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The Four Levers of Corporate Change, by Peter L. Brill and Richard Worth
AMACON, New York, NY   $22.95 

Reviewed by C. Donald Williams, MD 

Peter Brill’s and Richard Worth’s book  begins with the following passage: 

On a steamy July day, the leaders of a major American organization assembled at a stately old colonial building to discuss the serious problems currently confronting them.  They were operating in an environment that was daily growing more turbulent, with increasing economic pressures from abroad and dissatisfaction among their domestic customers, and the organization itself was rapidly being torn apart by fierce internal struggles between its various units. Indeed, disaster seemed in the offing unless the organization could somehow change. 

This introduction, a variation of the classic “It was a dark and stormy night…”, sets the tone for a book that is at once an amalgam of the storyteller’s art (Richard Worth has 20 years experience as a writer and video/film producer for Fortune 500 clients) and creatively expressed insights into organizations, their dynamics, and techniques for bringing about change. It is clear throughout the book that the ideas have been developed and proven in the field.  The book is organized around the use of “four levers of change into twelve hallmarks of outstanding organizations.”   

Using historical anecdotes and case material from the Peter Brill’s own consulting practice, the authors develop the central themes of the book.  Crises, either naturally arising, or created by the organization’s leader, provide the catalyst for change.  The effective use of power, combined with an understanding of human nature, are prerequisites for successful leaders.  Social processes, i.e. exercises designed to change employee’s belief systems on both an intellectual and emotional level, are illustrated with case examples. Maintenance of successfully initiated organizational change requires that the organization’s members both identify with and internalize the new values on an emotional level.  

The book is divided into three parts, “A Framework for Change,” “The Four Levers,” and “Ensuring Continued Success.”   

“A Framework for Change” underscores the complexity of organizations, and the fact that there are no simple solutions.  It explores the role of crises in opening an organization to a change process, and specifies both the purpose and limitations of ideals and vision statements in that process. 

The second section, “The Four Levers,” describes each aspect of change one by one: the human factor, the uses of power, social process, and dimensions of leadership

The concluding section, “Ensuring Continued Success,” focuses on sustaining change by means of fostering identification and alignment

Part 1 ~ A Framework for Change 

Part One begins with a description of how successful organizations possess certain essential qualities; these include having vision, innovation, flexibility, and being customer driven.  Bringing these qualities into harmony requires effective organization and distribution of power within the organization while taking into account an understanding of human nature.  Effective leaders must be able to create networks within the organization which remain at once in balance with each other and capable of efficient pursuit of the goals of the organization.  To accomplish this, requires an understanding of social process. When guided effectively by the leader, social process can be used to produce and sustain changes in vision and power relationships within the organization. The beliefs and value systems of the individuals who are assigned the task of achieving its goals must be aligned with the purposes of the organization, and in harmony with its overall structure and purpose.  

The complexity of managing organizations is articulated in this comparison with psychotherapy: 

Management is not an exact science, like mathematics; it is closer to psychotherapy, where there are generally no right or wrong answers, just theories—and hundreds of them, at that.  Perhaps to an even greater extent than psychotherapy, the study of organizations is only in its infancy.  We simply don’t have the database to say with any confidence what works or what doesn’t, and (even more importantly) why.  

However, Peter Brill has considerable experience with consulting to organizations, and records his experiences in accessible language.  For example:  

First Principle of Power: People who have power usually do not give it up voluntarily.
Second Principle of Power: Hierarchies are the natural order of things.
Third Principle of Power: In each organization there are different kinds of power. (Formal, Moral, Expertise, Coercive).  

Strategies employed by Jack Welch when he became CEO of General Electric are used to illustrate the effective use of power.  Welch created a crisis at GE to make it open to change, and then created a vision statement which radically altered the way in which GE approached its business.  Welch recognized that GE would have to be able to compete internationally if it were to prosper as an organization.  To precipitate the crisis necessary to create the openness necessary for initiating the change process he decreed that all GE divisions that were not leading their market area would be sold off.  The initial reaction against this initiative was intense. However, as Welch demonstrated that he possessed the power to implement his plan and that his plan made sense in the changing global competitive environment and, it became obvious that it was untenable for anyone to argue that second place was good enough. 

Some easy to read business books are full of fluff.  Well written and easy to follow, this book is densely packed with valuable insights.  A good novelist may achieve this meld as a matter of course;  management consultants are less often as successful.  More examples: regarding the three “realities of power” several principles are enumerated.

People who have power usually do not give it up voluntarily (managers may give lip service to empowerment, but they rarely enact it voluntarily)
Hierarchies are the natural order of things (for each organization, there appears to be an optimal degree of command structure).
In each organization there are different types of power (formal, moral, expertise, coercive).




Part Two ~ The Four Levers
 

Part Two, “The Four Levers,” begins with a story about the Luddites.  

