The document discusses the need for management reset in response to changing business conditions. Key drivers include technological change, globalization, workforce changes, and increasing focus on social and environmental accountability. Organizations must move from episodic to continuous change approaches to remain agile. This involves embedding change capabilities, focusing on ambidexterity over efficiency, and decentralizing decision making. A sustainable management organization treats talent well through development and rewards, is guided by shared leadership, and uses performance management to track social and environmental goals.

1. Built to Change:
Management Reset Needed
NHDRN Conference Edward E. Lawler III
Marshall School of Business
November 17, 2011
Center for Effective Organizations
Bangalore, India University of Southern California
© 2011 University of Southern California

2. Drivers of the “New Normal”
Technological
Change
Drivers of Agility Globalization
The New Normal:
Faster and Faster
Change Workforce Change
Financial, Social
and
Environmental The Rise of
Accountability Community
Drivers of
Responsibility
The Rise of
Environmental
Concerns
© 2011 University of Southern California 2

3. Signs of Change
But look at 2006 through a different
lens and you'll see another story, one
that isn't about conflict or great men.
It's a story about community and
collaboration on a scale never seen
before. It's about…
Wikipedia…YouTube and …MySpace.
It's about the many wresting power
from the few and helping one another
for nothing and how that will not only
change the world, but also change the
way the world changes.
© 2011 University of Southern California

4. The B2∆ Model
• Why does planned change go so wrong so
often?
1) We need better models, tools, and
processes of organization change and
development.
2) The concept of “stability” is a pervasive
assumption in principles of organization
design and buried deep in the
managerial psyche. Most organizations
are “anti-change.”
• Avoiding the “In Search of Excellence”
trap.
© 2011 University of Southern California CW95R (4)

5. Nature of Episodic vs. Continuous Change
Episodic Change Continuous Change
Amount of Change
Amount of Change
Time Time
 Relatively long periods of  Relatively higher levels
stability are punctuated by of change over long
short bursts of periods of time
transformational change
© 2011 University of Southern California

6. Implications of Episodic vs. Continuous Change
Episodic Change Continuous Change
Amount of Change
Amount of Change
Time Time
• Change capability lacking – rented when • Change capability embedded in
needed organization design
• Focus on efficiency over innovation • Focus on ambidexterity
• Stability = Effectiveness • Change = Effectiveness
• Change = Enemy • Stability = Enemy
• Performance reflects change pattern • Performance reflects change pattern
• Decision making centralized • Decision making shared/decentralized
• Resources allocated through budgets • Resources allocated through
accountabilities
© 2011 University of Southern California

7. From Omar El Sawy,
USC Marshall School of Business
© 2011 University of Southern California EL14V

8. The Four “Ways” of An Agile,
Sustainable Management Organization
The way value is created
…utilize a differentiated future focus, a sustainability-friendly identity, and
a robust strategic intent
The way work is organized
…employ a “maximum surface area” structure, a flexible resource allocation
system, transparent information, and a dynamic work system
The way talent is treated
…focus on human capital development and flexible reward systems
The way behavior is guided
…leverage a shared leadership philosophy and a remodeled board of
directors
© 2011 University of Southern California 8

9. SMO Performance Management
Principles
 Establish a balanced scorecard that includes social and
environmental goals as well as performance objectives
 Set talent development objectives that include the
acquisition of sustainability related competencies,
including collaboration, networking, relevant subject
matter knowledge, and so on
 Don’t assume an annual appraisal is often enough –
agility requires relatively short cycle times of project
progress taking
 Use web-enabled technology to support flexible
performance management processes
© 2011 University of Southern California 9

10. SMO Talent Principles
 Build a “Travel Light” Talent Brand to Support Agility
 Use Competencies to Drive Talent Management
 Identify Pivotal Work Skills
 Create Career Diversity – Give Individual Choices
 Make Career Management the Individual’s
Responsibility
© 2011 University of Southern California 10

11. The “Ways” of a Sustainable Management
Organization
My definition of leadership is very simple: if you
positively influence someone, you are a leader.
Paul Polman, CEO
Unilever
I think we are at the end of a difficult generation of
business leadership. Tough-mindedness…was replaced
by meanness and greed. The richest people made the
most mistakes with the least accountability. In too
many situations, leaders divided us instead of bringing
us together.
Jeff Immelt, CEO G.E.
The way behavior is guided
…leverage a shared leadership philosophy and a remodeled board of
directors
© 2011 University of Southern California

12. MANAGEMENT APPROACHES
MEANS
To what extent do the following approaches
describe how your organization is managed? USA1 CANADA2 AUSTRALIA3 EUROPE4 UK5 INDIA6 CHINA7
Bureaucratic (hierarchical structure, tight job
2.8 2.5 2.8 2.6 2.7 2.6 2.8
descriptions, top down decision making)
Low cost operator (low wages, minimum
benefits, focus on cost reduction and 2.067 1.867 1.967 2.167 2.27 2.91234 2.812345
controls)
High involvement (flat structure,
participative decisions, commitment to 3.07 3.1 3.27 3.27 2.9 3.1 2.7134
employee development and careers)
Global competitor (complex interesting work,
hire best talent, low commitment to 2.77 2.346 2.6 3.127 3.07 3.227 2.31456
employee development and careers)
Sustainable (agile design, focus on financial
3.3 3.67 3.5 3.4 3.4 3.77 3.026
performance and sustainability)
Response Scale: 1 = Little or Not Extent; 2 = Some Extent; 3 = Moderate Extent; 4 = Great Extent; 5 = Very Great Extent
1234567 Significant differences between countries (p ≤ .05)
© 2011 University of Southern California

13. “There is nothing wrong with change,
if it is in the right direction.”
– Winston Churchill
© 2011 University of Southern California