Changed Has Changed! Handout Part 1

Changed Has Changed! Presented by Chris Shade, Director of District Improvement TIA July 26, 2012

expressed

I

Imagine a stack of 400 pennies. Each penny represents 250 years of human
culture, and the entire stack signifies the 100,000 years. Take the top one off the
stack. This one penny represents how many years our society has revolved
around factories and the jobs and the world as we see it. The other 399 coins
stand for a very different view of commerce, economy, and culture.

http://www.youtube.com/watch?v=y5UT04p5f7U

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Do you remember the old American Dream?

Keep your head down. Follow instructions. Show up on time. Work hard. Suck it
up. …you will be rewarded.

That dream is over.

The new American Dream is this: Be remarkable. Be generous. Create art. Make
judgment calls. Connect people and idea. …and we have no choice to reward you.

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Here’s the deal our parents signed up for: Our world is filled with factories.
Factories that make widgets and insurance and websites, factories that make
movies and take care of sick people and answer the telephone. These factories
need workers. If you learn how to be one of these workers, if you pay attention in
school, follow instructions, show up on time, and try hard, we will take care of
you. We will pay you a lot of money, give you health insurance, and offer you job
security. It was the American Dream. It worked.

All of humanity’s scientific advances would have contributed little to our quality
of life if they hadn’t been accompanied by equally astounding breakthroughts in
management science. Over the past century, much of this innovation was focused
on getting people to be as reliable as machines, a challenge that required a new
and systematic approach to the problem of control. The name for that approach:
bureaucracy. 184

In routinizing work, we risked routinizied human beings. Indeed, this was
inevitable, since the goal of bureaucracy was (and is) to excise the human factor,
to turn people into machines made of flesh and blood. 186

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Most white-collar workers wear white collars, but they’re still working in the
factory. They push a pencil or process an application or type on a keyboard
instead of operating a [machine]. The white-collar job was supposed to save the
middle class, because it was machine-proof. Of course, machines have replaced
those workers. If we can measure it, we can do it faster. If we can put it in a
manual, we can outsource it. If we can outsource it, we can get it cheaper.

But in the face of competition and technology, the bargain has fallen apart. Job
growth is flat at best. Wages in many industries are in a negative cycle. The
middle class is under siege like never before, and the future appears dismal.
People are no longer being taken care of—pensions are gone; 401(k)s have been
sliced in half; and it’s hard to see where to go from here. It’s futile to work hard at
restoring the take-care-of-you bargain. The bargain is gone and it’s not worth
whining about and it’s not effective to complain. There’s a new bargain now, one
that leverages talent and creativity and art more than it rewards obedience.

Change has changed. We are surrounded by all sorts of things that are changing
at an exceptional pace: the number of mobile phones in the world, CO2
emissions, data storage, the power of semiconductor chips, the number of
devices connected to the Internet, the number of genes that have been
sequenced, world energy consumption, and knowledge itself. As human beings,
we don’t have much experience with exponential change. 85

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What are the most important inventions of the last 100 years?
http://todaysmeet.com/bread

https://www.phoenix.edu/lectures/gary-hamel/management-matters.html

https://www.phoenix.edu/lectures/gary-hamel/management-2.html

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Most [organizations] end up shackled to one business model—and when it
atrophies, so does the institution. 96

Truth is, every[thing] is successful until it’s not. 104

Change brings both promise and peril, but the proportion facing any particular
organization depends on its capacity to adapt. And therein lies the problem: our
organizations were never built to be adaptable. Those early management
pioneers, a hundred years ago, set out to build companies that were disciplined,
not resilient. The understood that efficiency comes from routinizing the
nonroutine. 87

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I’ve never met a leader who swears allegiance to the status quo, and yet few
organizations seem capable of proactive change. How do we explain this? I think
the answer lies, in part, with the difficulty we have in identifying our deeply
engrained habits.

