Managing the Five Hidden Dimensions of Organizational Change
Robert Marshak (Author)
Publication date: 08/01/2006
- The first book to offer an integrated approach for recognizing and dealing with the hidden processes that sabotage organizational change efforts
- Identifies five different dimensions of these covert processes
- Offers a comprehensive approach that can be used to address any type of covert process
- The first book to offer an integrated approach for recognizing and dealing with the hidden processes that sabotage organizational change efforts
- Identifies five different dimensions of these covert processes
- Offers a comprehensive approach that can be used to address any type of covert process
Covert Dimensions and Change
Have you ever sat through a business meeting, thinking “Something is going on here that is really getting in the way, but I can’t put my finger on it.” You were probably sensing covert processes at work. Covert processes are hidden dynamics that routinely impact human interactions and can confound our most diligent efforts to accomplish our goals. When we try to effect organizational change, these hidden factors impact our ability to recognize the need for change, plan appropriate responses, align people and resources, and successfully implement new initiatives. In short, covert processes are a crucial aspect of organizational change and, when not made explicit, they can block even the best of intentions.
The term covert processes is used here to mean any hidden or unconscious dynamic. In every culture there are unspoken beliefs and assumptions underlying people’s behavior. They affect what we say and do even though we may not be aware of them. From a psychological viewpoint, covert processes include the unspoken mental models and unconscious dynamics of individuals and groups. In everyday usage, the term covert tends to evoke images of spies, intrigue, and secret deals. For our purposes we define covert more neutrally as “out-of-everyday awareness.” Covert processes include all out-of-awareness dynamics that occur in human systems, for whatever reasons.
This book represents an integration of personal and professional experiences that incorporates some of my earliest memories. I grew up in a family that, like many others, had its secrets. Family members used hushed voices about certain topics that others were not supposed to hear. As a boy I was interested in magic, magicians, and carnival games—the secrets of misdirection and illusion, as well as the unseen gimmicks and ruses that rigged the games of chance. As a young man I was drafted into the Army during the Vietnam War and assigned to duty near the DMZ in South Korea as a special agent in military intelligence. When I returned home I started a career in government service and completed a doctorate in public administration.
In my early career as an analyst and executive in the U.S. government, I had a chance to witness and learn at close hand the political behavior of public organizations. This led me to study organizational psychology and organization development. Later, as a professional consultant, I encountered covert processes while working with executives on organizational change in corporations around the world. All of these experiences, along with research about covert processes drawn from the social sciences, have informed the principles and practices presented here.
The Limits of Rationality
As a society we place great importance on being rational and logical. This is the primary reason that certain crucial elements may become covert during change initiatives. Presenting a rational argument is often done at the expense of attention to anything else—emotions, for instance. In many years of working with executives around the world, three aspects of organizational change have become increasingly clear to me:
- Most change agents rely primarily on rational approaches to foster organizational change.
- Most change initiatives actually involve significant non-rational dynamics and processes.
- Most change agents still insist on operating as if organizational change is a purely rational process.
Time after time I have witnessed the over-emphasis on reason contribute to failed or ineffectual change initiatives. Because of their insistence on rational approaches, many change leaders are unable to see the non-rational dimensions of organizational change that are adversely impacting their initiatives.
Analyteks, Inc., was a highly successful professional services company for over forty years. Analyteks’ culture and management style were based on a small circle of entrepreneurial executives doing all the marketing and sales work. These executives would then provide instructions to highly educated analysts, who were expected to follow directions while applying their professional skills to assigned projects. This centralized model had for decades produced many notable accomplishments and steady growth.
Now, changes in the competitive landscape and new advances in technologies threatened Analyteks’ success. After many quarters of decline, management announced the first cutbacks in the company’s history. Anticipating the need for even more cutbacks, leadership decided that the analysts needed to become more entrepreneurial in their work so the company could continue to succeed in the new world they were facing.
Accordingly, the executives presented their case for more entrepreneurial behavior from the analysts at a series of company-wide meetings. Then they waited for behaviors to change. When nothing very different happened, they were confused. After all, they had clearly stated the reasons for change.