The Luddites were workers in the stocking trade—journeymen and apprentices operating the hand looms for their bosses, master stockingers, who had rented them from hosiers.  These stocking workers were craftsmen, used to producing high-quality, finely styled stockings.  Unfortunately, they were also members of a dying trade.  The stocking market was changing; hosiers were now demanding mass-produced, lower quality stockings and were willing to pay far less for them.  Wages declined, and the workers saw their hours cut.  Then the hosiers introduced the wide frames, which would enable them to produce even more stockings faster and with eve fewer operators.  Seeing their livelihoods in jeopardy and being forced to reduce the quality of their products, the workers eventually began to demonstrate.  When this didn’t work, they turned to violence.  Eventually the Luddites attacked factories, destroying power looms and wool shearing machines, killing armed guards whom the owners had hired to protect their factories.  Ultimately they were arrested, tried, and executed or transported to penal colonies.  Today they are regarded as ignorant workers with an “irrational, shortsighted attitude toward change.” 

Used to illustrate a truth regarding human nature, this example from English history during the Industrial Revolution adds dimension to the principle under examination: “Change must occur at the emotional level—the same place where resistance to change usually occurs. It’s a battle for the hearts of employees, and if you lose that battle, the transformation process will encounter barriers that may prove insurmountable.”  An in depth analysis of resistance (familiar in the therapeutic context to all psychiatrists) follows.  The “elites, the ins, and the outs” all have a particular view of the world that is determined by their place in the hierarchy. These views direct the responses to change initiatives undertaken by management.  The consultant must appreciate the different perspectives of the members of the organization, as it is shaped and influenced by their status.   

This book contains several insights, strategies, and techniques that are arresting in their impact.  Because human beings are complex, full of contradictions and paradoxes, and internally conflicted, obtaining clear and accurate information regarding an organization is difficult.  Several principles of information gathering are elucidated:  

Never depend on one individual.
Never fully rely on what a group says because it may reflect only what people think they should say.
The culture of the organization will determine what views are sanctioned.
Some people’s opinions will be of far greater value than others, depending on their leadership role.
Outside information sources are less biased. 

Immediately useful and practical techniques for gaining insight into organization members are presented.  These include the “Life Chart” (Fig. 4-1).  Retrospectively obvious in its conception (as in, “Why didn’t I think of that?”), it consists of a graph with life satisfaction levels on the y-axis and age on the x-axis.  Peaks and valleys are labeled as significant events in the individual’s life.  Remarkable longitudinal insights can be developed in the 40 minutes or so that completion of the chart requires.  This portrayal of patterns serves to lead naturally to an appreciation of sequences of repetition, in which developmentally significant experiences are played out repetitively in relationships with co-workers and superiors.  Case examples illuminate the points being illustrated. This procedure is one of the “social processes” utilized in bringing about change within an organization; much of its potency resides in the emotional impact this self disclosure entails.  Most people completing the chart learn things about themselves they did not know consciously.  This lends power to the entire process, and enhances its credibility. I found myself wondering whether this could be useful in psychotherapy as part of an assessment process. 

Other techniques, which impressed me with their apparent simplicity, include the use of “Powergrams,” a graphical means of representing the power relationships within an organization.  The clarity of the diagrams is a testimony to the thought and experience which led to their development.  Figures 5-1 through 5-6 depict a variety of relationships within a top management group, ranging from split to cohesive.  Specific case examples illustrate the concepts, a principal strength of this book. 

The detailed analysis of the elements of a “social process” presented in Chapter 6 is too lengthy to include in this review.  However, the following quotation illustrates its basis: “Centuries ago the Greek mathematician Archimedes, trying to demonstrate the power of a lever to King Hiero II, reportedly told him, ‘Give me a place to stand and I will move the world.’ Properly designed, a social process can act as a lever, initiating change in almost any organization.  Conversely, a process that is poorly designed can only increase resistance, produce deadlock, and eventually derail an entire change effort.”  For example, when Welch used his power to create a crisis at General Electric to serve as a catalyst for change, he continued the process by controlling the power sources within the organization.  He eliminated the authority of staff at central headquarters, who historically approved all planning and financial decisions made by the business managers.  He shifted power to the business managers themselves, resulting in a decentralization of authority and enabling the business units to respond more quickly to marketplace changes.  He maintained his own authority by controlling the purse strings himself.  He then perpetuated the change process by instituting a new curriculum at GE’s management training center, in the process “winning the battle for the hearts and minds of the company’s mangers.”  Ultimately, over the course of many years, the entire culture of General Electric was changed.  Proper emphasis is placed on the necessity of the change process focusing on the elements of the organization which need changing, as opposed to change processes which focus simply on personal development.  While the latter may be desirable, what is critical for the organization is that the change be directed to improving the organization’s functioning in critical areas. 

