The Nobel-prize winning behavioral economist, Daniel Kahneman, has a very interesting relationship with Gary Klein—with whom he both conflicts and collaborates. As Kahneman notes, in alignment with both Frans Johansson (2004) and Scott Page (2011), great diversity of opinion and perspective is likely to yield creative solutions and breakthrough thinking and analysis—as is the case regarding his relationships with Klein. In his extraordinary book, Thinking, Fast and Slow, Kahneman (2011) writes about his extensive and successful use of an analytic tool devised by Gary Klein. It is called “The Pre-Mortem.”
The Strengths and Weaknesses of Optimism
Like many of his behavioral economics colleagues, Kahneman points out that optimistic thinking (and the avoidance of analyses concerned with failure, loss and risk) is both a strength and weakness. On the one hand, we get a dose of dopamine when imagining positive and rewarding outcomes. Dopamine, in turn, is a great motivator (but not a primary source of pleasure as some neuroscientists in the past assumed). It moves us to a state of activity – rather than the passive state in which we find ourselves when pessimistic and (at a more extreme state) depressed. Chronic depression is actually often linked to the absence of dopamine in our neural system.
Perpetual optimism, on the other hand, can also get us into a heap of trouble. Kahneman other behavioral economists identify several major biases associated with optimism:
(1) Neglect of the strengths and strategies used by competitors (neglect of the Threat sector in a SWOT analysis)
(2) Over-estimation of our own individual and collective strengths (neglect of the Weakness sector in a SWOT analysis)
(3) Failure to acknowledge unanticipated impacts on our plans (Nassim Taleb’s “Black Swans”) (neglect of the unanticipated Threats in SWOT)
(4) Failure to acknowledge that there are unknowns we don’t know we don’t know (to paraphrase Donald Rumsfeld moment of candor and insight) (neglect of both the Weakness and Threat sectors of SWOT)
(5) Failure to take into full consideration the change curve that inevitably is engaged when a new plan is engaged (see my discussion of “change curve” below).
The Pre-mortem Speech and Key Coaching Questions
As a way to address these potential biases of optimism, Klein (and Kahneman) suggest that a pre-mortem analysis be done before the decision is made to venture into new territory (a new project, strategy, way of approaching recurrent problems, etc.). I believe that the pre-mortem can be a very powerful coaching tool and strategy and provide Kahneman’s specific and brief description of this process while also offering a set of coaching questions that address the five biases I just listed. First, the quote from Kahneman (2011, p. 264):
The procedure is simple: when the organization has almost come to an important decision but has not formally committed itself, Klein proposes gathering for a brief session a group of individuals who are knowledgeable about the decision. The premise of the session is a short speech: “Imagine that we are a year into the future. We implemented the plan as it now exists. The outcome was a disaster. Please take 5 to 10 minutes to write a brief history of that disaster.”
While the premortem is best done (as Kahneman suggests) with a knowledgeable group, it also can be effectively used with a leader when one is the coach. I would propose that the following coaching questions be asked:
One year from now you are reflecting back on why this venture failed:
(1) What did your competitors do that contributed to the failure?
(2) What ended up not being a strength for you – or it was a strength that was used too often or inappropriately?
(3) What are several possible unanticipated impacts that had a negative impact on your venture?
(4) What were your areas of relative ignorance or your misleading biases? What could you have learned more about before starting this venture? What outside data might you have used (for example, the processes and outcomes of similar projects done in other organizations or done in your organization at another point in time)?
(5) What did the change curve look like? Was it deeper or longer than anticipated? What could have been done to reduce the depth or length of the change curve (see description of change curve below)?
These are difficult – quite challenging—questions to ask of a leader who is about to embark on a new venture. These questions are directly aligned with (yet also expand on) the spirit of organizational learning and reflective practice that are often associated with Donald Schön, Chris Argyris and Peter Senge (of Fifth Discipline fame). While the emphasis is usually placed on learning from one’s mistakes and more recently (with the emergence of appreciative inquiry) learning from one’s successes, there is also the possibility of anticipatory learning — which is what Klein and Kahneman are encouraging with the use of pre-mortem analysis (and is similar to Otto Scharmer’s “learning from the future”). This kind of analysis might be a fundamental way in which we contribute to the welfare and success of our coaching clients.
