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The Work of Leadership

by Ronald A. Heifetz and Donald L. Laurie

Included with this full-text

Harvard Business Review

article:

The Idea in Brief—the core ideaThe Idea in Practice—putting the idea to work

Article Summary


A list of related materials, with annotations to guide furtherexploration of the article’s ideas and applications

Further Reading

Followers want comfort, stability, and solutions from their leaders. But that’s babysitting. Real leaders ask hard questions and knock people out of their comfort zones. Then they manage the resulting distress.

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The Idea in Brief The Idea in Practice

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What presents your company with its toughest challenges? Shifting markets? Stiffening competition? Emerging tech-nologies? When such challenges intensify, you may need to reclarify corporate values, redesign strategies, merge or dissolve busi-nesses, or manage cross-functional strife.

These

adaptive challenges

are murky, systemic problems with no easy answers. Perhaps even more vexing, the solutions to adaptive challenges

don’t

reside in the executive suite. Solving them requires the involvement of people

throughout

your organization.

Adaptive work is tough on everyone. For

leaders

, it’s counterintuitive. Rather than providing solutions, you must ask tough questions and leverage employees’ collec-tive intelligence. Instead of maintaining norms, you must challenge the “way we do business.” And rather than quelling conflict, you need to draw issues out and let people feel the sting of reality.

For your

employees

, adaptive work is painful—requiring unfamiliar roles, responsibilities, values, and ways of working. No wonder employees often try to lob adaptive work back to their leaders.

How to ensure that you

and

your employees embrace the challenges of adaptive work? Applying the following six principles will help.

1. Get on the balcony.

Don’t get swept up in the field of play. Instead, move back and forth between the “action” and the “balcony.” You’ll spot emerging patterns, such as power strug-gles or work avoidance. This high-level per-spective helps you mobilize people to do adaptive work.

2. Identify your adaptive challenge.

Example:

When British Airways’ passengers nick-named it “Bloody Awful,” CEO Colin Marshall knew he had to infuse the company with a dedication to customers. He identified the adaptive challenge as “creating trust throughout British Airways.” To diagnose the challenge further, Marshall’s team min-gled with employees and customers in baggage areas, reservation centers, and planes, asking which beliefs, values, and be-haviors needed overhauling. They exposed value-based conflicts underlying surface-level disputes, and resolved the team’s own dysfunctional conflicts which impaired companywide collaboration. By under-standing themselves, their people, and the company’s conflicts, the team strength-ened British Airways’ bid to become “the World’s Favourite Airline.”

3. Regulate distress.

To inspire change—without disabling people—pace adaptive work:

•

First, let employees debate issues and clarify assumptions behind competing views—safely.

•

Then provide direction. Define

key

issues and values. Control the rate of change: Don’t start too many initiatives simulta-neously without stopping others.

•

Maintain just enough tension, resisting pressure to restore the status quo. Raise tough questions without succumbing to anxiety yourself. Communicate presence and poise.

4. Maintain disciplined attention.

Encour-age managers to grapple with divisive issues, rather than indulging in scapegoating or de-nial. Deepen the debate to unlock polarized, superficial conflict. Demonstrate collaboration to solve problems.

5. Give the work back to employees.

To instill collective self-confidence—versus de-pendence on you—support rather than control people. Encourage risk-taking and responsibility—then back people up if they err. Help them recognize they contain the solutions.

6. Protect leadership voices from below.

Don’t silence whistle-blowers, creative deviants, and others exposing contradictions within your company. Their perspectives can provoke fresh thinking. Ask, “What is this guy

really

talk-ing about? Have we missed something?”

page 2Purchased by Annie Marks ([email protected]) on January 09, 2012

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by Ronald A. Heifetz and Donald L. Laurie

harvard business review • december 2001

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Followers want comfort, stability, and solutions from their leaders. But that’s babysitting. Real leaders ask hard questions and knock people out of their comfort zones. Then they manage the resulting distress.

Sometimes an article comes along and turns the conventional thinking on a subject not upside down but inside out. So it is with this landmark piece by Ronald Heifetz and Donald Laurie, pub-lished in January 1997. Not only do the authors introduce the breakthrough concept of adaptive change—the sort of change that occurs when people and organizations are forced to adjust to a radically altered environment—they chal-lenge the traditional understanding of the leader-follower relationship.

Leaders are shepherds, goes the conventional thinking, protecting their flock from harsh sur-roundings. Not so, say the authors. Leaders who truly care for their followers expose them to the painful reality of their condition and demand that they fashion a response. Instead of giving people false assurance that their best is good enough, leaders insist that people surpass them-selves. And rather than smoothing over conflicts, leaders force disputes to the surface.

Modeling the candor they encourage leaders to display, the authors don’t disguise adaptive change’s emotional costs. Few people are likely to

thank the leader for stirring anxiety and uncover-ing conflict. But leaders who cultivate emotional fortitude soon learn what they can achieve when they maximize their followers’ well-being instead of their comfort.

To stay alive, Jack Pritchard had to change hislife. Triple bypass surgery and medicationcould help, the heart surgeon told him, but notechnical fix could release Pritchard from hisown responsibility for changing the habits of alifetime. He had to stop smoking, improve hisdiet, get some exercise, and take time to relax,remembering to breathe more deeply eachday. Pritchard’s doctor could provide sustain-ing technical expertise and take supportiveaction, but only Pritchard could adapt his in-grained habits to improve his long-termhealth. The doctor faced the leadership task ofmobilizing the patient to make critical be-havioral changes; Jack Pritchard faced theadaptive work of figuring out which specificchanges to make and how to incorporate theminto his daily life.