[What are our deeply engrained habits?] 101

In our topsy-turvy world, you’re either going forward or going backwards—but
you’re never standing still—and at the moment, a lot of organizations are going
backwards. 95

I believe that institutional longevity has value, but I believe that every
organization must continually earn its right to exist. 117

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Once [an organization] crests the peak of industry leadership, its employees, from
top to bottom, start to think defensively. The organizational ethos shifts from
entrepreneurial to custodial. Executives who once challenged the status quo now
defend it.

As a company grows, its attention shifts from innovation to improvement.
Discipline, focus, and alignment take center stage. As this happens, assets, skills,
and processes become more specialized, and change becomes more incremental.
All of this is great for efficiency but deadly for adaptability. After a while, all of the
components of the business system are so tightly interlaced that almost any sort
of change is apt to be seen as dangerously disruptive. 107

In most organizations, deep-rooted assumptions are the biggest barrier to
adaptation. 122

[What deep-rooted assumptions do we hold?]

Organizations don’t die from “natural causes”. “They die from predictable
causes”. 115

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When organizations dies, it is usually from suicide, from the decisions made and
not made, that rendered the institution unfit for the future. 115

Individuals change only when they have to, or when they want to. Deep change is
usually crisis-driven. People are usually pushed to change by circumstance outside
their control. In the absence of purpose, the only thing that will disrupt the status
quo is pain. 130

There are three things you can do to inoculate yourself against denial. 99

First, be humble. Regard your industry beliefs as mere hypothesis, forever open
to disconfirmation. Executives often say, “This is how our industry works.” My
stock reply: “Yeah, until it doesn’t.”

Second, be honest. Seek out the most discomforting facts you can find and share
them with everyone in your organization. A leader has to confront the future, not
discredit it. So find the dissident voices inside your organization and give them a
platform.

Another way to head off entropy is keep the mission paramount. It is easy, over
time, to elevate form over function and confuse programs with purpose. 100

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[Organizations] fail when they over-invest in “what is” at the expense of “what
could be.” 124

There are only two things, I think, that can throw our habits into sharp relief: a
crisis that brutally exposes our collective myopia, or a mission so compelling and
preposterous that it forces us to rethink our time-worn practices. 101

There are only two things, I think, that can throw our habits into sharp relief: a
crisis that brutally exposes our collective myopia, or a mission so compelling and
preposterous that it forces us to rethink our time-worn practices. 101

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Building a truly adaptable company is a lot of work. It requires a shift in
aspirations, behaviors, and management systems. 88

Building a truly adaptable company is a lot of work. It requires a shift in
aspirations, behaviors, and management systems. 88

[You can ask, what does Disneyland, Singapore Airlines, Fandango, or Lexus do,
for example, to engender great customer experiences, and how might those
practices be applied in our industry? Innovation isn’t always about invention;
often it’s about borrowing great ideas from other industries.]

Get a group of colleagues or customers together and ask each person to identify a
product or service that dramatically reshaped their expectations—something that
made them go “Wow! How amazing!”

[Identify an experience that provoked a gusher of good feelings. Next, ask folks,
what were the unique attributes of that experience that made it so memorable?
How exactly did it defy their expectations? How might we leverage this idea to
redefine customer expectations in our own industry?] 71

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Trader Joe’s

[If Google, Facebook, Amazon, Virgin, or some other highly admired company was
intent on reinventing your industry, how would they use their competencies and
assets to do so, and what could you gain by partnering with them? As individuals
learn to see their company and others from this perspective, the opportunities for
innovation will multiply.] 68

Within any organization, it’s usually the malcontents and rebels who are the first
to sense the impending demise of a long-cherished business model, and the first
to see the value in wacky, new ideas. Yet these folks are often muzzled rather
than encouraged to speak up. The best leaders are the ones who get the most
options on the table before making a decision, and the most adaptable
companies will be those that encourage folks to voice heretical viewpoints. 123

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http://www.youtube.com/watch?v=No1MxAnHuJM

If the values in the left-hand column distinguish Apple, what are the values that
characterize your [organization]. 80

