The process of organizational renewal appears on the surface to be an easy one and the role of the leader in that process to be clear-cut. But in reality, an organizational renewal, even when extremely urgent, is a tough process that also often triggers a personal struggle on the part of the leader of the organization. After all, that leader realizes that the key to the necessary improvements lies in the hands of the people who do the work – and not necessarily in the heads of management. This in turn produces anxiety in the leader as to whether he or she is no longer in control and unable to give guarantees to people. This article deals with this anxiety and how a leader can address it. It tells the story of the toppling over of the organizational pyramid at Dactylo. Why this was necessary, what the results were and, most importantly, how the organizational change affected and what it demanded of the management at Dactylo. Other managers will probably identify strongly with the section on the personal struggle and quest of a leader during an organizational change.
The process of organizational renewal appears on the surface to be an easy one, and the role of the leader in that process to be clear-cut. But, in reality, an organizational renewal, even when extremely urgent, is a tough process that also often triggers a personal struggle on the part of the leader of the organization. This article talks about this personal struggle, the anxiety that this struggle evokes in the leader, and how this anxiety can be addressed.
Over the past century, we have derived considerable pleasure from work of Frederick Winston Taylor. After all, thanks in part to his theories, we have achieved our current level of prosperity. The Taylorian system, however, has led to large organizations that maintain control through handing down instructions and bosses that govern with rules and procedures. This is not a problem in an industrial production environment, where the emphasis is on achieving increasingly greater efficiency and output. But there are few industrial organizations in our country these days and today’s emphasis is on the service industry. This industry requires a different type of management approach than a ‘factory’ does. It is not ‘stupid’ machines that are put to work, but ‘clever’ people, who can and want to make their own decisions. Yet we still tinker away at organizations as if they consisted solely of machines, with the goal of achieving mass volumes and profit maximization. To keep those working in the organization under control, more and more protocols and procedures are introduced, and more layers and staff departments. But these people – longer and better educated than in the past – are experiencing more and more friction. During the daytime, someone else comes up with rules for their behavior while, in the evening hours, these same people demonstrate plenty of leadership and independence in their tennis association or soccer club board. In addition, the service industry does not require standardization as does the production world, but rather customization, by which maintaining good relationships with clients and stakeholders is of vital importance. Unfortunately, organizations choose more and more often either the cost savings of a large-scale organization or the quality yielded by client intimacy – while today’s clients want both. This point of tension also proved to be problematic at the staffing and recruitment organization Dactylo, not only in its contact with clients, but also with employees, temps and stakeholders. Their management realized it was high time to make a transition from the current organization to a high performance one, one that would provide more added value for all stakeholders. But every organizational change also entails personal struggle in the leader of that organization. It forces a realization that the key to the necessary improvements lies in the hands of the people who do the work – and not necessarily in the heads of management. This in turn produces anxiety in the leader as to whether he or she is no longer in control and unable to give guarantees to people. This article deals with that anxiety and how a leader can address it. It tells the story of the toppling over of the organizational pyramid at Dactylo. Why this was necessary, what the results were and, most importantly, how the organizational change affected and what it demanded of the management at Dactylo. Other managers will probably identify strongly with the section on the personal struggle and quest of a leader during an organizational change. This article was written from the point of view of Jonard Speijer, Director of Dactylo from 1996 to 2007. The transition took place during the years 2006-2007.
With around 120 offices across the country, Dactylo is one of the ten largest staffing and recruitment organizations in the country. Dactylo contracts out temporary employees in every imaginable field, but primarily focuses on administrative, industrial and technical personnel. After being taken over by parent organization Vedior NV, Dactylo was integrated into Randstad Staffing in 2008.
