1. Change as Un:balanced Transformation – in 5 acts
based on: Article ZOE 1 / 2002
Barbara Heitger / Alexander Doujak
The new board of a family-owned, organically grown group of companies in the trade sector,
with many years of tradition and active in various branches, decides on launching a change
project, aimed at the company’s strategic repositioning and reorganisation. The company is
successful but growth rates are showing marked decreases. It cannot go on like that. Top
priorities consist in strengthening the power of innovation (keyword: "e-commerce and value
chain" to suppliers and customers), bringing new momentum to business activities and
creating growth potentials for the future.
An airline is facing hard times not only due to the events of September 2001: there has been
a drastic decline in sales, major parts of the business must be restructured. In the past,
substantial crises could be overcome successfully, therefore the management faces the
challenge: the situation is stabilised with short-term measures such as recruitment stops. In
all areas, teams are taking measures to redesign processes and structures, to increase
market focus and reduce costs.
These two examples from our own consultancy practice are characterised by a high degree
of the need for change. Whereas in the trading company this need comes from the inside,
the airline is prompted in this direction by dramatic outside developments. Even though the
experience of a crisis does not prompt the managers of the airline to "reduce costs by any
means", their scope of action is more limited than in the trading firm. That's where the two
cases differ. Their common feature is the need to introduce rationalisation measures and
incentives for growth at the same time – albeit with a differing degree of urgency. In our own
consultancy practice, the number of such projects has increased.
What makes enterprises successful
In its annual hit parade of "America's Most Admired Companies", Fortune magazine
assesses companies using the following criteria:
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innovation
quality of management
employee talent
quality of products and services
long-term investment value
financial soundness
social responsibility and
use of corporate assets
An Ernst & Young study1 shows that financial analysts and portfolio managers base their
investment decisions on non-financial information in 35% of cases. The ranking of criteria is
the following:
1
As quoted in: Becker, Huselid, Ulrich: ”The HR Scorecard”, HBS Press, Boston 2001
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2. 1. implementation of company strategy
2. credibility of management
3. quality of company strategy
4. innovation
5. ability to recruit and keep employees with potential
6. market share
7. management expertise
8. payment systems adapted to shareholder interests
9. leadership in research
10. quality of key business processes
Both of these studies show that successful change management must be measurable not
merely by figures such as growth of turnover and profit but also by innovative power put in
practice and consistent implementation of the company strategy. Also, the quality and
credibility of the management and the ability to find and keep talented staff are highly
significant success factors. This makes professional change management, now more than
ever, a decisive competitive advantage. And: measurement criteria for successful change
management have become more ambitious and varied than in the past.
Boosters of change
A comparison of annual surveys by the American Management Association (with about 1,650
American companies, www.amanet.org) renders the following result:
When questioned about the development in 2001 (01-06/01), 36% of all companies surveyed
said that they created jobs and laid off staff at the same time. This combination of
simultaneous new growth combined with drastic cuts has increased continuously in recent
years.
The main reason for staff reduction is restructuring and productivity gains (37%), the main
reason for new growth is market demand (40%). The study shows that in the medium term
growth and rationalisation initiatives taken at the same time are the most promising in terms
of success in productivity, profitability, shareholder value and product quality. Unfortunately,
no comparable studies are available for Europe; however, our own empirical experiences
show that similar developments can be found here as well.
On the whole, these studies show that demands made on change management are
increasing and becoming more varied (innovative power, consistent implementation of
strategies) and that the simultaneous integration of growth and rationalisation goals is the
most successful strategy. Both developments require further differentiation of change
concepts to account for the variety and dynamics of differing change goals in terms of
architecture, design and structuring of the stages of change.
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3. In the jungle of change concepts
The corporate day-to-day business of managers and consultants is characterised by a wealth
of differing change projects. A "map" provides orientation in this jungle.
The vertical axis marks the perceived urgency of change and the recognised current need for
change based on operating success indicators. Systemically speaking, it is about the
description/perception of the system environment relation: Do we need an evolutionary or a
radical change (step by step vs. quantum leap)?
The horizontal axis describes the interior relationship, the system's perceived ability and
willingness to change – thus the individuals' and the organisation's change management
skills – the former being the key resource. An organisation's ability to change comprises
elements such as management and control systems, incentive systems as well as business
processes and support to push the change. In addition, it depends on the company's
structures and culture in terms of change-friendliness. (For instance, what happens with new
ideas or customer complaints? How are "negative" feelings handled? How much openness
and willingness to experiment is there? etc.)
This map can be a significant help for the individuals initiating change processes and those
in charge of them:
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4.  It makes different assessments of planned projects visible at a fairly early stage, leading
to necessary discussions on diagnosis, aims and consequences for architecture and
control. It creates a joint orientation
 It helps to specify which change management interventions (architecture, roles,
processes) are best suited to the respective case and which control strategies have the
best chances of success at which stage ("top down" vs. "bottom up" interventions and
directive vs. context and incentive control)
This paper focuses on changes involving a radical repositioning (e.g. airline) and innovation
(e.g. trading enterprise). Both companies pursue growth and rationalisation goals, albeit with
varying intensity. We combine them in the concept of "un:balanced transformation".
Un:balanced transformation
Transformation as a radical and comprehensive change. Transformation, according to our
definition of the word, comprises the following features:
A transformation is radical in that it changes key aspects of identity. It is comprehensive in
that the entire system is involved. It changes the content-related orientation of the enterprise
(vision, strategy, aims), the organisation's structures, processes and systems, as well as the
"material-psychological" contract between the enterprise and its staff and it changes the
relationship to customers and partners in value-added activities. This leads to a drastic
change of the company culture even though it cannot be influenced directly.
