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John 
Mark 

Changing the Chart, Changing the Heart
How to Accelerate Recovery from Organizational Change
by John Scherer & Mark Yeoell

"Your mission is to safeguard the human spirit through this merger process," said the CEO. We remember wondering, stunned, "Did he just say what I think he said?!" We looked around the room at the other executives sitting at the conference table, who all nodded in agreement. What an amazing request to receive from a client!

But there was a hitch. Not a hitch, exactly, just a little addendum. Our clients, it turns out, had also hired another consulting firm—one with an international reputation for bringing mergers home on time and on budget. As the conversation unfolded, it became clear that their job was to handle the organizational redesign and to ensure the merger met the financial targets anticipated from the integration of the two companies. Our job was to make sure the merger "took" at the human level and assure the wellbeing of the company's most precious assets—its people—during a process when they were most vulnerable to becoming discarded, dispirited and afraid.

At this point, however, experienced consultants and business leaders could be thinking, "What in the world did that CEO have in mind when he proposed 'safeguarding the human spirit' during a merger?"

When we asked this man what motivated him to make this unusual request, here's what he said: "Before I took on the role of CEO—when I was a Vice President, even Chief Operating Officer—I knew it wasn't really me who was ultimately responsible for the impact of my decisions on large numbers of people. As CEO, I've become very sensitive to the realization that a simple 'Yes' or 'No' in this room affects people. Lots of them. For life. Plus their spouses, kids, neighbors, even communities.

"As we started into this merger, it was clear to me that we were going to be fiddling with people’s lives, not just jobs, but their entire being. I wanted to do everything I could to make sure that the individuals whose jobs were eliminated by this merger—and those who remained—were treated with dignity and respect."

As the merger project unfolded, it became clear that there were two worlds that had to come together: changing the chart and changing the heart. Changing the chart is the work that most business-consulting firms do to downsize or reconstruct a company. Re-draw the org chart. Move the right people into the right positions. Eliminate the weaker players. Deal with the fallout. In fact, the leader of the merger consulting team told us and the client, "It usually takes from two to three years for a merged organization to heal after we're gone."

Our client's mandate, however, suggested another scenario. What if these two companies could be merged so that it did not take two years to heal? What if the employees and their work teams could actually become stronger, healthier and even more effective in the marketplace as a result of moving through the trauma of the merger?

If the experts—not to mention most of the thousands of merger veterans—are right, the traditional way to conduct a process like this leaves a trail of bodies. This results in a dispirited workforce and a wounded community which has to slowly forget its way out of a valley of despair and back to something close to status quo ante.

But this client wasn't buying it. He believed—insisted actually—that the chart and the heart had to be worked on at the same time and that it all had to happen in 90 days. In our conversations with him and the Steering Committee, made up of the two CEOs and COOs of the two merging companies, we worked out another option, a Scenario B. We took the position that it was possible to reduce the time needed for recovery considerably and to leave the body stronger and more alive than before. (Maybe it's no accident that the word "corporation" comes from the Latin root corpus, and refers to the human body.)

Let's take this body metaphor one step further. The merger process was designed to be an outright attack on the duplicate structures of the two companies and whatever inefficiencies were discovered. But the merger would also be an attack on the heart and soul of both companies and the individuals in them. In fact, you could look at any major organizational change as a potential corporate "heart attack." Some people die from that trauma. Some companies do, too. Some not only survive, but get a new life out of the experience as they learn to live a leaner, more active existence.

What Happened

80 days into the process, the new organization charts and implementation plans for each division had been developed by teams of managers and supervisors. This success was made more difficult by a last-minute request from the parent holding company. Not only were the two organizations to merge successfully, but they also had to find $10 million in budget cuts while they were at it! The implications became clear: what had begun--and been promised--as a simple integration would now have to include downsizing. This news sent a frisson of frustration through both organizations, but the teams dug in and stayed the course.

The work was hard and grueling for the team members, all of whom had regular jobs to perform at the same time. Their colleagues had to pick up the slack as they backstopped team members, which meant long days and short nights. "Overwhelmed" was the most-overheard word in the elevators. But they did it. They made the tough decisions. They found the $10 million. They brought the merger-planning process home within the 90-day framework. And they attended to the heart all the while, assessing and addressing on a constant basis how well they were taking care of the human spirit.

Critical Success Factors

The success of the Integration Teams was due in large part to the continuous hands-on support, number-crunching work and prodding by the change-the-chart consulting firm. They labored tirelessly in the operational trenches, making sure each team was working with real numbers and was headed in the right direction.

