I need to make The Symbolic and culture Frame for this case L arry's head was spinning as he left the initial meeting of the newly formed Newton Innovation Team The goals of the team seemed clear and the intentions good, but Larry had no idea how the team could accomplish them Walking back to his office, he saw Lars Rogen, the lead consultant from Lars Group, talking with Richard, his CEO Richard motioned him over Tell me how the meeting went, Richard said anxiously to Larry When Richard hired Larry as Director of Strategic Accounts and Business Development just 1 year prior, he made it clear he demanded honesty, so Larry knew not to pull any punches You know what I'm excited about the concept of the innovation team and I get what you want to do I just have a hard time seeing us as ever being an innovative company I mean, the meeting went great, but I just don't see how it's possible for us to pull this off I appreciate your candor I know you will keep an open mind as we continue to work through this, Richard said, patting Larry on the shoulder That's the key, interjected Lars Give us some time to add more of the pieces and I believe we can clear it up for you, okay von, Fremd, Sarah E Cases and Exercises in Organization Development Change Doing More With Less , edited by Donald L Anderson, SAGE Publications, 2011 ProQuest Ebook Central, http ebookcentral proquest com lib latrobe detail action docID 1921114 273 Created from latrobe on 2017 09 02 21 51 42 Copyright 2011 SAGE Publications All rights reserved 274 PART II CASES IN ORGANIZATION DEVELOPMENT INTERVENTIONS Oh, sure, said Larry Don't get the wrong impression, Lars Richard knows he can count on me Thanks Larry Let's plan to catch up next week, Lars added as he left the room You got it, Larry said As he headed back to his office he was worried Richard had that look and everyone knew that meant trouble Over the weekend, Larry had plenty of time to reflect on his comments Although he knew he was accurate in describing his feelings, he wondered if Richard really under stood his concern and confusion It's hard to know where you need to go without knowing where you've been, thought Larry He needed to be more precise in voicing his concerns next time So, to prepare for his meeting with Richard, Larry sat down at his computer to type notes and recall Newton's history, culture, structure, and business model Larry wrote in big bold letters, center aligned at the top of the page WHO ARE WE He figured he had to start somewhere Newton manufactures commodity consumer packaged products for consumers in the mass market, including pharmacies, food chains, and chain drug stores Newton's suc cess as a manufacturer of high volume, low profit items requires a business model focused on operational efficiencies and the elimination of production downtime and errors Operational efficiency requires a hierarchical personnel structure This focus and structure creates a Newton centric company culture, where decisions are put through a what is best for Newton filter Within this type of culture, there is little room for personal creativity and innovation As Larry reviewed his summary, the conflict that caused his concern and confusion was becoming clear Larry's next heading read WHY CHANGE WILL BE HARD Newton has a 133 year history of doing everything to eliminate outside distractions and reduce friction Newton is a well oiled machine Innovation, the way Lars described it, means making fast decisions, looking for new ideas, shaking things up, being creative, and doing things Newton has NEVER done before They would have to shake up the inner workings of the machine the people Beyond that, inno vation means listening to what customers want and finding a way to make that happen When thinking about a dramatic change in company culture, Larry had many more questions than answers He would make sure he brought them up at the next meeting His next heading was von, Fremd, Sarah E Cases and Exercises in Organization Development Change Doing More With Less , edited by Donald L Anderson, SAGE Publications, 2011 ProQuest Ebook Central, http ebookcentral proquest com lib latrobe detail action docID 1921114 Created from latrobe on 2017 09 02 21 51 42 Copyright 2011 SAGE Publications All rights reserved Case 29 We Must Learn to Innovate 275 QUESTIONS FOR LARS How are we going to take this old school, hierarchically structured company and turn it into an innovative, fast, new ideas company with the consumer and customers at the center How would people with more than 20 years of experience doing the exact same thing every day react to learning new things and being open to all new ideas Will my friends even try to learn Will any of this work Larry thought, Change scares a lot of people Actually, just about everybody I know, especially when not much has changed in a long time Not only had not much changed, but Newton had built systems to eliminate changes and increase sameness What is driv ing all this change anyway Something must be going on, mused Larry The more he thought about it, the more he wondered if he could adjust Was he too old and set in his ways to be innovative After all, he wasn't a creative or innovative person Maybe he was among those included just for appearances but not expected to be around after all the changes Seriously, Larry thought, how often does a company bring in a consultant and not end up losing or laying off a bunch of people Scenes from the movie Office Space began to flood his mind Was the initial meeting with Lars only the first of many that would result in a meeting with The Bobs and ultimately lead to layoffs Larry did not have the answers, in