Transformation implies drastic changes for the organisation and the individuals involved.
Let's talk first about the implications for the organisation.
Transformation is equivalent to a change of the mental models and patterns that have been
successful in the past and still are today. These have become something natural by now,
their impact on day-to-day business can be overlooked easily, and actors, who see them as
the "social grammar of day-to-day business", are often less aware of them – simply because
they are so "natural" – than outside observers. As constructions of reality "come true", these
models and patterns embody the inner pictures of oneself and one's environment. In the
management's everyday culture, they are the corporate "culture".
Mental models are important resources: They provide orientation, represent the basis of
common traits and identity, draw lines, standardise and make everyday routines less
arduous. Their drawback for transformation processes is that they always create defensive
routines. Whatever they hide from view, whether it be assumptions or other possible
constructions of reality, stays "outside the door" and is not available as a potential for
innovation and change (perceptive barriers). It is not without reason that ideas revolutionising
a particular sector of industry nearly always come from newcomers, cross-entrants and not
from the "well established blue chips" of the sector. Transformation requires organisations to
question pictures, models and routines that have become natural to them.
And it requires individuals to draw up a new picture of the future for themselves and to
decide whether and how the company's change corresponds to their own identity and
development perspectives. It is necessary to understand the reason for and direction of a
transformation process to be able to specify, in concrete terms, one's own contribution with a
view to understanding its meaning, finding out individual consequences of change, and opt
for or against it. This commitment (meaning, conviction and energy) is the result of
communication, experience, action (tests) and decisions.
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5. As far as content is concerned, it is most important to learn something new, to practise new
behaviour and knowledge in the change. Such an acquisition process, which is boosted by
commitment and cognitive learning, promises success above all when the
relevant content is experienced, experimented with, practised, evaluated, adapted and
repeated. The integration of new elements into one's identity requires letting go of and giving
up other elements that have so far provided a feeling of safety, such as certain roles and
habits. New elements can be integrated into the existing structure only by active
experience, which lets one test whether something could work one way or whether another
way would be preferable – for instance, if a key account manager has to re-evaluate a
customer relationship when (s)he has previously appeared in the role of expert vis-à-vis the
customer.
Un:balance
A pronounced un-balance is required before transformations can be launched. In the two
cases described at the beginning, this was the crisis in the aviation sector and the realisation
by the trading company's new board that the company lacked innovative power. Both
companies show clearly that more of "the same old stuff" or the mere optimisation of
business (evolutionary change) will not be successful. It is only with a marked unbalance that
the system gets moving and is thrust in the direction of transformation. Expressed in a
picture: the "change leaders" themselves produce the waves on which they must surf later.
Impulses for the un-balance, which legitimise it, so to speak, and make it justifiable for the
organisation, include "objective" external factors (weak economic conditions, changing
technologies, developments in competition, etc.) and/or internal factors (lack of a strong
vision, "sclerotic" organisational structures, repeated mistakes in business transactions, etc.)
This necessary un-balance early on nearly always triggers two simultaneous but
contradictory feelings: collective fears and the spirit of a new era. Restlessness and
sometimes also relief can be felt because "finally someone has spoken out and taken
unmistakable steps". This irritation is the fuel that gets the transformation started – by
contrast, if the main focus is on balancing, the process will be paralysed.
Experience shows that this realisation is evident to managers at the cognitive level but is
most challenging at the emotional level, particularly for long-term executives. The
strengthening of un-balances represents risks for them and means that they expose
themselves to reproaches of polarisation and injustice. For consultants in such a change
situation this means, again, that they have to let go of traditional organisational development
(in a normative sense).
In general, everything depends, on the one hand, on a successful combination of creating
and promoting imbalances and, on the other, of safeguarding balances and stability. This is
why we use the term "un:balanced transformation". Un:balanced transformation is the
conscious control of imbalance and balance and thus creates a "balance of a higher order",
so to speak.
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6. Phase model: "Life is full of surprises"
In the following we will present a phase model we have developed after comparing many
"survival curves" of change projects we have co-designed as consultants. (Please refer also
to the concepts described in management literature, particularly from the U.S.2) In addition,
we have integrated our own experiences as managing partners and managers in change
processes in our own consulting firm.
We are describing a typical transformation "route" in order to
get orientation and new ideas for interventions as a manager or consultant in practice and
have a checklist, like a pilot in an aeroplane who, despite his experience and intuition, might
use such a list to ensure he has not overlooked anything.
Our message does not require that all points mentioned must be completed in a linear order.
Due to our systemic background we are aware of the fact that, in practice, these phases are
not coupled in linear succession. In each phase, the others are evident. If, for instance, the
focus is on "creating the future", all those involved are also occupied with the issue of what
this may mean for implementation. In the "anchoring stage" of successes, topics for the
future which are already thought to have been completed may quite easily come to the
foreground again. The various phases are iterative and have a fractal organisation; in each
phase, the others are reflected. But they are not exchangeable as far as their respective
content focus is concerned.
Phase models provide orientation by showing the "laws" behind the process and typical
dynamic developments. They are particularly helpful in times of transformation due to the
connected strong emotionalisation of stakeholders. They relieve them, create a scope for
comparison, and progressive development targets.
