New Thoughts on Strategy and Change Initiative Implementation: Emergence, Readiness,
and Adaptability

by Lawrence E. Wharton and Richard Roi

"Systems theory tells us that in an environment of turbulent change and competition, the entity that can take in information most widely, learn from it most thoroughly, and respond most nimbly, creatively, and flexibly will be the most adaptive." (Goleman, Primal Leadership, pg 298)

Introduction

Many organizations experience difficulties implementing strategic projects. And even more have trouble successfully putting internal change initiatives into play, themselves often connected to strategic efforts. Depending on whom you read, between 70 and 85 percent of all change initiatives limp along or fail outright, and poorly implemented strategic efforts are legion.

Although there are many reasons for these troubles, two in particular stand out as having a very large impact:

  1. Things simply do not work as intended, both in plan development and plan implementation. Unforeseen and unpredictable outcomes arise that challenge leaders in the extreme, but which are often highly beneficial.

  2. Leaders are ill equipped to deal with the challenges of unpredictable outcomes. While leaders refer often and passionately to the need for flexibility and adaptability, few have a clear idea of how those are created and maintained. Worse, leaders can work against their own best interests when responding to the unpredictable.

In this paper we will talk about the problems of implementation in both strategic efforts and internal change initiatives because they are closely connected and produce similar challenges for leaders. In fact, change initiatives are often conducted to assist in the accomplishment of strategic goals.

Many leaders emphasize looking strong, appearing to have all the answers, needing to be right, and consistently assuming their way is the best one. In other words, being seen as in charge and in control. In the current complex environment, and with today's far more cutting-edge version of leadership, these postures are quaint anachronisms at best, and highly damaging at worst. The excellent book, Surfing the Edge of Chaos, states:

"The leader becomes a context setter (our emphasis), the designer of a learning experience --- not an authority figure with solutions."

Leaders understand this, but they seem to have an enormously difficult time implementing it.

Being a context setter has a direct impact on how successfully an organization implements its strategy or conducts its internal change initiatives. Context setters do not assume they have the answers to anything, but they do understand clearly that any implementation process demands a heightened awareness and an aggressive attitude of responsiveness. In great part these are states of mind, and not things that can be easily manipulated. Context setters realize people cannot be compelled, coerced, or sweet-talked into having these states of mind. They recognize that context and the critical states of mind are developed primarily through their behavior, how they as leaders act with others in carrying out role responsibilities.

Further, context setters know that the organization must use its key values as primary organizing principles in pursuing strategic success. Again, it is through their behavior that leaders convince people at all levels of their sincerity and commitment. Traditional leadership patterns, including those mentioned above, actively and seriously detract from an organization's success.

Our view of strategic thinking and acting, including internal change projects, is not about having a "plan," as important as that can be. It is about developing an attitude of openness, flexibility, creativity, and quick response that completely pervades the organization in a highly integrated manner.

Naturally, it is the organization's leaders who foster this or who undermine it, no matter how good their intentions. Our approach is far more than "doing planning." It is a comprehensive and integrative method that represents a significant culture change in how the organization functions top to bottom: how it creates its future in the midst of chaos, paradox, and uncertainty.

Many organizations have strategic planning and change initiative processes, often quite extensive. However, we believe that for a large number of these organizations there is far more form than substance.

Seldom is the problem one of the leaders lacking understanding. They usually know quite well how to construct a strategic or change initiative plan. Far more often, the issue is a failure to really put into play quality strategic thinking and acting measures, a failure to engage in new leadership postures and behaviors, and a failure to adequately appreciate the immense impact of systemic cultural issues.

The latest writing about, and practice of, strategic planning and thinking requires CEO's and their executive teams to rethink and reframe the entire business of strategic work and internal change initiatives. A very important reason for this new view, as we pointed out above, is that neither strategic plans nor change initiatives work out as designed, as they are portrayed on paper. The idea is this: no matter how much information we have about a current or past situation, we cannot in any way foretell or predict the future with any degree of accuracy. Plans were originally conceived to do just this, and some leaders still feel they can do it.