fact, he was downright worried, but at least now he understood his questions As he clicked print on his computer to get his notes, he felt a little better about the impending meeting Monday morning at the weekly meeting of the senior executive team, Richard made the official announcement and introduced the members of the Innovation Team Richard paced back and forth at the front of the conference room like a caged lion Abruptly, Richard said, Working with consultants from the Lars Group, the innovation team is an important component of our future as we work together in transforming our company Then Richard made an announcement that surprised everyone Over the weekend, the board and I closed on an agreement in principle with Benson Company to sell our high volume commodity businesses After a pause that seemed to last an hour, he continued, I know this announcement comes as a surprise and may even shock some I recognize that as much as we share information around here, this is different I hope you can appreciate our need to keep the negotiations on something like this very close to the vest Larry looked around the room and shock was a good word for it His boss, David, Vice President of Marketing, was sitting in stunned silence, facing away from everyone Just as Richard started to speak again, David interrupted, spinning around rapidly in his chair to face Richard You're selling the high volume commodity business What does that leave us How will we survive on what's left With that, Larry knew David had truly been caught off guard by the announcement Richard smiled Great question, David, and I appreciate you getting it out there because I imagine everyone else is thinking it Before we get to what's left, let me start von, Fremd, Sarah E Cases and Exercises in Organization Development Change Doing More With Less , edited by Donald L Anderson, SAGE Publications, 2011 ProQuest Ebook Central, http ebookcentral proquest com lib latrobe detail action docID 1921114 Created from latrobe on 2017 09 02 21 51 42 Copyright 2011 SAGE Publications All rights reserved 276 PART II CASES IN ORGANIZATION DEVELOPMENT INTERVENTIONS with the 'why' of this deal I think that will help Richard laid out for the team the background market conditions that led to his decisions Over the next hour he went through the details of why the deal had to be done As I looked at the market and the changes in customer dynamics, I realized we needed a new vision for the future if we are to thrive With the deal we are doing with Benson, with the proceeds from the sale, we are going to invest in innovation We will develop and launch branded items that consum ers have a need for What this means for us is quite a shift um, no, a complete overhaul of our company We have to be faster, smarter, and most importantly do things with a sense of urgency Innovation is only valuable to those at the front of the line, or better yet, those selling the tickets others line up for Everyone laughed and Richard continued, I'm not telling you anything new when I say this is different than how we have been doing things, right Hopefully, that explains the 'why' of the deal Now, David, to your question of 'what will we have left and how will we survive ' We will still have the balance of our items We sold ten items, about 52 of our sales dollars, so we have 48 of the business left Right, said Lisa, the controller, but those items about 75 to 80 of the units How will we ever pay the bills with what we have left The group grumbled in agreement with Lisa, waiting for Richard's response No question, Lisa You're right on the money Let's go down that road Larry, put this up on the board so we can all get a firm grasp of the numbers, will you Richard asked As Larry wrote the figures on the whiteboard, Richard carefully explained how Newton, although different, would not only survive but thrive Ladies and gentlemen, the biggest change we are going to go through is NOT in what we make and sell, or even how we make stuff No, the biggest change is going to be to our culture WE WILL NOT CONDUCT WHOLESALE LAYOFFS Richard wrote in large letters on the whiteboard, right above all of the numbers Larry had recorded I think you all know this company is a family to me We treat people fairly here I don't want to lose our family culture It's our heritage and the lifeblood of this company I've made this point clear to Lars and his group At the same time, we have some difficult decisions to make After a moment's pause for the group to gather their thoughts, Richard continued, The key for this transformation is a couple of things Richard now took a seat, eye level with the team First, we, this group, no, this team, have to catch this vision of transform ing the company into 'The New Newton ' Richard jumped from his seat and wrote it on the white board He returned to his seat and continued, This means big culture changes, keeping the best part of our family heritage Second, we must become an innovative company from what we do to how we do it That's what the Innovation Team is all about Lars and his group will lead the 'I team' through a process and they will lead us As they do, all of us are going to be involved I know some of you will grab hold of this and be excited For others, it may take a little while to sink in My expectation is that everyone will be on board and fully supportive At this comment, Larry looked around the room Faces were filled with anxiety There were no smiles and most heads were down Most noticeably, David was once again spun around in his chair, facing away from everyone von, Fremd, Sarah E Cases and Exercises in Organization Development Change