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Companies today face challenges similar tothe ones that confronted Pritchard and his doc-tor. They face adaptive challenges. Changes insocieties, markets, customers, competition,and technology around the globe are forcingorganizations to clarify their values, developnew strategies, and learn new ways of operat-ing. Often the toughest task for leaders ineffecting change is mobilizing people through-out the organization to do adaptive work.

Adaptive work is required when our deeplyheld beliefs are challenged, when the valuesthat made us successful become less relevant,and when legitimate yet competing perspec-tives emerge. We see adaptive challenges everyday at every level of the workplace—whencompanies restructure or reengineer, developor implement strategy, or merge businesses.We see adaptive challenges when marketinghas difficulty working with operations, whencross-functional teams don’t work well, orwhen senior executives complain, “We don’tseem to be able to execute effectively.” Adap-tive problems are often systemic problemswith no ready answers.

Mobilizing an organization to adapt its be-haviors in order to thrive in new business envi-ronments is critical. Without such change, anycompany today would falter. Indeed, gettingpeople to do adaptive work is the mark ofleadership in a competitive world. Yet for mostsenior executives, providing leadership and notjust authoritative expertise is extremely diffi-cult. Why? We see two reasons. First, in orderto make change happen, executives have tobreak a longstanding behavior pattern of theirown: providing leadership in the form of solu-tions. This tendency is quite natural becausemany executives reach their positions of au-thority by virtue of their competence in takingresponsibility and solving problems. But thelocus of responsibility for problem solvingwhen a company faces an adaptive challengemust shift to its people. Solutions to adaptivechallenges reside not in the executive suite butin the collective intelligence of employees atall levels, who need to use one another as re-sources, often across boundaries, and learntheir way to those solutions.

Second, adaptive change is distressing forthe people going through it. They need to takeon new roles, new relationships, new values,new behaviors, and new approaches to work.Many employees are ambivalent about the ef-

forts and sacrifices required of them. Theyoften look to the senior executive to take prob-lems off their shoulders. But those expecta-tions have to be unlearned. Rather than fulfill-ing the expectation that they will provideanswers, leaders have to ask tough questions.Rather than protecting people from outsidethreats, leaders should allow them to feel thepinch of reality in order to stimulate them toadapt. Instead of orienting people to theircurrent roles, leaders must disorient them sothat new relationships can develop. Instead ofquelling conflict, leaders have to draw the is-sues out. Instead of maintaining norms, leadershave to challenge “the way we do business”and help others distinguish immutable valuesfrom historical practices that must go.

Drawing on our experience with managersfrom around the world, we offer six principlesfor leading adaptive work: “getting on thebalcony,” identifying the adaptive challenge,regulating distress, maintaining disciplinedattention, giving the work back to people, andprotecting voices of leadership from below.We illustrate those principles with an exampleof adaptive change at KPMG Netherlands, aprofessional-services firm.

Get on the Balcony

Earvin “Magic” Johnson’s greatness in leadinghis basketball team came in part from his abilityto play hard while keeping the whole game situ-ation in mind, as if he stood in a press box oron a balcony above the field of play. Bobby Orrplayed hockey in the same way. Other playersmight fail to recognize the larger patterns ofplay that performers like Johnson and Orrquickly understand, because they are so en-gaged in the game that they get carried awayby it. Their attention is captured by the rapidmotion, the physical contact, the roar of thecrowd, and the pressure to execute. In sports,most players simply may not see who is openfor a pass, who is missing a block, or how theoffense and defense work together. Players likeJohnson and Orr watch these things and allowtheir observations to guide their actions.

Business leaders have to be able to view pat-terns as if they were on a balcony. It does themno good to be swept up in the field of action.Leaders have to see a context for change or cre-ate one. They should give employees a strongsense of the history of the enterprise andwhat’s good about its past, as well as an idea of

Ronald A. Heifetz

is codirector of the Center for Public Leadership at Harvard University’s John F. Kennedy School of Government in Cambridge, Massachu-setts.

Donald L. Laurie

is founder and managing director of Laurie Interna-tional, a Boston-based management consulting firm. He is also a founder and partner at Oyster International, an-other Boston-based management con-sulting firm. He is the author of

Venture Catalyst

(Perseus Books, 2001). This article is based in part on Heifetz’s

Leadership Without Easy Answers

(Belknap Press of Harvard University Press, 1994).



the market forces at work today and the re-sponsibility people must take in shaping thefuture. Leaders must be able to identify strug-gles over values and power, recognize patternsof work avoidance, and watch for the manyother functional and dysfunctional reactionsto change.

Without the capacity to move back andforth between the field of action and the bal-cony, to reflect day to day, moment to mo-ment, on the many ways in which an organi-zation’s habits can sabotage adaptive work, aleader easily and unwittingly becomes a pris-oner of the system. The dynamics of adaptivechange are far too complex to keep track of,let alone influence, if leaders stay only on thefield of play.