The problem is that all actions have unpredictable outcomes, what are called 2nd and 3rd order consequences, both within the organization and without. These are often referred to as "unintended consequences," but we will not use this phrase as it has a negative connotation for most leaders. They are also known as emergent outcomes, and they can be beneficial, neutral or dangerous. The importance of emergent outcomes cannot be overstated. Unfortunately, many leaders would sooner have their livers cut out than accept (much less encourage!) emergent outcomes. Nonetheless, they are the basis for most creative and long-term beneficial action.

Any executive who tries to control the outcomes of a change initiative or strategic plan will receive some very unpleasant shocks. This does not mean that a plan and its implementation cannot be influenced. They can be. But influence is not the same as control, and the CEO and his senior staff operate in very different ways with influence than they do with control.

More control equals less creativity, and is often associated with fear in higher-level leaders. Less creativity means less effective strategic positioning and lowered organizational effectiveness, sooner or later. Even further, influence is not an unalloyed good thing, as it can be oppressive and negative (punitive) or it can be liberating and generative.

Failures in strategic planning and change initiative implementation we have seen generally come down to not taking the critical perspective of emergence and its potential benefits into account. Many leaders are using old (not to say antediluvian) tools and behavior to address new, and very different, problems. These problems are in a constant state of fluidity and change, and thus not subject to "normal" methods of attack.

Tomorrow's leading-edge organization, the one that will set the standard for all others, will not only see the world through a new set of lenses. It will create strategic systems that monitor emerging aspects and act on those before others have any idea that there was something to react to. Such an organization will be vibrant beyond imagining because this system and the attitude it represents will permeate the organization's culture and practice.

Strategic Readiness

That today's environment is tempestuous is a platitude. Nonetheless, it is true. And being true it means the CEO must begin thinking much more carefully about two very important large scale organizational aspects: adaptive responsiveness to environmental (both inner and outer) events and strategic inventiveness.

This is not just the typical strategic scan, but attention directed inwards and outwards that actively seeks emergence, paradox, and creation. It is clearly insufficient to have a strategic planning effort if these two enormously important elements are not included. In fact, they should be the entire focus of on-going strategic thinking and acting, and are equally important for internal change initiatives.

These two vital aspects are what we call Strategic Readiness: a permanent and heightened state of alertness and attentiveness to the organization's inner and outer environments. Readiness reflects:

  • The unknowability of the world.
  • The value of paradox and contradiction.
  • The need for the organization to be successful in the midst of high uncertainty, and often to create it.
  • The need to expect emergent outcomes and to use those to move the organization forward.

Organizations must be dynamically tuned to both internal and external environmental conditions, and must possess the ability to respond rapidly and opportunistically to any emergent event, issue, or force, internal or external. Doing this requires that the organization develop its Strategic Readiness to a fine edge, which can occur only if critical "structural" conditions and leader competencies are present.

Structural Components: Leader Competencies:
Free flow of useful information. Quality leader behavior.
Appropriate/accurate scanning systems. Double-loop learning.
Fast feedback mechanisms. Systems thinking and acting.
Action orientation. Pattern discernment.
Distributed knowledge. Use of leverage.
Facilitating structure(s). Work with paradox and uncertainty.

The success of Strategic Readiness can be determined and assessed, but doing it well depends on a healthy process similar to what the US Army calls "After Action Reviews," which are very candid assessments of what went right and wrong in a training battle. Using the elements of Strategic Readiness, leaders can determine how well they are engaged with the inner and outer environments, and how well they saw and acted opportunistically on emerging aspects.

