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9-488-037 R E V : J A N U A R Y 1 2 , 2 0 0 7
________________________________________________________________________________________________________________ Professor Michael Beer prepared this note as the basis for class discussion. "The change formula presented in this note was adapted from an earlier version attributed to David Gleicher. Copyright © 1988 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or ...view middle of the document...

What conditions lead executives to be dissatisfied with the status quo? A survey of the contemporary business scene quickly leads to the conclusion that crisis is the most frequent condition which energizes change. But must companies approach the precipice before major adaptation to new conditions is possible? Are the human and economic costs of a crisis an inevitable by-product of major change? In my view the answer to these questions is no! Change can be stimulated and managed without crisis. Though one obvious lesson for managers is to make use of external crisis when it presents itself as a vehicle for managing planned change.
What then is the alternative to crisis as the stepping stone to change? If "dissatisfaction" is the sine qua non for change then change leaders must create "dissatisfaction" in their organizations for change to flourish. The following are four ways in which this might be done.
For the exclusive use of K. Fardshisheh
This document is authorized for use only by Kamyar Fardshisheh in Change Management taught by Schlafer Pepperdine University from October 2014 to April 2015.

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488-037 Leading Change
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1. Information about the organization's competitive environment can be used to generate discussions of current or prospective problems. Top management often does not understand why employees are not as concerned about productivity, customer service or cost as they are. All too often it is because management has not taken the time to put employees in touch with the same data that have led to management's "dissatisfaction." Often this information is kept from employees because it is thought to be confidential. Recently companies trying to be more competitive have begun avidly communicating this information, making presentations to employee groups and union leaders.
2. Similarly, information about the concerns of employees and their perceptions about how the company is being run can be a powerful tool for creating "dissatisfaction" among managers. Just as competitive information can be a tool for creating "dissatisfaction" downward so attitude surveys (through interviews and questionnaires) can be a powerful tool for creating "dissatisfaction" upward. Consider the manager who does not know his subordinates feel uninvolved because he controls too closely or top management that does not understand how the vitality of their organization is being sapped by overmanagement on the part of corporate staff groups.
3. It is not sufficient to provide data, there must be a dialogue about the meaning of the data. This dialogue must arrive at a joint understanding, a diagnosis of underlying reasons for the organization's problems. That dialogue is useful because it provides the means by which both managers and employees can inform each other about their underlying assumptions and evolve a shared explanation for their difficulties.
4. Change managers can also create the energy for change...

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