We worked in the human trenches, coaching VPs, managers and supervisors in how to attend to the heart while getting the work done. We also functioned as troubleshooters and third party conflict facilitators, loosening logjams and resolving potential "show-stoppers" wherever groups or individuals were stuck.

Then came the week for unveiling each division's re-designed organization chart—with its boxes showing the proposed positions and those being eliminated—first to managers,

then to supervisors, then to front-line performers. The emotional impact was immediate and intense as people counted the boxes and wondered if they and their friends still had jobs.

This put the process at a watershed. "Merger" now had morphed from a nice-sounding concept into a real life experience for everyone involved. A moment of truth for the organization—and for the CEO's decision to simultaneously change the chart and the heart. The week that managers and supervisors fanned out among their people to hold life-changing conversations would tell whether or not it was working.

Is It Working?

Frankly, the results have been beyond our—and the clients'—expectations. At precisely the moment you would expect the morale of the two workforces to be devastated, they were, in fact, continuing to move forward on the journey of the heart. We knew this because we had been taking the pulse of 137 managers and supervisors as they entered our training sessions throughout the process. Our measurement was a simple scale showing where they saw themselves on what we called the "below-the-waterline" (changing the heart) timeline.

We explained to each group of managers and supervisors: You are about to move yourselves through a set of visible, tangible stages "above the waterline." You will also be moving—or not moving—through another set of stages "below the waterline" at the emotional and personal level. It is this hidden passage where changing the heart occurs and if that does not happen, you will never actually arrive at a merged organization. The chart may change, but until the heart changes, people don’t change.

Measuring Progress in Changing the Heart

To track progress in the heart domain, each person in the management group was asked to indicate where they were on a scale of 0-10 correlating with the classic stages of the grief process, which are present in any major life change. A score of from 0 to 2.5 meant they were in the Shock and Denial stage; 2.6 to 5 meant they were into Anger and Resistance; 5.1 to 7.5, Growing Acceptance; 7.6 to 10, Full Commitment. In the first weeks of the merger process, their average score was 4.6, just beyond Shock and Denial into Anger and Resistance. A score below 5.0 indicates someone who is still trying to hold on to the past, either in denial or fighting. When someone gets beyond 5.0, they are beginning to let go and move on, opening to the future.

On the day the new chart came out showing who stays and who leaves—the day everyone was dreading—their scores showed an amazing "heart shift." Prior to that point, the average was 6.6, itself surprising, given all the uncertainty in the situation. That day their average jumped to 7.3, well into Growing Acceptance and almost to the point of Full Commitment. No one thought they would be that far along on the heart line at this point in the process.

Let's be real here. Out of the 2,000 employees in the two organizations, there were several hurt and angry people who left so upset that it tore the fabric of their work groups. There were two work teams who refused to accept a new boss from the other company. There was high anxiety among staff at all levels, even among those whose jobs were secure. But the most frequently heard reports from the front lines were that the overwhelming majority of people were finding ways to let go of their attachment to the past and were opening themselves to the new reality, complete with its threats and opportunities.

When we asked the CEO what the signs of a successful chart-heart integration process would be from his point of view, he listed these:

• No setbacks in the marketplace

• No erosion of customer-service levels

• An invisible transition to all stakeholders

• Maintenance of adequate product inventories

• Continuation—even improvement—of the team spirit in both companies

• No huge dip in performance

At this writing, one year after the integration process started, the dust has settled and the results are clear. Not only did the new merged company find the mandated $10 million, they astonished everyone by saving an additional $7 million! And the new company not only did not lose a single major customer during the process, they increased their market share.

From all that can be ascertained at this point, it appears that the CEO's decision to address both the chart and the heart has been vindicated.

What's to be Learned?

We are still learning. It's a rocky road attempting to integrate these two concerns, like riding two horses at the same time, each of which has its mind made up about where it wants to go. But the stakes are worth the effort. Since any major structural change holds the possibility of a corporate heart attack, every major difficulty encountered in the process should be seen as an important obstacle to be overcome, not a reason to back away.

In the spirit of going to the blackboard and showing our work, here are two principles we followed, four processes we used and a five caveats we suggest you consider.

Principles

Our two most frequently applied principles in the chart-heart approach were these.

Polarity Management
Working on changing the organization chart and changing the hearts of those involved are most easily seen as competing agendas. In this traditional way of thinking, you have to choose one over the other.