Such assessments are not at all about blame, but the highly positive outcome of a setting and a method of dealing with the volatile world in which people can "speak their piece." Obviously, safety is critical and few leaders disagree. But some leaders have a very difficult time generating safety. Certain organizations are notorious for not creating such assessments, and for having leaders who actually shift blame and evade responsibility, with horrible consequences for staff, operations, and strategic actions.

There is a clear connection of the Components and Competencies to quality plan development, but the full benefit of these aspects will play themselves out in plan implementation. Executives who create a system that includes the 12 elements will have a huge advantage over those who do not. The most important consideration in creating this system is to not fall prey to inconsistency and hypocrisy, to not say the organization will do all these things and then fail to do them. Thus, senior leaders must have a very clear understanding of the nature of their organization's culture, norms, and reinforcement methods. It is these that will determine whether the 12 elements will be properly and energetically carried out.

Emergence

Since no plan ever goes as designed, and since unforeseen complications are sure to arise, the key is monitoring and very fast action. Consider a client's management redesign, with changes in titles, positions, responsibilities, new reporting structures, etc. Planning the process of implementation went extremely well, but actual implementation broke down at critical points because unintended consequences were not considered.

This client has a culture of precision that relies on a very strict adherence to the written design of any project, certainly not always a bad thing. In this case, however, it was the project's undoing. The top leaders suppressed information coming from field leaders describing emergent elements, some of which, if adopted, would have made the project very successful. The culture and the inflexible attitude of top leaders doomed this effort.

These leaders should have assumed that unpredictable outcomes would occur. As the new assignments are worked out, for example, at the very least confusion and disagreement often (usually) occur over who is really responsible for what, or because one person or another does not want to let lose of something he/she was formally responsible for. These are not necessarily bad things, because alert leaders will monitor the emergent issues and use those to adjust how the plan is unfolding. Positive ones are capitalized on and less beneficial ones are addressed (decided and acted on), very, very quickly.

Thus, rather than trying to implement a change initiative with a crystal clear (and unvarying) set of outcomes, the wise leader has a general set of outcomes, more an outline of outcomes than anything else, that may easily change as the initiative unfolds and emergent elements appear. This is context setting in play. As leaders attempt to "tightly hold the line" on implementation, so everything goes exactly as planned, they loose the ability to respond helpfully and beneficially to the emergent outcomes, especially those that are positive. Such emergent outcomes represent aspects the planners of the initiative had no way to predict, and the one thing smart leaders know: emergent outcomes will ALWAYS occur.

Emergence derived originally from science, as did ideas of complexity and chaos. They have been adapted to organizational functioning because they provide a way of understanding and dealing with such things as emergent outcomes, paradox, and complexity. In fact, among the truly adventurous CEO's, these cross-overs from the world of physics offer an amazing opportunity.

Living systems, and an organization is certainly one, are at their most vibrant and creative when they (or at least parts of them) are at what is called, "the edge of chaos," a point of delicate, unstable/stable, balancing between the forces of total disorder and those of total order. This highly charged and potentially beneficial state can be one of great anxiety and paradox. Sadly, leaders in the western world have been taught to resolve paradoxes, rather than to seek the underlying unity of what appears to be two opposing positions or views, a far more sophisticated and useful exercise.

The adventurous CEO and his/her senior staff seek to instill "edge-of-chaos" creativity in their strategic work, including incorporating it into the organization's culture. But doing so is an enormous challenge, as it asks organization members to change in often-radical ways what they do and how they do it; how they interact with others; and even how they think. Hence: anxiety, and the need for the leader to know how to both generate and contain (not control) the anxiety. The demands on the leaders are very large, but the payoff is profound. Leaders at any level unprepared for this quality of response undermine their units and the organization itself. Clearly we are talking about leader development, but in ways and in issues most organizations have not even thought about.

"Heat" and "Noise"

Discerning emergence means looking at areas internally and externally that have a lot of "heat," "noise," "disruption," and "inconsistencies." To hear this, however, leaders need flows of information that are open in the extreme, especially when that information is disconcerting, challenging, or even disruptive. Few organizations have leaders with enough ego strength and confidence in their abilities to handle such information. Like the client mentioned above, it is usually dismissed or suppressed, if it arrives at all!