Doing More With Less , edited by Donald L Anderson, SAGE Publications, 2011 ProQuest Ebook Central, http ebookcentral proquest com lib latrobe detail action docID 1921114 Created from latrobe on 2017 09 02 21 51 42 Copyright 2011 SAGE Publications All rights reserved Case 29 We Must Learn to Innovate 277 It is important that this be an open process and that you ask questions as we go along, Richard said Also, be patient We're all going through this With change, any change, there will be some bumps along the way Be patient with the process, with yourself, with others, and with me This is an exciting time Welcome to The New Newton, and with that, I'll turn this meeting over to Lars and his team Thank you, Richard, said Lars OK You have all had a lot piled on your plate Let's take a break, take a few minutes to check your messages Let's come back together in 20 minutes When you come back, I'd like each of you to be prepared to fill in the blank in this statement Lars rushed to the white board and wrote When I hear the word change, I feel No right or wrong answers, just tell us what you think of Oh, Larry thought, I don't need 20 minutes I can tell you right now How about Scared Terrified Confused Worried Richard chuckled nervously as Lars dismissed the meeting for their 20 minute break At 10 20 sharp, Lars called the group back together He was not totally surprised that David, the VP of marketing, was not in the room Let's give the rest of our group a few minutes and then we'll begin, said Lars With that, Lars went to check on David He found him in his office, his feet up on his credenza, talking on his phone Lars knocked just loud enough to let David know he was there and David turned around Lars waited as a red faced David said with a hushed voice, Call you later honey, and hung up the phone Everything OK We are ready to start, Lars said David answered, Oh, you guys go ahead with your meeting I'll get the notes from someone I've got too much going on Lars closed David's door and said, David I appreciate that the announcement Richard made this morning caught you by surprise, so I understand, to some extent, you feeling like you are too busy to be part of this Let me ask you something though Do you think pulling back and not contributing is the best, not only for you but for your team I mean, what message is that going to send to Richard I can't force you to join us of course, but I will tell you that Richard asked me to provide him with feedback this afternoon on the contributions of his leadership team I am heading back to the meeting and hope you will join us We can use your input With that, Lars walked down the hall and back into the conference room and resumed the meeting All right, let's see what you came up with on what you think of when you hear the word change, Lars began The door opened and David said, Sorry I'm late guys My wife called and I forgot the time Lars said, Not a problem We are just getting started OK, who wants to go first with what they think of regarding change Mary in accounts payable spoke first saying, Change doesn't bother me In fact it's kind of exciting It's something new to learn One of Lars's consultants, Jim, said, I'm going to write the themes we come up with up here so we can remember them as we go along The first thing Jim wrote on the white board was EXCITING OPPORTUNITY von, Fremd, Sarah E Cases and Exercises in Organization Development Change Doing More With Less , edited by Donald L Anderson, SAGE Publications, 2011 ProQuest Ebook Central, http ebookcentral proquest com lib latrobe detail action docID 1921114 Created from latrobe on 2017 09 02 21 51 42 Copyright 2011 SAGE Publications All rights reserved 278 PART II CASES IN ORGANIZATION DEVELOPMENT INTERVENTIONS That's a fair way to put it, Jim, Mary said Scott, the director of manufacturing, said I wish I could be as positive as Mary, but to me, change is just scary I mean, we've spent lots of time getting all of our policies and procedures put into writing and approved Then we trained all of the employees so they know exactly what to do Change just means we have to start all over again It's lots of work if you ask me Jim summarized Scott's comments with the words SCARY HAVING TO START OVER Scott sarcastically commented Yeah, and that's putting it nicely The team chuckled, adding in some much needed comedic relief Lars then asked How many of you can relate to Scott's comments When no one raised their hand, Lars said, Oh, come on None of you see change as scary You can be more honest than that With that, 11 of the 15 people in the room raised their hand That's what I thought, Lars said That's pretty common A great majority of people, if they are honest, admit that change is scary or not something they like very much The rest are usually just too scared to admit it Lars laughed and the group laughed with him, again breaking the tension in the room Lars continued, Listen, to be successful, one thing we have to agree on is we need to be transparent, be honest with each other If you like something, say so, and if you don't like something, say that as well Richard's vision is for a big change We won't sugarcoat that The culture will change He told you that The good news is that his vision is for a better, more secure Newton The key is to embrace the future rather than focus on the past I've got another thought about change for you, David interjected How about 'impossible ' Everyone in the room turned toward Lars, shocked that David had been so blunt, and not sure how Lars would respond Lars looked toward David and very calmly said, Now that's more like it That's prob ably closer to what most of you