E X E C U T I V E F O R U M

THE LEADER
AS CAPACITY
BUILDER
Ronald N. Ashkenas and Robert H. Schaffer

W
hat differentiates senior leaders who success- But now shift the focus down to the first few levels of
fully drive change in their organizations employees and supervisors. While the main systems
from those who struggle to get out of first and structural changes had been achieved, many of the
gear? Our experience working with dozens of CEOs and detailed changes to each person’s job had to be figured
senior executives over the past three decades convinces us out by that person—while everyone else was also trying
that a key factor is the ability to create change capability to figure out theirs.
at every level. That means enabling hundreds or thou- In Order Entry, for example, major overall system and
sands of people—from senior management to the grass process changes had been introduced. But every day the
roots—to play effective roles in modifying work pro- salespeople, order entry clerks, manufacturing sched-
cesses and organizational performance. No matter how ulers, logistics staff, engineers, and accountants faced
brilliant a new strategy or how powerful a new informa- thousands of actions for which no detailed instructions
tion system, major innovations always depend for success had been or could have been issued. The people them-
on large numbers of people who are not just following selves were left to their own devices to work out these
instructions but creatively modifying their own sphere of thousands of details of re-creating their jobs and mak-
activities to get the new processes working. ing sure they meshed with one another’s.
Consider this case: The senior management of a large, But in this organization as in most, it was a fact of life
functionally organized manufacturing company decided that the grassroots levels had limited capacity to imple-
to reorganize into three product groups, each aimed at a ment such changes—not because people resisted new
unique customer market. With the help of a consulting ways of working, but because they did not know how
firm, senior management eventually succeeded in get- to change their work in concert with everyone else. To
ting the main pieces of the puzzle to fall into place. assume that it will just happen is a prescription for fail-

44 LEADER TO LEADER
ure. Thus, even though the overall change process in this they take it a step further—beyond just recommenda-
case was well designed, the demand that hundreds of tions—and give people an opportunity to put their solu-
grassroots-level people reformulate their own jobs seri- tions to the test. And they make sure people are learning
ously undermined its success. Virtually every large-scale from these experiences, not just “being involved.”
transformation effort that requires significant changes
For example, several years ago when Emil Frankel be-
in what people do is subject to this hazard.
came commissioner of transportation for the state of
Connecticut, he was faced with the challenge of reduc-
Capacity-Building Leaders ing costs and bureaucracy while providing better service
Capacity-building senior leaders recognize that lofty to the public. It was clear that major innovation would
goals, new directions, expensive systems, and visionary require the department’s managers and unionized em-
strategies mean very little unless dozens, hundreds, or ployees to work in fundamentally new ways—with more
thousands of people have the ability to make creative ad- teamwork, flexibility, and cross-functional collaboration,
justments in the way they work from day to day, both on while making faster decisions—with more customer (cit-
their own and with others. What kind of leadership fos- izen) input. Frankel realized that success depended as
ters this change capacity at the grassroots level? From much on developing these new skills as on the wisdom
our experience with dozens of capacity-building leaders, of the strategy. And he knew that these skills would have
we have observed four specific actions that are deeply to be learned in the context of implementation. Thus
engrained in the way they work: instead of the traditional approach of creating new pro-
1. They shape business challenges to serve as developmen- grams and then assuming (or hoping) that managers and
tal opportunities. employees would somehow figure out how to achieve
them, Frankel decided to build development into the
Capacity-building leaders realize that achieving major very process of formulating and meeting the depart-
business advances and developing organizational capacity ment’s objectives.
to change are activities that need to be done in tandem. As
with skiing, people learn this by doing it. Theoretical in- The effort began with a full-day working session attended
sights mean nothing until you strap on the skis and actu- by more than 40 people from the Department of Trans-
ally go down the hill. Moreover, for every hour that people portation, including all levels of management, plus union
participate in training sessions they are at work 50 or 100 and nonunion workers. Five groups brainstormed and
or 200 hours. Capacity builders draw on this insight and then developed specific recommendations for reducing
treat every business challenge as an opportunity to make bureaucratic waste and delays. One of the teams, for ex-
sure their people develop change capability. They know ample, recommended a streamlined process for granting
that along the way there will be moguls and rough new permits and rights of way, reducing the time by sev-
patches, not to mention other skiers, and that their peo- eral weeks. Another team developed an innovative way
ple will need to learn to make adjustments on the fly. By to reduce road congestion and increase worker productiv-
helping them learn to make these adjustments, leaders de- ity by piloting new work schedules. At the end of the day,
velop their people’s capacity and confidence to tackle even each of these cross-functional teams presented its recom-
more difficult challenges—over and over again. mendations to the commissioner and senior staff, and
most of them received on-the-spot approval to go ahead.
Capacity builders are explicit about this relationship be-
tween achievement and development, and they shape Implementation of the approved actions was led by man-
their response to business problems accordingly. Thus agers from the relevant departments. They were helped
when tackling new business challenges, capacity builders to set specific goals and milestones, to create written
involve a wide circle of people and engage them in think- work plans, to hold efficient team meetings, and to in-
ing about what to do. They challenge teams to come up volve the people and functions needed to help them
with solutions, rather than give them solutions. And then achieve their goals. The commissioner conducted peri-

