2. The power of honest, collective and public conversations
The Science of Organizational Transformation: Why its Not Easy and What to Do About It
The power of honest, collective and public conversations

3. Essential System Level Outcomes They ensure sustained effectiveness, commitment and performance
A system of organizing, managing and leading aligned with strategy
High
Performance
High Trust and Commitment
A system aligned with enduring human needs
Sustained Performance and Commitment
Capacity to Learn & Change
Capacity to have honest, collective & public conversations about the system
Source: Adapted from
Beer (2009)

4. Senior leadership team
The Strategic Fitness Process A means for honest, collective and public conversations about the system of organizing, managing and leading
Senior leadership team
Advocacy
Inquiry
Fitness task force
Broader organization
Source: Beer & Eisenstat (2004) 4 4 4

5. The Transformation at Becton Dickinson Becoming a more innovative company
We were genuinely concerned about growth. We …..sat down with…..the leadership team and we put it to them. ….I explicitly remember that we sat down and I said you guys may not want to think about employing the Strategic Fitness Process (SFP), we’ve done it in the past, we believe that a fitness process, ….would really do us a lot of good and I think it was during that discussion that someone said …
’Let’s really go looking for insights, criticisms, ideas regarding our growth agenda because we’re spending more and more money and we’re not seeing good results.’
We had probably been through a couple of acquisitions that …weren’t quite right and a couple of products that sort of died upon launch. Unlike 2000 when I took over as CEO when we employed SFP to deal with very poor performance, as well as problems with a new enterprise system, dating of orders, and hostile shareholders, this time ….we…had a Higher Ambition to achieve – becoming a more innovative company that will grow faster.
– Ed Ludwig, CEO

6. The Fallacy of Top Down Programmatic Change
Quick-fix programs and initiatives
Globalization
Information Technology
Best practices
Total quality
Benchmarking
Outsourcing
Customer-focused
Value creation
Partnering
Micromarketing
Flexible manufacturing
Core competence
Competitive advantage
Networks
Strategic alliances
Delaying
Revitalization
Information
Computer-aided design
Concurrent engineering
Restructuring
Diversity
Cross-functional teams
Empowerment
The new organization
Computer-aided engineering mission
Knowledge
The information organization
The shamrock organization
The hybrid organization
Strategic stretch and leverage
The chaotic organization
The postindustrial organization
The postmodern organization
The spider-web organization
The turbulent organization
The cyclical organization 6 6

7. Top Down Initiatives Fail to Recognize that Each Sub-Unit is a System
CEO
Senior Team
Businesses/Functions/Regions
Cross-cutting teams
Source: Adapted from the Beer Eisenstat & Spector, “The Critical Path to Corporate Renewal,” 1990

8. Effective Organizations are High Fit Systems But top down transformation do not enable leaders to “see,” hear and change the whole system
Leadership
and
Direction
People
Organization
Design
Organization
Behavior,
Capabilities &
Culture
Rewards
Processes
Source: Adapted from: Jay Galbraith

9. BD Task Force Feedback About Barriers to Innovation and Faster Growth
Targets/ strategic direction
Customer focus/ weak strategic marketing
Ineffective acquisition process
Poor partnership and collaboration with partners
Culture – too little constructive challenge
Feedback
Feedback
Poor innovation process
Short-term financial focus
Inadequate talent management
Organizational structure and control
U.S.- centricity

10. Organizations are Technical & Socio-emotional Systems But top down transformations do not let leaders to ”see,” hear and change the intangible socio-emotional system
Organization
Commitment
and
Performance
Tangible Business/ Technical System
Intangible Socio/
Emotional System
Power and influence
Capacity to speak truth to power
Norms governing behavior
Emotions – positive and negative
Psychological safety
Pessimism about capacity to change
Strategy
Business Processes
HR policies & Practices
Information Systems
IP, Technologies, Brands
Plant and Capital Assets
Source: Adapted from: Malcolm Wolf