think anyway If so, that's OK Folks, if we don't start communicating like this with each other, we ARE NOT going to be successful As Jim captured the word IMPOSSIBLE on the white board, the team, now laughing even more, was starting to feel relieved that they could be honest Over the rest of that day, Lars and his group of consultants took the senior executives and the Innovation Team members through a series of training exercises to equip the group to understand change so they could lead their teams over the coming months For example, in one exercise the consultants put the employees in teams of four and assigned each team one of six stages of the change cycle Lars went to the white board and wrote down the stages LOSS DOUBT DISCOMFORT DISCOVERY UNDERSTANDING INTEGRATION Lars then instructed, Each group has 20 minutes to brainstorm and put together a presentation to teach the rest of the groups about their assigned stage Larry's group was assigned Stage 2 Doubt Larry kicked off the presentation by saying, In this stage one experiences feelings of resentment, thoughts are skeptical, and behavior is resistant Then, Larry's team chose to role play these various feelings for the group For example, Larry and Cathy role played feelings of resentment by acting out a meeting between Lars and David In the von, Fremd, Sarah E Cases and Exercises in Organization Development Change Doing More With Less , edited by Donald L Anderson, SAGE Publications, 2011 ProQuest Ebook Central, http ebookcentral proquest com lib latrobe detail action docID 1921114 Created from latrobe on 2017 09 02 21 51 42 Copyright 2011 SAGE Publications All rights reserved Case 29 We Must Learn to Innovate 279 role play, David vented his frustrations about how the change would be impossible by saying, You can't just come in here and expect us to change what we've been doing for all these years I feel offended that we weren't consulted about this prior to you coming in This resonated with rest of the team since most of them felt they were in the earliest stages of understanding all the changes that were going on Resentment Skepticism Resistance Yep, those pretty much sum it up, David said after seeing Larry's group's role play of himself The group chuckled, including Lars and Richard After the meetings and training exercises were over, Lars met with Richard to update him Give me the bottom line first, Lars How does it look I am very pleased with the overall contribution and attitude of the group We knew there would be some resistance, but it will go well For the first group of meetings, I'm pleased, Lars replied OK, now give me the rest of it What concerns you Richard asked Lars looked at his notes before responding It's early, but David is not on board I think he was really caught off guard by the announcement I don't know if he will buy in Richard frowned The bus has left the station on this, Lars There are just so many seats on the bus and some may decide they don't want to go on this trip In other cases, we may decide they aren't going with us David is a key player on our team If he's not on board, there's a good chance others aren't as well If we lose buy in from key mem bers of this team, it could kill our culture I want to give everyone an opportunity to accept what we're doing and contribute to the process But I won't have a lot of patience because this deal is getting done quickly When the bus gets rolling, those who are not on the bus, or not actively on board and participating, will be allowed to go somewhere else Let's talk about timing How long do you need to complete the innovation team training and put the culture, purpose, and guiding principles modules in place Lars passed paperwork across the desk to Richard Here's the timeline from the agreement we signed a couple of weeks ago It has points we can Richard interrupted No, no, I know what the timeline says, Lars It says 2 years to get all this in place What I'm asking is, what can you do to get it done now Surely it doesn't take 2 years to sit down and purpose statement and guiding principles I can't wait 2 years to have the new culture, the speed to market, the innovation, and prod uct development in place Lars sighed Richard, I understand, but ask for your patience The thing you don't want is to talk about change, about a new vision, but not do it properly My team prepared a very thorough plan to ensure that doesn't happen I'm confident we will lead you and Newton through this change, but you have to commit to the timeframe we proposed I have been through lots of these with companies and experience will not let me shortcut this change process It's not fair to you because it won't be successful and in the end it will hurt your company and mine Richard paused to reflect, reading through the agreement timeline, and then said, No, I know you're right I just am so anxious to get this going Please agree just to be flexible von, Fremd, Sarah E Cases and Exercises in Organization Development Change Doing More With Less , edited by Donald L Anderson, SAGE Publications, 2011 ProQuest Ebook Central, http ebookcentral proquest com lib latrobe detail action docID 1921114 Created from latrobe on 2017 09 02 21 51 42 Copyright 2011 SAGE Publications All rights reserved 280 PART II CASES IN ORGANIZATION DEVELOPMENT INTERVENTIONS on it and if you find, as we get into it, that there are any opportunities to prioritize the training or shorten the timeframe, let's discuss it, OK Lars smiled in relief, extended his hand in agreement, and said, We are in agreement on that, Richard With a satisfied, yet skeptical look, Richard said, Good deal Well, let's start loading the bus