WINTER 2007 45
odic reviews with the teams. Implementation happened
quickly. Team leaders were helped to break down their
more complex projects into a series of experiments that
Many senior executives are
could be tested quickly. For example, a proposed change
in roadway maintenance to reduce traffic jams and in-
crease worker productivity was tested on one highway
trapped by a self-defeating
project. When the pilot proved successful, union and
management (who had collaborated to develop the idea) management pattern.
agreed to write the new procedure into the work rules
of the next union contract.
By taking this approach, Frankel not only got results
more quickly, but he also ensured that his managers and And why do them sequentially when they can be done si-
employees learned all sorts of new skills about cross- multaneously? Capacity-building leaders implement
functional collaboration, union-management teamwork, major change by commissioning dozens or even hun-
innovation, measurement, and change management. dreds of parallel short-term projects—each of which is a
From that point forward, the department functioned at miniature organization development effort as well as a
a new level of competence and speed. vehicle for driving the large-scale change.
2. Capacity-building leaders break down large corporate For example, in late 2002, adhesive materials company
initiatives into dozens of short-term, results-focused proj- Avery Dennison was determined to break out of its pat-
ects—to stimulate both learning and achievement. tern of relatively slow organic growth. CEO Phil Neal
and President Dean Scarborough realized that this was
To serve as a learning laboratory, a business initiative
a business challenge that also had developmental com-
needs to take place in a relatively short time so that peo-
ponents. Simply increasing the R&D budget would not
ple can try something, see how it works, and learn from
make enough difference. Instead the company needed
the experience. Large-scale, long-term programs that
to develop a growth mind-set at every level, so that hun-
involve many elements simultaneously do not permit
dreds of people would be constantly identifying and
this focused learning. Capacity-building leaders intu-
testing innovative growth ideas.
itively attack large-scale change in an incremental man-
ner, generating not only rapid results but also the To make this happen, Neal and Scarborough, with the
continuous development of the organization’s change assistance of one of our colleagues, launched a test where
management skills. they asked several divisions to each establish a few cross-
functional growth teams. Each team was to come up
In our book Rapid Results! we documented the power of
with one innovative growth idea and then get some ini-
focused, short-term projects to achieve immediate im-
tial results from it in 100 days or less. Within a few
provements and to give participants a developmental ex-
weeks a dozen projects were under way, with more than
perience. When facing an urgent need for large-scale
90 people involved. At the end of the test, when Neal
change across an entire organization, however, most ex-
and Scarborough reviewed these projects, they were as
ecutives have no patience for what they perceive as “small”
impressed by the enthusiasm, high spirits, and fresh in-
projects. They say that working on limited changes in
sights of the teams as they were by the very substantial
one location, or with one product, or with one customer
bottom-line gains that almost every team had achieved.
would be too trivial an effort—it would take too long for
its impact to reach the entire organization. Capacity We then helped the company scale up the concept
builders turn this argument on its head. If a small proj- around the world in a way that would produce both
ect in one place will produce real results and build local growth results and the grassroots capacity for continuous
change skills, then why not do these projects everywhere? innovation. As the process was introduced into each di-

