Change Management 11 - Certain Misery Or the Misery of Uncertainty

By Ian Glickman Ph.D

Small changes can lead to big changes. We don't need a treatise on Chaos Theory to observe that changing systems are nonlinear. Each variable in the change environment exponentially affects the outcome. For example, a simple three-variable closed environment will yield 6 permutations, while 6 variables will yield 720 possible outcomes. In this field, sometimes it's best not to count past three! It's this unwieldy number of possible outcomes that leads us to the creative insight. The former Soviet Union went to great lengths to control this type of creative insight by controlling variables. Control was their thing, after all, and they suffocated from lack of creative adaptation to change. Today, countries and companies go to great lengths to foster the creativity inherent in change.

Embracing creativity is essentially the only way a business can adapt to the constantly changing business environment. Unfortunately, in the face of organizational change, many individuals, departments and corporate cultures still retreat into the unhealthy and limiting defense mechanism of over-control, even when it stifles the very process of creative adaptation. As a successful leader in change, you must be comfortable with a multitude of unknown variables and outcomes. If you are not, then you risk the misery of controlling an ever-increasing number of possible outcomes. Remember, only 6 variables produce 720 possible outcomes. This is a lot of plates to keep spinning-not to mention the no-confidence vote you're giving your creative problem solvers. Creative team members just don't react all that well to manipulation and stifling over-control.

The very first exercise the leader must undertake is a thorough inventory of his or her fears. Look at the worst case scenarios first. Once you have a good long list, brainstorm them with the team. If worst case scenario number one occurs, what are the creative recourses? If you let your team run free with ideas for an hour or so, you might be surprised at the far-reaching and pleasantly unexpected results. What you are doing here is fear (negative outcome) control. If you're going to lead through a period of change, you must know thyself, and particularly your fears. Predictability and ambiguity are two dynamic forces working in constant opposition. In an active change situation, predictability tends to contract while ambiguity expands. In dynamic situations, leaders can become fearful of an explosion of ambiguity (too many options). In attempting to control this, they inadvertently implode due to the repression of creativity (a la the Former Soviet Union). In the heat of battle it's easy to forget that it's always much easier to tone down a overly creatively solution than to spruce up a dull one (known as the lipstick on a pig solution). It's not part of our macho, action hero culture to admit to fear and possible negative outcomes, but this is what must be done. Get the team together and get those fears on the flip chart and allow the creativity to flow. This exercise is an exceptionally powerful way to unify the team. What usually happens is that many of these fears are unfounded or easily solved by the collective open creativity of the team.

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Ian Glickman, Ph.D.


How Business Schools Have Failed Business

Why Not More Education on the Responsibility of Boards?
By Michael Jacobs

As we try to understand why our economy is so troubled, fingers are increasingly being pointed at the academic institutions that educated those who got us into this mess. What have business schools failed to teach our business leaders and policy makers? There are three profound failures of sound business practices at the root of the economic crisis, and none of them have been adequately addressed by our business schools.

Just about everyone agrees that misaligned incentive programs are at the core of what brought our financial system to its knees. Countless individuals became multimillionaires by gambling away shareholders' money. Incentive systems that rewarded short-term gain took precedence over those designed for long-term value creation.

We could chalk this all up to greed, as many pundits have. But first we should ask how many of the business schools attended by America's CEOs and directors educate their students about the best way to design management compensation systems. Amazingly, this subject is not systematically addressed at most business schools, and not even discussed at others.

Secondly, as Washington scrambles to restructure the financial regulatory system, those who still believe in the private sector are asking why corporate boards were AWOL as institution after institution crumbled. Why did it take rumors of nationalization and a drop in Citicorp stock to below $2 a share to inspire Citigroup to nominate directors with experience in financial markets?

American icon General Electric was stripped of its coveted AAA-rating because of problems emanating from its financial services unit. Yet its board has only one director with experience in a financial institution. If it is the board's job to oversee a corporation, it seems logical that there would be a segment in the core curriculum of every business school devoted to board structure, composition and processes. But most programs don't cover the topic.

The third breakdown came in the investment community. Nearly 20 years ago I wrote a book titled "Short-Term America" that warned about the growing chasm between those who provide capital and the companies who use it. The concept is simple: When money provided to homeowners or businesses comes from an anonymous source, possibly half way around the world, there are serious challenges to operating a functioning system of accountability.

Nationally, finance departments at business schools offer hundreds of courses in asset securitization and portfolio diversification. They have taught a generation of financial leaders that risk can be diversified away. But in their B-school days, few investment bankers examined the notion of "agency costs." That concept explains that as the gulf between the provider and the user of capital widens, the risks involved with selecting and monitoring the participants in the portfolio increase. It should come as no surprise that financial institutions amassed securities that consist of a diversified portfolio of deadbeats.