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I need to make The Symbolic and culture Frame for this case L arry's head was spinning as he left the initial meeting of the

I need to make The Symbolic and culture Frame for this case

Larry's head was spinning as he left the initial meeting of the newly formed Newton Innovation Team. The goals of the team seemed clear and the intentions good, but Larry had no idea how the team could accomplish them. Walking back to his office, he saw Lars Rogen, the lead consultant from Lars Group, talking with Richard, his CEO. Richard motioned him over. "Tell me how the meeting went," Richard said anxiously to Larry.

When Richard hired Larry as Director of Strategic Accounts and Business Development just 1 year prior, he made it clear he demanded honesty, so Larry knew not to pull any punches. "You know what? I'm excited about the concept of the innovation team and I get what you want to do. I just have a hard time seeing us as ever being an innovative company. I mean, the meeting went great, but I just don't see how it's possible for us to pull this off."

"I appreciate your candor. I know you will keep an open mind as we continue to work through this," Richard said, patting Larry on the shoulder.

"That's the key," interjected Lars. "Give us some time to add more of the pieces and I believe we can clear it up for you, okay?"

von, Fremd, Sarah E.. Cases and Exercises in Organization Development & Change : Doing More With Less!, edited by Donald L. Anderson, SAGE

Publications, 2011. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/latrobe/detail.action?docID=1921114. 273

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274 PART II. CASES IN ORGANIZATION DEVELOPMENT INTERVENTIONS

"Oh, sure," said Larry. "Don't get the wrong impression, Lars. Richard knows he can count on me."

"Thanks Larry. Let's plan to catch up next week," Lars added as he left the room.

"You got it," Larry said. As he headed back to his office he was worried. Richard had "that look" and everyone knew that meant trouble.

Over the weekend, Larry had plenty of time to reflect on his comments. Although he knew he was accurate in describing his feelings, he wondered if Richard really under- stood his concern and confusion. "It's hard to know where you need to go without knowing where you've been," thought Larry. He needed to be more precise in voicing his concerns next time. So, to prepare for his meeting with Richard, Larry sat down at his computer to type notes and recall Newton's history, culture, structure, and business model.

Larry wrote in big bold letters, center-aligned at the top of the page: WHO ARE WE?

He figured he had to start somewhere.

Newton manufactures commodity consumer packaged products for consumers in the mass market, including pharmacies, food chains, and chain drug stores. Newton's suc- cess as a manufacturer of high-volume, low-profit items requires a business model focused on operational efficiencies and the elimination of production downtime and errors. Operational efficiency requires a hierarchical personnel structure. This focus and structure creates a "Newton-centric" company culture, where decisions are put through a "what is best for Newton" filter. Within this type of culture, there is little room for personal creativity and innovation.

As Larry reviewed his summary, the conflict that caused his concern and confusion was becoming clear. Larry's next heading read:

WHY CHANGE WILL BE HARD!

Newton has a 133-year history of doing everything to eliminate outside distractions and reduce friction; Newton is a "well-oiled machine." Innovation, the way Lars described it, means making fast decisions, looking for new ideas, shaking things up, being creative, and doing things Newton has NEVER done before! They would have to shake up the inner workings of the machine: the people! Beyond that, inno- vation means listening to what customers want and finding a way to make that happen.

When thinking about a dramatic change in company culture, Larry had many more questions than answers. He would make sure he brought them up at the next meeting. His next heading was:

von, Fremd, Sarah E.. Cases and Exercises in Organization Development & Change : Doing More With Less!, edited by Donald L. Anderson, SAGE Publications, 2011. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/latrobe/detail.action?docID=1921114.

Created from latrobe on 2017-09-02 21:51:42.

Case 29. We Must Learn to Innovate! 275 QUESTIONS FOR LARS

How are we going to take this old-school, hierarchically structured company and turn it into an innovative, fast, new-ideas company with the consumer and customers at the center?

How would people with more than 20 years of experience doing the exact same thing every day react to learning new things and being open to all new ideas?