Some Often-Neglected Dimensions
What had the Analyteks executives failed to consider in their planning sessions? They had not thought about the differing self-interests of the executives and analysts and how those differences might impact support of the new directions. In fact, the analysts saw the call for them to be more entrepreneurial as a bailout for the failures of the executives. One analyst summed it up with the comment: “When I joined Analyteks it was with the understanding that they would do the selling and I could work on neat projects.” Furthermore, becoming sales people did not inspire the analysts, who wanted to do cutting-edge work and not just survive to sell “schlock services to make a buck.”
Unfortunately, the analytical nature of the people and of the business culture, added to concerns about being seen as weak, prevented the analysts (and the executives, for that matter) from openly expressing their fears or their anger. Those feelings were covert, and thus there were no signals to alert the executives that they were on the wrong track. The top-down, centralized culture of Analyteks had helped to create mindsets in which analysts were not expected to be entrepreneurs. That was the job of the executives. In fact, it was considered unprofessional within the Analyteks culture for an analyst to “sell out by selling your work.”
Finally, it would not be too great a stretch to speculate that unconscious processes involving denial or excessive rationalizations among the executives, who were facing failure for the first time in their careers, may have prevented a more carefully thought-out approach. Instead, the executives ended up repeating the very behavior they said they wanted to change. In the meetings they presented a rational plan, predicated on the assumption that they knew best, even as they called for more ideas and involvement from the analysts.
Beyond Good Reasons
The Analyteks case helps to illustrate the overt and covert dimensions of organizational change. Analyteks executives relied on their rational analysis of the situation to provide good reasons to persuade the analysts to change their behavior. Overlooked or hidden from consideration, however, were the politics of the situation, including the differing needs and interests of the analysts and executives. The absence of providing anything to really motivate or inspire the analysts to change their behavior, as well as the inability to express such emotions as fear, anger, or doubt, prevented important considerations from being overtly discussed.
The unaddressed organizational culture and mindsets about what constitutes prestigious and professional work made it virtually impossible for the analysts to “hear” the executives’ reasoned analysis about the need to be more entrepreneurial. Finally, unconscious psychodynamics fueled by the stress and anxieties associated with the declining situation may have led to reduced or impaired abilities in the executive group and among the analysts to fully consider all aspects of the situation.
Dimensions of Change
Expressed in everyday language, the six dimensions that are always involved in organizational change are: reasons, politics, inspirations, emotions, mindsets, and psychodynamics. These are summarized in the accompanying table. As already noted, reason always gets the overt emphasis. The other five dimensions are frequently covert, despite their influence on achieving desired results. Let’s look more closely at these dimensions to see how they impact organizational change.
Overt and Covert Dimensions of Organizational Change
Most organizational change initiatives begin, and sometimes end untimely, with “making the case for change.” This case for change is invariably a well-documented, logical analysis of the compelling reasons why the organization and the people in it must do something different. For example, the Analyteks executives might have said at some point:
Due to the forces of globalization, information technology, and increased worldwide competitiveness, we must become more entrepreneurial at all levels of the company. In order to do this we will, (a) pursue a new strategy, (b) adopt a new structure, (c) create a new reward and compensation system, (d) downsize, right-size, and contract out some functions. If we do these things well, then we will once again be successful and prosperous as an organization.
The unspoken part of this message, which can lead people to ignore important considerations, is: We expect everyone to be logical and rational and accept the compelling reasons for what has to be done, and therefore not only understand and go along with the changes but even embrace them. When this does not happen, as in the Analyteks case, change leaders are surprised. They may conclude that they are dealing with irrational resistance to change because their well-reasoned arguments are being ignored.
In response, some combination of three strategies is often pursued. First, change leaders emphasize the overwhelming logic and rationale for change with even more compelling analyses, educational efforts, and discussions. The thinking is something like: If only we make the right case for change, people will understand what needs to be done and do it.
Second, leadership may try addressing what they consider to be irrational resistance through venting or involvement sessions. Frequently these efforts receive less attention than the case for change itself, and they are quickly abandoned if they don’t produce immediate results. Management thinks: What’s the use? Nothing will work. We are dealing with irrational resistance.
Third, if reason and logic don’t seem to carry the day, the change effort is aborted, abbreviated, or forced. Well, people are just too emotional, so we need to.…”
Although the rational case for change tends to be the most overt or visible dimension, covert elements also play a critical role in all organizational change initiatives. We will now discuss the five dimensions of covert behavior: internal politics, inspirations, emotions, mindsets, and unconscious defenses or psychodynamics. When these five dimensions are overlooked, they become traps that can block even the best-planned efforts.