We have encountered several leaders, someof whom we discuss in this article, who man-age to spend much of their precious time onthe balcony as they guide their organizationsthrough change. Without that perspective,they probably would have been unable to mo-bilize people to do adaptive work. Getting onthe balcony is thus a prerequisite for followingthe next five principles.

Identify the Adaptive Challenge

When a leopard threatens a band of chimpan-zees, the leopard rarely succeeds in picking offa stray. Chimps know how to respond to thiskind of threat. But when a man with an auto-matic rifle comes near, the routine responsesfail. Chimps risk extinction in a world ofpoachers unless they figure out how to disarmthe new threat. Similarly, when businessescannot learn quickly to adapt to new chal-lenges, they are likely to face their own formof extinction.

Consider the well-known case of BritishAirways. Having observed the revolutionarychanges in the airline industry during the1980s, then chief executive Colin Marshallclearly recognized the need to transform anairline nicknamed Bloody Awful by its ownpassengers into an exemplar of customer ser-vice. He also understood that this ambitionwould require more than anything else changesin values, practices, and relationships through-out the company. An organization whosepeople clung to functional silos and valuedpleasing their bosses more than pleasing cus-tomers could not become “the world’s favoriteairline.” Marshall needed an organization dedi-

cated to serving people, acting on trust, re-specting the individual, and making team-work happen across boundaries. Values had tochange throughout British Airways. Peoplehad to learn to collaborate and to develop acollective sense of responsibility for the direc-tion and performance of the airline. Marshallidentified the essential adaptive challenge:creating trust throughout the organization. Heis one of the first executives we have known tomake “creating trust” a priority.

To lead British Airways, Marshall had to gethis executive team to understand the nature ofthe threat created by dissatisfied customers:Did it represent a technical challenge or anadaptive challenge? Would expert advice andtechnical adjustments within basic routinessuffice, or would people throughout the com-pany have to learn different ways of doingbusiness, develop new competencies, andbegin to work collectively?

Marshall and his team set out to diagnose inmore detail the organization’s challenges. Theylooked in three places. First, they listened tothe ideas and concerns of people inside andoutside the organization—meeting with crewson flights, showing up in the 350-person reser-vations center in New York, wanderingaround the baggage-handling area in Tokyo, orvisiting the passenger lounge in whatever air-port they happened to be in. Their primaryquestions were, Whose values, beliefs, atti-tudes, or behaviors would have to change inorder for progress to take place? What shifts inpriorities, resources, and power were neces-sary? What sacrifices would have to be madeand by whom?

Second, Marshall and his team saw conflictsas clues—symptoms of adaptive challenges.The way conflicts across functions were beingexpressed were mere surface phenomena; theunderlying conflicts had to be diagnosed. Dis-putes over seemingly technical issues such asprocedures, schedules, and lines of authoritywere in fact proxies for underlying conflictsabout values and norms.

Third, Marshall and his team held a mirrorup to themselves, recognizing that they em-bodied the adaptive challenges facing the orga-nization. Early in the transformation of BritishAirways, competing values and norms wereplayed out on the executive team in dysfunc-tional ways that impaired the capacity of therest of the company to collaborate across func-

Solutions to adaptive challenges reside not in the executive suite but in the collective intelligence of employees at all levels.

The Work of Leadership • BEST OF HBR



tions and units and make the necessary trade-offs. No executive can hide from the fact thathis or her team reflects the best and the worstof the company’s values and norms, and there-fore provides a case in point for insight into thenature of the adaptive work ahead.

Thus, identifying its adaptive challengewas crucial in British Airways’ bid to becomethe world’s favorite airline. For the strategy tosucceed, the company’s leaders needed to un-derstand themselves, their people, and thepotential sources of conflict. Marshall recog-nized that strategy development itself requiresadaptive work.

Regulate Distress

Adaptive work generates distress. Before put-ting people to work on challenges for whichthere are no ready solutions, a leader must re-alize that people can learn only so much sofast. At the same time, they must feel the needto change as reality brings new challenges.They cannot learn new ways when they areoverwhelmed, but eliminating stress altogetherremoves the impetus for doing adaptive work.Because a leader must strike a delicate balancebetween having people feel the need tochange and having them feel overwhelmed bychange, leadership is a razor’s edge.

A leader must attend to three fundamentaltasks in order to help maintain a productivelevel of tension. Adhering to these tasks willallow him or her to motivate people withoutdisabling them. First, a leader must createwhat can be called a

holding environment.

Touse the analogy of a pressure cooker, a leaderneeds to regulate the pressure by turning upthe heat while also allowing some steam to es-cape. If the pressure exceeds the cooker’s ca-pacity, the cooker can blow up. However, noth-ing cooks without some heat.

In the early stages of a corporate change, theholding environment can be a temporary“place” in which a leader creates the condi-tions for diverse groups to talk to one anotherabout the challenges facing them, to frameand debate issues, and to clarify the assump-tions behind competing perspectives and values.Over time, more issues can be phased in asthey become ripe. At British Airways, for exam-ple, the shift from an internal focus to a cus-tomer focus took place over four or five yearsand dealt with important issues in succession:building a credible executive team, communi-

cating with a highly fragmented organization,defining new measures of performance andcompensation, and developing sophisticatedinformation systems. During that time, em-ployees at all levels learned to identify whatand how they needed to change.

