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474 PART 5: THE LEADER AS SOCIAL ARCHITECT

IN THE LEAD factories that were weak in that area, which led to learning and cross-pollination of
ideas. In short order, factory mangers were helping one another implement the best
manufacturing methods of the entire organization across boundaries.
Leaders set broad improvement goals for each factory, but allowed the factory
manager to determine the specific elements to improve during each year of the

five-year improvement plan. They reasoned that, even if some managers chose only

easy improvements, at least everyone’s efforts were focused in the same direc-
tion. Training was provided to help managers and improvement teams accomplish
59
results faster.
The change journey at Raytheon Missile Systems was not without challenges, but
by communicating with employees, allowing people to participate in the change,
actively involving factory managers, and providing training, leaders overcame most
of the resistance and facilitated a smoother implementation. After two years, they
decided to apply for the Shingo Prize for Excellence in Manufacturing as a way to
gauge the organization’s progress. Surprisingly, RMS won the award on its fi rst at-
tempt, which served both as a reminder of how far the organization had come and
a way to celebrate and reward factory managers for all their hard work.
The Two Faces of Change
Effectively and humanely leading change is one of the greatest challenges for lead-
ers. The nature and pace of change in today’s environment can be exhilarating
and even fun. But it can also be inconvenient, painful, and downright scary. Even
when a change appears to be good for individual employees as well as the organi-
zation, it can lead to decreased morale, lower commitment, and diminished trust
if not handled carefully.
In addition, some changes that may be necessary for the good of the orga-
nization can cause real, negative consequences for individual employees, who
may experience high levels of stress, be compelled to quickly learn entirely new
tasks and ways of working, or possibly lose their jobs. Consider what’s happen-
ing at Hewlett-Packard Co., where new CIO Randy Mott is leading a $1 billion
makeover of HP’s internal IT systems, which will cut the company’s IT costs
in half and increase sales by enabling managers to analyze buying trends and
other data. The transformation calls for slashing thousands of small IT projects
and replacing 85 loosely-connected data centers with six cutting edge facilities.
Tearing up the entire IT infrastructure is causing tremendous stress for many
employees. In addition, the new centralized approach means some people have
had their projects terminated, and thousands of employees may lose their jobs.
Referring to the stress level at HP, one veteran manager said, “At some point, you
hit a breaking point.” 60
Some of the most diffi cult changes are those related to structure, such as
redefi ning positions and responsibilities, re-engineering the company, redesigning
jobs, departments, or divisions, or downsizing the organization. In many cases,
these types of changes mean that some people will be seriously hurt because they
will lose their jobs. Downsizing is one of the most diffi cult situations leaders face;
they have to handle the layoffs in a way that eases the pain and tension for depart-
ing employees and maintains the trust, morale, and performance of employees
who remain with the organization.
Leadership and Downsizing
Downsizing
Downsizing Downsizing refers to intentionally reducing the size of a company’s workforce.
intentionally reducing the size of
intentionally reducing the size of
s workforce
a company’
a company’s workforce During the boom years of the 1990s, few leaders had to be concerned with the