46 LEADER TO LEADER
vision, one or two divisional “growth champions” were incorporated into the plant’s routines, a new round of
quickly trained to facilitate it. Thus, not only did the projects was launched. Over the years many thousands
team participants learn from their experiences, the in- of projects have been carried out. In 2003, $380 mil-
ternal consultants were learning how to support the ef- lion in incremental profit improvement was generated
fort without outside support. through the MIP effort.
By fostering this kind of organization development at the Periodically, CEO Pete Correll and the senior manage-
grassroots level and engaging thousands of people in the ment team assess progress of the overall process and make
learning process, Neal and Scarborough drove their growth modifications, expansions, or shifts as needed—or apply
agenda effectively, and they created an incredible amount the process to other areas or challenges in the business.
of capacity for sustainable change at the same time. In the For example when, after the first year, it was noticed that
first two years more than 1,000 projects were launched in- the mills tended to use the same small group of capable
volving over 4,000 people. More than $200 million of in- people on all of their improvement projects, new ap-
cremental sales were generated—and an ongoing proaches were enacted to encourage the engagement of
momentum and capacity for growth was developed in many other people. After a further year or so of experi-
every part of the company around the world. (Note: Since ence, the process was modified to include hourly and
the events described here, Dean Scarborough has become unionized workers. Then, when MIP had demonstrated
CEO of Avery Dennison and Phil Neal has retired.) its power in the mills, it was extended to marketing and
3. Capacity-building leaders treat large-scale change as a business strategy as well as operations. And when the
series of evolving stages rather than as a grand plan. company made an acquisition, such as the Fort James
Corporation, MIP was used to create common processes
Effective capacity builders also realize that large-scale and ways of working across facilities. Thus instead of
transformational change is an iterative process, which thinking of capacity development as a one-time effort,
needs to be regularly assessed, revised, and reenergized, Correll and his team manage it as an ongoing strategic
no matter how many projects or how much success has priority and a way of creating competitive advantage.
already occurred. It is managed as a series of develop-
mental stages—each of which might run anywhere from 4. Capacity-building leaders insist that their staff experts
12 to 18 months. At the end of each stage, leaders as- share the job of building capacity.
sess what’s been learned from the many short-term proj- To be truly successful at the continuous process of build-
ects carried out. They decide broadly what’s needed to ing grassroots skills while also driving business results, ca-
take the organization to the next level. And within this pacity-building senior leaders engage their staff
framework, they begin to organize the next round of ac- functions—Finance, Information Technology, Human Re-
tion projects while also identifying who needs to be in- sources, and others—as partners in the process. They insist
volved from a capacity standpoint. Thus they do not try that staff people collaborate in producing business results
to lead major change as a preordained process; instead, and building capacity—and not just deliver professional
they move through successive approximations toward an expertise, tools, controls, and standards to line managers.
overall vision that is itself being clarified and redefined.
For most leaders of staff functions and their people this
The Mill Improvement Process (MIP) at Georgia Pacific is a huge shift. Staff people generally spend the bulk of
is a good illustration of this staged approach to large- their time developing programs, tools, systems, controls,
scale change and how it creates a continuous process of or other units of “expert input” that they offer up to line
grassroots development. managers who, they assume, will then use them to get re-
Starting in 1995, each mill in Georgia Pacific was re- sults. As senior executives generate increasing numbers of
quired to improve productivity by launching a number rapid-cycle projects and create a continuous develop-
of rapid-cycle projects on a tight 10-week schedule. After mental process, they need staff specialists to be with
each round of projects was completed and its learning them every step of the way, not just whispering in their