Thus, a leader must sequence and pace thework. Too often, senior managers convey thateverything is important. They start new initia-tives without stopping other activities, or theystart too many initiatives at the same time.They overwhelm and disorient the very peoplewho need to take responsibility for the work.

Second, a leader is responsible for direction,protection, orientation, managing conflict, andshaping norms. (See the exhibit “AdaptiveWork Calls for Leadership.”) Fulfilling these re-sponsibilities is also important for a managerin technical or routine situations. But a leaderengaged in adaptive work uses his authority tofulfill them differently. A leader provides direc-tion by identifying the organization’s adaptivechallenge and framing the key questions andissues. A leader protects people by managingthe rate of change. A leader orients people tonew roles and responsibilities by clarifying busi-ness realities and key values. A leader helps ex-pose conflict, viewing it as the engine of cre-ativity and learning. Finally, a leader helps theorganization maintain those norms that mustendure and challenge those that need to change.

Third, a leader must have presence andpoise; regulating distress is perhaps a leader’smost difficult job. The pressures to restoreequilibrium are enormous. Just as moleculesbang hard against the walls of a pressurecooker, people bang up against leaders whoare trying to sustain the pressures of tough,conflict-filled work. Although leadership de-mands a deep understanding of the pain ofchange—the fears and sacrifices associatedwith major readjustment—it also requires theability to hold steady and maintain the ten-sion. Otherwise, the pressure escapes and thestimulus for learning and change is lost.

A leader has to have the emotional capacityto tolerate uncertainty, frustration, and pain.He has to be able to raise tough questionswithout getting too anxious himself. Employeesas well as colleagues and customers will care-fully observe verbal and nonverbal cues to aleader’s ability to hold steady. He needs tocommunicate confidence that he and they cantackle the tasks ahead.

A leader must sequence and pace the work. Too often, senior managers convey that everything is important. They overwhelm and disorient the very people who need to take responsibility for the work.




Maintain Disciplined Attention

Different people within the same organiza-tion bring different experiences, assumptions,values, beliefs, and habits to their work. Thisdiversity is valuable because innovation andlearning are the products of differences. Noone learns anything without being open tocontrasting points of view. Yet managers at alllevels are often unwilling—or unable—to ad-dress their competing perspectives collec-tively. They frequently avoid paying attentionto issues that disturb them. They restore equi-librium quickly, often with work avoidancemaneuvers. A leader must get employees toconfront tough trade-offs in values, proce-dures, operating styles, and power.

That is as true at the top of the organizationas it is in the middle or on the front line. In-deed, if the executive team cannot modeladaptive work, the organization will languish.If senior managers can’t draw out and deal

with divisive issues, how will people elsewherein the organization change their behaviors andrework their relationships? As Jan Carlzon, thelegendary CEO of Scandinavian Airlines Sys-tem (SAS), told us, “One of the most interest-ing missions of leadership is getting people onthe executive team to listen to and learn fromone another. Held in debate, people can learntheir way to collective solutions when they un-derstand one another’s assumptions. The workof the leader is to get conflict out into theopen and use it as a source of creativity.”

Because work avoidance is rampant in orga-nizations, a leader has to counteract distrac-tions that prevent people from dealing withadaptive issues. Scapegoating, denial, focusingonly on today’s technical issues, or attacking in-dividuals rather than the perspectives they rep-resent—all forms of work avoidance—are tobe expected when an organization under-takes adaptive work. Distractions have to be

Direction

Protection

Orientation

Managing Conflict

Shaping Norms

Adaptive Work Calls for Leadership

Technical or Routine Adaptive

Define problems and provide solutions

Shield the organizationfrom external threats

Clarify roles and responsibilities

Restore order

Maintain norms

Identify the adaptive challenge and frame keyquestions and issues

Let the organization feel external pressures within a range it can stand

Challenge current roles and resist pressure to define new roles quickly

Expose conflict or let it emerge

Challenge unproductivenorms

Leader’s Type ofResponsibilities Situation

In the course of regulating people’s distress, a leader faces several key responsibilities and may have to use his or her authority differently depending on the type of work situation.




identified when they occur so that peoplewill regain focus.

When sterile conflict takes the place of dia-logue, a leader has to step in and put the teamto work on reframing the issues. She has todeepen the debate with questions, unbundlingthe issues into their parts rather than lettingconflict remain polarized and superficial. Whenpeople preoccupy themselves with blamingexternal forces, higher management, or a heavyworkload, a leader has to sharpen the team’ssense of responsibility for carving out the timeto press forward. When the team fragmentsand individuals resort to protecting their ownturf, leaders have to demonstrate the need forcollaboration. People have to discover thevalue of consulting with one another and usingone another as resources in the problem-solving process. For example, one CEO weknow uses executive meetings, even those thatfocus on operational and technical issues, asopportunities to teach the team how to workcollectively on adaptive problems.

Of course, only the rare manager intends toavoid adaptive work. In general, people feelambivalent about it. Although they want tomake progress on hard problems or live up totheir renewed and clarified values, peoplealso want to avoid the associated distress. Justas millions of U.S. citizens want to reduce thefederal budget deficit, but not by giving uptheir tax dollars or benefits or jobs, so, too,managers may consider adaptive work a pri-ority but have difficulty sacrificing their famil-iar ways of doing business. People need lead-ership to help them maintain their focus onthe tough questions. Disciplined attention isthe currency of leadership.

