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Organizational Change

Organizational change, in general, is an exceedingly difficult task. Every leader recognizes that organizations must continuously adapt to changes in the external environment. Nonetheless, the introduction of organizational change creates anxiety and fear. When a major adjustment is required because of some newly proposed reorganization, it can lead to high levels of “fight, flight, or freeze.” To introduce continuous change, such as that required in today's turbulent environment, leaders need to recognize the importance of motivation and the involvement of employees.

An example of how effective leadership helped to keep innovation and entrepreneurial energy alive was the approach taken by CEO George Hatsopoulos of Thermo Electron Corporation. He allowed each new project to spin off as a separate company, with Thermo Electron as the majority stakeholder. While thought by some to be primarily an innovation in capital financing, he believed it provided a strong incentive to employees, while at the same time being helpful in bringing in funding. His approach has been an ongoing success.

On the other hand, companies can inadvertently discourage innovation. A new marketing director was hired to help in meeting fierce competition. The director had an imaginative Creative Intelligence style that was different from everyone else in the conservative, family-owned company. He came up with many creative ideas that challenged the status quo and made people uncomfortable. His fellow employees were excited and not threatened by his ideas. However, when he presented a new product line to senior management, it was rejected out of hand, leading to stifled creativity. This is a classic case that illustrates the conflict that exists between the need for innovation in a changing marketplace on the one hand, and tradition-bound corporate culture on the other.

The alternative to rigidity and tradition is an approach taken by Chris Bangle, Global Chief of Design for BMW in Munich, Germany. He sees himself as living at the intersection of art and commerce. He constantly looks for ways to produce the “ultimate driving machine,” while at the same time looking to make a profit. He uses three key principles. His first goal is to protect the creative team from the rest of the company as much as possible. Second, he insists on protecting the creative process from time pressures that could disrupt the focus of the work. Third, he communicates continuously with the team and mediates creatively between the design and business sides of the company. He says that the constant quest to convince non-designers that a BMW, like a fine wine, cannot be hurried is a most difficult task. He has to appeal to a deeply held, nonverbal belief about BMW-ness. Designers have a sense of pride about the product that they share with everyone in the company. The designers view perfection as ephemeral, an almost spiritual quest. They realize that it is a goal that needs to be achieved in stages. Engineers, on the other hand, feel that perfection is measurable and should be done right.

While technological innovation may be the foundation for competitive advantage, if not accepted or properly implemented, the advantage disappears. To assure acceptance of radical change, leaders also need to rely on their Emotional Intelligence. Daniel Goleman describes five components of Emotional Intelligence that include the following: self-awareness, self-confidence, relating to others, being open to change, and knowing what motivates you to pursue difficult goals. Leaders need to know that others have feelings, and they must be persuasive in getting change accepted. Goleman describes how Emotional Intelligence is used to gain cooperation and encourage others to embrace high levels of innovation and creativity. Bangle often has to translate the language of art into a form that can be understood by the rest of the corporation. In persuading people to focus on the relevant aspects of creative design, he applies techniques such as keeping things concrete by speaking in descriptive, amusing terms, comparing design features to animals and people (a rear bumper sagging like a baby with a full diaper). He also uses pictures as much as possible to illustrate his points.

From another perspective, intrinsic motivation is also crucial for individuals who have a sense of personal purpose and who tend to devote their energy to the creative process. Extrinsic motivation includes public recognition, promotions, and tangible rewards. A study conducted at Pillsbury showed that brand managers valued rewarding both intrinsic and extrinsic motivation to stimulate innovation and creativity.

How can Creative Intelligence be used effectively in an organization? Using the following steps, any organization can increase its creativity quotient, that is, the ratio of available talent to that used:

  • Start with identifying each individual's Creative Intelligence. An organization should strive to match abilities with requirements. Placing people in positions that utilize their abilities achieves better performance and more satisfied employees.

  • Allow greater flexibility in positions within an organization. Creative people easily become bored. By providing rotation and new or challenging positions, management is able to retain valuable employees.

  • Allow greater use of teamwork and recognize accomplishment. Although creative individuals have high levels of personal satisfaction in what they do, they also enjoy recognition by others of their accomplishments.

  • Make the organization more flexible by introducing training that expands the horizons of the employees rather than emphasizes increased proficiency on the job.

  • Encourage an “open” organization, where questioning and differences are accepted and respected. The creative mind thoroughly dislikes “limits” or having to adhere to the “party line.”

  • Most important, recognize that a small investment in individuals often has tremendous payback. Papermate had a major problem with leaking ballpoint pens. A young engineer volunteered to study quality control and reduced the rejected pens from 17% to 4%. This was a win-win solution. The engineer was thrilled at making that significant a contribution and Papermate saved its pen business.

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