WINTER 2007 47
ears and going away but getting out on the field and tak- ects and to integrate the learning from these projects into
ing joint accountability for making the change happen. the broader strategy formulation of each stage of change.
These coaches also rotate back into the line organization,
When line and staff executives work together effectively
thus seeding it with even more capacity for change. Not
to get results while building capacity it can be a power-
only do these internal consultants help others develop,
ful combination. Patrick O’Sullivan, the group finance
the experience is a great capacity builder for them, and
director for Zurich Financial Services, provides a good
they are frequently selected for promotion.
example. When O’Sullivan took on this role in 2002,
CEO James Schiro was in the midst of an aggressive
turnaround effort. Previously, the Finance group had
played a traditional staff role: studying and analyzing the
Change as Rapidly as Needed
company’s situation and issuing recommendations but Capacity-building senior executives provide a powerful
taking little ownership for achieving better results. Schiro model of how to succeed in a world of accelerating
and O’Sullivan, however, agreed that Finance should change. The notion that line managers can be responsi-
partner with the business units to produce results and ble for an organization’s achievements while its HR ex-
change some of the key ways that work was done. ecutives try to anticipate what capabilities will be needed
To make this happen, O’Sullivan quickly identified a in the future and then inculcate those capabilities into
few core areas where Finance could play a more results- the organization seems quaint in the chaotic environ-
producing role. One of those areas was cash manage- ment of the world today. Achievement and development
ment. O’Sullivan and his team then took the initiative to must be linked for immediate reinforcement.
bring together more than 50 people from certain Zurich This linkage between results and development sounds
businesses—including both Operations managers and so straightforward—to consider business problems to
both local and corporate Finance people—to shape a be developmental opportunities; attack large-scale chal-
global approach to managing the company’s cash. The lenges through many simultaneous results-producing,
aim was to improve the amount of cash flowing from developmental short-term projects; assess progress peri-
units around the globe into the corporate center for bet- odically and recalibrate as needed; support grassroots ca-
ter deployment. The Finance staff had been discussing pacity development with staff partners and internal
the need for better cash management, but this was the coaches. So why don’t more senior executives approach
first time they had worked directly with Operations to major challenges in this way?
make it happen. The result was a set of actions that, in
One answer is that many senior executives are trapped by
less than three months, freed up an additional billion
a self-defeating management pattern: The more difficult
dollars in cash—worth millions in bottom-line savings
a company’s situation and the more challenging its goals,
and additional income opportunities.
the more likely it seems to be that senior managers, over-
In addition to using existing staff groups as partners, whelmed by anxiety, will go for a big fix and pay little at-
sometimes capacity builders need to create a new inter- tention to developing implementation capacity. They may
nal staff group with the explicit job of developing grass- intellectually understand that the organization will have
roots performance and change capability. At difficulty absorbing large-scale change, but they still feel
Avery-Dennison, for example, high-potential managers that there is not enough time to work with hundreds or
were assigned as “growth champions.” At Georgia Pa- thousands of people to get them ready for it. Even think-
cific, the Mill Improvement Process is supported by a ing about such a task seems daunting, so they dismiss it.
rotating team of MIP consultants who help each mill
Another reason why many senior leaders avoid capacity
and function design and implement its MIP program.
building is that it requires new skills on their part as well.
These internal consultants help stimulate managers to se- For example, making clear demands for the rapid deliv-
lect and launch an unending stream of rapid-cycle proj- ery of tangible, measurable results is often the most fun-

48 LEADER TO LEADER
damental innovation in capacity building. Senior man- in contrast, provides a way to put the other 95 percent
agers almost always fall for the arguments their people or 97 percent of the people to work on the change at
offer: that studies, training, new system development, the same time. Projects are launched and results ensue,
and a host of other preparatory activity must first be car- with an emphasis on short-term achievements based on
ried out before any real results can be attempted. Learn- experimentation, learning, skill-building, and leadership
ing to make these demands is a capacity-enhancing step development—and not just on creating strategies or sys-
for the senior executives who try it. tems for later use. Everybody in the organization devel-
ops a fundamental sense of being a vital part of the
The senior executives who opt for the big-picture trans-
process, with a real responsibility to keep it moving, in-
formation track usually work with only a few key people
stead of waiting for detailed instructions from above.
and some outside consultants, taking many months to
plan the big change. Everyone else continues on their The capacity builder can unleash this energy and thus
daily rounds, neither contributing to the transformation build an organization able to succeed at major change—
nor learning how to implement it. The capacity builder, not once, but over and over.

Ronald N. Ashkenas is a managing partner of Robert Robert H. Schaffer is the founder of Robert H.
H. Schaffer & Associates, a management consulting Schaffer & Associates, and coauthor with Ronald
firm based in Stamford, Connecticut. The firm’s N. Ashkenas and others of “Rapid Results!” His
unique results-driven change management process pioneering work in organizational transformation
was described in the book “Rapid Results! How 100- and the dynamics of effective consulting have been
Day Projects Build the Capacity for Large-Scale the basis of more than 60 articles on management
Change,” which he coauthored with Robert Schaffer and consulting, including a half-dozen in Har-
and other members of the firm. He is also a coauthor vard Business Review. He is also the author of
of “The Boundaryless Organization,” “The GE “The Breakthrough Strategy” and “High-Impact
Work-Out,” and dozens of articles on change man- Consulting.”
agement and leadership that draw upon his extensive
consulting and leadership coaching experience.

WINTER 2007 49