GUEST POST from Greg Satell
When Lou Gerstner took over at IBM in 1993, the century-old tech giant was on its knees. Many thought it should be broken up into smaller, more focused companies. Others had different ideas. So at Gerster’s first press conference, people were curious about his strategy and disappointed when he failed to deliver one.
“The last thing IBM needs right now as a vision,” he said. What he meant was that IBM’s culture was broken. “Culture isn’t just one aspect of the game,” he would later write. “It is the game. What does the culture reward and punish – individual achievement or team play, risk taking or consensus building?”
What Gerstner saw was that IBM had lost sight of the values that had made it successful in the first place. He wasn’t “disrupting.” He was making IBM culture safe to innovate again and, by doing that, he achieved one of the most remarkable turnarounds in corporate history. If you want to achieve truly radical change, you need to start with shared values.
Making The Shift From Differentiating Values To Shared Values
IBM wasn’t Gerstner’s first stint leading a company. He’s been President at American Express and CEO at RJR Nabisco, both of which were very different from technological companies. Yet Gerstner didn’t focus on how his experiences were different, but on how they were the same—each of these businesses have to serve the customer.
“Lou refocused us all on customers and listening to what they wanted and he did it by example,” Irving Wladawsky-Berger, one of Gerstner’s chief lieutenants would later tell me. “We started listening to customers more because he listened to customers.” It was upon that simple principle that he changed the course of IBM’s future.
In a similar vein, when Nelson Mandela wanted to create a new future for South Africa, he organized a Congress of the People, a multi-racial gathering which produced a statement of shared values that came to be known as the Freedom Charter, which is still revered even today. He would later say it would have been very different if his organization, the ANC, had written it by themselves, but it wouldn’t have been nearly as powerful
When we’re passionate about an idea, we want to show how it’s different. We want to explain all its beautiful complexity and nuance, so that people can share our passion and fervor. That’s almost always a mistake. The first step to creating truly transformational change is to anchor it in what people already know and feel comfortable with.
Creating Safety Around The Change Conversation
When an enterprise is in crisis, one of the first things that often gets cut is investments in the future. So when Gerstner scheduled his first non-headquarters visit at IBM to the firm’s legendary research facility at Yorktown Heights, everybody there got nervous. Many expected there to be deep cuts and, possibly, that the entire facility would be shut down.
Actually, quite the opposite. “I saw the pain of IBM’s problems on their faces,” Gerstner remembered. “I talked about how proud I was to be at IBM. I underscored the importance of research to IBM’s future.” It was a wise move. Although few knew it at the time, scientists at IBM had just made a major breakthrough that made quantum computing possible and a few years later the company’s Deep Blue supercomputer would beat Garry Kasparov at chess.
Many change management schemes advise to create a “sense of urgency” and creating a “burning platform” atmosphere. Yet Gerstner understood that employees were perfectly aware of how dire the situation was. What they needed wasn’t more fear, but to see a path forward. Terrified people don’t make good decisions. They’re also more likely to head for the exit than to work for the future.
Don’t get me wrong, you don’t want to sugarcoat things. You need to be frank, honest and paint a clear picture. Gerstner made it plain that day that there would be changes. Yet by rooting his message in shared values, he was able to create a sense of safety around the change conversation. The scientists were able to see that they could, in fact, be heroes in the story of IBM’s future. As it turned out, they would be.
Creating A Dilemma Rather Than A Conflict
Once you start being explicit about your values you will inevitably find that not everyone shares them and that was certainly true at IBM. For example, Wladawsky-Berger told me that “IBM had always valued competitiveness, but we had started to compete with each other internally rather than working together to beat the competition. Lou put a stop to that and even let go of some senior executives who were known for infighting.”
A simple truth is that whenever we set out to make a significant impact, there will always be those who will work to undermine what we are trying to achieve in ways that are dishonest, underhanded and deceptive. Yet when that happens we need to be careful not to get sucked into a conflict, which will likely take us off course and discredit what we’re trying to achieve. Instead, we need to learn to design a dilemma.
Dilemma actions have been used for at least a century—famous examples include Gandhi’s Salt March, King’s Birmingham Campaign and Alice Paul’s Silent Sentinels—but more recently codified by the global activist, Srdja Popović. They are just as effective in an organizational context, using an opponent’s resistance against them.
One of the great things about dilemma actions is that you approach them exactly the same way you approach building allies—by identifying a shared purpose. Once you do that, you can design a constructive act rooted in that shared purpose that advances your agenda. That forces your opponent to make a choice: they can either disrupt the act and violate the shared value or they can let it go forward and allow change to proceed.
For example, I was once running a transformation project that was being impeded by a Sales Director hogging accounts. Although it was agreed that she would distribute her clients, she never got around to it. So I set up a meeting with a key account and one of our salespeople. When she tried to disrupt the meeting, she violated the shared value we had established and was dismissed from her position. Everything fell into place after that.
Forging A Shared Purpose
Change always begins with a grievance—there’s something people don’t like and they want it to change. Yet the status quo always has inertia on its side and never yields its power gracefully. That’s why it’s so important to forge a shared purpose, because people need a common mission they can believe in to see themselves as stakeholders in a shared future.
The reason so many organizations find themselves unable to pursue a purpose isn’t because they don’t want to, but because it is so hard. Purpose doesn’t begin with a single step, but with a diverging path. To honor a value we need to be willing to incur costs and constraints. We must choose one direction at the expense of another, or stay mired and lost, unable to move forward.
That’s why the change conversation needs to focus on what you value. Values are how an enterprise honors its mission. They represent choices of what an organization will and will not do, what it rewards and what it punishes and how it defines success and failure. Perhaps most importantly, values will determine an enterprise’s relationships with other stakeholders, how it collaborates and what it can achieve.
Perhaps most importantly, shared values enable a shared identity, which is what you need for change to last. The goal of a revolution, as Srdja Popović once explained to me, is not a constant state of disruption, but eventually to become mainstream, to be mundane and ordinary. That can only be done if change is built on common ground.
— Article courtesy of the Digital Tonto blog
— Image credit: Google Gemini
Sign up here to join 17,000+ leaders getting Human-Centered Change & Innovation Weekly delivered to their inbox every week.
Drum roll please…