To be an innovator you have to challenge the beliefs that everyone else takes for
granted—the long-held assumptions that blind industry incumbents to new ways
of doing business. Innovators are natural contrarians (“What box?”), and with a
little practice, anyone can learn how to uncover and challenge long-static beliefs.
Here are a couple of questions you can use to arouse the contrarian instincts of
your team: First, in what respects is our business model indistinguishable from
that of our competitors? To what extent is our value proposition, service bundle,
pricing, customer support, distribution, or supply chain undifferentiated? And
second, what aspects of our business model have remained unchanged over the
past 3-5 years? Whenever you identify a convergent belief, ask, does this rest on
some inviolable law of physics, or is it simply an artifact of our devotion to
precedent? 64

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Innovators don’t waste a lot of time speculating about what might change;
they’re not big on scenario planning. They pay a lot of attention to the little things
that are already changing, but have gone unnoticed by industry stalwarts.
Innovators are constantly on the lookout for emerging discontinuities—in
technology, regulation, lifestyle, values, and geopolitics—that could be harnessed
to overturn old industry structures. What this requires is not so much a crystal
ball as a wide-angled lens. You have to learn in places your competitors aren’t
even looking. 65

Innovators don’t waste a lot of time speculating about what might change;
they’re not big on scenario planning. They pay a lot of attention to the little things
that are already changing, but have gone unnoticed by industry stalwarts.
Innovators are constantly on the lookout for emerging discontinuities—in
technology, regulation, lifestyle, values, and geopolitics—that could be harnessed
to overturn old industry structures. What this requires is not so much a crystal
ball as a wide-angled lens. You have to learn in places your competitors aren’t
even looking. 65

You can’t outrun the future if you don’t see it coming. More often than not,
companies miss the future not because it was unknowable, but because it was
disconcerting. 120

The conversation about “where to go next” should be dominated by individuals
who have their emotional equity invested in the future rather than in the past. It
needs to be led by individuals who don’t feel the need to defend decisions that
were taken ten or twenty years ago. 121

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Principles for building an adaptable company: variety (you have to try a lot of new
things); decentralization (you need to create mechanisms for bottom-up change);
serendipity (you have to create more opportunities for unexpected encounters
and unscripted conversations); and allocation flexibility (you have to make it easy
for resources to find one another). 131

We need to turn the assumption of “organization first, human beings second” on
its head. Instead of asking, how do we get employees to better serve the
organization, we need to ask, how do we build organizations that deserve the
extraordinary gifts that employees could bring to work? The most important task
for any manager today is to create a work environment that inspires exception
contribution and that merits an outpouring of passion, imagination, and initiative.
142

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We have to say goodbye to the knowledge economy and say hello to the creative
economy.

Engagement may have been irrelevant in the industrial economy and optional in
the knowledge economy, but it’s pretty much the whole game now. 142

[How can you expect people to be engaged in their work if their work isn’t
engaging?]

Three things are critical to engagement: first, the scope that employees have to
learn and advance (are there opportunities to grow?); second, the company’s
reputation and its commitment to making a difference in the world (is there a
mission that warrants extraordinary effort?); and third, the behaviors and values
of the organization’s leaders (are they trusted, do people want to follow them?)]
143

If we’re going to improve engagement we have to start by admitting that if
employees aren’t as enthusiastic, impassioned, and excited as they could be, it’s
not because work sucks, it’s because management blows.

