Keep momentum going: Complacency creep

Kotter’s The heart of change: Real-life stories of how people change their organizations (2002) illustrates the premature victory declaration syndrome in the story “PE Ratios” (p. 144). In “PE Ratios”, the firm does recognize the creeping resurgence of complacency. The change agent looks for other crises or performance measures to show employees that the job is not done and they must not stop. The hub is moved to focus the investor’s point of view with a different goal related to external business factors because the other goal is achieved and without this shift workers are feeling victorious and satisfied. Smaller projects should continue until the complete vision is fulfilled. New entrants, competitors, lean players, and internal smugness can temper competitive advantage.

Tersely stated, “Past success provides too many resources, reduces our sense of urgency, and encourages us to turn inward. For individuals, it creates an ego problem; for firms, a cultural problem. Big egos and arrogant cultures reinforce the nine sources of complacency…” (Kotter, 1996, p. 41). Whether a sports team or a business organization, complacency is exaggerated by the sense of victory, while the ultimate goal may be lost.

© Neal Huffman 2014

Transition: Momentum and Persistent Reinforcement Displace Contentment and Reversion

Transition: Momentum and Persistent Reinforcement Displace Contentment and Reversion

The Colorado Avalanche hockey team seemed to be destined for another Stanley Cup in 2003. The team signed several talented players and earned enough wins during the regular season to gain some home ice advantage in the playoffs. Success continued in the post season playoffs toward the championship series. The Avalanche won three straight games against newcomer Minnesota Wild in a seven game series, needing only one more win to take the series and advance. Avalanche fans suffered a devastating letdown after the Wild won the next four games and defeated the Avalanche in a shocking upset. The apparent success followed by stunning defeat for this hockey team is similar in nature to an organizational phenomenon of complacency to a future vision because of past success. The core concept in stage seven (making change stick) of the multistage transition process outlined by John Kotter is the ability to continue cycles of change and not letting up until the vision is a reality. (Kotter, 1996)

© Neal Huffman 2014

Abraham Lincoln: Leadership at a glance

Leadership

Self

Born in log cabin.  Jeffersonian agrarianism.  Subsistence farming.  Little $$ in trade.

Abe wanted to read and to learn.  Took upon himself to do this.  Child labor essential.

Abe wanted a better life.  Subsistence farming unsatisfactory.

Constantly read.  Engaged in politics, courts, clubs, and social storytelling.

Self taught.  Mainly law.  Attended courts, read Constitution, Declaration of Independence, Indiana Revised Statutes.  Law books.

Personal experiences: labor, learning, slavery, infrastructure.

New Salem on his own.  Earned extreme reputation for honesty and reliability.

New Salem dwindles.  New opportunity in Springfield.

Losses: Mother Nancy, sister Sarah, cousins.

Organization

1832 runs for legislature.  1834 Assemblyman.  Meets Stephen A. Douglas.

1837 license to practice joins law partnership.

Continued to engage in debate societies, speeches, social interactions, anecdotist.

Travelled circuit.  Sharpened political skills.  Enhanced public reputation.  Met people, learned issues.  Common people interactions.  Persuasion skills.

Mary Todd.  Married, started to have children.

Became Whig leader.  More reputation.  Platform of banking, tariffs, economy, infrastructure, and progressive thinking.

Leadership and reputation gained national renown.  Douglas debates.  NY speeches.

RNC nomination.  Election to Presedency.

Country

Morals and values.  Anti-slavery.  Whig vision.  Common people touch.

Held Republican factions together.  Abolitionists to Whigs, liberal Democrats.

Democracy.  Global thinking.  Transformational leadership.

Honesty.  Cultivated diversity, yet retained loyalty.

Domestic and international policy – laissez faire.  Delegating, supporting style.

Constitutional issues, military issues, major decisions – reserved to himself.  Directing style.

The Civil War.  Generals; McClellan, Hooker, Meade.  Coaching style.

People skill.  Patience, good will, intuitive, thinking.

Emancipation.  13th Amendment

Reconstruction.

Snapshot

Trait                                           “Honest Abe”  Very determined.

Skills                                           Conceptual, people HIGH.  Technical – LOW.

Style                                           Task and relationship – Civil War leader

Situational                                   Delegating, Supporting, Coaching, Directing

Delegated to his cabinet.  Coached his Generals

Contingency                                Leader-match.  Civil War leader.

Path-Goal                                   Achievement-oriented.

Leader-Member                          In-group with Generals.  Out-group by merit.

Transformational                         Visionary.  Raised motivation and morals.  Role

model.

Team                                          Excellent monitor.  Collaborative climate.

Psychodynamic                           Archetype – Honest Abe.  Magician-leader.

Women                                       Diversity.  Herndon (boisterous, drinker).