Most organizations are managed based solely on rationality, defined roles, rules, expertise, and the good of the organization as a whole. Individuals and work units are discouraged from advancing their own interests. Actions based on your own interests are deemed to be “political,” and being political is considered inappropriate behavior in most organizations. This set of beliefs also supports reliance on “making the case for change” through top-down initiatives.
In reality, people and work groups do consider their own needs and interests when they respond to organizational change initiatives. It is folly to assume otherwise. These needs and interests may sometimes be selfish or self-serving, but generally they simply reflect people of goodwill operating from a place rooted in their own experience. From their point of view, what others call resistance may be a well-intentioned attempt to keep the organization on the right track.
Who is to say that the change in question is not the selfish or self-serving initiative of an elite group of executives advancing their own interests over those of the organization as a whole? In the Analyteks case, one analyst was heard to comment: “When they came up with this new sales strategy, did they understand the impact it will have on the way we do our work as professional analysts, or were they just worried about their own bonuses?”
This orientation suggests a different model of organizations, one where it is assumed that people and groups act on their own needs and interests. In this model, political as well as rational processes are the ways through which organizations really operate.
The general distaste for recognizing and dealing with organizational politics is often evident in change efforts. In my experience, this is mostly associated with the mindset that organizations should be managed through reason and logic alone, and that politics is somehow “bad”—thus change planners often do not think in terms of political perspectives or organizational politics. Others might stoop to do this, but we should not. Consequently, when political processes of one kind or another emerge to challenge or disrupt a change effort, planners are unprepared to deal with what they experience as covert political dynamics.
Most change efforts include some kind of vision statement intended to capture the essence of the desired future state: We will be the best (biggest, smartest, fastest, friendliest, most flexible, most knowledgeable) company in the world. These statements are often a shorthand version of the case for change analysis: Because of globalization, we need to be the best company in the world. They are intended to help people think rationally about the change and become convinced to work toward it.
The difference between these kinds of vision statements and values-based and visionary aspirations is the difference between head and heart. Evoking values and aspirations is intentionally inspirational. Inspirational statements speak to our better selves, bypassing logic and striking a chord. When this occurs people feel compelled to make the desired change a reality. This happens because people are willing to work towards strongly held values or aspirations, sometimes despite rational logic. The analysts in Analyteks did not want to sell more “schlock services,” but they might have strongly supported changes that would enable them to work toward providing customers with higher-quality products or services.
Enlisting positive values and aspirations is the province of the inspirational leader, not the analytical manager. Martin Luther King’s “I Have a Dream” speech inspired people to change by evoking powerful shared values and aspirations, not by a rational analysis of prevailing conditions. Imagine the same speech if Dr. King had presented an analysis of the number or percentage of discriminatory events in the past year and the market forces that positively or negatively impacted a more just society! The power of inspiration to bring about change is that it does not appeal to reason and logic. Inspiration speaks to the aspects of people that want to do good things, want to be part of something bigger than themselves, and want to see their values, hopes, and dreams fulfilled.
Despite the power of inspiration, it is frequently ignored or muted in change efforts. When that happens, a potentially powerful force for change is underutilized or becomes an unexpressed covert dynamic. Even worse, change efforts sometimes fail because they unknowingly work against the strongly held, but unexpressed, values and aspirations of key employees or work groups.
The power of heart over head in organizational change is explained by John Kotter and Dan Cohen in their book The Heart of Change (2002). They assert that most change efforts are based solely on the core method of analysis-think-change, or what I have called “making the case for change,” and that most change efforts fail as a result. In the analysis-think-change method people are given (1) a databased, logical analysis of the situation and what needs to be different; it is then presumed that (2) the data and analysis will influence how people think; and then (3) this will lead to new thoughts that will produce changed behaviors and actions.
Contrasted with this is the core method of see-feel-change, which Kotter and Cohen claim is almost always associated with successful change efforts. In the see-feel-change method, people are (1) helped to see a compelling vision or situation needing to be addressed; then (2) that compelling vision or situation hits the emotions and evokes a gut-level response; and then (3) the emotionally charged response to the situation leads to changed behaviors and actions. They strongly advocate greater use of inspiration and emotion over reason and analysis in organizational change efforts. Engage the heart, not just the head!