Cause for new insight…
We felt that we had settled into a ‘comfort zone’ at Dactylo. We had been doing well for years and would keep doing well for years to come…or so we thought. Until changes in our environment began to affect us more and more and it became clear that we were of continuously less value to our customers. We also realized that a new generation of employees had arrived that was far better brought up and trained for self-reflection and to take control of their own lives, i.e. become masters of their own destiny. This generation was less and less interested in working for an organization that demanded that they ‘leave themselves at home’ or where ‘the boss tells them what to do’. They demand an attractive learning environment, in which they are coached and allowed to develop. If you can offer this as an employer, you can tap into enormous potential that can help resolve future shortages in the job market. You can also stimulate tremendous dynamics based on entrepreneurship and employee’s conviction that they want to get the most out of themselves. As management, we were not the ones who determined the results: the employees were. Every six minutes, the employees at the desk made a decision and, during that moment of decision-making, 80 percent of our added value was supplied. One decision every six minutes adds up to 80 decisions a day – by a single person. With 400 desk clerks, that adds up to 32,000 decisions in a single day! This is not something that can be controlled through protocol or instructions. In other words, the employees make these decisions independently. If, in doing so, they do not consider the needs of the customer and simply go through the organization’s checklist, there is little opportunity to increase our added value. Good examples of this are call centers, banks and insurance companies, where, in most cases, protocols, scripts and checklists dominate, but the customer is completely overlooked. They think inside-out instead of the other way around. We were not going to let this happen at Dactylo. We realized that we needed to create an organization that facilitated its employees in making the best decisions possible. It became more and more clear that the work floor had to be considered the most important organizational layer. This meant toppling over the organization pyramid and placing the bottom of the organization at the top. This necessity became even more pronounced by the realization that, for many employees, work is an important ‘well-being’ factor. They are motivated by serving customers as best as possible and by good teamwork. This led to a sorting out of clients. We only wanted to work with those clients who were equally as convinced of the importance of their employees and demonstrated this in their behavior.
… and converting it into change
This meant that we needed to leave our comfort zone and start working on offering genuine added value. This required abandoning the idea that generating volume and profit should be the main goal of the organization. Growth as a goal had to be replaced by delivery quality and customization, with volume and profit growth as an outcome. This meant working together more cleverly, taking more action, listening better to what the customer needs and ’serving’ that customer a good product or service. It all seemed so logical and simple, but demanded a radically different way of organizing our work and eliminating unnecessary protocols, overly strict schedules and rigid scenarios. In other words, this required a paradigm shift. We needed to stop instructing from the top and renounce the notion that the boss must always be in control. This approach did little to inspire our people to serve customers better. As management, we needed to work towards inspiring, make more of a difference for our people, and facilitate and coach more. But, in reality, it is easier to gain power than to part with it. This was also clear at Dactylo, where the ‘old rulers’ withdrew and responded reactively at first, only to attempt to fall back into normal routine again afterwards. It turns out that true change is a process, not a conversion. Letting go of power once and for all and working based on strength requires perseverance and continuously confronting one another regarding desirable behavior and dealing with undesirable behavior in a resolute manner.
The leader’s struggle
Obviously Dactylo was not the only organization that wanted to make this kind of paradigm shift. But many organizations never get past the conceptual stage. I think that the failure to make fundamental changes is largely the result of the current generation of top management and executives having too much to lose personally. Also, they are often ‘encapsulated’ in the existing system and ‘chained’ to the rigid performance agreements in their management contracts. As a result, today’s middle management (thirty and forty-year-olds) is fed the wrong examples and trained in outdated management strategies. This also alienates this group of people entirely from their own strengths. But, as the Director of Dactylo, I was fully aware of the necessity and direction of the change. And I believed that this alone was half the battle. But the exact opposite turned out to be true, as I had not yet answered a number of essential questions: How was I going to approach this reversal? What was required of me? What would this change mean for me personally? I understood clearly that I would have to give up the routine and the familiar and would have to face my fears. Is that what I really want? Can I handle it? Where do I fit in? At the same time, I also knew that the path would be a lonely one in the beginning. After all, the organization was not exactly dying to make any changes. I also realized that the progress – and perhaps even the outcome – of the organizational change would be uncertain at times, and that the responses to this would be negative. After all, as Director, I was expected to offer and exude absolute certainty to my employees and shareholders. Although, personally, I was sure about the direction of the change, I was not as certain about the details and how the outcome of the transition would play out, while facing shareholder demands for guarantees of a positive outcome. Why on earth would I trade in good virtually guaranteed short-term results for an uncertain long-term vision? I felt that the risk of damaging the company’s image was considerable. As so I struggled continually with three questions: What was I going to change? How was I doing to do it? How would I deal with my own uncertainty? This struggle lasted two years. I occasionally managed to put these questions out of my mind, but realized that something did indeed have to happen or the reversal would never take place. Continuing the same old way would not help the employees get the best out of themselves, which obviously would ultimately be of no benefit to customers. I gradually realized that uncertainty was inevitable, necessary even for a fundamental change process. It would be a journey of discovery in which you knew the direction in which you were going, but not how long it would take or what obstacles you would face. As a leader, you need to face your uncertainties and deal with them. Once I truly understood this, I was ready to take the next step.