2
Hambrick, Nadler, Tushmann: Navigating Change, HBS Press, Boston 1998, p. 358/359 (phases: Diagnosis
and prescription/clarifying and coalition building, acting, consolidating and refining, sustaining)
Paul Taffinder: Big Change, John Wiley & Sons, Chichester 1998: p.40 (phases: Awakening/Conceiving the
future/building the change agenda/delivering big change/mastering change)
Becker, Huselid, Ulrich: The HR Scorecard, HBS Press, Boston 2001, p.186 (phases: leading change/shaping a
vision/creating a shared need/mobilizing commitment/building enabling systems/monitoring and demonstrating
progress/making it last)
Bennis, Mische: The 21st century organization, Jossey-Bass Publishers, San Francisco 1995 (phases: Visioning
and setting goals/ benchmarking and defining success/innovating processes/transforming the
organization/monitoring reengineered processes)
Kotter: Chaos, Wandel, Führung – Leading Change, ECON, Munich 1997, p. 55 et seq. (phases: Creating a
feeling of urgency/forming a leadership coalition/developing a vision and strategies/the communication of the
vision of change/the empowerment of employees/safeguarding short-term successes/consolidating successes
and safeguarding further changes/anchoring new approaches in culture).
The first model by Kurt Lewin, Group decisions an social change, in: Maccoby/New comb/Hartley (ed.) Readings
in Social Psychology, New York 1958, pp. 197-211
Stefan Roth: Emotionen im Visier, neue Wege des Changemanagement, in ZOE 2/2000
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7. We distinguish five typical phases of a change process:
Phases 1 and 2 consist of letting go of the past and former everyday routines; at the same
time, they are linked to the conviction that today's success may be tomorrow's failure.
Slowly, a picture of the future emerges. In phases 3 and 4, due to first practical steps, this
picture becomes more concrete and graspable. It is important to relearn existing
problemsolving patterns which are no longer adequate. Major themes in phase 4 – even
more so than in phase 5 – include broad implementation and anchoring in the company's
control systems as well as stabilisation of new content. According to our experience, the
various phases do not have the same duration; we assume a typical and ideal standard
proportion, of course, of 10:10:20:25:35. This timeline is at variance with many change
management concepts and projects which focus mainly on the first stages of change and
neglect the oftentimes cumbersome integration into all corporate systems. Phases 4 and 5
last longer than all those before; during these phases, the process must be kept going and
change management must be pursued consistently. We emphasise these two phases above
all phases because many transformation projects are completed in the third phase, which is
much too early for sustainable changes. In addition to the various phases, we have
introduced a "system curve" representing the system's perceived ability to perform (vertical
axis) during each phase (horizontal axis).
This consists of three dimensions:
 a dimension oriented towards the past and which refers to the organisation's
selfimage in its interpretation of the past ("our history, our 'gallery of ancestral
portraits', former successes, accomplishments, tradition")
 a dimension oriented towards the present and towards current items of profit and loss
account ("business indicators, stock market price, key skills, customer capital,
efficiency of organisation and processes, staff commitment, know-how and innovation
capital, a positive image of identity and culture") and
 a future-oriented dimension ("our sustainability, success potentials, probability of
future success, as well as confidence in mastering turbulent times in the future").
With regard to the system's perceived ability to perform it is important to be aware of the
resources and accomplishments of the past and present as well as of potentials for the
future. Self-observation must be sharpened. This means, above all, deciding on and
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8. prioritising criteria for own capacity potentials and for what is success.3
So much for the model's dimensions. We believe that no phase can be replaced by another –
fundamental changes must go through these phases, the highs and lows, to be effective. "In
reality" such transformations are, of course, not a linear process, often they go in loops and
"laps of honour". For their success it is important to undergo the phases, including all their
emotional aspects.
The different target groups do not go through the phases at the same time. Initiators and top
managers go through the phases first; they have progressed much farther at an emotional
level, as far as their assessment is concerned, and they are much more impatient in terms of
implementation and anchoring than those who are involved at a later point in time, such as
middle managers and employees.
Phase 1: Breaking through routine – we must change!
What's up?
This phase is typically characterised by very varying perspectives of the status and
sustainability of the organisation. A common picture is still missing – both of the past, of the
present, and of concrete future developments. Most often, the situation is seen from the
viewpoint of one's own division; accordingly, the overall view is fragmented and
individualised. The energy for change is different in many places – e.g. in comparison
between the top management and account managers who have direct customer contact. The
environment gives contradictory signals (feedback from customers, for instance). Then a
discussion is launched on whether the right information from the market and stakeholders
has been taken into account. The collective mood is ambivalent – routine, day-to-day
business, interest in something new – as are blocks conditioned by fear which prevent any
"disturbance" of the everyday feeling of security.
Change agenda – what to do?
1. Disrupting routine: "Change starts with me."
Disrupting routines means actively inciting and promoting conflicts, which is tantamount to
destabilisation – tearing the company out of the "comfort zone of familiar day-to-day
business". For every change to be effective it is required that the key players (mainly but not
only top management) must be personally prepared to interrupt the routine of everyday
business without knowing in advance how the unclear issues will be resolved – without
knowing and having control over any direction and change process. In other words: stepping
into unsafe terrain and allowing an open future to cause feelings of insecurity as well as
enthusiasm. A major pivot is the realisation that everybody bears responsibility for the whole
and not merely for his/her own area.
Example: Informal and/or official first talks with internal and external stakeholders to assess
the situation and future potential.4
3
It is with full justification that related discussions are gaining in importance. The Balanced Scorecard concept is
an approach of high repute aiming in this direction; other instruments for self-observation that go beyond the
(required) controlling of everyday business are models that make knowledge management measurable, EFQM,
Due Diligence and Cultural Due Diligence processes, Benchmarking and Best Practice comparisons.)
4
Examples presented in the following are a mix of natural but important and innovative interventions and are
meant as food for thought. By no means this is a comprehensive presentation of activities; a detailed description
will be included in our book of autumn 2002 (un:balanced transformation).