A few examples: customer complaints, inconsistencies between the organization's values and how those are acted out by leaders, territoriality, resistance (a particular favorite of leaders!), breakdowns in strategy implementation, and leaders at lower levels behaving poorly (unfair, arbitrary, unreasonable, etc.).

Naturally, such flows do not develop by accident. It takes considerable effort. The biggest challenge is usually the attitude and behavior of top leaders. These leaders may have needs to control, to be right, or to avoid conflict. These are damaging behaviors. Top leaders may insist vigorously that they are interested in getting the "real story," but they often definitely are not. The inappropriate behavioral responses undermine any effort to establish and maintain truly open channels of communication about what is REALLY happening. Staff sees such behavior exactly for what it is: hypocrisy. The cost to the organization in its strategic or change initiative implementation is huge.

Example: Mid-level leaders of a client deciding on their own to create a new, but challenging, staffing proposal. They saw an existing one as less beneficial, and their formal efforts at change had not been received well. In this case, the proposal was picked up by a top leader known for her openness. The issue for top leaders was not whether the proposal was good or bad, but the commitment of those lower-level leaders and the information that called for their effort. They were applauded for their work, and contributed significantly to changes in the staffing method.

This is an illustration of a positive outcome of an emergent process. Sadly, not all such outcomes are positive. Another client has a HQ office and a large group of field offices. Top leaders in this organization state that the field offices and their views are vitally important. However, reality is another story: the norm fostered (although vociferously denied) is that HQ is always right. Thus, when the field offices are asked to give input, they are frequently told that what they have provided is inappropriate or unworkable. This HQ response is particularly aggressive when the field ideas, no matter how potentially beneficial, conflict with those of a couple of top leaders, especially the CEO.

The adept executive leaps on such challenging information to capitalize on the positive aspects. In the above case, the CEO could have accepted the complaints from the field (which have existed for years!) instead of denying and then getting hostile about them. The fact that she didn't like them was irrelevant, but that posture drove her behavior. She could have used this "noise" as a way to improve the organization and assist in moving toward mission accomplishment. She could also have seen that her behavior drove how HQ acted, including the actions of those top leaders who brooked no opposition to their views.

The challenging aspect of leaders searching for spots with "heat" and "noise" is that doing so may produce discomfort, because the "noise" is frequently a disturbance, a disruption in what is happening and what people are doing. "Noise" doesn't have to be only difficulties; it can come from vibrant people with interesting, innovative, and highly useful ideas. It could even come from a senior leadership team that tells the CEO that the world as she/he sees it may not be quite accurate. The real leadership issue in such a case is not whether the senior team is "correct," but whether the senior leader deals with the information in such a way that the staff members can safely engage her/him in addressing their concerns.

Since the wise senior leader assumes he/she does not know everything and recognizes that this is the absolute worst time to get defensive, the conversation with the team will yield the most clarity and understanding if the senior leader asks lots of questions, instead of making lots of statements. This approach not only allows for a broader and more useful perspective for everyone, it also allows the senior leader to model the very behavior she/he is seeking in those below.

Integrated Purpose

Part of strategic work for the senior team is to create what we call an Integrated Purpose (IP), the systemically connected group of strategic elements: vision, mission, values, goals, and metrics, all of which serve as organizing principles as implementation proceeds. The importance of their role in successful outcomes cannot be overstated, yet we see time and again inadequate or even awful use of the IP elements.

We have spoken about emergence as a natural, even desirable, part of strategic and change initiative implementation. But emergence is also a property of the deliberations contributing to the development of the IP and to all strategic choices and actions, and can be the source of outstanding creativity, but only if top leaders do not attempt to control the outcomes.

