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Change Management

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One of the definite highlights of our learning journey was the meeting with Ed Schein, the former MIT professor who has made a notable mark on the field of organizational development in many areas, including change management, group dynamics and organizational culture. Ed Schein is as well a long term companion of ICG, a small group of us met him and his son Peter for dinner in Palo Alto.

Ed opened his talk to us by sharing a crucial observation he made: In our economy in the US and Europe we are lacking loadable relationships at a personal level. This he argued is a major obstacle for cooperation and for cultural change

How to make cooperation and cultural change work?

By that he differentiated three levels of relationships:

1) relationships and roles at a transactional level: We make transactions at work, we treat another as fellow humans and we trust to a certain degree not to harm us. We make polite conversations and small talk, but we don´t know each other as individuals.
2) relationships on a personal level: We know each other as individuals, co-workers and colleagues. We have gotten to know personally but not intimately through common work or educational experiences. According to his book “Humble Consulting” this kind of relationship implies a deeper level of trust and openness in terms of a) making and honoring commitments and premises to ach other b) agreeing not to undermine each other or harm what we are endeavoring to do and c) agreeing not to lie or to withhold information relevant to our task
3) Relationships with strong positive emotions: like close friendships, love and intimacy implying not only more openness and not only no harm but active support whenever needed.

Ed set out that – because of the strong emotions - level 3 relationships are undesirable at work or in helping situations. But the first two levels are crucial in the organizational context to enable cooperation in complex business environments (headword VUCA) and as well to make deep change projects including cultural change work. Especially organizations centered around issues of safety (operational military teams, fire brigades, aircraft carriers) are heavily relying on level 2 relationships, without which they couldn’t exist.

In Ed´s view current organizations are predominantly lacking loadable relationships at a personal level. This is a major reason why cooperation is often failing and cultural change projects get stuck. So what is to do? In his view we can make cultural change and cooperation more likely work, if we are focusing on making level two relationships denser. Addressing us, the dozen of more or less strangers from Europe having dinner with him, he said: “If there is a catastrophy this evening and we have to handle it together, then tomorrow morning we have a culture together.”

What are the consequences for our work as consultants?

As a consequence for consultants, if we want to support our clients in issues of cooperation and cultural change, we have to focus on the following aspects:

  • Is there an appropriate balance between level 1 and level 2 relationships? How can we perceive and assess that?
  • How can we support our customers in establishing more loadable relationships and making these level 2 relationships more dense? What does this mean for our models and tools of consulting, team performance and team development?
  • How can we make leaders more aware of the crucial importance of level 2 relationships?

And what for us consultants with a systemic perspective may be more confusing: According to Ed the consulting process itself requires a new kind of level 2 personal relationships between the consultant and the client built on trust and personalization. That means to abandon the old idea of professional distance and working with our clients in a more personal way, emphasizing authentic openness, curiosity, and humility.

How will our corporate culture effect our innovation performance: Europe and the Silicon Valley perspective

Another idea Ed brought in is the influence of national and occupational culture on the innovation culture and performance of companies. Ed emphasized that we have to take corporate culture at a much more general level and look at both occupational cultures and national cultures and how they play out in the corporate cultures.

From the European perspective, if we look at our European corporate cultures we can – at least at a rather general level – see the following crucial points and questions:

  • In the European national and professional cultural context the following elements play a major role: focus on regulation and stability, bureaucracy guaranteeing order, safety, appraisal of institutions, being skeptical in terms of radical new ideas, fostering incremental innovation, focus on analyzing and planning, reducing uncertainty, avoiding risk.
  • Maybe this was an appropriate cultural context for organizations in the industrial era, but this will probably not be an appropriate context for the new era of VUCA and agile organizations.
  • How can we deal with this cultural heritage? What can we learn from the Silicon Valley experience?

After four days in the Valley and having had several talks with people from Stanford and established corporations we brought our first impressions and learnings into the discussion. What in our perspective seems to be different here? The strong focus on the purpose of the organization, the focus on trust and pretrust in the people that they will do the right things and making the right decision corresponding with a high level of personal autonomy and autonomy of teams, the radical focus on finding new ways and solutions not being confused by arguments why it will not work…

Ed and Peter, who has been working as a manager for Apple and several other SV companies, shared most of these points. Nevertheless, with some critical remarks. According to them most of the top executives in the Valley are as well still not aware of the importance of level 2 relationships for cooperation and change, hence some potential of organizations and people here still cannot be used. A second point was that the SV-model is a high level approach with top talents and performers recruited from all over the world but excluding a high percentage of people being not able to perform in that way.

However, finishing our conversation, Ed gave us a nice and hopeful story on our way: A student of Ed having made a study about start-ups in the area of ecology came to the conclusion that the major motivation of these entrepreneurs is really to make the world a better place. Making profits as a motive is far behind.

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