that question. Did winning the Shingo Prize, Industry Week’s Plant of the Year award, and most important, demonstrating the ability to lead and influence an organization toward measurably improved performance help? It’s hard to think it didn’t. SUMMARY AND BEST PRACTICES It is a daunting challenge to attempt to change widely held and deeply entrenched patterns of behavior across a large and complex organization. And yet there are times when it is the only path to significantly improved performance. New strategies or processes are worthless if poorly implemented— and behavior is the key to effective implementation. Such was the challenge facing Lockheed Martin. A few best practices emerge from Lockheed Martin’s successful effort to change its culture in its successful pursuit of the Joint Strike Fighter contract. LOCKHEED MARTIN 253 cart_14399_ch10.qxd 10/19/04 12:25 PM Page 253 The major lesson is that a handful of committed leaders can positively influ- ence thousands of others with the appropriate leverage. Dain Hancock and his staff prepared themselves for effective influence by 1. Identifying a few critical behaviors that were easy to tie to improved performance 2. Setting a specific and measurable improvement goal 3. Holding the top two levels of leaders accountable not for supporting culture change activities, but instead for achieving measurable changes in critical behaviors Lockheed Martin leaders gained leverage for influencing 12,000 others by 1. Enabling formal leaders to take responsibility for influencing new behaviors by having them assume the role of “teacher” 2. Enlisting informal opinion leaders in leading change by identifying them, listening to them, and involving them in strategic ways APPENDIX EVERETT ROGERS Lessons from Known Studies of Diffusion Everett Rogers is well known for his systematic study of how new ideas and behav- iors catch on in large and complex populations. There is evidence of his influence in words he helped introduced into business usage such as “early adopters” and “laggards.” What is less known is that he began his academic interest after a sum- mer job in which, as a county agent, he utterly failed to induce Midwest farmers to accept free advice on what were irrefutably better ways of farming. He was stunned. Through this and similar experiences, Rogers began a systematic exploration into what came to be known as the diffusion of innovations. He looked at every kind of new behavior one could try to foster. He examined what encourages doc- tors to begin using new drugs, what inspires farmers to begin using better farming techniques, what motivates people to buy a VCR for the first time, how new man- agement techniques are adopted, how passing fads become popular, and so on. He examined 3,085 behavior-change studies, and concluded that 84 percent of the population is unlikely to change its behavior based solely on arguments of merit, scientific proof, great training, or jazzy media campaigns. The majority of those who try new behaviors do so because of the influence of a respected peer. Rogers came to this realization in an interesting way. In reviewing these 3,000ϩ studies, he noticed that in every one of them, change followed an S- shaped curve. Change begins slowly and progresses grudgingly at first. Gradually 254 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE cart_14399_ch10.qxd 10/19/04 12:25 PM Page 254 a few converts are won over. As more of the “right” converts amass, the process accelerates. That’s where the S-curve becomes steep. Later, as most of those who are easy to moderately difficult to engage adopt the innovation, the curve levels back out, finishing off the S. Progress past this point slows again, requiring great effort. Consider a common challenge, such as attempting to introduce the use of qual- ity tools, like fishbone diagrams, process mapping, and Pareto analyses. Many reports suggest that this innovation follows the S-curve precisely. Some people buy in fairly quickly, creating a false sense of momentum. The true picture emerges when the initial euphoria wears off and leaders realize that, behind the few faith- ful who are giddy about these new tools, no one else is standing in line. A few influential managers later begin using the ideas in meetings and advocating process-mapping in some of their less-effective departments. These few gain pock- ets of support. The adoption curve climbs slowly for about eighteen months. This is the stretch of road where many leaders just quit pushing, declaring the effort an unofficial failure. If the top leaders persist, they might enjoy the rewards of the steeper part of the curve—that is, if those who are persuaded before the curve points upward are the right people. The people living at this elbow are the key to everyone else. At first Rogers and his colleagues called this group “early adopters.” After discovering their relationship with everyone to their right on the curve, they began calling them “opinion leaders.” What these scholars found was that opinion leaders tend to adopt new behav- iors for reasons different from those who show up later. Opinion leaders tend to listen to various arguments, read objective sources, and carefully weigh options. Other characteristics of this group distinguish them, too: they are seen by their peers as smarter, better connected, more