Our colleague, Barry Johnson, author of Polarity Management , has introduced another way to work with what appear to be "either/or" situations. In our case, each pole was represented by an on-site consulting firm. One had made its reputation from the way it was able to guarantee merging companies that they would hit their business targets if they followed their process to the letter. The other firm had made their reputation from the way it was able to unleash and focus the human spirit of their clients, enabling them to think, relate and produce in extraordinary ways.

Which firm was right? Which pole should be pursued to the exclusion of the other?

Johnson says, "What if one pole is not right or even preferable? What if the right thing—and the smart thing—to do is to hold a creative tension between the two worlds? Let them move back and forth, pushing and pulling each other into a resulting synergy which is better than if one of them gets the upper hand."

We took the position, as did our clients, that the two agendas of changing the chart and changing the heart were not actually opposed to each other. Rather, we operated as if they represented a fundamental polarity which had to be managed so that neither pole won—nor lost. Success in either agenda without success in the other would fail to produce the results the merger was meant to create.

Body-Mind-Spirit Connection
The body is not the only thing that comes to work in the morning. There is a mind and a spirit that walks through the door, too. Any approach designed to "safeguard the human spirit" would have to work with this body-mind-spirit continuum. Any change the chart effort needs to avoid creating a downward spiral in workforce commitment and energy. It needs to leave them ready and eager to put their hearts and souls back into the new enterprise. This is not accomplished by appealing only to the mind.

Recognizing that reality, we peppered training and conflict-resolution sessions with short "centering" and focusing exercises, stretching and even self-management coaching. As the flight attendants direct us before takeoff, "If you're traveling with a small child or someone who needs assistance, put your own mask on first." Evaluation of our sessions uniformly reflected people's eagerness for even more body-mind-spirit training.

In addition, communications were infused with "heart talk," which touched people at an emotional level. We coached leaders and managers to speak the truth and not hide behind safe, corporate-sounding, neutered phrases. "Let employees have their feelings," we advised. "People are going to have their reactions, so accept the fact and work with whatever is so for them; don't insult people by trying to talk them out of their experience."

Questions to Ponder

Before you undertake the next big change project, you might want to ask yourself:

• What would be the benefit of changing the chart and changing the heart at the same time?

• What would be the likely consequences of doing the project without attention to the heart?

• How much additional time and cost would be involved in doing them both?

• How would we manage and integrate a two-track process?

• How would I sell the chart-heart concept to colleagues at work? To customers? To other key stakeholders?

PROCESSES

What would such a commitment to address the chart and the heart together look like? Given the extremely tight timeframe, here's how we operationalized the mandate to 'safeguard the human spirit'. We prioritized four crucial areas of focus for our work:

1. Equipping managers and supervisors to attend to their people's hearts.

We delivered 16 days of training to about 150 of the 200 VP's, managers and supervisors in both companies. The agendas included a half-day on each of the following topics, timed for when the topic was "hot" for them:

• Opening to Change

• The Power to Accomplish

• How to Talk with your People about Their Job Situation

• Making a Matrix Organization Work

2. Launching and providing ongoing support to the 12 Integration Teams tasked with redesigning their functions for the new organization.

We took the position that the merger of the two companies had to happen first on the Integration teams, since they were composed of people from both organizations. In most cases they were strangers to each other. In other situations—based on past history—there was downright hostility between the departments. So we devoted a lot of time and attention, especially in the early going, to helping these groups become teams. Only real teams were capable of doing the tough work of deciding the shape of the new functional area without getting protective about turf and colleagues.

In the feedback, people said one of the most valuable aspects of this training was the chance to get acquainted with colleagues from the other organization. "I am finding out that 'they' are really just like 'us,'" as one person stated. It is impossible to overstate the importance of working with merging groups to get beyond history. Without this step, people will appear to be addressing some re-design problem in the group, but, in reality, they will be working out their unresolved "stuff" regarding the other company. Decisions then end up being made off the wrong criteria, generating lots of unnecessary work downstream during implementation.

In addition, after each team meeting, we had them reflect on their meeting using a simple teamwork effectiveness checklist and apply the results in improving their process. We kept track of all the scores from all the teams. That way, when we saw a team's scores drop, we could consult with the Team Captain and suggest an intervention to help them get back on track.