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9. 2. Evaluating the need for action: "From the outside to the inside".
Each change starts and ends with the organisation's business activities – because change
projects oriented only towards internal processes without any positive effects on customer
and/or supplier relations are not only useless but also boycott any future initiatives. For this
reason it is important to systematically supply the organisation with information from the
"outside" – in a form in which it is accepted and supported at an emotional level (e.g. from
renowned experts, key customer representatives, state-of the-art business methods or
innovative events). Successful transformation processes are boosted by intense competition,
by market/business topics and impulses by customers.
Example: conducting a customer and supplier parliament, chimney talks with key customers,
benchmarking, analyses of business indicators, surveys
3. Conducting an assessment of the willingness to go ahead: "Let's test ourselves!"
Not only the need for change but also an organisation's willingness to change are decisive
factors in selecting the right process and suitable support measures. For this reason, the
organisation must examine oneself and start to learn about itself. Which pictures of change
are predominant in our behaviour in transformation processes? What have been the
strengths and deficits of previous change projects? How great is the actors' change
management competence? How can willingness to change (or fatigue from change) be
assessed? In our opinion, one's own position can best be explored by careful reviews of own
changes and non-changes, by learning with others, and with the help of small test balloons.
Example: Learning journey "change projects" in one's own and other companies, open
qualitative interviews and diagnosis.
4. Communicating by shaking up: "Opening up – taking a position – sending signals"
In this phase characterised by huge ambivalence, it is necessary to "open up" and create
communications situations where the currents can express themselves and be heard. Top
management, in particular, will communicate consistently by sending "messages to shake up
the system" and explaining why this radical change is necessary. Courage and the
willingness to take risks are more often reflected in small decisions with a broad knock-on
effect than in "big words". The individual stakeholders' positions should become clear – in a
dialogue full of appreciation for the other person.
"Communicating by shaking up" describes the starting point, the aim of the transformation,
and first inputs on the way there, so it provides an orientation and combines cognitive and
emotional messages. Those who communicate themselves become personally perceivable
in the interaction. Apart from written communications and talks, interactive groups "where
one can have a real talk" are necessary.
Example: Abolish any "luxury" (a trifle with a broad impact, such as changing the regulation
concerning business cars) and create many interactive communication situations
5. Identifying the key players: "Finding the best people."
Change doesn't simply "happen", it is driven by people (and later by teams). In this
connection it is of the utmost importance to find the key players for the change who will
promote the transformation process and be in the centre of future developments
(problemsolving system vs. problem system). The key players are an authentic
representation of all the key currents in the organisation. A mix of a high degree of
commitment and a strong anchoring in the organisation are vital for encouraging individual
action. It is dangerous to view only the "normal and experienced" heads of projects or
competent managers as the key players, because they of all people are co-responsible for
the current status. These staff decisions are the key to success.
Example: Microcosm analysis/environment analysis
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10. Phase 2: Creating visions of the future – develop the architecture,
plan a route!
What's up?
At the beginning of the second phase there are initial concepts or ideas about possible future
scenarios. It is only natural that, as far as their content is concerned, these ideas cannot be
implemented "as is" – they are not yet coupled in social terms and are often perceived as
alien by those involved. It is not clear how binding suggestions are, by whom they are to be
implemented, and who will be affected in what way. As content-related security cannot be
provided at that point in time, it is vital to create process security – a stable process of
transformation. It should be stable mainly because those involved should be able to rely on
the elements of the architecture and milestone dates, so that there is a stable framework to
boost contents and bring them to fruition (vision, strategies, organisational models). In this
connection it is important that key players are involved who are trusted by the various groups
of stakeholders to varying degrees. The (perceived) system performance usually increases
– future concepts, clear master plans and a clear organisation provide safety – and any
potential threats can no longer be felt as strongly and directly. At the collective emotional
level, interest is predominant, and those who are directly involved feel the spirit of a new era.
First successes make them stronger.
Change agenda – what to do?
1. Working on the vision: "We are creating a (fitting) future."
The vision is an essential "supplier of energy" for the change. We have had good experience
with a resource-oriented approach (Where are our own strengths?) which, first of all, starts
with the key players and their very personal perspective and then integrates "objective"
future trends and stakeholder perspectives. It is most important here to break through
perception barriers regarding one's own design possibilities ("Only if I can think differently will
I change."). The vision as a challenging realistic dream must fit into the system. In this
selffinding process, identity is the centre of attention, and therefore this process takes some
time and requires a place to anchor this vision of the future ("What makes us unique? What
is our focus?") not only rationally but also emotionally.
Example: Vision process with major events as milestones
2. Developing a strategy and a master plan: "Drastic cuts and new growth in the big
picture"
The main result of this phase is decisions on strategy, organisation (structures & processes)
and the filling of key positions, at least the recruitment procedure. Other important items
include decisions on architecture (cf. 3, who is involved to what extent in the change
process) and on the master plan (what must be achieved by what time). There may be
uncertainty about the outcome of radical changes, and this is where a strategy of principle
and a professional master plan come in to increase the (subjective) feeling of security.
Commitment grows because the future is already conceived up to the point of
implementation, also mentally and in discussions. Thinking and talking are trial balloons for
the head and the heart. That is why it is important who is involved in designing the strategy
and the master plan and what the development process looks like. If more quality and time is
invested at this stage, it will save much money, time and useless conflicts in the stages to
come. This means that, according to our experience, such a plan is most effective if
negotiated directly with the stakeholders involved. Major events with start-up character have
proved their worth and prevent people from withdrawing to meditate on their own.