Give the Work Back to People

Everyone in the organization has special ac-cess to information that comes from his or herparticular vantage point. Everyone may seedifferent needs and opportunities. People whosense early changes in the marketplace areoften at the periphery, but the organizationwill thrive if it can bring that information tobear on tactical and strategic decisions. Whenpeople do not act on their special knowledge,businesses fail to adapt.

All too often, people look up the chain ofcommand, expecting senior management tomeet market challenges for which they them-selves are responsible. Indeed, the greater and

more persistent distresses that accompany adap-tive work make such dependence worse. Peopletend to become passive, and senior managerswho pride themselves on being problem solv-ers take decisive action. That behavior restoresequilibrium in the short term but ultimatelyleads to complacency and habits of work avoid-ance that shield people from responsibility,pain, and the need to change.

Getting people to assume greater responsi-bility is not easy. Not only are many lower-levelemployees comfortable being told what to do,but many managers are accustomed to treat-ing subordinates like machinery that requirescontrol. Letting people take the initiative in de-fining and solving problems means that man-agement needs to learn to support rather thancontrol. Workers, for their part, need to learnto take responsibility.

Jan Carlzon encouraged responsibility takingat SAS by trusting others and decentralizingauthority. A leader has to let people bear theweight of responsibility. “The key is to let themdiscover the problem,” he said. “You won’t besuccessful if people aren’t carrying the recogni-tion of the problem and the solution withinthemselves.” To that end, Carlzon sought wide-spread engagement.

For example, in his first two years at SAS,Carlzon spent up to 50% of his time communi-cating directly in large meetings and indirectlyin a host of innovative ways: through work-shops, brainstorming sessions, learning exer-cises, newsletters, brochures, and exposure inthe public media. He demonstrated through avariety of symbolic acts—for example, by elim-inating the pretentious executive dining roomand burning thousands of pages of manualsand handbooks—the extent to which ruleshad come to dominate the company. He madehimself a pervasive presence, meeting withand listening to people both inside and out-side the organization. He even wrote a book,

Moments of Truth

(HarperCollins, 1989), to ex-plain his values, philosophy, and strategy. AsCarlzon noted, “If no one else read it, at leastmy people would.”

A leader also must develop collective self-confidence. Again, Carlzon said it well: “Peoplearen’t born with self-confidence. Even themost self-confident people can be broken.Self-confidence comes from success, experi-ence, and the organization’s environment. Theleader’s most important role is to instill confi-

Management needs to learn to support rather than control. Workers, for their part, need to learn to take responsibility.




dence in people. They must dare to take risksand responsibility. You must back them up ifthey make mistakes.”

Protect Voices of Leadership from Below

Giving a voice to all people is the foundationof an organization that is willing to experi-ment and learn. But, in fact, whistle-blowers,creative deviants, and other such originalvoices routinely get smashed and silenced inorganizational life. They generate disequilib-rium, and the easiest way for an organizationto restore equilibrium is to neutralize thosevoices, sometimes in the name of teamworkand “alignment.”

The voices from below are usually not asarticulate as one would wish. People speakingbeyond their authority usually feel self-conscious and sometimes have to generate“too much” passion to get themselves gearedup for speaking out. Of course, that oftenmakes it harder for them to communicateeffectively. They pick the wrong time andplace, and often bypass proper channels ofcommunication and lines of authority. Butburied inside a poorly packaged interjectionmay lie an important intuition that needs tobe teased out and considered. To toss it out forits bad timing, lack of clarity, or seeming un-reasonableness is to lose potentially valu-able information and discourage a potentialleader in the organization.

That is what happened to David, a managerin a large manufacturing company. He had lis-tened when his superiors encouraged peopleto look for problems, speak openly, and takeresponsibility. So he raised an issue about oneof the CEO’s pet projects—an issue that wasdeemed “too hot to handle” and had beenswept under the carpet for years. Everyone un-derstood that it was not open to discussion,but David knew that proceeding with theproject could damage or derail key elements ofthe company’s overall strategy. He raised theissue directly in a meeting with his boss andthe CEO. He provided a clear description of theproblem, a rundown of competing perspec-tives, and a summary of the consequences ofcontinuing to pursue the project.

The CEO angrily squelched the discussionand reinforced the positive aspects of his petproject. When David and his boss left theroom, his boss exploded: “Who do you think

you are, with your holier-than-thou attitude?”He insinuated that David had never likedthe CEO’s pet project because David hadn’tcome up with the idea himself. The subjectwas closed.

David had greater expertise in the area ofthe project than either his boss or the CEO. Buthis two superiors demonstrated no curiosity, noeffort to investigate David’s reasoning, noawareness that he was behaving responsiblywith the interests of the company at heart. Itrapidly became clear to David that it was moreimportant to understand what mattered to theboss than to focus on real issues. The CEO andDavid’s boss together squashed the viewpointof a leader from below and thereby killed hispotential for leadership in the organization.He would either leave the company or nevergo against the grain again.

Leaders must rely on others within the busi-ness to raise questions that may indicate an im-pending adaptive challenge. They have to pro-vide cover to people who point to the internalcontradictions of the enterprise. Those indi-viduals often have the perspective to provokerethinking that people in authority do not.Thus, as a rule of thumb, when authority fig-ures feel the reflexive urge to glare at or other-wise silence someone, they should resist. Theurge to restore social equilibrium is quite power-ful, and it comes on fast. One has to get accus-tomed to getting on the balcony, delaying theimpulse, and asking, What is this guy really talk-ing about? Is there something we’re missing?