The Change Curve
At noted in the pre-mortem coaching questions I have proposed, there is a key dynamic element which I have identified as the change curve. When advocating any specific change in the life of a person or organization, we typically describe the positive outcomes that will attend this change—especially if we are optimists. A new accounting procedure will cut down on paperwork by twenty percent or a new patient intake procedure will significantly increase both staff and patient satisfaction. While these outcomes might realistically be expected of a successful change effort over a relatively long period of time, we must expect any change effort to have an initial impact that is deleterious with reference to the achievement of these outcomes. A change curve accompanies any attempt to improve a situation.
Let’s focus on a particular change curve—and assume that the change effort is ultimately successful, and that members of the organization are willing to wait out the initial drop off in productivity, morale and so forth. What actually occurs during this change curve phenomenon and why does it occur?
At the start of any change, the existing state of the person or organization holds several distinct advantages over the desired state. First, everyone is familiar with the current state. They have confronted it, discovered how it works and, in most instances, come to terms with it, no matter how bad it is. No one will be caught by surprise. No new demands will be placed on anyone by new people or new situations.
Second, some organization theorists suggest that the current status of any system (person or organization) is, in some sense, meeting at least some of the needs (conscious or otherwise) of all members of the system—especially if the current system has remained relatively stable for some time. The mere fact that the present state is “rotten” serves the purpose, for example, of enabling one to excuse her own current, unsuccessful behavior.
We are all quite skillful at hiding behind the failures of other people or the organizations in which we work: “If only old George wasn’t my boss … or “If I could only get a job in a better managed company.” “I could finish this task if only this company had a decent personnel policy.” “We would be a terrific team in an organization that really cared about our work.” The current situation thus holds a distinct advantage over the desired change in that there are few unrealistic expectations about the current situation, whereas the desired change becomes the home for many misguided hopes and dreams, as well as some realistic expectations.
A third advantage which is held by the current situation concerns the proclivity of all systems to remain stable. When we change any part of the current system in order to make this part more efficient, more responsive, more humane or more profitable, then we can expect that other parts of the system also will have to change—even if they currently are working in an acceptable manner. Unless the desired change is trivial, it will set up ripples (if not tidal waves) in other parts of the system that often will not be fully appreciated by members of these parts of the system. Consequently, unless a change effort is truly system-wide in scope, it will tend to meet with local resistance. Even a systemic change effort will bump up against resistance from other neighboring systems, for no one system is an island—rather it is always one component of an even larger meta-level system. From this perspective, one begins to fully appreciate the pessimism of many organizational theorists about the prospects for real, lasting change.
Why then is any change effort begun? It is begin because, in some essential way, the current situation is intolerable. It is better to try something than to accept the current circumstances as givens. Thus, the impetus for change is persuasive and enduring. We embark upon planned change, typically, because the alternatives—no change and haphazard change—are unacceptable.
Initiating the Change
What occurs when the change has been initiated? First, things are disrupted. An unfreezing process is essential to any planned change effort. At the individual level, we can speak of the transitional periods or psychic limbo states that intercede between more stable periods in the lives of adults. During each transitional period some fundamental assumptions are questioned and the existing life structure is reappraised. Previously dismissed options and possibilities for change in oneself and in one’s world are now given credence. For the first time, we hear voices from other rooms in our psychic structure and consider profound changes in the way in which we encounter our world.
Whether engaged in organizational unfreezing or personal transitions, people are forced to adjust and learn when first initiating change. This is often a painful and consuming process. Participants in the change understandably begin to focus more on their own coping and their own learning than they do on the task at hand. They become introspective: old memories, hopes and fears often are evoked as people being changed seek out the stability of the past amidst the new values and behaviors. The old boundaries between home and work often are broken, as are many interpersonal constraints and traditional role differences (teacher and learner, young and old, male and female). Many change efforts will open up new perspectives that seem on the surface to have little to do specifically with this change. Change processes and learning often are not very discriminating.
Because of unrealistically high expectations and the often distracting learning that accompanies most change efforts, the productivity of a person or organization during periods of change will drop off, as compared with performance levels established prior to this change. Accompanying this drop off is a reduction in morale: the “new day” has not yet come; in fact, the “old days” are looking better all the time. At least there were fewer problems in the old days that were so unpredictable and difficult to solve. This drop off in morale often further exacerbates production problems, which in turn further lower the morale. A vicious cycle has been started which can leave an individual or organization in a rather long-term depressed state.