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[Ask yourself what task would you take on if you were free to choose? What boss
would you work for if it were up to you?] 149

Low-trust, low engagement institutions will fail to fully exploit the talents of their
members, and consequently be less innovative and resilent. The combination of
heavy-handed regulation and underleveraged talent will result in institutions that
are less competitive than they might be. And we deserve better. No on should
have to work in an organization that feels more like a centrally planned economy
than a vibrant, open community. 150

We understand we live in an uncertain world, where no one can guarantee our
job security. We also understand that individual interests vary, and that no single
organization can reconcile all our competing demands. Nevertheless, we expect
our institutions to be our servants and not the reverse. This implies organizations
that are built around some simple but important principles:
• Decentralize whenever possible
• Emphasize community over hierarchy
• Ensure transparency in decision making
• Make leaders more accountable to the led
• Align rewards with contributions, rather than power and position
• Substitute peer review for top-down review 151

To create an organization that’s adaptable and innovative, people need the
freedom to challenge precedent, to “waste” time, to go outside of channels, to
experiment, to take risks and to follow their passions. 163

Policies and rules are important—no organization can survive without them. Most
organizations, though, are overcontrolled. That’s because control works like a
ratchet. Managers are incentives to create rules, not abolish them. More rules
mean more things to control, and that means more job security and more power.
164

If you’re a formally appointed leader, and you want to turn sheep into shepherds,
you have to take off your leadership mantle and say to people, “I don’t have a
plan, what’s yours?” That’s humbling, but it’s the only way to release the latent
talents within your organization.

Let people find the work that best suits their interests. This is the key to building a
community of passion. When you force people into slots, you get slot-shaped
contributions; you don’t get bold and astonishing contributions. If you want the

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unexpected, you have to give people the freedom to do the unexpected. 162

To create an organization that’s adaptable and innovative, people need the
freedom to challenge precedent, to “waste” time, to go outside of channels, to
experiment, to take risks and to follow their passions. 163

Policies and rules are important—no organization can survive without them. Most
organizations, though, are overcontrolled. That’s because control works like a
ratchet. Managers are incentives to create rules, not abolish them. More rules
mean more things to control, and that means more job security and more power.
164

172-174 Web-based collaboration

Have you ever been more enthused about something you were told to do, rather
than something you chose to do?

“Theory X” [is] a management mindset that regards employees as lazy and ill-
disciplined. In this view, workers are shirkers. They will be industrious only to the
extent they are monitored by supervisors and motivated by extrinsic rewards,
such as money and the threat of punishment. Control, in a Theory X organization,
comes from without, not within.

“Theory Y”, by contrast, holds that employees are inherently self-motivating. They
are eager to do a good job and will happily do so if given the chance. Here,
motivation comes from the pride of accomplishment rather than from a clever
amalgam of sticks and carrots. Build a high-trust organization and employees will
reciprocate by exhibiting a high degree of self-control. 186

“I have no argument with control, per se. No organization can long survive
without a strong spine of discipline. I do believe, though, that most organizations
are overcontrolled and wrongly controlled. They are overcontrolled in the sense
that managers try to control too many things, too tightly; and wrongly controlled
in that control comes too much from supervisors and edits rather than from peers
and norms.” Gary Hamel 188

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As an emotional catalyst, wealth maximization [or test scores] lacks the power to
mobilize the energies of every employee. It’s neither specific nor compelling
enough to spur renewal. For these reasons, tomorrow’s management practices
must be focused on the achievement of socially significant and noble goals. 246

Passion is a significant multiplier of human effort, particularly when like-minded
individuals converge around a worthy cause. Companies must facilitate the
emergence of communities of passion by allowing individuals to find a higher
calling within their work lives, by connecting employees who share similar
passions, and by better aligning the organization’s objectives with the natural
interests of its employees. 248

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Human beings are most productive when work feels like play. Enthusiasm,
imagination, and resourcefulness get unleashed when people are having fun. In
the future, the most successful organizations will be the ones that have learned
how to blur the line between work and play. Management innovators must
engineer the drudgery out of work. 249

Play: “The opposite of play isn’t work. It’s depression.” AWNM 187
“People rarely succeed at
anything unless they are “People rarely succeed at anything unless they are having fun doing it.”
having fun doing it.”
~Southwest Airlines (Southwest Airlines company’s mission statement)
mission statement

Play: “The opposite of play isn’t work. It’s depression.” AWNM 187

“People rarely succeed at anything unless they are having fun doing it.”
(Southwest Airlines company’s mission statement)

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The challenge may seem intimidating, but take heart. Those early management
pioneers had to turn free-thinking, obstreperous human beings into obedient,
kowtowing employees. They were working against the grain of human nature.
We, on the other hand, are working with the grain. Our goal is to make
organizations more human, not less. 256

13.
Culture changes to match the economy, not the other way around. The economy
needed an institution that would churn out compliant workers, so we built it.
Factories didn’t happen because there were schools; schools happened because
there were factories.