Special attention must be paid to the issue of how to handle "hot topics" (such as outsourcing
divisions, merging departments, reducing management levels, dismissal or relocation of staff,
key personnel decisions). Transparency on how such "hot potatoes" will be dealt with is
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11. decisive. In addition, the planning and implementation of these aspects – when perceived as
"drastic cuts" – require specific architectural elements and settings to take account of
emotional turbulence and the content-related challenges of "de-learning" and "letting go".
However, at places and times where new growth is needed, completely different architectural
elements must be made available. It is useful to split up these strategies for drastic cuts and
new growth – including overall control, above all in the case of the concept of "radical
repositioning" ("dual change architecture"), because the dynamic processes of the two
focuses are completely opposed to one another in emotional respects.
Example: Change management master plan combined with a strategic implementation pilot
3. Architecture and teams decide: "Security due to process stability and trust"
The decision on where the main responsibility for implementation should be is a central one
(directly in the management team, in a separate change team, or a corporate development
department). Depending on this fundamental decision, other architectural elements must be
selected to guarantee maximum process security. Teams are key motors for every change
process as they are best able to represent and manage social and content-related
complexity5. A variety of content, knowledge, emotional acceptance and adequate
representation of the complexity of the entire system (representatives of stakeholders) must
be integrated: Teams with the right composition and motivated with the right incentives are
best suited to integrate knowledge, experiences and emotions. The standard principle in staff
selection is: put the best people on the teams.
The key functions to be represented in change architecture: decision, control,
communication, content-related expertise, trial runs of pilots, resonance and multiplication,
evaluation, support and the development of know-how.
Example: Team composition according to the "capital forms model" (combination of
knowledge, decision, relationship and application capital)
4. Serious and transparent communication: "That's where we want to go" – "How we get
going" - " Business cases of the future"
Now it is important to link to "communicating by shaking up" from Phase 1 and to make
people aware of everything that has become clear since then, what has been achieved, and
what the goal and route look like.
It is a great challenge to formulate visions precisely and in an emotionally touching manner. It
is only the personal work of those involved, introduction of their own perspectives and their
own emotions that creates identification. This is why the principle applies: "Those who are
involved in the development process no longer need communication. The results of the
transformation process may best be described in concrete terms as "business cases" of the
future. These visions of the future describe their use for stakeholders, make sense and are
capable of arousing enthusiasm. A mix of prompt information, decentralised for a ("graspable
change") and the use of modern information technology guarantees transparency and
intensity of communication.
Factors to success:
 "Emotional" – "in pictures" – "in precise wording". This applies to the titles, symbols
and event-oriented elements of the transformation process at the start.
 Interaction. Communicating means creating a common basis: Speaking – listening –
understanding – asking and reacting. It is necessary to have two sides to enter into a
relationship. This implies that one's own feelings and reactions as well as those of the
other person, the stakeholder, must be dealt with. Feedback provides key information
5
cf. Königswieser: Teams als Hyperexperten im Komplexitätsmanagement. In: Ahlemeyer/Königswieser
(eds.): Komplexität managen. Strategien, Konzepte und Fallbeispiele. FAZ, Frankfurt am Main 1998 & Gabler
Verlag,Wiesbaden 1998.
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12. for the flexible control of the change process with an orientation towards the
respective target group.
 Consistent repetition of key messages, demonstrating credibility. As intensifiers: "Let
action speak" (the model effect of the management, in particular, is a major multiplier)
Example: Clear and challenging aims of the management which produce tension and
pressure
5. Deepening and broadening change management know-how: "About the art of
change"
Change management is an important new management skill and requires
professionalisation. Broad support of the change process requires coaching and ad-hoc
workshops as well as networked, concentrated professionalisation activities with (further)
training modules, external counselling and support activities for the transfer. Marked
knowhow profits oriented towards the change process are decisive: The time resources of
the persons in charge of change are the scarcest resource in these processes.
Example: Internal change management curriculum for decision-makers (high impact parallel
to the transformation process doubles returns!)
Phase 3: Courageous decisions – jumping into the cold water
What's up?
After key decisions on the future, strategy, organisation and people have been made, the first
steps are taken to implement them. The higher the degree of complexity of the changes, the
more important it is to conceive transformation processes in a way that mistakes are allowed,
experiments encouraged and learning promoted. This means, above all, giving up the notion
of comprehensive and "perfect" conception projects aiming at an "as is" implementation.
Rather, it is vital to try out the big things "en miniature", on the basis of small activities limited
in scope, and to learn from these experiments.
A typical feature of this stage is "initial euphoria" among those involved – and equally typical
is their subsequent disillusionment. "Monstrosities" occur, which – upon closer examination –
turn out to be misunderstandings or "misinterpretations". Analysis reveals that they are
understandable reactions prompted by fear or aggressive tendencies aiming to defend
former identities or "to conquer new territories". The result is "resistance". Because now, for
the first time, people can see what will remain of the former identity and which new elements
of identity will develop.6
Change agenda – what to do?
1. Planning and implementing "quick wins": "Taking advantage of the trampoline"
The term "quick wins" is an often-used catchword! In practice, only very few results termed
as such meet the following basic requirements:
 quick in the sense of "soon after the launch" and characterised by a "surprising”
speed and efficiency
 win in the sense of a sustainable and perceptible improvement for several
stakeholders in the process
Fast results have a positive influence on the credibility of change. They have a pronounced
impact on the outside and inside, they give energy and motivation for the future path of
transformation ("engine"). But they also require commitment right from the start, courage and
the wish to perform above the average. It is advisable to think thoroughly over the
"dramatisation" of the first successes – to prevent that, after a short interlude, energy
6
Cf. Heitger, Barbara; Die Logik der Gefühle, In: Hernsteiner 1/2000, 13. Jahrgang, pp. 16-20
12

13. dwindles (timing, interactions, returns for the various stakeholders).