Sometimes when a change is introduced it will yield a short-term boost in productivity and morale—the so-called Hawthorne Effect. While the actual Hawthorne Studies involved the investigation of many different aspects of worker motivation and performance, they are best known for an early finding that workers will try harder because they are involved in an experimental program or, more basically, because they have been singled out for special attention of some type—this has commonly been labeled the Hawthorne Effect. People try harder because they are involved in a new venture—particularly if they have some psychological or financial stake in the outcome of this venture. If the decision to initiate the change was difficult to make, then people will also attempt, for a short period of time, to work toward its success, or at least ignore its initial failings, in order to reduce the cognitive dissonance associated with this difficult decision. The proverbial donkey that is caught midway between two haystacks of equal size is not only likely to vacillate between these two stacks, he is likely also to focus on the positive attributes of the haystack that he finally does choose and to identify and dwell on the negative attributes of the haystack that wasn’t chosen.
This post-decision tendency to justify one’s choice often will give any change effort an initial boost. This boost usually is short-lived, however, especially if there are people involved in the change effort that prefer the other haystack and would benefit in some way from the failure of this change initiative. Most importantly, the tendency to ignore negative implications of a chosen course of action, once the decision is made, will itself often contribute to the downturn in productively and morale, for problems associated with a change effort often will be ignored until they become particularly difficult to resolve. The “bugs” in a new website, for instance, may be overlooked during the pilot test phase because those involved in the program want it to succeed and therefore ignore these “trivial” difficulties. The true extent of the problem only becomes apparent when this website is accessed by all of the operating units of the company or by customers.
Responding to the Change
What typically happens after this downturn in productivity and morale? People involved in the change will either wait it out, to see if productivity and morale improve over time, or panic and decide either to return to the old way of doing things or institute yet another change. If the latter course of action is taken, then a particularly vicious cycle often is set in motion, for another change effort will institute yet another change curve—further reducing production and morale, leading to yet another change, another change curve and so forth. Very soon, this person or organization will suffer from the effects of uncontrolled change. A tailspin will ensue. Performance will become increasingly variable–in systems terms this is called “oscillation”. It usually precedes and is indicative of the system’s death.
At the very least, a system in which change itself has become a problem will experience a long term drop off in productivity and morale which may falsely be attributed to the first of the change efforts or to a whole series of decisions about change, rather than to the process of change itself. Thus, the Dean of a School of Medicine will complain about her “bad luck” in selecting four Assistant Deans over a six-year period who did not work out. The Manager of Glassware in a large department store will complain about his Assistant Buyer’s choice of a new line of stemware that didn’t initially sell very well, leading to a reorganization of the stemware display, which, in turn, led to an overall drop in stemware sales.
If a decision is made to return to the pre-change state, then a person or organization has benefited very little from the change effort. The same old problems remain unsolved. Those who formerly were optimistic about solving these problems through change are now disillusioned, because the change didn’t work, or embittered, because the change was never given an adequate chance to succeed. New problems may be added to the list of old problems as the person or organization attempts to make up for the drop in productivity and morale that was produced by the change effort.
At the very least, this person or organization is much less inclined to initiate another change in the near future. Frequently, we find that those people who are now the recalcitrants in an organization—resisting any and all change efforts—were formerly those who advocated change, but found that their change efforts were unsuccessful or, more frequently, never given a fair test. Thus, when we abort a change effort in the middle of a change curve we may be creating employees who will be hindrances to change efforts in the future.
When a change effort is stopped in mid-stream, the future options and resources of the person or organization in adapting to changing conditions and responding to complex problems are reduced. This person or organization has become immobilized—stagnated—by its premature rejection of the change initiative. This premature rejection is based, in turn, on a failure to anticipate, identify and understand the change curve phenomenon.
Deciding Whether or Not to Initiate Change
Because of the negative consequences associated with an aborted change effort, it is better for a person or organization not to undertake a major change effort if this person or organization is unable to see this change through to the end. One should keep open the option of stabilization as well as change when leading an organization. To paraphrase a passage from Ecclesiastes: for everything there is a season — a time for change, and a time to refrain from change.
What then are the conditions under which one can sustain a change effort through the period of disillusionment and disruption? First, people who will be involved in this change effort must recognize that the change curve is likely to be present. They should not immediately judge the worth of a change effort, but wait instead until there has been ample time for the system to adjust to this change.
Second, people who are immediately involved in the change effort should be sufficiently committed to this effort to give it a good try. If the change effort has been initiated without adequate consultation with those who must enact the change, then the change curve is likely to be long-term and debilitating. There will be no Hawthorne Effect to provide an initial boost in morale and productivity. Nor will there be much motivation to continue with the change, once the disruption sets in. Typically, those people who were not consulted about the change will push for a return to the status quo (producing stagnation) or will push for another type of change (producing the vicious cycle of repetitive change).