Entrepreneurship as catalyst
What was of tremendous help at the start of the transition towards becoming a high performance organization was the entrepreneurship that Dactylo had embedded in its DNA, which was reflected in the high degree of involvement on the part of everyone within the organization. This sense of entrepreneurship worked as a catalyst in the reversal process. We started by creating a core group that consisted of a cross section of the Dactylo branches and that developed a shared awareness of the necessity of the transition. The core group reflected on such trends as the waning and aging of the population, rise of new economies and evolution from industrial to service-oriented organization, and examined the consequences of these for their own branch. A general understanding arose that an organizational change was necessary, which in turn created support for the change. The core group was then challenged to develop a new vision for the organization. We held core group sessions once every four to six weeks, during which all details was discussed and we fleshed out the new vision, organization roles – from desk clerk to director – remuneration structures, work processes, the desired organizational model and a new payment policy. New subgroups were formed, sometimes with the addition of internal and external experts. The findings were submitted to the rest of the group, where they were discussed and the necessary changes made. We worked on the content, while at the same time gained experience with the process. Everything took place with complete openness, open dialog and respect for each other’s capabilities and responsibilities. This was the first step towards toppling the pyramid. A sense of ownership of the change and the individual role within that change began to grow. It was interesting to see how points and suggestions were aimed at the common good. The employees began to feel a sense of liberation, of ‘mastering my own destiny’, as well as a sense of ownership and the ability to influence. It was not something that came from above, but from within. We had found a way to practice, build, and gather success experiences – together. The question then arose as to how these results and experiences could be transferred from this safe setting to the other members of the organization. Naturally this question was also answered jointly. Everyone contributed and was bursting with ideas. “Is it okay if I organize pizza sessions to discuss this with my coworkers?” Another then added to this the offer to make a presentation for this session. The core group suggested familiarizing coworkers with the process and sense of ownership using the ‘golden goose’ principle. It was suggested that, after four to six sessions, the current core group members would put forward a coworker as their successor. This created the dynamics we had aspired to achieve from the very start.
Success without resistance?
An important condition for ensuring a smoother change process is to give people leeway. This is particularly difficult for middle management, the one group that was inclined to return to the ’old control mode’. So middle management received additional training to generate a more facilitative approach. I watched people grow but, unfortunately, also watched some fall, and had to take leave of those who were too resistant to adopt the desired behavior. Giving people leeway, not instructing them or determining the vision in a top-down fashion, i.e. giving the lead and not just taking lead truly demands a different mentality and skills that not all managers possess. These people often brandish themselves with abstract notions like ‘policy’ or ‘organization’ and use them to conceal their power. When someone said “That’s not company policy” to stop a change, we responded, “There is no company policy, which is what we have decided as a group here and now and can therefore change here and now so that you can in effect facilitate this change.”