The reason so many people grew up to look for a job is that the economy has
needed people who would grown up to look for a job. Jobs were invented before
workers were invented.

School, no surprise, is focused on creating hourly workers, because that’s what
the creators of school needed, in large numbers. Think about the fact that school
relentlessly downplays group work. It breaks tasks into the smallest possible
measurable units. It does nothing to coordinate teaching across subjects. It often
isolates teachers into departments. And most of all, it measures, relentlessly, at
the individual level, and re-processes those who don’t meet the minimum
performance standards.

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3.
150 years ago, adults were incensed about child labor. Low-wage kids were taking
jobs away from hard-working adults. Sure, there was some moral outrage about
7-year-olds losing fingers and being abused at work, but the economic rational
was paramount. Factory owners insisted that losing child workers would be
catastrophic to their industries and fought hard to keep the kids at work—they
said they couldn’t afford to hire adults. It wasn’t until 1918 that nationwide
compulsory education was in place. Part of the rationale used to sell this minor
transformation to industrialists was the idea that educated kids would actually
become more compliant and productive workers. Our current system of teaching
kids to sit in straight rows and obey rules isn’t a coincidence—it was an
investment in our economic future. The plan: trade short-term child-labor wages
for longer-term productivity by giving kids a head start in doing what they’re told.
Large-scale education was not developed to motivate kids or to create scholars. It
was invented to churn out adults who worked well within the system.

If you do a job where someone tells you exactly what to do, he will find someone
cheaper than you to do it. And yet our schools are churning out kids who are
stuck looking for jobs where the boss tells them exactly what to do.

The bargain (take kids out of work so we can teach them to become better
factory workers as adults) has set us on a race to the bottom. Some people argue
that we ought to become the cheaper, easier country for sourcing cheap,
compliant workers who do what their told. Even if we could win that race, we’d
lose. The bottom is not a good place to be, even if you’re capable.

http://todaysmeet.com/top101960

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39.
In 1960, the top ten employers in the U.S. were: GM, AT&T, Ford, GE, U.S. Steel,
Sears, A&P, Esso, Bethlehem Steel, and IT&T. Eight of these (not so much Sears
and A&P) offered substantial pay and a long-term career to hard-working people
who actually made something. It was easy to see how the promises of
advancement and a social contract could be kept, particularly for the “good
student” who had demonstrated an ability and willingness to be part of the
system.

Today, the top ten employers are: Walmart, Kelly Services, IBM, UPS, McDonald’s,
Yum (Taco Bell, KFC, et al), Target, Kroger, HP, and The Home Depot. Of these,
only two (two!) offer a path similar to the one that the vast majority of major
companies offered fifty years ago.


39.
In 1960, the top ten employers in the U.S. were: GM, AT&T, Ford, GE, U.S. Steel,
Sears, A&P, Esso, Bethlehem Steel, and IT&T. Eight of these (not so much Sears
and A&P) offered substantial pay and a long-term career to hard-working people
who actually made something. It was easy to see how the promises of
advancement and a social contract could be kept, particularly for the “good
student” who had demonstrated an ability and willingness to be part of the
system.

Today, the top ten employers are: Walmart, Kelly Services, IBM, UPS, McDonald’s,
Yum (Taco Bell, KFC, et al), Target, Kroger, HP, and The Home Depot. Of these,
only two (two!) offer a path similar to the one that the vast majority of major
companies offered fifty years ago.

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http://www.youtube.com/watch?v=G8Yt4wxSblc

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Changed Has Changed! Handout Part 1

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