11. BD Associates’ Perception of Power and Influence
Finance
Operations
Legal
Quality
Regulatory
Human resources
U.S. markets
Medical
Marketing
Sales
Research and development
OUS markets

12. Transformation: Why is it hard?
Short-term
Long-term
Hard
Soft
Surface
Deep
Experience and Comfort Zone of leaders
“Go-to” position under pressure
Essential to Transformation
Requires step-out courage from leaders
Source: Adapted from Malcolm Wolf

13. The Silent “Killers” Undiscussible soft and deep barriers to sustained learning and change
Unclear strategy, values, and conflicting priorities
An ineffective senior team
Leadership style – top down or laissez faire (hands off)
Poor coordination across businesses, functions or geographic regions
Inadequate leadership/management skills and development in organization
Low capacity for honest, collective and public conversations about external and internal reality
Source: Adapted from Beer & Eisenstat (2000) 13

14. How Silent “Killers” Prevent Sustained Learning & Change
Top-down or hands off senior management style
Unclear strategy,
values and priorities
Ineffective top team
Low quality of direction
Low quality of
learning
Closed vertical
communication
Low quality of implementation
Inadequate down-the-line leadership skills and development
Poorly designed system
of organizing,
managing
and leading 14

15. Why Transformations Fail: Common Pitfalls
Performance
Effective system of organizing, managing and leading
Failure to Integrate
Inadequate direction
Hijacked by short-term performance pressure
Missing strategic management process
Wrong change process
Source: Adapted from Malcolm Wolf

16. A Discipline for “Seeing” and Acting on the System
Develop a high-quality direction direction – strategy and values 
Learn the whole truth about the quality of your organization
Its direction?
Its alignment with strategy and values 
Design a high-quality system of organizing, managing, and leading (hard and soft) to enable implementation 
Adapt the direction and continuously improve the effectiveness

17. High quality direction High quality implementation
Honest Conversations at Becton Dickinson Transformed Silent “Killers” Into Strengths
Engaged leader who listens and encourages conflict
Clear strategy,
values and priorities
Effective top team
High quality direction
High quality
learning
Honest vertical
communication
High quality
learning
Honest vertical
communication
High quality implementation
Effective down-the-line leadership skills and development
Strategically aligned
system of organizing,
managing
and leading 17

18. Former CEO Ed Ludwig Who Kicked Off SFP in 2010
I don’t think it would’ve happened as rapidly without SFP. I’m absolutely convinced that this is an energy concentrator, an action accelerator simply because everyone is [engaged]. It’s not so much about eliminating resistance as it’s about getting everyone to go in the same direction.
Now, there [was] some passive resistance. For example, creating a new chief marketing office was a very controversial move in a company that had some pockets of excellence in marketing … so you need conviction … I think SFP took our vague concern about innovation, a notion that something was not quite right … – that was un-actionable to … a clear compelling action plan for change. It accelerated the transformation.

19. CEO Vince Forlenza Implemented BD’s Successful Transformation – 2011-2016
Doubled NPD 8% to 16%
Revenue up 26%
Stock price up 39% - well above S&P 500 Index
The work that we [with SFP] kicked off started to really energize the transformation of BD
in multiple dimensions … So all of those things happened because of SFP.
Sure, I had a lot of these ideas, but … SFP was giving a voice to the organization so they
could have dialog with me and with Kozy and with others. But I didn’t have the whole thing scoped
out in my head. It was this information from SFP that enabled me to refine my thinking.

22. Risks: Sustaining Transformation to High Performance and Commitment Organization
Financial policies that could cause harm to the system
Debt
Underinvestment in leadership and organization development
Responding to rather than shaping investor expectations 
Rapid growth
Shortfall of high quality EQ leaders
Rapid hiring prevents careful selection to fit culture 
Acquisitions and mergers 
CEO succession 
Board of Directors
Are not committed to CEOs long-term aspirations