widely read, and more influential. Whereas opinion leaders often try new things because they’ve studied it, other groups more often adopt because opinion leaders did. The good news in all of this is that leaders trying to pound through the layers of clay in their organizations can accelerate their progress if they take the time to identify and engage this smaller group of very influential people. Opinion leaders are the key to accelerating the S-curve. If leaders miss with these people, they risk missing completely. SURVEY DETAILS Surveys were administered five times from April 1998 to December 1999, approx- imately five months apart. Surveys were administered electronically to all white- collar employees. Represented employees who did not have access to the Internet took a paper-and-pencil survey administered in the company auditorium. Each survey contained thirty-two items, eight of which were designed to assess the three critical behaviors. All scales were found to have acceptable reliability (Cronbach’s alpha Ͼ .70, on each administration). Means for each critical behavior, at each survey administration, are depicted in Exhibit 10.3. LOCKHEED MARTIN 255 cart_14399_ch10.qxd 10/19/04 12:25 PM Page 255 For the first four surveys, random samples were drawn representing from 30 to 40 percent of the workforce. Response rates ranged from 33 to 51 percent. For the final survey, a census was drawn. The response rate for this survey was 44 per- cent. All participation was voluntary and anonymous. Analyses were conducted to ensure that each survey was representative of the demographics of the com- pany, in terms of functional area, organizational level, and union representation. These proportions were consistent across survey administrations and consistent with the proportions for these variables within the company. Finally, results from represented and nonrepresented sectors of the workforce paralleled each other, and indicated significant changes only on the December 1999 administration of the survey. 256 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE • People spoke up when they saw wasteful or unproductive practices. • When supervisors were slow in responding to employee needs, employees spoke up in a way that got results. • When upper management needed to pay attention to problems, employees and supervisors gave candid feedback up the chain of command to the appropriate person. Exhibit 10.1. Critical Conversations in Six Sigma cart_14399_ch10.qxd 10/19/04 12:25 PM Page 256 LOCKHEED MARTIN 257 Information Conduit—Attend briefings; convey information to others based on your understanding of company efforts. Advisor—When solicited, give feedback on proposals and ideas for improving vitality in the organization. Model—Model the critical behaviors of open communication, personal commit- ment, and sense of urgency. Data Collector—Interview others, run focus groups to discover root issues, and help formal leaders improve vitality. Participant, Improvement Event—Participate in a focused improvement event, such as a Kaizen event or large-group problem-solving meeting. Facilitator—Notice unproductive patterns in groups and among senior managers; candidly share observations with others and gain commitment for more effective strategies. Teacher—Facilitate single-point lessons aimed at improving communication and teaming skills. Improvement Event Leader—Facilitate or lead an improvement event, such as a Kaizen event or large-group problem-solving meeting. Improvement Project Leader—Lead or support specific improvement projects to remove barriers to cultural vitality. Coach Formal Leaders—Give behavioral feedback to leaders from interviews or personal experience to promote openness and change. Exhibit 10.2. Potential Opinion Leaders’ Roles in Culture Change cart_14399_ch10.qxd 10/19/04 12:25 PM Page 257 258 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE 3.5 3.6 3.7 3.8 3.9 4 4.1 4.2 4.3 4.4 4.5 1 Critical behaviors: 1 = Open communication, 2 = Personal engagement, 3 = Sense of urgency 23 April '98 Sept '98 Feb '99 June '99 Dec '99 Exhibit 10.3. Survey Results cart_14399_ch10.qxd 10/19/04 12:25 PM Page 258 LOCKHEED MARTIN 259 Efficiency* Productivity Quality People challenged .50 .42 coworkers when they saw wasteful or unproductive practices. When supervisors .53 .52 .49 were slow in responding to employee needs, employees spoke up in a way that got results. When upper management .68 .43 needed to pay attention to problems, employees and supervisors gave candid feedback up the chain of command to the appropriate person. Exhibit 10.4. Significant Correlations Between Specific Critical Behavior Items and Three Performance Metrics *Efficiency is a measure of time per unit, standardized by size of unit. Productivity reflects the percent- age of possible work actually accomplished. Quality is measured by amount of rework required, standardized by size of unit. Note: Only statistically significant correlations are reported. cart_14399_ch10.qxd 10/19/04 12:25 PM Page 259 . no one else is standing in line. A few in uential managers later begin using the ideas in meetings and advocating process-mapping in some of their less-effective. responsibility for in uencing new behaviors by having them assume the role of “teacher” 2. Enlisting informal opinion leaders in leading change by identifying them,