Example: Quick win portfolio: rating after implementation period/returns/expenditure
2. Signals for drastic cuts: "Challenging and unpleasant aspects first – with support
measures, with the motto: clear but sympathetic"
Drastic cuts draw on resources – of the organisation and of the people involved. According to
our experience, this process can be mastered successfully with a "double strategy". Active
communication and clear implementation of the drastic cuts is one thing, support measures
for those affected another. In practice, attempts are sometimes made to alleviate the "true
extent" of drastic cuts by presenting them "in small portions". But this procedure undermines
credibility and gives rise to further speculation ("What will come next?"). Sometimes, the
people involved are left standing in the rain. This applies to those who leave and those who
experience the change as a loss or disparagement in the same way as to their managers.
The stage model of delivering bad news7 provides orientation about the stages of processing
and about what should be taken into consideration in this connection. But drastic cuts
represent a turning point also for the "winners" and those who stay. Their reactions are
clearly described in the concept of the "survivor syndrome". Decreasing morale, distrust of
the management, feelings of guilt, and loss of motivation are among the most common
negative consequences if this process is not managed in a proactive way and accompanied
by thorough communication. Staff members now need support measures they themselves
can develop further and use individually – and, in particular, also the personal presence of
the management on site. As drastic cuts have an identity-changing effect, it is also important
to offer symbolic processing methods: because, obviously, this is an "intervention" in the
personal identity, a change of relationships and relations, and a transformation of the system
at the same time.
Example: Top management hearings on site -> "any questions are allowed"
3. Promoting growth and innovation: "Incentives and scope of freedom"
Quality-oriented generic growth by itself cannot be forced – it sprouts wherever it finds the
desire for innovation and fertile grounds, wherever people introduce their experience,
knowhow and energy, and where this is stimulated by strong incentives.
In this phase it is vital to "sow little plants" and make space, resources and incentives
available for that purpose. Quite often, major stimuli come from the outside – although, time
and again, people shy away from co-operating "too early" with customers, suppliers and
partners in value-added activities. It is anything but trivial to establish innovation-friendly
designs in transformation processes because it is important to overcome perception barriers
of former day-to-day routine, to have surprising new thoughts, to protect such ideas so that
they can take shape, and try them out8.
Examples: Innovation markets, pilots
4. Working with resistance: "With the resistance – not against it!"
It is nothing new that there is "resistance" to organisational changes – approaches to
solutions differ, though. At times, managers and consultants see it as their aim to put "their
own solution" into practice – those who oppose them are standing in their way and are
disparaged.
The alternative is to work "with" rather than "against" any resistance – to find out whether
and how the energy of resistance may be used. It has often come out that the failure to use
known resistances (a synonym for the works council) shortens the conceptual phase but then
7
Königswieser, Roswita, Die Auswirkung schockierender Nachrichten: psychische Bewältigungsmechanismen und Methoden
der Überbringung In: Die Betriebswirtschaft, Heft 5 1985, Poeschel Verlag, Stuttgart, S. 51-61
8
Cf. Gary Hamel, Leading the Revolution, HBS Press 2000 and Heitger, Doujak; Un:balanced Transformation,
autumn 2002
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14. either too little time is allowed for implementation or it took too long. By their very nature,
change situations are always full of contradictions and ambivalence – it is fairly demanding
and energy-intensive not to deny them and work with them, because, as a consequence,
also your own change concepts are open to discussion again. First of all, resistance wants to
be understood. Under what conditions would the other person co-operate? The answer to
this question often opens up new options because resistance requires concrete answers to
the following questions: What will remain unchanged? What will change? Or, more precisely,
what can I gain/lose? The good news – whenever there is resistance, the change is taken
seriously and the fight between continuity and change becomes concrete. The bad news:
resistance means conflict and requires that positions be taken on how opposing interests and
the "distribution of change budgets" will be negotiated. And whenever stakeholders'
negotiating processes on implementation become more intense, this is a sign that resistance
is being well used.
Examples: Events with open, dialogue-oriented designs such as resistance – acceptance –
new creation, pilots as rooms for trying out practical implementation
5. Using evaluation as a motor: "Broad, stimulating – with consequences"
By evaluation we mean the targeted, consistent and continuous analysis of the
transformation. Evaluation goes beyond controlling, which focuses on the indicators and
result criteria of objectives. It provides orientation not only on the respective status of aims
and indicators but also on the overall impacts produced by the transformation process on the
system. Therefore, the professionalism in the methods applied (qualitative and quantitative
elements, group interviews, such as mini-questionnaires) and the evaluators' impartiality are
decisive. "You get what you measure" – Our actions and the results in transformation
processes as well as their results are influenced by what and how we measure and evaluate.
Evaluation of the status quo requires that results criteria have been specified and also that
the "effects and side-effects" of the transformation process are considered that were
previously not taken into account. The evaluation provides valuable information for the
control of the "work in progress". The effort is worthwhile, in particular if the evaluation –
designed in an efficient, targeted and interactive way – gives real-time feedback to those who
control the transformation. Evaluation itself is an intervention. It makes available information
on process control and is the motor for targeted transformation. Therefore, the "bosses"
themselves are responsible for initiating evaluations.
Examples: Open, qualitative interviews with a mix of individual and group interviews,
evaluated by means of sequential analysis (systems diagnosis)
Phase 4: Consistent implementation – connecting the desire for
innovation with broad involvement
What's up?