Will my friends even try to learn? Will any of this work?

Larry thought, "Change scares a lot of people. Actually, just about everybody I know, especially when not much has changed in a long time." Not only had not much changed, but Newton had built systems to eliminate changes and increase sameness. "What is driv- ing all this change anyway? Something must be going on," mused Larry. The more he thought about it, the more he wondered if he could adjust. Was he too old and set in his ways to be innovative? After all, he wasn't a creative or innovative person. Maybe he was among those included just for appearances but not expected to be around after all the changes. "Seriously," Larry thought, "how often does a company bring in a consultant and not end up losing or laying off a bunch of people?" Scenes from the movie Office Space began to flood his mind. Was the initial meeting with Lars only the first of many that would result in a meeting with "The Bobs" and ultimately lead to layoffs? Larry did not have the answers, in fact, he was downright worried, but at least now he understood his questions. As he clicked "print" on his computer to get his notes, he felt a little better about the impending meeting.

Monday morning at the weekly meeting of the senior executive team, Richard made the official announcement and introduced the members of the Innovation Team. Richard paced back and forth at the front of the conference room like a caged lion. Abruptly, Richard said, "Working with consultants from the Lars Group, the innovation team is an important component of our future as we work together in transforming our company." Then Richard made an announcement that surprised everyone. "Over the weekend, the board and I closed on an agreement-in-principle with Benson Company to sell our high- volume commodity businesses." After a pause that seemed to last an hour, he continued, "I know this announcement comes as a surprise and may even shock some. I recognize that as much as we share information around here, this is different. I hope you can appreciate our need to keep the negotiations on something like this very close to the vest."

Larry looked around the room and shock was a good word for it. His boss, David, Vice President of Marketing, was sitting in stunned silence, facing away from everyone. Just as Richard started to speak again, David interrupted, spinning around rapidly in his chair to face Richard. "You're selling the high-volume commodity business? What does that leave us? How will we survive on what's left?" With that, Larry knew David had truly been caught off guard by the announcement.

Richard smiled. "Great question, David, and I appreciate you getting it out there because I imagine everyone else is thinking it. Before we get to what's left, let me start

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276 PART II. CASES IN ORGANIZATION DEVELOPMENT INTERVENTIONS

with the 'why' of this deal. I think that will help." Richard laid out for the team the background market conditions that led to his decisions. Over the next hour he went through the details of why the deal had to be done. "As I looked at the market and the changes in customer dynamics, I realized we needed a new vision for the future if we are to thrive. With the deal we are doing with Benson, with the proceeds from the sale, we are going to invest in innovation. We will develop and launch branded items that consum- ers have a need for. What this means for us is quite a shift. . .um, no, a complete overhaul of our company. We have to be faster, smarter, and most importantly do things with a sense of urgency. Innovation is only valuable to those at the front of the line, or better yet, those selling the tickets others line up for!"

Everyone laughed and Richard continued, "I'm not telling you anything new when I say this is different than how we have been doing things, right? Hopefully, that explains the 'why' of the deal. Now, David, to your question of 'what will we have left and how will we survive?' We will still have the balance of our items. We sold ten items, about 52% of our sales dollars, so we have 48% of the business left."

"Right," said Lisa, the controller, "but those items about 75 to 80% of the units! How will we ever pay the bills with what we have left?"

The group grumbled in agreement with Lisa, waiting for Richard's response. "No question, Lisa. You're right on the money. Let's go down that road. Larry, put this up on the board so we can all get a firm grasp of the numbers, will you?" Richard asked. As Larry wrote the figures on the whiteboard, Richard carefully explained how Newton, although different, would not only survive but thrive.

"Ladies and gentlemen, the biggest change we are going to go through is NOT in what we make and sell, or even how we make stuff. No, the biggest change is going to be to our culture." WE WILL NOT CONDUCT WHOLESALE LAYOFFS Richard wrote in large letters on the whiteboard, right above all of the numbers Larry had recorded. I think you all know this company is a family to me. We treat people fairly here. I don't want to lose our family culture. It's our heritage and the lifeblood of this company. I've made this point clear to Lars and his group. At the same time, we have some difficult decisions to make."