Similar to but different from visionary inspiration is the role of emotions in organizational change. To be more accurate, it is the non-role of emotions in organizational life. Historically, emotions have been viewed as the enemy of reason and thus to be overcome or suppressed. This attitude pervades the organizational world, where decision-making by logic and analysis—not emotion—is extolled as a virtue. Although emotions and feelings are an integral part of human life, they are generally considered to be anathema in the workplace, despite the recent importance placed on emotional intelligence. Consequently, whatever feelings and emotions exist related to a change effort, they tend to be hidden and expressed only in covert ways.
Many of the change leaders with whom I have been associated have been less than eager to participate in open meetings because the sessions might become “too emotional.” I recall a reluctant executive who, before an all-hands meeting, commented in an agitated voice: “If people are going to be emotional about these changes, then I don’t want to deal with them. When they are ready to discuss things rationally and logically, I’ll meet with them.” Not surprisingly, three days later the all-hands meeting was indefinitely postponed “due to pressing business.” An opportunity to engage the workforce in supporting the change had been missed for fear of overt emotionality.
Emphasizing reason and logic in organizational matters, while avoiding anyone who is too mad, glad, sad, or afraid, ensures that unexpressed emotions will go underground and covertly impact any change initiatives. Most organizational change consultants agree that people react to organizational change in ways similar to Elizabeth Kübler-Ross’ (1973) stages of death and dying: denial, anger, bargaining, depression, acceptance, and, finally, adaptive behavior.
This analogy makes clear that many people will react initially with anger to the announcement of any significant organizational change and that this is normal and predictable. Thus it would be unreasonable to expect otherwise. Nonetheless, leaders often act as if they should be able to announce a change and then immediately enter into reasoned discussions with impacted employees about implementing the change. In this scenario, if the employees show any anger they are labeled as irrational, emotional, or resistant to change. A more savvy response would be that they are having normal human reactions that need to be acknowledged and addressed in some manner.
A comparison of two similar change situations illustrates the power of covert emotions in organizational change. I was working with two very different organizations, a not-for-profit service agency and a for-profit global corporation. Both organizations had concluded that, for better positioning in the marketplace, they needed to change their identity and their name. One had a name that limited who it could serve. The other had done market research and wanted to change its image from an old-line, slow, cold corporation into one that would be regarded as responsive, service-oriented, and warm.
In each case, months of research and analysis had been completed by internal task forces and outside expert reports. Furthermore, the respective executive teams and boards had agreed with the need to change the name and identity of the organization. In each case, the moment finally came for the executive team to make the proposed name change. In neither case was the name changed!
Instead, another round of discussion ensued, and again everyone expressed reasons for the change based on logic, need, and sound research. After this additional round of assurance that they were doing the right thing, once more the time came to take the vote. Again, in each case, the vote was delayed. The leaders of the meetings were perplexed, but to me they had appeared somewhat reluctant to take the vote.
At this point I wondered if there were unexpressed emotions about the impending loss of their long-established names and identities. In both cases I suggested that, having shared their thoughts about the name change, maybe they should also look at their feelings about the proposed change. After initial hesitation, people began to share how sad and depressed, and maybe even a little afraid, they were to do away with the old name. They went on to talk about how much they were attached to the old name and how things would not be the same using the new one.
These discussions went on for some time and allowed people to release a range of emotions that had previously been covert. Following a break, they came back and took the vote again. In both cases they voted to make the change. In both instances it is likely that unexpressed sadness, loss, and fear were covertly preventing the executives from acting on their reasoned analysis.
In addition to explicit reasoning, change initiatives are guided by unexamined or untested assumptions, beliefs, and premises. I will refer to them here as mindsets. Because people generally don’t think about the underlying frameworks that guide the way they reason and interpret the world, mindsets have a profound (though often covert) impact on the ways we react to change possibilities.
In the form of mental models, they are “deeply ingrained assumptions, generalizations, or even pictures or images that influence how we understand the world and how we take action” (Senge, 1990, p. 8). In the form of paradigms or worldviews, they prevent people from imagining possibilities that exist outside of their unexamined assumptions. Expressed as organizational cultures, these covert beliefs, values, and assumptions guide and interpret the most fundamental aspects of organizational life. Individual and organizational mindsets can thus form covert conceptual traps that limit our thinking and require a mental revolution to change how we act and react in the world.