In addition to facilitating the change, the managers had another important task: to be resolute and act in accordance with our core values. We agreed that damage to our core values would not be accepted by anyone. Our core values were:
Ultimately, the entire process encouraged people to view their reality through new glasses in order to master a new way of thinking and acting. The question was in fact not “How do I change the organization?” or “How can I topple over the pyramid?” but how the change process could be set into motion in a way that makes people attracted to the idea of organizing the system differently. The employees had to become masters of their own destiny, since management was no longer in control. That was the real change, i.e. the realization on the part of both employees and managers that people make the difference and do not necessarily have to be kept in the ‘straightjacket’ of the organizational policy. Perhaps the greatest transition was made by me, the Director, and my management team. Not only did we aim to continuously stimulate and facilitate the dynamics that would cause the pyramid to topple over, but we also received new leadership tasks. Our most important leadership task was to continuously encourage people to become masters of their own destiny and to get the most out of themselves, their coworkers and customers. We repeatedly confronted everyone – including ourselves – regarding this in a variety of ways. We needed to keep the results in mind; it was anything but a free for all. Our efforts needed to lead to results. Some people thought we no longer had to consider output, but we were in fact constantly measuring everything that was accomplished. We tried to remind everyone of that fact time and again, and to serve as an example. As the Director, I also maintained a ‘hierarchical’ line, since, after all, I still had final responsibility for the overall results. This result orientation also meant dealing with non-performers in a candid fashion. We gave people more say, but at the same time presented a clear framework within which results must be achieved. This framework was formed by our core values, of which we continuously reminded each other, and the planning & control cycle that allowed us to continually gather and share performance information. Clear leadership also turned out to be decisive in toppling over the organizational pyramid. We wanted people to dare to tell the truth, expose relevant matters and use their own behavior to set an example. This would make them the de factor leaders of the organization. Their exemplary behavior was what made the change a success. This means that we, the management, were continuously coaching each other with regard to our behavior. Without a good role model as catalyst, we noticed that, in spite of everyone’s good intentions, the transition to a high performance organization would never get off the ground.
A birds’-eye view of the toppling of the organizational pyramid
Step 1: Create awareness of the necessity of the change
Awareness of the ‘why’ of the change is essential and entails an understanding down to the gut level. “It became clear to me that continuing along the same path might very well be safe and lucrative in the short term, but not in the long term. It’s like driving 100 miles an hour on a dead-end street, knowing there is a concrete wall up ahead.”
Step 2: As the leader (initiator), prepare for a struggle
This is the struggle to break free of the past, as well as to dare to take initiative in an environment that expects guarantees, not to mention profitable results. “Whether or not this would result in greater profit was not something I could guarantee. It was at complete odds with my instinct and training as far as control and managing are concerned.”
Step 3: Carry out the process of change/struggle with the entire group (in co-creation involving the ’why’, ’what’, and ’how’)
The ‘why’, ‘what’ and ‘how’ run parallel here as a sort of co-creation that is continuously intertwined. This process is dealt with by going on an exploratory mission together with a cross section of the organization. Apart from the rational necessity of the change and the ‘productive and inspiring process’, when faced with setbacks and doubt, people tend to irrevocably fall back into the old routine without undergoing any struggle. The struggle ultimately begins with the leader, the one who takes the initiative. However, to ensure a successful reversal, everyone must experience this struggle in the end since, after all, this is the ‘fire’ that kindles inspiration, ownership and enthusiasm.
Step 4: Carry out the reversal, taking into account what must be done differently
Although essential matters in business operations are organized and shaped differently, it turns out that carrying these out without straying from the path is anything but an automatism. People tend to revert to old habits, especially when facing setbacks. This is when it’s all or nothing! When, for example, it became clear that the new payment policy would not turn out as hoped for, the managers had to ‘take the heat’. It is important not to hide behind ‘company policy’, but identify as a group with the decisions made by management.
Step 5: Make reflection, mastery and internalization a continuous process
A transition is never complete since, after all, an organization is continuously in motion and influenced by its surroundings. This necessitates a continual process of reflection, followed by determining and mastering the necessary changes in order to subsequently implement them and embed them in the organizational DNA.
By Jonard Speijer, Simon van der Veer and André de Waal (HPO Center)
Jonard Speijer was affiliated with the staffing and recruitment agency Dactylo from 1992 to 2007, as Director from 1996. Simon van der Veer is the Practice Director at the Center for Organizational Performance (HPO Center). André de Waal is the Academic Director at the Center for Organizational Performance (HPO Center).
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