Doing Adaptive Work at KPMG Netherlands

The highly successful KPMG Netherlands pro-vides a good example of how a company canengage in adaptive work. In 1994, Ruud Koedijk,the firm’s chairman, recognized a strategicchallenge. Although the auditing, consulting,and tax-preparation partnership was the in-dustry leader in the Netherlands and washighly profitable, growth opportunities in thesegments it served were limited. Margins inthe auditing business were being squeezed asthe market became more saturated, and com-petition in the consulting business was in-creasing as well. Koedijk knew that the firmneeded to move into more profitable growthareas, but he didn’t know what they were orhow KPMG might identify them.

Koedijk and his board were confident that




they had the tools to do the analytical strategywork: analyze trends and discontinuities, un-derstand core competencies, assess their com-petitive position, and map potential opportu-nities. They were considerably less certain thatthey could commit to implementing the strategythat would emerge from their work. Histori-cally, the partnership had resisted attempts tochange, basically because the partners werecontent with the way things were. They hadbeen successful for a long time, so they saw noreason to learn new ways of doing business,either from their fellow partners or from any-one lower down in the organization. Overturn-ing the partners’ attitude and its deep impacton the organization’s culture posed an enor-mous adaptive challenge for KPMG.

Koedijk could see from the balcony that thevery structure of KPMG inhibited change. Intruth, KPMG was less a partnership than a collec-tion of small fiefdoms in which each partnerwas a lord. The firm’s success was the cumula-tive accomplishment of each of the individualpartners, not the unified result of 300 colleaguespulling together toward a shared ambition.Success was measured solely in terms of theprofitability of individual units. As one partnerdescribed it, “If the bottom line was correct,you were a ‘good fellow.’” As a result, one part-ner would not trespass on another’s turf, andlearning from others was a rare event. Becauseindependence was so highly valued, confronta-tions were rare and conflict was camouflaged.If partners wanted to resist firmwide change,they did not kill the issue directly. “Say yes, dono” was the operative phrase.

Koedijk also knew that this sense of auton-omy got in the way of developing new talent atKPMG. Directors rewarded their subordinatesfor two things: not making mistakes and deliver-ing a high number of billable hours per week.The emphasis was not on creativity or innova-tion. Partners were looking for errors whenthey reviewed their subordinates’ work, not fornew understanding or fresh insight. AlthoughKoedijk could see the broad outlines of theadaptive challenges facing his organization, heknew that he could not mandate behavioralchange. What he could do was create the con-ditions for people to discover for themselveshow they needed to change. He set a process inmotion to make that happen.

To start, Koedijk held a meeting of all 300partners and focused their attention on the

history of KPMG, the current business reality,and the business issues they could expect toface. He then raised the question of how theywould go about changing as a firm and askedfor their perspectives on the issues. By launch-ing the strategic initiative through dialoguerather than edict, he built trust within thepartner ranks. Based on this emerging trustand his own credibility, Koedijk persuaded thepartners to release 100 partners and nonpart-ners from their day-to-day responsibilities towork on the strategic challenges. They woulddevote 60% of their time for nearly four monthsto that work.

Koedijk and his colleagues established a stra-tegic integration team of 12 senior partners towork with the 100 professionals (called “the100”) from different levels and disciplines. En-gaging people below the rank of partner in amajor strategic initiative was unheard of andsignaled a new approach from the start: Manyof these people’s opinions had never beforebeen valued or sought by authority figures inthe firm. Divided into 14 task forces, the 100were to work in three areas: gauging futuretrends and discontinuities, defining core com-petencies, and grappling with the adaptivechallenges facing the organization. They werehoused on a separate floor with their own sup-port staff, and they were unfettered by tradi-tional rules and regulations. Hennie Both,KPMG’s director of marketing and communi-cations, signed on as project manager.

As the strategy work got under way, thetask forces had to confront the existing KPMGculture. Why? Because they literally could notdo their new work within the old rules. Theycould not work when strong respect for theindividual came at the expense of effectiveteamwork, when deeply held individual be-liefs got in the way of genuine discussion, andwhen unit loyalties formed a barrier to cross-functional problem solving. Worst of all, taskforce members found themselves avoiding con-flict and unable to discuss those problems. Anumber of the task forces became dysfunc-tional and unable to do their strategy work.

To focus their attention on what needed tochange, Both helped the task forces map theculture they desired against the current cul-ture. They discovered very little overlap. Thetop descriptors of the current culture were: de-velop opposing views, demand perfection, andavoid conflict. The top characteristics of the




desired culture were: create the opportunityfor self-fulfillment, develop a caring environ-ment, and maintain trusting relations withcolleagues. Articulating this gap made tangiblefor the group the adaptive challenge thatKoedijk saw facing KPMG. In other words, thepeople who needed to do the changing hadfinally framed the adaptive challenge forthemselves: How could KPMG succeed at acompetence-based strategy that depended oncooperation across multiple units and layers ifits people couldn’t succeed in these task forces?Armed with that understanding, the task forcemembers could become emissaries to the restof the firm.