Chris Argyris was one of the first organizational researchers to point out the limiting power of hidden mindsets in organizations and advocated double-loop learning as a way to avoid such covert conceptual traps (1977). In essence, double-loop learning asks people to examine the assumptions they take for granted that may guide their current ways of thinking and to consider adopting new beliefs that would allow different possibilities to occur. Dramatic organizational change is only possible, says Argyris, when prevailing covert mindsets are made overt, challenged, and modified.
Without a change in mindsets, people will continue to see situations in the same way and develop the same responses no matter how much they may rationally or emotionally wish to change. I recall working in the early 1980s, shortly after the breakup of AT&T, with the executive team of one of the Baby Bells. Our task was to plan how to become a more customer-responsive organization.
The team worked hard, but moving toward “outside-in thinking” (What do customers want and how can we provide it?) from ingrained “inside-out thinking” (What do we provide and how can we get customers to purchase it?) proved to be an extremely difficult shift in mindset. All of their habitual ways of thinking about and addressing a situation were turned upside down. This became obvious when, in frustration, one of the executives turned to me and said: “Let’s stop wasting our time trying to figure out what customers want. What we have to do is get them to buy more of what we have.”
It is not unusual for planners and implementers of change to be limited in their thinking by covert mindsets that prevent truly transformational initiatives. It’s not that such results are not wanted; it is simply that unexamined mindsets covertly prevent people from thinking outside the box. Stop and consider how many of the management initiatives and organizational forms that are currently accepted practice were virtually unthinkable twenty years ago. The shift from the capacity-driven, certainty-oriented, mass-production, industrial-age paradigm to the more customer-oriented, flexible, and customized paradigm of the current information age requires both a revolution in information technologies and a revolution in managerial mindsets. And, as more than one organization has discovered, installing new technologies can be much easier than changing prevailing mindsets.
No dimension is more covert, or less often addressed, than our unconscious reactions to change. This is related to the widespread taboo about dealing with—or even seriously speculating about—unconscious dynamics in a workplace setting. That’s for employee assistance programs or personal counseling. A manager once asked me during a team-building session, when people seated in a circle were asked to share their perceptions of each other: “Is this going to become a shrink session?”
Addressing the overt and rational reasons for change is always a requirement for an organizational change effort. Considering the covert, unconscious reactions and dynamics is almost always considered off-limits in the workplace.
Despite this persistent taboo, there has been a great deal of research about the covert impacts of the unconscious on groups and organizations. Generally speaking, unconscious defenses against anxiety are a root aspect of psychodynamic phenomena at work. Because organizational change—from initially identifying new needs through implementing new ways of working—is likely to be anxiety producing, the possible impact of unconscious reactions must be considered. Of course some resistence may be consciously calculated, but some may be unconscious reactions to the anxieties triggered by organizational change, or even organizational life in general.
Taking a psychodynamic point of view, we should not be surprised if, during a meeting announcing a major change, an individual or even a whole group exhibits a variety of unconscious defense mechanisms. Maybe the group, instead of rationally working on how to implement the change, will engage in “fight or flight” behavior (by being argumentative or by avoiding the topic). Maybe an individual will engage in transference and begin to act as if the leader were a parent (“You always favor the marketing department”). Maybe a leader will repress feelings of anxiety about having to downsize fellow workers and compensate by acting overly logical and cool at a time when some warmth and emotions are needed (“Please report to human resources to finalize the paperwork”).
Once, when I was in an internal staff position, I worked with a top executive who was leading a change effort. In meetings he constantly berated his direct reports, pointing out how incompetent they were, while posing as just the opposite. Privately, I inquired how he could ask his people to change when he presented himself as needing no changes. I suggested that perhaps, as an act of leadership, he needed to model how people could change themselves in order to produce organizational culture change.
In a moment of candor growing out of our long association, this leader revealed that he had to be “perfect” because his father had always berated him for not measuring up. This led to a discussion of “that was then and this was now.” It also included a gentle inquiry to see if he had ever considered or sought counseling (the answer was yes) and how the present situation could be an unconscious trigger for past feelings and patterns of behavior.