After a moment's pause for the group to gather their thoughts, Richard continued, "The key for this transformation is a couple of things." Richard now took a seat, eye level with the team. "First, we, this group, no, this team, have to catch this vision of transform- ing the company into 'The New Newton.' Richard jumped from his seat and wrote it on the white board. He returned to his seat and continued, "This means big culture changes, keeping the best part of our family heritage. Second, we must become an innovative company from what we do to how we do it. That's what the Innovation Team is all about. Lars and his group will lead the 'I team' through a process and they will lead us. As they do, all of us are going to be involved. I know some of you will grab hold of this and be excited. For others, it may take a little while to sink in. My expectation is that everyone will be on board and fully supportive."

At this comment, Larry looked around the room. Faces were filled with anxiety. There were no smiles and most heads were down. Most noticeably, David was once again spun around in his chair, facing away from everyone.

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Case 29. We Must Learn to Innovate! 277

"It is important that this be an open process and that you ask questions as we go along," Richard said. "Also, be patient. We're all going through this. With change, any change, there will be some bumps along the way. Be patient with the process, with yourself, with others, and with me. This is an exciting time. Welcome to The New Newton, and with that, I'll turn this meeting over to Lars and his team."

"Thank you, Richard," said Lars. "OK. You have all had a lot piled on your plate. Let's take a break, take a few minutes to check your messages. Let's come back together in 20 minutes. When you come back, I'd like each of you to be prepared to fill in the blank in this statement." Lars rushed to the white board and wrote: When I hear the word change, I feel _____. "No right or wrong answers, just tell us what you think of."

"Oh," Larry thought, "I don't need 20 minutes; I can tell you right now. How about: Scared! Terrified! Confused! Worried!"

Richard chuckled nervously as Lars dismissed the meeting for their 20-minute break.

At 10:20 sharp, Lars called the group back together. He was not totally surprised that David, the VP of marketing, was not in the room. "Let's give the rest of our group a few minutes and then we'll begin," said Lars.

With that, Lars went to check on David. He found him in his office, his feet up on his credenza, talking on his phone. Lars knocked just loud enough to let David know he was there and David turned around. Lars waited as a red-faced David said with a hushed voice, "Call you later honey," and hung up the phone.

"Everything OK? We are ready to start," Lars said.

David answered, "Oh, you guys go ahead with your meeting. I'll get the notes from someone. I've got too much going on."

Lars closed David's door and said, "David I appreciate that the announcement Richard made this morning caught you by surprise, so I understand, to some extent, you feeling like you are too busy to be part of this. Let me ask you something though. Do you think pulling back and not contributing is the best, not only for you but for your team? I mean, what message is that going to send to Richard? I can't force you to join us of course, but I will tell you that Richard asked me to provide him with feedback this afternoon on the contributions of his leadership team. I am heading back to the meeting and hope you will join us. We can use your input." With that, Lars walked down the hall and back into the conference room and resumed the meeting.

"All right, let's see what you came up with on what you think of when you hear the word change," Lars began.

The door opened and David said, "Sorry I'm late guys. My wife called and I forgot the time."

Lars said, "Not a problem. We are just getting started. OK, who wants to go first with what they think of regarding change."

Mary in accounts payable spoke first saying, "Change doesn't bother me. In fact it's kind of exciting. It's something new to learn."

One of Lars's consultants, Jim, said, "I'm going to write the themes we come up with up here so we can remember them as we go along." The first thing Jim wrote on the white board was EXCITING OPPORTUNITY.

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"That's a fair way to put it, Jim," Mary said.

Scott, the director of manufacturing, said "I wish I could be as positive as Mary, but to me, change is just scary. I mean, we've spent lots of time getting all of our policies and procedures put into writing and approved. Then we trained all of the employees so they know exactly what to do. Change just means we have to start all over again. It's lots of work if you ask me."

Jim summarized Scott's comments with the words SCARY HAVING TO START OVER. Scott sarcastically commented "Yeah, and that's putting it nicely." The team chuckled, adding in some much-needed comedic relief.

Lars then asked "How many of you can relate to Scott's comments?" When no one raised their hand, Lars said, "Oh, come on. None of you see change as scary? You can be more honest than that." With that, 11 of the 15 people in the room raised their hand. "That's what I thought," Lars said. "That's pretty common. A great majority of people, if they are honest, admit that change is scary or not something they like very much. The rest are usually just too scared to admit it." Lars laughed and the group laughed with him, again breaking the tension in the room. Lars continued, "Listen, to be successful, one thing we have to agree on is we need to be transparent, be honest with each other. If you like something, say so, and if you don't like something, say that as well. Richard's vision is for a big change. We won't sugarcoat that. The culture will change. He told you that. The good news is that his vision is for a better, more secure Newton. The key is to embrace the future rather than focus on the past."