3. Contributing "heart material" into the communications process.

Because of our neutral role as outsiders, we were able to say some things to both workforces that would have been difficult for the internal people to get through their communication "gates." Periodically we would send out articles to all employees emphasizing some aspect of the human part of the change process. One, which stimulated a great deal of feedback, was entitled "The Game is Changing: How to Manage Your Life and Career During Turbulent Times". In it, we suggested that the old psychological contract (work hard, keep your nose clean and we'll take care of you for life) was null and void in today's business environment. The new one was more like, "Work hard, keep learning and developing yourself and we'll treat you the best we can as long as it makes good business sense."

There were also times when we were moved to suggest to leaders that they express their appreciation to the workforce—face to face and in writing—for the way their employees were handling the very difficult challenge of merging. Sometimes it's tough for executives to speak words of encouragement to help their people make it through tough times. This is most true when the tough times are the result of decisions the executives themselves have made. Leaders and managers can get "target fixation" on matters of the chart and forget that it will be matters of the heart that will determine how fast the new organization becomes productive—and profitable—again.

4. Troubleshooting hot spots and potential show stoppers which might threaten the people side of the merger.

One example here from among several will tell volumes. Two of the VP's (one from each company) were in an open conflict which was paralyzing their integration team's ability to decide on the shape of the new chart for the functional area. The division in the smaller company was organized in a traditional, hierarchical structure to deliver service to the customers. They had consistently achieved a score of 98% on a nationally standardized service level rating and were darned proud of it. The same division in the bigger company had just completed the first year of a 3-to-5 year restructuring into customer-segmented cross-functional teams. Their service level score on the same rating had dropped to 81% at the beginning of the team approach, then climbed to 93% by this time. There was, as you might guess, a strong difference of opinion about which approach should be recommended.

They faced questions like, "Why make everybody switch to a team structure when the traditional approach is working so well?" "If so much time and money has been spent by the biggest company on the transition to a team environment, how can we scrap all that and go back to a traditional organization?" Team members, who looked to their own leader for guidance, were stymied because of the unresolved conflict between the two VPs. Sensing they were stuck and blocking their team's success, they asked for help.

We discovered a laundry list of long-standing personal grievances between the two of them. A huge one was that the VP from the larger company had been given the division-head job in the new organization, resulting in hard feelings in the smaller company's VP and staff. One of them tended to be more formal in their leadership style; the other more family. The two of them were communicating professionally and, on the surface at least, were doing OK. But under the surface there was not enough trust and respect ("relationship money in the bank") for them to engage in the kind of breakthrough thinking required by the merger process.

We facilitated an off-line conversation between the two of them designed to get straight talk—and constructive power—flowing between them again. In the process, they discovered they wanted the same thing from each other, namely to be respected personally and to have their point of view honored. It also became clear that they triggered each other at many levels. There were issues around gender and power and management style. These are not things that can be resolved quickly, as anyone who has been there knows, but because they were willing to engage each other candidly, i.e. heart-to-heart, they were able to clear the air enough to commit to re-building their relationship. This "heart work" made it possible for the two of them—and their constituent "camps"—to succeed at the "chart work," creating a breakthrough option for the organizational design and bringing the action plan in on time.

Just for the record, the solution they reached was to phase the shift from traditional management to teams over a year, making it possible to evaluate what features from the traditional approach should be incorporated in the teams. A simple resolution, and to the uninvolved observer, an obvious one, but without the interpersonal opening that took place, an impossible one.

CAVEATS

This chart-heart approach is working. There is virtually no argument about that. There are, however, some issues to be aware of which take the form of caveats.

1. In combining the work of two consulting groups with dramatically different agendas, collaboration became the big issue. Even though we were able to integrate with the other firm's team at the personal level, it was difficult to integrate our work into their pre-set process. We had to work around or parallel to their agendas, which required more time from the clients who had to schedule with us both.

2. Looking back, it would have been beneficial for the two consulting teams to experience something of the other's approach prior to beginning. This was, in fact, suggested by the CEO and members of the Steering Committee, but once the gun went off, both firms became so preoccupied with the day-to-day work of the project that we failed to make it happen. Over time, we became better acquainted with their task-driven, above-the-waterline "chart" agenda and they with our below-the-waterline "heart" expertise.

3. Polarity management between our two approaches was not easy to do in real time. During meetings, the change-the-chart agenda of the other consulting team often ran into ours head-on. Since our client had mandated that we not interfere with theirs, we had to find a way to work attention to the heart into the nooks and crannies of their agenda. This, following the adage that "hard always drives out soft," meant that we were frequently fighting for airtime with clients who really believed in what we were about.

4. Given the above caveats, we suggest you estimate the time to do the chart-changing work, then add 30% for attending to the corporate heart.