Ethics                                         Altruistic.  Gave everything for country.  Justice.

Change efforts: Conclusion

Conclusion

People need to see and feel the need for change. Otherwise, complacency is hard to overcome. Because Ted’s company is stuck in the past and does not understand that economy of scale can lead to competitive advantage, Ted must show the company an actual customer problem. By integrating external stakeholders into the change process, Ted can show how the change initiative is directly related to sustainable competitive advantage.

References

Harari, O. (1999). Leading change from the middle. Management Review, 88(2), 29-32.

Kotter, J.P. (1996). Leading change. Boston: Harvard Business School Press.

Kotter, J.P. & Cohen, D. (2002). The heart of change: Real-life stories of how people change their organizations. Boston: Harvard Business School Press.

Nabokov, V. (1974.). In Lolita: A screenplay, foreward. In R. Andrews, M. Biggs, & M. Seidel, et al. (1996). The Columbia World of Quotations. Search by “complacency.” Number: 41109. Retrieved June 14 2004, from http://www.bartleby.com/66/9/41109.html

© Neal Huffman 2014 All rights reserved

Start the change this way

For example, Ted Watson hosts a brief meeting with the executive committee, the CEO, and the coalition. In the short meeting, Ted lets the customer explain that competitors have integrated systems to standardize methods. The competitor then uses this efficiency to create a competitive advantage. The competitor is approaching the customer with the value it can produce for the customer and asks the customer if their existing vendor can duplicate this. The customer then explains that the competitor is close to winning its business, with the direct result that Ted’s company loses a customer. Ted asks the customer if they will stay if this firm can change. The customer, wanting to maintain the relationship indicates they will stay. Finish by asking the customer if their story is unique or if this is a pattern developing. The customer indicates that other customers in the industry are leaning the same way in favor of the competitor.

After excusing the customer, meet again with the coalition. With the results of the customer meeting, logic dictates that the status quo will lead to churn of customers to competitors and ultimately extinction of the company. Insist on at least one business unit change effort, one unit that has direct ties to the customer that is going to leave. Bring the entire coalition to focus on the one business unit. Show the customer meeting story to the whole group. Win this business unit for change and then show all the other business units how one customer affected a change in the company that ensures a sustainable, successful company for the future. Reward the business unit that successfully adopted the change and make sure that the whole company sees the rewards aligned with the logical change effort.

© Neal Huffman 2014 All rights reserved

Raise the Urgency Level

Stakeholder Support Improves Change Efforts

The first place to start is with external stakeholders. Change must be supported by a visible need of clients and customers. Visit customer sites to listen and take notes about what is important to them. Explain how the business could save money and take feedback from shareholders. Tell customers that a change is being discussed that will save money for the company which can be dedicated to resources that improve customer relationships. Stakeholders are at least as important in approval as is senior management, maybe even more so.

In the February, 1999 issue of Management Review, Oren Harari describes eleven rules for leading change at the mid management level. The first principle Harari describes is “Let the customer drive your change process” (p. 29). By visiting customers and listening, a company gains valuable insight and strategic information. The economy and customers are always changing and successful businesses cannot ignore change and the customer’s needs.

Ensure Open Communication

After gathering critical stakeholder data and gaining their support for change, use the stakeholders as part of the change initiative. Since there is no immediate crisis, create visible and critical analogies linked to the enterprise in relation to its customers. For example, show the coalition and the workers how important it is to save money for the whole company in order to apply resources to solving customer needs. Can your business unit succeed if it is not directly addressing customer needs of which this change is an important part?

Show figures of the amount of money to be saved by implementing the change effort. Then show how the savings can be directly applied to resources that serve customers and improve relations. Show everyone that market share or margin improves by shifting resources to value chains ending at the customer.

Engage the CEO and the executive committee to state the vision of the change and ask for direct feedback. Open the communication to honest and clear factors of the change effort. After showing the critical needs of the stakeholders and how the money will be used to serve customers and keep competitors at bay, ask if anyone sees any negatives. If customers are not served by our company, then competitors will surely take them away.

Only after the channels of open and honest communication are open can the implementation really take place. Do not proceed from management approval to implementation. Involve the power coalition into every stage of implementation. Reinforce constant communication and feedback. (Kotter, 1996) Always stress the crisis that failure to take the leap will surely open the door to competitor insurgency.

Get the support of one customer and bring the customer together with one or two line managers from the coalition. Seek a small win with agreement on the change effort from this subgroup. Use the subgroup to gain greater scope of acceptance and build momentum to the entire coalition, and then finally the entire organization through empowerment.