Many organizations construct an IP, but few assess the implementation implications, particularly those involving behavior. For example, many firms have something like "respect" as an organizational value (considering just one IP element), but few leaders understand the real behavioral aspects of implementing this value. Those are enormous and are the prime determinants of whether the organization is effective and successful. For example, what do leaders at all levels have to behave like for this value to be acted out properly and transmitted successfully to the rest of staff?

Leaders must be very watchful that two contradictory sets of values, what we refer to as "page one" and "page two" values, do not develop. The former are the officially promulgated and published values, and the latter are what is really acted out in the organization. When "page one" and "page two" values exist, the organization operates on two conflicting sets of reality, with huge damage to effectiveness and success. Any implementation efforts are compromised, often severely, as staff members at all levels readily see the hypocrisy.

The implementation process is further complicated by the fact that values, for one example, cannot be precisely defined. There are too many legitimate interpretations. You and I could have a fine time agreeing that respect is a great value, but each of us may have a different view of what the word means. This will translate into different actions in the workplace, some at odds with each other. Thus, the senior team has to construct on-going forums for conversations in which such differences and their workplace implications are dealt with.

The idea is not to get everyone to agree to a definition of respect, but to develop instead what we term a definitional pattern, which is a felt sense of what the value means to each person arising (emerging!) out of these often charged but highly useful conversations. Only when people can talk in complete safety about what they see as appropriate or inappropriate applications of the value can the definitional pattern be reduced in size enough to allow for legitimate differences to properly play themselves out in the workplace.

The kicker in such forums is that the behavior of leaders that does not accord with most people's sense of the value will be raised (along with other things of a discomforting nature), and this is where weak leaders stop the flow of information. It takes great courage to be open to such challenges, even if they are incorrect views. The mere fact that a large segment of the work force has such views is itself an indication of "heat." Courageous leaders are ready for these challenges and see them as opportunities to make the organization that much better. The key is that no one's behavior can be off limits.

Meaning

More demanding yet is the requirement to develop meaning in staff for the vision, goals, etc. It is meaning that generates the commitment and dedication that makes for a truly vibrant implementation process. Where the IP elements have real meaning for all staff, the organization is one in which operations, processes, and relationships move with exquisite respect and smoothness. The outcome is a far more effective implementation effort and, in the long run, greater success.

Leaders too often assume because they redone or developed anew the IP elements that all staff members at all levels buy into and find personal meaning in those. A dangerous assumption that has very unpleasant consequences. Leaders must realize that meaning is defined by each person, not by the college hierarchy. Thus, senior leaders must work actively to develop meaning in staff at all levels, and not assume meaning is there because they, the senior leaders, think it is or wish it to be. Top leaders have a major stake in developing such meaning within their staffs, but doing so is far more difficult than merely parroting the goals and encouraging staff. The presence of "page one" and "page two" values, for example, actively undermines the development of meaning.

People across the system look at how their leaders act out the organization's values. That is a key ingredient in buy-in and meaning development. An organization we know formally expresses valuing the employees and being committed to their leadership development and success. Both a highly admirable value, and one very difficult to implement well.

How does it really play itself out in every leadership encounter within the system? How are leaders trained, supported, and held accountable for this value? Many leaders we know use the HAG approach: being fearful of hearing unpleasant news, they Hope, Assume, or Guess all is fine. Or, perhaps worse yet, they accept at face value what certain people tell them about how the value is being acted out by lower-level leaders: Everything is just fine. Whenever a leader hears such "good news," she/he should be very skeptical, for usually the news is not nearly as good as portrayed.

A (if not the) critical aspect to successful implementation of strategic plans and change initiatives is the effective working of the senior team(s). Strategy formulation is certainly a very challenging effort, the more so because of the tempestuous environment. But successful implementation may be even more difficult, and a quality senior team is a must to ensure that the ideas presented in this paper are part of its method of operation.