The “universal solvent,” a means of obtaining crucial information from employees is designed to be an efficient and powerful “social process.”  Suppose an organization needs to know the opinions of 20 key people regarding 10 issues.  If all 20 people are invited, in a theater group setting, to raise their hands and offer their opinions, with each being allotted 5 minutes per issue, nearly 17 hours will be required, and the proceedings will most likely be dominated by the most aggressive people, who are a) not likely to reflect the opinions of the group as a whole and b) are likely to be influenced in what they say by their expectation of what their boss’s response will be; candor will suffer.  The alternative (depicted in Fig. 6-1), the “universal solvent,” breaks the group up into 10 pairs of two people, each assigned to ask one question, with 5 minutes allotted for their partner’s response, the listener simply acting as a recorder and not offering any opinion of his own.  Every 10 minutes the pairs change, and after only 100 minutes, all 20 have expressed their feelings about each one of the 10 issues, privately, and without group coercion. The responses are summarized, without identifying who said what, and presented to management. Each participant feels that he or she has been listened to, and the truth comes out.  Equally important, each person becomes emotionally engaged in the process, and feels empowered.  

The universal solvent removes the power of the boss as an obstacle to communication. Furthermore, when the answers are summarized at the end and presented to the boss, the exercise demonstrates dramatically his or her willingness to listen.  The entire group sees that the boss is prepared to take in new information and learn from it.  This provides a model for them to do the same thing. 

Capturing the emotional commitment of the key members of the organization is critical to succeeding in any change process.  The example just given, along with the “life chart,” is one of the principal “social process tools” utilized towards that end. It is also essential in perpetuating the changes.   

Part 3 ~ Ensuring Continued Success 

The concluding section begins with a description of how Mikhail Gorbachev’s efforts at perestroika, or “restructuring,” failed.  In discrediting the past conduct of the state and undermining Communist ideology, Gorbachev failed to provide any credible replacement.  This history lesson dramatizes how a change process can spiral out of control of a leader.  It also demonstrates “the importance of an ideology—a glue—to hold things together as the change effort is underway.”  The parallel with modern corporate experience is apparent.  The old security of lifetime jobs which was given in return for loyalty to the company is gone.  Layoffs and restructuring broke the contract between employer and employee.  Now companies are attempting to create a culture with which employees can identify even though they can no longer count on security and loyalty from their companies.  These efforts are meeting with mixed success at best. 

The authors examine the process of identification, the process of attributing to themselves, consciously or unconsciously, the characteristics of another person or group. Utilizing examples of how people identify with sports teams, and then proceeding to describe the role of identification in the developmental process, they give the concept depth.  With observations about pathological identification, such as that which occurred with the Nazis, and the role identification plays in Christian beliefs, they identify key elements: 

Internalizing a set of values and beliefs.
Personal investment and sacrifice.
Public renunciation of previous social ties.
Ceremonies to enhance group cohesion.
Public disavowal of previous norms.
  Reform of self-concept in terms of new organizational values.
  Use of symbols to stand for beliefs.
  A cause that is larger than life. 

A detailed program for developing identification with overall corporate goals by means of a three day training workshop is presented in Fig. 8-2.  This program was developed because after power was decentralized, it became apparent that the work teams did not share in the overall corporate goal, nor did they work together.  Instead, they pursued independent agendas and worked at cross purposes.  The training workshop was utilized as a social process, and included life charts, the universal solvent, and an educational component.  Simulation activities provided an opportunity to practice what was learned, and to experience both success and failure.  Great emphasis is placed on having events occur in proper sequence, as this is the key to its impact. A public ceremony in which each employee “proclaimed what he or she would do individually to embody the values of the organization and implement them in their jobs” while holding posters with symbols they had created was highly emotional, and cemented the identification process. 

The final chapter reviews the elements of change, 12 characteristics of organizations which will achieve success:  

Vision directed
Cross-functional where employees from different areas work together
Flatter and empowered, where individuals at every level of an organization are empowered to make decisions
Networked, partnering with other firms to carry out certain functions
Information technology based
Stakeholder focused, responding to the needs of shareholders, employees, and the larger community (Microsoft’s commitment to quality public education serves as an example)
Flexible Adaptive
Global
Customer driven, including anticipating future needs
Total quality-focused, where things are done right the first time
Time-based, developing and bringing new products to the marketplace ahead of the competition
Innovative, with an entrepreneurial spirit 

The book concludes with policies for following up.  This consists of regular information gathering which will allow for mid-course corrections as necessary. Sampling different levels and areas of the organization at least every three months to provide the leader with accurate data is essential.  Outside consultants may provide a truer picture of the status of the change effort, and can assess employee morale, and current attitudes towards the change process. 

The Four Levers of Corporate Change is a valuable contribution to the organizational consultation literature.  It is a bonus that it is also enjoyable to read.   

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