The initial euphoria has worn off by now – the setbacks have hit home. What should be done
now? "Should we stop or continue?" This question is often raised (unofficially and officially)
at the beginning of this stage. It is most relieving for those involved if they can discuss this
issue openly. After this "big bang" the projects already launched will have to be questioned
and the projects that are still prioritised will have to be pursued consistently. Active
communication has a supportive function ("We will stick to it!").
At this point, middle managers, being the mentors and multipliers responsible for
implementation, are at the centre of change. The change process becomes wider, more
quick wins have an intensifying effect, more and more projects are completed. The perceived
system's performance improves – at the same time, much work on the identity is still left
undone – the transformation is far from being complete.
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15. Often, the various target groups are in a completely different "mood"; in most cases, top
management becomes impatient because the change as such is already a thing of the past.
Those who have been involved in the pilots are a part of it. Those who implement the
changes are still busy while not all people affected are fully integrated yet and still have to be
won over. This stage takes much longer than the previous ones. This requires much
endurance from those involved.
Change agenda – what to do?
1. Speeding up implementation activities and projects consistently: "Pulling yourself out
of the swamp by your own hair"
The pilots have been evaluated, broad implementation has been planned, related projects
have been specified. The general mood is characterised by disillusionment and realism. It is
obvious that much fine-tuning work is still left undone and that much training and practising
is still necessary. There is the danger of change fatigue and the wish to return to old habits –
i.e. the familiar routines, already tried in practice and coupled with self-confidence – grows.
Although the new routines have been tried out in practice they still feel like a foreign body in
everyday business. The strategy and new organisation are well-known to everyone by now,
all personnel decisions have been made. The way up to the peak is clear now, but steep. It
must be reached without any help from the outside. In this stage it is of the utmost
importance that all those involved have full knowledge of the status of change. Incentive
systems encourage implementation, the focus is on effective partial successes. Fast
decision-making routes for comprehensive measures and a regular, emotionally efficient
overall analysis are needed. Efficient leadership – mainly on the part of middle management
as the booster of transformation – is needed; project management instruments are a
precondition but not decisive. It is important here to execute implementation on a broad basis
after completing pilots and first tests of the change in practice.
Example: Project portfolio
2. Continuous adaptation of architecture: "Nothing is forever"
In this stage it is important for architecture and design to connect the desire for innovation
with broad involvement. For this reason, the change architecture must be renewed in this
stage. In the design of intervention, the following design principles are helpful:
 creating incentives for implementation which are oriented, as much as possible,
towards the (new) business process or model
 professional overall control which integrates the dual separation of drastic cuts and
new growth into one implementation process
 strengthening incentives and implementation skills for middle management
 major events create a network between those involved and a mix of co-operation and
competition in implementation
 those responsible for piloting are available as consultants, experts and launch pads
 in simulation workshops, new processes/models are tested on a broad basis, pros
and cons are discussed, and feedback integrated into the fine-tuning process of new
models/concepts. Those responsible for implementation are in charge.
 intensive training and skills training offensives function as sources of information,
providing the skills and know-how for implementation
 well-targeted customer activities and related successes create a pull through the
entire business and motivation for broad implementation
 the planning of quick wins and their implementation in daily business gives the energy
for the "performance increase" during this phase.
 evaluation is needed because much turbulence can be expected during this phase.
 example: overlapping project teams or delivery change team with the management
team (strengthening of line responsibility)
15

16. 3. Winning over undecided and sceptical individuals: "From the team into the
organisation"
A change process may be described as a continuous switch between closing and opening
forms of work. What do we mean by that? At the beginning of Phase 4 the decision must be
taken: shall we continue, shall we move on to a broader basis or not? This decision is made
in the circle of those involved and of those who have pushed and tested the pilots. . After this
critical point has been passed, it is important, above all, to work actively on the broad
implementation of change. Particular attention should be paid to stakeholders who are still
undecided or sceptical about the process. To achieve this goal, all those who have been
active so far act as multipliers. Also here it is important to find a balance between convincing
and the acceptance and negotiation of existing contradictions.
Example: Stakeholder analysis with clear target group strategies
4. Adapting systems step by step: "Good systems save energy"
The majority of change processes are designed in a project- and team-oriented way, which
liberates lots of energy for change and allows people to work efficiently on the overall
complexity.
In order to anchor the change throughout the organisation, the systems determining the
relation between the individual and the organisation are adapted step by step: systems to
control business, controlling systems, HR as well as incentive and salary systems,
communication systems, etc.
The order in which steps are taken differs between organisations. The system with the
biggest leverage and most attention must be picked out and adapted. This requires intensive
diagnosis in the control process and the involvement of internal or external experts.
Example: Integration into IT systems
5. Continuing to learn and building up skills for transformation: "Looking behind the
backdrop and creating skills"
Now it is important to learn and train the skills and competences required for putting change
into practice (e.g. leadership skills, subject-related and process know-how, IT know-how,
market know-how, social skills, languages, intercultural competence). According to our
experience, the significance of these skills initiatives to success is often underestimated.
Target-group orientation, business orientation and experiential learning are success factors
(learning on the job, super-user and coaching concepts on site, high impact workshops and
training programmes). Implementation requires a lot of energy. Evaluation and qualitative
controlling deal with the issue of whether it is applied usefully and which of the new problemsolving patterns and action patterns are most efficient. In this way, effectiveness is
increased, existing perception barriers are opened up, and stimuli for more fine-tuning work
are obtained. Such evaluations do not slow down the process, they improve efficiency and
also provide relief and a deeper understanding of the change process in day-to-day business
activities among those involved (conscious "identity work").
Example: Learning on the job with support structures
Phase 5: Mastering the difficulties on the highland planes –
anchoring successes
What's up?