© Neal Huffman 2014 All rights reserved

Complacency Fueled by Past Success

As Kotter explains in Leading Change, often a firm will develop a sense of well-being based on past successes. This leads people into complacency. Mr. Watson’s initiative was based on analysis and rational thinking. Sometimes, a crisis is needed to push complacency out of the way. Without a real or perceived crisis, complacency means that workers see no visible reason to change the status quo. (Kotter, 1996)

The current environment at this firm is culturally and structurally in a status quo resistant to change. Culturally, managers and workers seem to have narrow goals based on the functionality of their business unit and do not have enterprise goals based on what is good for the company. Structurally, the narrow functional group goals lead to resistance and complacency when the line managers and power coalition were not involved in the necessary team effort. Change was perceived as an annoyance and an obstacle to business unit success. (Kotter, 2002)

Moreover, because the culture and structure focused on the unit level, company-wide performance standards did not support urgency in support of change initiative. As the questions came into Ted Watson, the complacency shown in performance standards based on the goals of the business unit. Operations were centered on how efficient the status quo made the unit without an alignment of the change effort to the rewards and objectives of the entire organization. (Kotter, 2002)

While the organization, at least at the executive committee and CEO, approved of the new idea, nowhere did this story show an understanding of external stakeholders. What did the customers think? What did the suppliers think? The change effort had no direct ties to the marketplace and the values and needs of external clients.

© Neal Huffman 2014 All rights reserved

Possible sources of complacency

Possible Sources of Complacency

Lack of Common Urgency and No Power Coalition

The approval story points out the lack of urgency from the line managers and workers whom need to implement the new processes and new software the change agent desires for company improvement. Although Ted believes he has approval to move forward with this change, once underway he realizes that everyone else is not aligned with the change effort as necessary. The executive committee signals acceptance for the analyzed change. However, adequate buy in from other important people to facilitate the change has not occurred. Ted Watson is consumed by questions and rejections from employees who seem annoyed at the new change and its affects on them. A hierarchical or autocratic change is not the best way to initiate change. Because the actual people needed to get on board with the business idea where not formed into a working coalition to shepherd the change initiative, the idea is ground to a halt and must be started anew. One of the main problems in this scenario stems from the overestimation of the support for change and the underestimation of the resources and tools necessary to work the change. Once these deficiencies were realized, change manifested itself in high complacency among the business employees and by their rejection of change. (Kotter, 2002)

)  ©  Neal Huffman 2014

Complacency Problems in Change Efforts: Raise Sense of Urgency

In, The heart of change: Real-life stories of how people change their organizations, John Kotter (2002) describes a story from Ted Watson, “Getting the Bosses’ Approval” which illustrates how troublesome corporate change can be, especially when employees do not exhibit the behaviors necessary to facilitate the change. As this story points out, in the event that workers are complacent and manifest fear, anger, resentment, and rejection to change, then perhaps one factor that could address complacency is a sense of urgency. Urgency presents the compelling need to drive people out of complacency and visualize the value associated with the particular change. Complacency can develop through emotions and stifle change processes. As quoted by Vladimir Nabokov (1974), “Complacency is a state of mind that exists only in retrospective: it has to be shattered before being ascertained(n.p.).

Encourage heart

Exemplary leaders establish unambiguous standards, set high expectations, give attention to people, and thoughtfully recognize accomplishment.  Explicit standards serve to guide constituents and focus efforts in norms of reciprocity where feedback helps form consensus on goals. Leaders set high expectations of themselves and their constituents which in turn brings forth higher performance and positive images. Being positive, leaders also pay attention to people, they listen, and are sensitive to human needs. When giving recognition, excellent leaders use efforts to make the recognition personal and thoughtful. Good leaders practice memorable, creative, and unique celebrations and recognition. (Kouzes & Posner, 2002)

Another essential ingredient in the encouragement theme is celebration. Kouzes and Posner (2002) set out some ideas for celebrating wins and shared values. One idea is creating community spirit through ceremony and individual recognition. Public recgontiion also increase self-worth and group cohesiveness. Another element is storytelling. Teaching, learning, and communicating with employees in an open manner and through a story furthrer solidifies motivation and memorable shared experience. In addition, leaders model the example by acting out the values and bring encouragement from the heart.

The most significant encouragement from Herb Kelleher came from his zany, unique ways of being a cheerleader. Whether dressing up like Elvis or staging a dramatic madcap arm wrestling contest, Herb recognizes and celebrates in distinctive fashion. Not only does he set the example in these wacky displays, he insists that fun accompany the celebratory event.

Some may question Kelleher’s antics, yet his recognition and encouragement flow directly from his vision centering on people and fun. Financial chiefs question the outlay for parties, celebrations, banquets, greeting cards, outings, and presents in the budget. Herb frankly replies, “Southwest Airlines has the fewest customer complaints in the industry. How much is that worth” (Ellis, 2001, p. 13)?