On a more personal level, each member wasasked to identify his or her individual adaptivechallenge. What attitudes, behaviors, or habitsdid each one need to change, and what spe-cific actions would he or she take? Who elseneeded to be involved for individual changeto take root? Acting as coaches and consult-ants, the task force members gave one anothersupportive feedback and suggestions. They hadlearned to confide, to listen, and to advise withgenuine care.

Progress on these issues raised the level oftrust dramatically, and task force membersbegan to understand what adapting their be-havior meant in everyday terms. They under-stood how to identify an adaptive issue and de-veloped a language with which to discuss whatthey needed to do to improve their collectiveability to solve problems. They talked about di-alogue, work avoidance, and using the collec-tive intelligence of the group. They knew howto call one another on dysfunctional behavior.They had begun to develop the culture re-quired to implement the new business strategy.

Despite the critical breakthroughs towarddeveloping a collective understanding of theadaptive challenge, regulating the level ofdistress was a constant preoccupation forKoedijk, the board, and Both. The nature ofthe work was distressing. Strategy work meansbroad assignments with limited instructions;at KPMG, people were accustomed to highlystructured assignments. Strategy work alsomeans being creative. At one breakfast meet-ing, a board member stood on a table to chal-lenge the group to be more creative and tossaside old rules. This radical and unexpectedbehavior further raised the distress level: Noone had ever seen a partner behave this way

before. People realized that their work experi-ence had prepared them only for performingroutine tasks with people “like them” fromtheir own units.

The process allowed for conflict and fo-cused people’s attention on the hot issues inorder to help them learn how to work withconflict in a constructive manner. But theheat was kept within a tolerable range insome of the following ways:

• On one occasion when tensions were un-usually high, the 100 were brought together tovoice their concerns to the board in an OprahWinfrey–style meeting. The board sat in thecenter of an auditorium and took pointed ques-tions from the surrounding group.

• The group devised sanctions to discourageunwanted behavior. In the soccer-crazy Nether-lands, all participants in the process were issuedthe yellow cards that soccer referees use toindicate “foul” to offending players. They usedthe cards to stop the action when someonestarted arguing his or her point without listen-ing to or understanding the assumptions andcompeting perspectives of other participants.

• The group created symbols. They com-pared the old KPMG to a hippopotamus thatwas large and cumbersome, liked to sleep a lot,and became aggressive when its normal habitswere disturbed. They aspired to be dolphins,which they characterized as playful, eager tolearn, and happily willing to go the extra milefor the team. They even paid attention to thestatement that clothes make: It surprised someclients to see managers wandering through theKPMG offices that summer in Bermuda shortsand T-shirts.

• The group made a deliberate point of hav-ing fun. “Playtime” could mean long bicyclerides or laser-gun games at a local amusementcenter. In one spontaneous moment at theKPMG offices, a discussion of the power of peo-ple mobilized toward a common goal led thegroup to go outside and use their collective le-verage to move a seemingly immovable con-crete block.

• The group attended frequent two- andthree-day off-site meetings to help bring clo-sure to parts of the work.

These actions, taken as a whole, altered atti-tudes and behaviors. Curiosity became morevalued than obedience to rules. People nolonger deferred to the senior authority figurein the room; genuine dialogue neutralized hi-




erarchical power in the battle over ideas. Thetendency for each individual to promote hisor her pet solution gave way to understandingother perspectives. A confidence in the abilityof people in different units to work togetherand work things out emerged. The people withthe most curious minds and interesting ques-tions soon became the most respected.

As a result of confronting strategic and adap-tive challenges, KPMG as a whole will movefrom auditing to assurance, from operationsconsulting to shaping corporate vision, frombusiness-process reengineering to developingorganizational capabilities, and from teachingtraditional skills to its own clients to creatinglearning organizations. The task forces identi-fied $50 million to $60 million worth of newbusiness opportunities.

Many senior partners who had believed thata firm dominated by the auditing mentalitycould not contain creative people were sur-prised when the process unlocked creativity,passion, imagination, and a willingness to takerisks. Two stories illustrate the fundamentalchanges that took place in the firm’s mind-set.

We saw one middle manager develop theconfidence to create a new business. He spot-ted the opportunity to provide KPMG servicesto virtual organizations and strategic alliances.He traveled the world, visiting the leaders of 65virtual organizations. The results of his innova-tive research served as a resource to KPMG inentering this growing market. Moreover, herepresented the new KPMG by giving a key-note address discussing his findings at a worldforum. We also saw a 28-year-old female audi-tor skillfully guide a group of older, male se-nior partners through a complex day of look-ing at opportunities associated withimplementing the firm’s new strategies. Thatcould not have occurred the year before. Thesenior partners never would have listened tosuch a voice from below.

Leadership as LearningMany efforts to transform organizationsthrough mergers and acquisitions, restructur-ing, reengineering, and strategy work falterbecause managers fail to grasp the require-ments of adaptive work. They make the classicerror of treating adaptive challenges like tech-nical problems that can be solved by tough-minded senior executives.

The implications of that error go to the

heart of the work of leaders in organizationstoday. Leaders crafting strategy have access tothe technical expertise and the tools they needto calculate the benefits of a merger or restruc-turing, understand future trends and disconti-nuities, identify opportunities, map existingcompetencies, and identify the steering mecha-nisms to support their strategic direction. Thesetools and techniques are readily available bothwithin organizations and from a variety of con-sulting firms, and they are very useful. In manycases, however, seemingly good strategies failto be implemented. And often the failure ismisdiagnosed: “We had a good strategy, but wecouldn’t execute it effectively.”