Using a senior team successfully and in a way that develops it into one that is really vibrant entails a setting:

  • In which conversations are wide-open and completely candid.
  • In which information, no matter how challenging, is not only accepted, but also welcomed.
  • In which the conversation is at the most profound level, including the examining the validity of deeply held assumptions.
  • In which no one feels fear to say what needs to be said.
  • In which disagreement and passion are expected, even encouraged, and are handled with complete respect.

Many leaders have grown up in systems that fail abjectly in preparing them for, and in many cases actually discourages, developing a senior team as we are suggesting. Certainly developing a senior team with the above characteristics can cause the top leader complications in her/his desire to get certain things done. But, as we pointed out early in this paper, this is a costly posture for any organization.

The above 5 aspects of senior team operations are extremely difficult to develop, but the outcomes are extraordinary if the CEO persists. Further, if the team(s) is so developed, its ability to function at very high levels of openness, objectivity, mutual support, decision-making, creativity, and adaptability is unprecedented. As this "attitude" of the senior team makes its way through the college, similar transformations at lower levels begin. In fact, the senior team can construct a tentative plan for accomplishing this, being very wary of emergent aspects, often unique to each department, and being similarly sensitive to the very high need for respect as team development proceeds.

This approach will help hugely to counteract the typical organizational change resistance and bureaucratic mind set, thereby improving morale, effectiveness, and long-term strategic success. Further, the approach addresses both strategic thinking and acting, as well as enhancing leader development in profound ways. Organizations have a huge investment in their leaders, but few have development processes that truly prepare them to act and behave at the highest levels. Many have no formal system of leader development at all.

Summary

Top-level leaders must rethink the entire process of strategy and change initiative implementation. Heretofore the emphasis has been on controlling the process from a master plan that specifies in considerable detail what will happen in implementation and when. Having an implementation plan is fine; expecting things to unfold exactly as stipulated in the plan is not.

The wise leader is a context setter, one who understands and uses the principle of emergence, and who assists others in that same understanding and use. This leader wields influence in a highly positive manner to gain both the attention and commitment of all staff. The wise leader is aware that her/his behavior is what determines the states of mind that are the true source of creativity and adaptability. Saying is not the same as doing, and everything rests on doing.

The wise leader ensures (does not hope, assume, or guess) that the "structural" components and leader competencies of strategic readiness pervade the organization. She/he does through a very clear understanding and participation in the culture and norms of the organization. This leader is ruthless in eliminating manipulative leader behavior, norms that contradict the highly beneficial goals of creativity and adaptability, and actions that restrict the open flow of information. In particular, the wise leader sets up information networks that expose the "heat" and "noise" that often signal emergent outcomes.

The wise leader uses the Integrated Purpose as a prime vehicle for influencing organizational behavior and actions, especially in working with staff to create and maintain meaning. Lastly, this leader understands all too well the great difficulty of doing what needs to be done to ensure an effective implementation effort. The challenges in the early stages of altering leader behavior, adjusting organizational norms, and developing commitment and new "edge of chaos" states of mind are huge. But the wise leader has the courage and dedication needed to work through this. The end result is worth it.



Lawrence E. Wharton and Richard Roi are partners of a leader behavior consulting firm (Wharton and Roi) that focuses on the connection between leaders' behavior and unit/organizational effectiveness. The firm has worked with clients such as Costco, Boeing, Oregon Dept of Health, The Oregon State Bar, Sharp Microelectronics, Portland Community College, The Casey Family Program, and many others.

Contact Lawrence E. Wharton, MBA at 3931 E. Skyline Dr. Tucson, AZ 85718, Phone: (520) 577-0823, Fax: (520) 577-3644, e-mail: whartonl@mindspring.com and visit http://www.wiseleadership.com/ .

Many more articles in Leading Change in The CEO Refresher Archives

   


Copyright 2002 by Lawrence E. Wharton and Richard Roi. All rights reserved.

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