Leading change: putting people into context

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Leaders tend to attach too much weight to another’s state of mind to explain problem behaviour, instead of looking at the effect of other influences on their actions. 

Andy Milward Ph.D.

“Fix him”.

This is the coaching brief I was given by James, the recently appointed managing director of an industrial electronics business.

James was very unhappy with the behaviour of Alan, his technical director.

Well, to be fair, this is not exactly the language that James used, but it is certainly what he meant.

The company developed electronic control systems for use in factories.

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For many years it had been a private company owned by its founder’s family. More recently the company had been  floated on the stock market.

Alan, a talented engineer, had been with the company for nineteen years.

For the last year or so, Alan’s productivity had fallen. He was irritable with his colleagues and his project teams were behind with their targets.

James thought that Alan was lazy and reluctant to cooperate with him.

Such was James’s frustration, he was considering replacing Alan, in spite of his talent and experience. However, before making a final decision he wanted to see if some one to one coaching would help.

Alan’s story

When I first met with Alan he confessed that after many years of satisfying employment with the company, he had recently become very unhappy.

He confided that over the last year he had come under increasing pressure from James to reduce costs and speed up completion of projects.

He explained that the company had always been very innovative in the development and installation of client solutions. But now James was curtailing this flexibility in favour of a more structured and disciplined approach.

Alan felt that this was not only affecting his relationships with his customers; it had also taken a lot of the interest and excitement out of his job.

He told me that unless things changed, and soon, he would look for a job elsewhere.

The Fundamental Attribution Error

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As with many coaching situations, the presenting problem is rarely the real problem.

James had assumed that Alan’s behaviour was due solely to his personality and work ethic.

This was an error.

James had made what Social-Psychologists call the ‘Fundamental Attribution Error’.[ref]Ross, L. and Nisbett, R. E. (1991) The Person and the Situation: Perspectives of Social Psychology. New York: McGraw-Hill.[/ref]

This is a bias that causes people to attach too much weight to another’s state of mind to explain problem behaviour, instead of looking at the effect of other influences on their behaviour.

James had not considered the effect of ‘context’ on Alan’s behaviour.

He did not realise that he could not solve this problem by ‘fixing’ Alan.

If he was to understand Alan’s behaviour he needed to look at the bigger picture.

Context matters

As I explained in an earlier post on this topic, https://andymilward.comthe-context-of-behaviour-in-organizations/ ‘context’ refers to conditions in the organisation that facilitate or constrain behaviour.

Internal context includes, (amongst many other factors) leadership style, organisational culture, technology, and beliefs held in common by organisation members.

External context includes market conditions, regulatory and legal frameworks within which the organisation must operate.

Context operates like a magnetic field – it constantly pulls organisation members in a particular direction.

People who do not move in the required direction stand out as anomalies.

Contextual Analysis

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Having heard Alan’s story I tactfully broached the problem with James.

I encouraged him to work with his leadership team on a process of Contextual Analysis.

His response was encouraging.

However, we faced a challenge; how to find out how all employees thought about the changes that James and his executive colleagues had introduced.

We decided to invite every member of staff (over two thousand), to anonymously answer three open-ended questions written to gauge their impressions about recent changes in the business, and what they thought James should do to improve things.

This produced a huge volume of data.

To reduce this data to a meaningful core, we used ‘Content Analysis’ – a computer-based method of analysing the volume of employee responses into key themes.

The real problem

The data told an interesting story.

During its long period of private ownership, the company had developed a unique culture that encouraged its employees to behave entrepreneurially, finding creative solutions to client problems.

Alan (and other employees) had been very comfortable working within this context. Employees apparently derived a sense of personal identity from working in this flexible environment.[ref]Haslam, S. A. (2010). The New Psychology of Leadership: Identity, Influence and Power. Hove, England: Psychology Press.[/ref]

Innovation, imagination, improvisation, and adaptability emerged as key values that all employees embraced.

A new economic context

The new economic and regulatory pressure introduced when the company went public created a new context that constrained people from expressing these values through their work.

The leadership team had had to revise this flexible approach to meet the expectations of a new stakeholder group – the shareholders.

They introduced a degree of standardisation in working practices and the development of client solutions to reduce costs, speed up project completion and increase scalability.

A gap in expectations

This sudden change in the company’s approach led to a gap between what the company and its employees expected from one another.

This gap resulted in a tension that had led Alan (and many other employees it seemed) to question whether they really wanted to work for the company.

On a positive note, the data also suggested that the business had accumulated a lot of goodwill with its employees over many years.

Many employees were therefore willing to work with the executive board to try to close the expectation gap to everyone’s benefit.

However, the employees indicated that it was critical the executive board demonstrate that they were genuinely interested in addressing staff concerns.

Leading Change

From this analysis, James concluded that the executive board had handled the transition to public ownership badly.

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They had assumed that all employees would adapt to public ownership as enthusiastically as senior leaders.

Alan’s disaffection was just the tip of the iceberg. It was a symptom of a much more serious underlying problem.

‘Fixing’ Alan was not the answer.

In essence, James and his team had ignored a critical community of stakeholders – the workforce.

The data also suggested that many customers were also frustrated by the changes.

He realised that the process of change needed the same rigorous leadership that had enabled him to grow the business and take it public.

Actions

James acknowledged to the entire workforce that the executive team had handled the change process badly.

He used the data yielded by the Content Analysis as a basis of working with employees to design a project methodology that met many of the ‘self-identity’ needs of employees.

This meant creating scope for greater flexibility and imaginative working, without losing the benefits that greater standardisation would bring.

This was a challenge to achieve, but drawing on the considerable staff goodwill that had accumulated over many years, James was able to reach a satisfactory compromise.

After a while, the employees came to see the benefits of increased standardisation.

It enabled the business to reduce its cost, become more nimble and make better use of resources.

What leaders can learn from this story

Leaders can learn several lessons from this story.

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The Fundamental Attribution Error

Avoid making the Fundamental Attribution Error.

Rather than jumping to conclusions about problem behaviour, remember that people act in context and that context can exert a powerful influence on their behaviour.

Take an holistic view of the organization as a complex, multilevel interacting system, where problems arise from people acting in a context.

Leading change

Supporting employees through the process of change is a crucial leadership skill.

If leaders do not carry their employees with them when they embark on a programme of radical change, they risk destroying value.

Employees are  important stakeholders and rank equal to customers and shareholders.

Contextual Analysis

Before embarking on any kind of change programme, ensure that you understand all of the issues.

The executive board had completely missed a critical issue – the business only worked because the employees had always had considerable latitude to express themselves through their work.

The change to public ownership largely deprived them of this.

The creative, improvisational environment that preceded the flotation was a critical context that motivated the workforce.

Leaders should embed the analysis of context in routine problem solving, decision-making, and particularly when planning large change projects.

They should consider the impact of a change in context on outcomes.

If James had assessed context before embarking on the flotation, he could have acted to mitigate the risks.

Once leaders understand the effect of context on behaviour, they can change what they can and manage what they can’t change.

Alan

Two years on Alan is still with the company.

 Andy Milward Ph.D. is founder and principal of Milward, a consulting and research firm specialising in Strategic Leadership.

©Andy Milward and Milward: Consulting in Strategic Leadership: Latest Thinking, 2014-2015.

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