About 70% of the shares of American corporations are held by institutional investors such as pension and mutual funds. These organizations are brimming with MBAs. But how many of these MBAs took a class devoted to how shareholders should exercise their rights and obligations as the owners of America's corporations? Few, if any. When shareholders are uneducated about their obligations, how can a corporate accountability system function properly?

Recently, when I delivered a guest lecture at another school, a distraught-looking student pulled me aside after class. She explained that my talk was very disturbing to her. After investing two years and $100,000, she was only weeks away from receiving her MBA. But prior to our class, she had never heard a discussion about board responsibilities or the rights of shareholders. She said she felt cheated.

By failing to teach the principles of corporate governance, our business schools have failed our students. And by not internalizing sound principles of governance and accountability, B-school graduates have matured into executives and investment bankers who have failed American workers and retirees who have witnessed their jobs and savings vanish.

Most B-schools paper cover the topic by requiring first-year students to take a compulsory ethics class, which is necessary, but not sufficient. Would Bernie Madoff have acted differently if he had aced his ethics final?

Could we have avoided most of the economic problems we now face if we had a generation of business leaders who were trained in designing compensation systems that promote long-term value? And who were educated in the proper make-up and responsibilities of boards? And who were enlightened as to how shareholders can use their proxies to affect accountability? I think we could have.

America's business schools need to rethink what we are teaching -- and not teaching -- the next generation of leaders.

Mr. Jacobs, a professor at the University of North Carolina's Kenan-Flager Business School, was director of corporate finance policy at the U.S. Treasury from 1989 to 1991. He may be contacted at michael_jacobs@unc.edu


Retaining Talent: Assessing Job Satisfaction Facets Most Related To Software Developer Turnover Intentions

Steven G. Westlund, Washington University, St. Louis
John C. Hannon, Capella University

Tech-savvy IT workers are a vital resource in our 21st century digital economy. Firms can better leverage their IT talent by developing cultures that foster creativity, empowerment, motivation, and organizational commitment.

Westlund [38] reported that IS project managers who exhibited both charismatic and contingent reward leadership styles had more satisfied subordinates with lower turnover intentions. Westlund also found that overall job satisfaction was more significantly related to software developer turnover intentions than satisfaction with supervision. The results of this study furthered that research by showing that satisfaction with the nature of work had the greatest influence on turnover intentions among these software developers.

It is important to recognize that turnover can have positive outcomes. Mobley [23] noted that it can displace poor performers, infuse new knowledge and technology through the replacements, and stimulate changes in policy and practice. Without turnover, organizations can become stagnate and lose their competitive advantage.

Jackofsky and Slocum [15] concluded that the worst and the best performers are the ones most likely to voluntarily leave the organization. Most IS project teams cannot afford to lose their top performers, especially during the development life cycle. We suggest that this attrition
can be reduced by designing jobs that software developers will find intrinsically rewarding and satisfying. This can be accomplished, in part, through progressively challenging assignments, opportunities to learn new technologies,and the recognition of achievement from management
and peers.

To read the full article, go to:

Journal of Information Technology Management Volume XIX, Number 4, 2008


We'd Like To Introduce...

Dr. Al Bento
Merrick School of Business
University of Baltimore

AoM/IAoM's Flagship publication is the Journal of Information Technology Management (JITM), a venue in which to publish research articles and papers of scholarly/professional significance:

  • to promote the integration and cross-fertilization of the behavioral/organizational and information sciences

  • to encourage, sharpen, and expand the dialogue between academicians and practitioners from an interdisciplinary perspective

  • to provide a forum for the communication of solutions to the multifaceted problems associated with managing information and technology as a corporate resource.
Editor-in-Chief of the journal is Dr. Al Bento, the BGE Research Professor of Information Systems, University of Baltimore.He was previously on the faculty of Boston University School of Management, California State University and Bentley College. He has served as Department Chair and Research Center Director in these institutions. Prior to his academic career, he worked for nine years at IBM World Trade as Systems Engineer, Budget Manager, and Education and Scientific Affairs Manager.

He has served the profession and the University in a variety of capacities, such as Chair of the Association for Information Systems (AIS) Special Interest Group on Security (SIGSEC), Conference track and mini-track Chair, Webmaster for the Merrick School of Business, Faculty Senate President, etc. For details see the Service Activities page.

Dr. Bento is an American citizen and holds a B.S.B.A, an M.S. in Computer Science and Systems Engineering, and a Ph.D. in Management, Computer Information Systems from the University of California, Los Angeles (1980).

The Journal of Information Technology Management may be viewed either on the AoM/IAoM website or at jitm.ubalt.edu. We welcome submission of articles and research studies for possible publication in JITM. Please contact Dr. Bento at abento@ubalt.edu or you may submit through our website, http://www.aom-iaom.org/.