The fifth phase is the longest – and most decisive – albeit not the most exciting one. After a
clear project orientation and broad implementation, system integration on a broad basis and
an in-depth anchoring process are now important. Slowly but surely, transformation has
become second nature to people, it is seen as something natural, and gets anchored in the
16

17. culture, day-to-day business and, in particular, in management (multipliers for anchoring).
Many employees are already involved – but still there are major differences in terms of
access to new conditions. Some ups and downs can still be observed; the entire organisation
stabilises the system performance slowly at a higher level.
Now all the systems and all staff members must be integrated and the "spirit of the new era"
must be anchored in day-to-day business. Timing of the completion of the transformation
process must be thought over and planned "dramaturgically".
Change agenda
1. Harmonising leadership systems: "Integration at all levels"
Back in Phase 4, first steps were taken to achieve this goal and system changes were
encouraged which had produced the most attention to/awareness of change. Now it all
revolves around continuation and system adaptation in the sense of a holistic consistency.
The basic question is: does the business model harmonise with management systems e.g. of
controlling, planning and business control, with the HR system (agreement on aims and
targets, tasks-competences-responsibility, incentive and salary systems, career
development) and with the communications architecture. Creative new solutions are called
for, which may also have a simplifying effect. Who should take care of that? A mixed group
consisting of system experts, decision-makers, and users.
Example: Meeting of the management team on: "system check"
2. Cultural change: Integrating behaviour, norms and values into day-to-day business:
"Awareness creates new possibilities"
The company culture comprises all the mental images, assumptions, values and norms that
characterise internal behaviour and provide orientation – frequently people are not aware of
them, they are something like an action grammar that has become second nature to the
company. This culture can be influenced only slowly and hardly ever directly. The first step
(of change) is to raise awareness of the specificity of the company's culture. This can be
done by means of an external diagnosis – often combined with in-house activities (e.g. by
teams of researchers who have been trained in the methodology of conducting supported
diagnoses themselves). The elaboration and assimilation of the results of the diagnoses into
open, dialogue-oriented settings creates a good basis for further development activities. In
this phase it is important to create incentives for cultural change that stabilises and
guarantees a transformation in the future.
Example: Success stories for positive cultural elements, visible sanctions and examples of
unproductive ones
3. Continuing the training on a broad basis: "Practise, practise, practise!"
Transformation-specific training programmes cannot be bought ready-made from seminar
providers. It is important here to have customised programmes oriented towards the specific
target group with the aim of developing the know-how and skills required for implementation
and of testing behaviour in interaction with others (e.g. by simulations). Transfer within the
organisation is not only a topic of the training but also and in particular a management task
(learning on the job, super-user, learning platforms via intranet or Internet).
Example: Stable learning communities e.g. three employees from different departments form
a "learning trio"
4. Increasingly outward orientation: "Happiness lies on the back of a horse"
Successful change always impacts on the market and affects net income. In the
transformation process it is necessary to go through phases of stronger inward orientation.
Whereas in Phases 3 and 4 the focus is more on targeted contacts with customers and
partners (e.g. focus groups, customer parliament, pilot projects), now a strong, consistent
17

18. outward orientation is the key item on the agenda. The new habits have been practised, now
comes the time of outward orientation, with full speed, power and a new feeling of security!
We have had good experiences with an early content-oriented involvement of customers and
partners in value-added activities – for several reasons:

Many processes can be optimised only along the entire value-added chain
(keywords: supply chain management or CRM).
 Partial optimisations are not really efficient – and customers and partners in valueadded activities change.
 Customer and supplier loyalty grows.
 The image of "openness and professionalism" is seen as positive.
 Ideas and implementation follow in quick succession.
 Outward orientation has an intensifying internal effect (feedback).
Example: Supply chain project
5. Bringing leadership into the focus of attention and completing the transformation:
"With enthusiasm towards new efficiency"
Many things can be planned and controlled, many things can be received by systems and
structures – a lack of leadership makes every change technocratic and "heartless".
Enthusiasm is an emotional dimension, and change is most effective when employees want
it and do not perceive it as a must. Leadership – apart from vision and architecture – is a
major lever for this. We are not referring to the ability to motivate "superficially" but to
managers who know how to lead a group in a way that each individual feels they are in good
hands ("contained") and the group as a whole performs extremely well (being able to spur
people on). The renaissance of leadership is an indication that personal development is
again gaining in importance in the field of management. The way managers lead themselves
in transformation processes is decisive for their activities in the outside. A strong personality
and social skills are much more important for success than cognitive leadership skills.
The clear completion of transformation marks the transition to the "leadership" of everyday
business in the line. As far as the transformation project content is concerned, it must be
evaluated and reviewed – what have we achieved, what was the quality of the change
management? At the emotional level, it is time "to say goodbye to the old system" again, now
with justified confidence in the future: The transformation has been successful, it will form a
part of one's history. The final stage is characterised by pride in joint work and everybody has
"reason for celebrating".
Example: Review event on the transformation (lessons learned – what are we proud of –
looking back from the future – thanks)
Executive Summary
As a manager or consultant un:balanced transformation means for you:
 You are surfing on the waves of change you have (co-)created yourself
 You are creating stability amid turbulence via a social architecture and change
processes that are coming up to the dynamics of the phases
 In the initial phases, differing interventions are required in individual cases to be able
to make drastic cuts and boost new growth at the same time; wherever anchoring
should take place on a broad basis, these interventions should integrate both
elements.
 The logic of feelings is an engine for transformations just like the power of figures –
you understand and "control" both of them in their differing dynamics without being
able to resolve their contradictions.
18