The realization that he had to address some of his unresolved feelings and patterns from the past in order to be the leader he wanted to be in the present did not need any further prompting. He started the next meeting by talking about how everyone, including himself, needed to change their behaviors to implement the new culture.
A Checklist for Change
We have seen that one helpful way to begin thinking about organizational change is to insist on considering the influences of all six overt and covert dimensions. This means making sure that both rational and non-rational dimensions of change are fully considered. A simple checklist can remind everyone that organizational change is not likely to be successful without considering all six of the dimensions.
Six Dimensions of Organizational Change
- Reasons: Rational and Analytic Logics
Are we clear about our intended outcomes and criteria?
Have we analyzed the forces and reasons for change related to our intended outcome and criteria?
Have we considered all the options and selected the one most likely to succeed?
Have we made a strong and persuasive case for change?
Do we have a clear implementation plan and processes?
- Politics: Individual and Group Interests
Who are the key stakeholders with interests related to this change and, based on their needs, how might they perceive this change?
What sources of power or influence do they have to impact the change?
How will we deal with each critical stakeholder to ensure support for the change?
Will we need to modify our proposal to gain enough support by those who could block our plan?
How will we continue to monitor the shifting needs, interests, and political processes as the change unfolds?
- Inspirations: Values-Based and Visionary Aspirations
What are the key values and aspirations of organizational members?
How will those values and aspirations be impacted or energized by the proposed change?
How can we present or modify our proposed change to inspire and enlist people?
Do we have leaders with the skills and abilities to inspire people about the change?
How do we develop leaders with basic inspirational skills and abilities?
- Emotions: Affective and Reactive Feelings
Which people may become mad, glad, sad, or afraid due to the proposed change?
Do we understand and accept that emotional reactions are a normal reaction to change and loss?
How will we create settings where emotions can be expressed in constructive and appropriate ways?
Do we have leaders with the emotional intelligence and skills to deal with people who are emotional about change?
How do we develop leaders with basic emotional intelligence skills and abilities?
- Mindsets: Guiding Beliefs and Assumptions
What are the key assumptions and beliefs currently limiting the possibilities for change?
What are the alternative assumptions and beliefs underlying our change proposal?
How will we change people’s mindsets to allow them to see the new possibilities?
Do we have leaders who are aware of their own mindsets and can practice double-loop learning as needed during the change effort?
How do we develop leaders with the ability to challenge their own thinking and strongly held assumptions and beliefs?
- Psychodynamics: Anxiety-Based and Unconscious Defenses
Do we understand and accept that there may be unconscious reactions by individuals and groups to our change proposal?
Do we know who might have the greatest anxieties, or be threatened the most, by our change proposal?
Do we understand enough of the basic manifestations of unconscious reactions to anxiety to recognize when logic and reason alone may not work?
Do we have leaders with enough emotional or psychological intelligence and skills to be able to deal at least on some level with the basic unconscious defenses they may encounter?
How do we develop leaders with enough basic emotional or psychological intelligence skills and abilities?
The purpose of such a checklist is to counterbalance the bias in most organizations toward expecting, or subtly demanding, only rational thinking and responses. It helps to remind us that non-rational, covert dimensions will be involved whether we like it or not. It also alerts us to anticipate the range of covert processes that may manifest themselves as we plan and manage organizational change.
Leaders, staff specialists, and consultants may be blindsided if they focus primarily on reason-based approaches to change. As we have seen, an array of hidden elements are likely at work whenever the need for change arises. Wisdom lies in anticipating and addressing the potential covert issues so that the following five dimensions do not derail a potentially positive change:
- Individual and group interests that are actually or potentially impacted by the change (the political dimensions of change)
- Values-based and visionary aspirations of members that may support or conflict with efforts (the inspirational dimensions of change)
- Feelings of people about the change (the emotional dimensions of change)
- Implicit beliefs and assumptions shaping how people think (the mindsets dimension of change)
- Anxiety-based and unconscious defenses and reactions (the psychodynamic dimensions of change)
To be a successful agent of change, you must go beyond reason-based initiatives to address these five covert dimensions. Being blindsided by a surprise birthday party may be fun, but it is rarely fun when you are planning and implementing change.
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