Culture, leadership, and power: the keys to Organizational Change. An idea behind the success of IBM.

Essay by er_pc January 2006

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Culture, leadership, and power: the keys to organizational Change

General Motors, IBM, and Sears: three companies facing a need for dramatic change that have already tried, but failed, at major change efforts. Judging from what I've read about these three companies in the business press recently, I'm inclined to believe they are unaware of the current ideas on organizational change--including the successful efforts of many large corporations---that have been appearing in the change literature.

The most important idea of all for companies like GM, IBM, and Sears is that those pushing for organizational improvement--whether they are external members of the board, major investors, or top executives--must deal with cultural and behavioral obstacles to change. Specifically, attempts at organizational change must consider three key features of organizational life: the firm's culture, the leadership of the change effort, and the existing network of power.

In this article, I discuss first the importance of dealing with organizational culture.

My key point here is that rather than changing culture directly, management must work with and through the existing culture to transform the organization. Whether the culture itself changes is secondary; the important objective is to improve the company.

The role of leadership in organizational change is my second key topic. Here I build on the discussion of organizational culture to reveal (1) the role of leadership in dealing with culture and (2) the form that leadership needs to take. For example, based on recent research we know that top management--and not some team of consultants--must lead the change effort. We also recognize certain key leadership actions that can help those efforts succeed.

Third, I discuss the need to consider organizational power (and the related topic of politics) in organizational change efforts. This topic, largely ignored in the literature until recently, is now...