In fact, the strategy itself is often deficientbecause too many perspectives were ignoredduring its formulation. The failure to do thenecessary adaptive work during the strategydevelopment process is a symptom of seniormanagers’ technical orientation. Managers fre-quently derive their solution to a problem andthen try to sell it to some colleagues and bypassor sandbag others in the commitment-build-ing process. Too often, leaders, their team, andconsultants fail to identify and tackle the adap-tive dimensions of the challenge and to askthemselves, Who needs to learn what in orderto develop, understand, commit to, and imple-ment the strategy?

The same technical orientation entrapsbusiness-process-reengineering and restructur-ing initiatives, in which consultants and man-agers have the know-how to do the technicalwork of framing the objectives, designing anew work flow, documenting and communicat-ing results, and identifying the activities to beperformed by people in the organization. Inmany instances, reengineering falls short ofthe mark because it treats process redesign as atechnical problem: Managers neglect to iden-tify the adaptive work and involve the peoplewho have to do the changing. Senior execu-tives fail to invest their time and their souls inunderstanding these issues and guiding peoplethrough the transition. Indeed, engineering isitself the wrong metaphor.

In short, the prevailing notion that leader-ship consists of having a vision and aligningpeople with that vision is bankrupt becauseit continues to treat adaptive situations as ifthey were technical: The authority figure issupposed to divine where the company isgoing, and people are supposed to follow.

As a result of confronting strategic and adaptive challenges, KPMG task forces identified $50 million to $60 million worth of new business opportunities.




Leadership is reduced to a combination ofgrand knowing and salesmanship. Such aperspective reveals a basic misconception aboutthe way businesses succeed in addressingadaptive challenges. Adaptive situations arehard to define and resolve precisely becausethey demand the work and responsibility ofmanagers and people throughout the organi-zation. They are not amenable to solutionsprovided by leaders; adaptive solutions re-quire members of the organization to takeresponsibility for the problematic situationsthat face them.

Leadership has to take place every day. Itcannot be the responsibility of the few, arare event, or a once-in-a-lifetime opportu-nity. In our world, in our businesses, we faceadaptive challenges all the time. When anexecutive is asked to square conflicting aspi-rations, he and his people face an adaptivechallenge. When a manager sees a solution toa problem—technical in many respects exceptthat it requires a change in the attitudes andhabits of subordinates—he faces an adaptivechallenge. When an employee close to thefront line sees a gap between the organiza-tion’s purpose and the objectives he is asked

to achieve, he faces both an adaptive chal-lenge and the risks and opportunity of lead-ing from below.

Leadership, as seen in this light, requires alearning strategy. A leader, from above or be-low, with or without authority, has to engagepeople in confronting the challenge, adjust-ing their values, changing perspectives, andlearning new habits. To an authoritative per-son who prides himself on his ability totackle hard problems, this shift may come asa rude awakening. But it also should ease theburden of having to know all the answers andbear all the load. To the person who waits toreceive either the coach’s call or “the vision”to lead, this change may also seem a mixtureof good news and bad news. The adaptive de-mands of our time require leaders who takeresponsibility without waiting for revelationor request. One can lead with no more thana question in hand.

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Further Reading

A R T I C L E

Whatever Happened to the Take-Charge Manager?

by Nitin Nohria and James D. Berkley


January–February 1994Product no. 94109

This article shares with Heifetz and Laurie the conviction that the fundamental responsibility of leadership cannot be outsourced. In the 1980s, U.S. business experienced an explosion of new managerial concepts unparalleled in previous decades—all claiming to have un-locked the secret to staying competitive in in-creasingly challenging marketplaces. Many managers felt that the emergence of these new managerial ideas signaled a rejuvenation of U.S. business. By readily adopting innova-tions such as total quality programs and self-managed teams, managers believed that they were demonstrating the kind of decisive leader-ship that would keep their companies com-petitive. But their thinking didn’t correspond to the facts. American managers didn’t take charge in the 1980s; they abdicated their re-sponsibility to a burgeoning industry of man-agement consultants. If business leaders want to reverse this trend, they must reclaim mana-gerial responsibility—and pragmatism is the place to start. Pragmatic managers, like leaders of adaptive work, are sensitive to their com-pany’s context and open to uncertainty.

B O O K

The Will to Lead: Running a Business with a Network of Leaders

by Marvin BowerHarvard Business School Press1997Product no. 7587

This book provides another perspective on the negative aspects of command-and-control leadership, and the positive aspects of a “network of leaders.” Such networks effec-tively respond to adaptive challenges that re-quire the involvement of people throughout an organization. Bower, longtime leader of McKinsey & Company, emphasizes that while command-and-control leadership once con-tributed to building America’s might, it is no longer the best system for today’s intensely competitive global market. Command-and-control management breeds rigidity and ex-cessive reliance on authority. In contrast, Bower sets forth his vision of a leadership model that replaces hierarchy with a network of leaders and leadership groups placed stra-tegically throughout a company. The goal? Helping individual workers learn to lead, work more efficiently, have more ideas, and exercise more creativity and initiative.


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