Third, the person or organization must be sufficiently “healthy” to live through the disruption of change. Ironically, major change efforts often are most successful when they are not really needed. Under conditions of crisis, a person or organization often is unable to live with the change curve, hence will return to the status quo or initiate another change, which hopefully will be immediately successful. Since the latter hope is rarely realized and the return to a former crisis state is rarely gratifying, the stress on a person or organization is usually intensified by a change effort.
Fourth, a change curve can be successfully endured if the person or organization sets realistic deadlines and high but realistic goals for the change effort. In other words, adequate planning and evaluation must precede and accompany any successful change effort. This is where the pre-mortem analysis conducted by a group or offered by a coach can be of great value. The change curve must be anticipated in setting up deadlines and timelines for program planning, initiation and review. Formative, nonjudgmental evaluation of the change effort may be appropriate at a relatively early point in the change effort (for example, one to two months), while more judgmental, summative evaluation should not occur until the change curve can be expected to be on an upturn (usually four to six months after the start of a major change).
If the goals for a change effort are not clearly formulated and if adequate assessment of current resources has not taken place before the change is initiated, then one will rarely be able to sustain commitment over a long changeover period, nor make critical judgments concerning an upturn in productivity and morale at the right point during the change effort. One should be able to set a time for program review prior to the start of a change effort. While this review date might be open to some adjustment as the change effort unfolds, one should be able to determine at some point relatively early in the life of a change effort if the downturn in productivity and morale is about to end or has ended. If the downturn continues or if productivity and morale level off at a low level, then a decision should be made to explore the reasons for this failure and to revise the change program, initiate a new program (based on lessons learned from the current change effort) or return to the previous status (with a new appreciation for its positive attributes and/or with suggestions for less drastic modifications in its structure).
These then are the central ingredients to keep in mind when initiating or encouraging others to initiate a major change effort:
• awareness about the change curve, commitment to the change decision
• capacity to sustain the system during the change
• adequate planning for and monitoring of the change effort.
Stabilization and the Change Curve
If awareness, commitment, capacity and planning are not present, then stabilization may be a more appropriate strategy than change. During a period of stabilization, one can encourage those involved in the potential change effort to become more fully acquainted with the dynamics of change and development—especially the change curve—while also working closely with these people to build their commitment to the change.
During a period of stability, an individual or organization may wish to do a better job with current resources, structures, procedures and so forth, in order to build up a capacity to sustain the disruptive effects of future change efforts. An HRD department may wish to work through its own internal human relations problems before seeking to help other departments work through their human relations problems. A high school teacher might wish to become a better lecturer or discussion leader as a precursor to learning how to conduct simulations or role-plays. A sales force may wish to become more intimately familiar with its current product line before taking on a new sales strategy involving an expanded portfolio.
Similarly, before embarking on a major change effort, an individual or organization is well-advised to build up its planning and evaluation capabilities. This is why the pre-mortem analysis makes so much sense. Any effective response to the change curve phenomenon requires a relatively long term planning perspective, as well as sensitive program monitoring and evaluation. No person or organization is likely to sustain commitment to a change effort, under conditions of reduced productivity and morale, unless there also is commitment to the benefits of long-term planning. Unless one is convinced that the monitoring and evaluation of systems now in place can do an adequate job of telling us, at an appropriate time, whether or not this change effort should be sustained in its present form, there will rarely be sufficient patience to wait out a change curve.
Conclusions
The muscles of a skillful change effort must be complemented by the eyes, ears and mind of careful planning and evaluation—by thoughtful pre-mortems, post-mortems (and mid-stream mortems). Otherwise, the change effort becomes a sightless and mindless force that unintentionally destroys people and organizations. Frankenstein monsters are often created by those well-meaning agents of change and optimists who are insensitive to change curves and their implications. _____________________
References
Argyris, Chris & Donald Schön (1978) Organizational Learning: A Theory of Action Perspective. Reading, MA: Addison-Wesley.
Johansson, Frans (2004) The Medici Effect. Boston, MA: Harvard Business School Press.
Kahneman, Daniel (2011) Thinking, Fast and Slow. New York: Farrar, Straus and Giroux.
Page, Scott (2011) Diversity and Complexity. Princeton, NJ: Princeton University Press.
Scharmer, C. Otto (2009) Theory U: Leading from the Future as It Emerges. San Francisco: Berrett-Kohler.
Senge, Peter (1990) The Fifth Discipline. New York: Doubleday.
Taleb, Nassim (2010) The Black Swan: The Impact of the Highly Improbable. New York: Random House.