"I've got another thought about change for you," David interjected. "How about 'impossible.'" Everyone in the room turned toward Lars, shocked that David had been so blunt, and not sure how Lars would respond.

Lars looked toward David and very calmly said, "Now that's more like it! That's prob- ably closer to what most of you think anyway. If so, that's OK! Folks, if we don't start communicating like this with each other, we ARE NOT going to be successful." As Jim captured the word IMPOSSIBLE on the white board, the team, now laughing even more, was starting to feel relieved that they could be honest.

Over the rest of that day, Lars and his group of consultants took the senior executives and the Innovation Team members through a series of training exercises to equip the group to understand change so they could lead their teams over the coming months. For example, in one exercise the consultants put the employees in teams of four and assigned each team one of six stages of the change cycle. Lars went to the white board and wrote down the stages: LOSS-DOUBT-DISCOMFORT-DISCOVERY-UNDERSTANDING- INTEGRATION. Lars then instructed, "Each group has 20 minutes to brainstorm and put together a presentation to teach the rest of the groups about their assigned stage." Larry's group was assigned Stage 2: Doubt.

Larry kicked off the presentation by saying, "In this stage one experiences feelings of resentment, thoughts are skeptical, and behavior is resistant." Then, Larry's team chose to role play these various feelings for the group. For example, Larry and Cathy role played feelings of resentment by acting out a meeting between Lars and David. In the

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role play, David vented his frustrations about how the change would be impossible by saying, "You can't just come in here and expect us to change what we've been doing for all these years. I feel offended that we weren't consulted about this prior to you coming in." This resonated with rest of the team since most of them felt they were in the earliest stages of understanding all the changes that were going on.

"Resentment. Skepticism. Resistance. Yep, those pretty much sum it up," David said after seeing Larry's group's role play of himself. The group chuckled, including Lars and Richard.

After the meetings and training exercises were over, Lars met with Richard to update him. "Give me the bottom line first, Lars. How does it look?"

"I am very pleased with the overall contribution and attitude of the group. We knew there would be some resistance, but it will go well. For the first group of meetings, I'm pleased," Lars replied.

"OK, now give me the rest of it. What concerns you?" Richard asked.

Lars looked at his notes before responding. "It's early, but David is not on board. I think he was really caught off guard by the announcement. I don't know if he will buy in."

Richard frowned. "The bus has left the station on this, Lars. There are just so many seats on the bus and some may decide they don't want to go on this trip. In other cases, we may decide they aren't going with us. David is a key player on our team. If he's not on board, there's a good chance others aren't as well. If we lose buy-in from key mem- bers of this team, it could kill our culture. I want to give everyone an opportunity to accept what we're doing and contribute to the process. But I won't have a lot of patience because this deal is getting done quickly. When the bus gets rolling, those who are not on the bus, or not actively on board and participating, will be allowed to go somewhere else. Let's talk about timing. How long do you need to complete the innovation team training and put the culture, purpose, and guiding principles modules in place?"

Lars passed paperwork across the desk to Richard. "Here's the timeline from the agreement we signed a couple of weeks ago. It has points we can"

Richard interrupted. "No, no, I know what the timeline says, Lars. It says 2 years to get all this in place. What I'm asking is, what can you do to get it done now? Surely it doesn't take 2 years to sit down and purpose statement and guiding principles! I can't wait 2 years to have the new culture, the speed-to-market, the innovation, and prod- uct development in place."

Lars sighed. "Richard, I understand, but ask for your patience. The thing you don't want is to talk about change, about a new vision, but not do it properly. My team prepared a very thorough plan to ensure that doesn't happen. I'm confident we will lead you and Newton through this change, but you have to commit to the timeframe we proposed. I have been through lots of these with companies and experience will not let me shortcut this change process. It's not fair to you because it won't be successful and in the end; it will hurt your company and mine."

Richard paused to reflect, reading through the agreement timeline, and then said, "No, I know you're right. I just am so anxious to get this going. Please agree just to be flexible

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on it and if you find, as we get into it, that there are any opportunities to prioritize the training or shorten the timeframe, let's discuss it, OK?"

Lars smiled in relief, extended his hand in agreement, and said, "We are in agreement on that, Richard."

With a satisfied, yet skeptical look, Richard said, "Good deal. Well, let's start loading the bus!"