5. Make sure the senior leadership team is completely on board with the chart + heart decision. We were fortunate in that, over the past year, all of the VPs from both merging organizations had experienced an intensive personal and professional development program with us—coming in two's and three's. The agenda for the four-day training focused almost entirely on skill building at the heart level. This gave them a common language and created a profound "boot camp" camaraderie that went a long way in motivating them to do the heart work with each other.

Now What?

After a frenzied ten years, leaders of the re-engineering movement have begun to address something the rest of us have been noticing for quite a while: many large-scale restructuring projects fail to produce the positive changes intended. The possible missing piece which we have attempted to address here has also been identified by none other than Mike Hammer, the best-known guru of re-engineering. In a straight-from-the-shoulder piece on the front page of the December26, 1996 Wall Street Journal , he admitted, "Basically, we are engineers. This process looked pretty good to us—but we forgot the human factor." (Italics added)

Most people who have lived through a heart attack talk about wishing they had paid more attention to living a balanced life before a near death experience. Our suggestion: go out and find two consulting firms you trust, one for the chart and one for the heart. Sit them down in a room and insist that they put their biases aside and work together on your behalf to not only change the chart, but do it in a way that leaves your heart stronger and more capable of getting on with life.

What we are recommending is not convenient, takes more time and money, and will result in a creative tension between apparently opposing worlds. Anyone, however, willing to enter this relatively uncharted territory has much to gain—and just maybe a company's life to save.

For more information on how to put these principles to work in a merger or downsizing project, or to find out more about The Scherer Yeoell Group -- Center for Work and the Human Spirit, contact us at 1-800-727-9115 or at inquiries@sygroupinc.com.  Visit their website at www.sygroupinc.com/.


John Scherer, president of The Scherer Yeoell Group, is a 1962 honors graduate of Roanoke College and was selected as one of the School’s 150 Distinguished Alumni for their Sesqui-Centennial Celebration. He is also an honors graduate of The Lutheran Theological Southern Seminary and is currently completing his PhD in Executive Development. Prior to beginning his consulting career, John served as Lutheran Chaplain at Cornell University in Ithaca, New York. 

John came to Spokane in 1973 to co-create the nation’s first competency-based graduate program in the Applied Behavior Sciences. In 1979, John and a colleague, Bob Crosby, developed the first computer-scored, holistic organization effectiveness assessment “The People Performance Profile” since used in hundreds of businesses. 

John is the creator of the Executive Development Intensive (EDI), a four-day solo program for senior managers and spouses, devoted to expanding the mind, stretching the body, and deepening the spirit. The Leadership Development Intensive (LDI), is the group version of the EDI for managers, entrepreneurs, and other professionals. Over the past ten years, business leaders from twelve countries have come to Spokane for these programs. 

The EDI inspired John to write Work and the Human Spirit in 1993, detailing what happens to executives and their spouses on their way to the top and what happens when they are given the opportunity to have a new experience within themselves. John has published numerous articles and produced widely used video/audio tapes on organizational change and conflict resolution. His latest book, The Sword and the Heart: How Two Merging Companies Dared to Care, co-authored with Mark Yeoell and Larry Shook, is in process. 

Mark Yeoell has over 20 years of hands-on experience as a manager and corporate executive. Fascinated by the challenge of sustainable peak performance, his favorite quote is: “All power to accomplish flows through relationship.”

Mark began his career as a commercial banker in Canada. More recently, he served as Chief Financial Officer, Chief Information Officer, and Chief Operating Officer for North America’s largest residential personal development center. The Center served over 10,000 program participants a year. Mark was also mentor to an International Network responsible for identifying, training, and coaching staff team leaders and managers for more than 160 affiliated chapters around the world. 

Since joining The Scherer Yeoell Group as a partner and vice president, Mark has been consulting to and coaching leaders from the United States, Asia, Canada, and Europe. Clients remark on his profound ability to hear what is going on beneath the surface and to produce actionable alternatives not previously seen. He is a lead facilitator of the Executive Development Intensive (EDI) and the Leadership Development Intensive (LDI) 

He is an engaging and dynamic keynote speaker, providing a refreshingly practical way of looking at the world of work and the human spirit. 

Mark is an honors graduate in business studies from London, England. He has lived in Malaysia, Nigeria, Morocco, England, Switzerland, Canada and the United States. This international experience provides a unique basis for appreciating and celebrating human diversity and for his contribution to JS&A’s mission of transforming the world at work. 

 

Learn more about Transforming the World At Work at:
www.sygroupinc.com

 

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