1. Leading Change Changes Leaders The Power of Social Capital in Planned Organizational Change
Dr. Zara F. Larsen
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2. Agenda The Paradox and Study Questions
Background Theory and Research Methods
Findings
Implications for Leadership Practice
Summary 2

3. The Paradox
Organizations often hire leaders from outside the organization
(Outsiders) to lead major change initiatives
- Proven “know how”
- External networks or “know who”
- Unencumbered by internal ties
- Opportunity to increase the firm’s change capacity
Despite successful project outcomes, Outsiders often and Insiders sometimes leave. Why? Different reasons for leaving?
Are Outsiders and Insiders different in who they are, and how they lead change?
Assuming a desire to retain the change leader post change, what can the organization do? the change leader do? 3

4. “Cannot live without them, but cannot live with them?”
The Paradox
“Cannot live without them,
but cannot live with them?” 4

5. Study Questions
Are leaders of high impact change projects different from those who “sustain” organizations?
Are Insider and Outsider change leaders different?
Does the type of project (radical change or continuous improvement) make a difference in retention of leaders?
Does organizational culture (authoritarian/prescriptive or open/collaborative) play a part?
How do social networks impact the outcome of projects and the outcome of the leader?
What role does sponsorship play in the outcomes? 5

6. Background Theory
Social Networks – information highway, nodes, ties, spans
Social Capital – strong personal relationships for access to information, influence, power, integration, reciprocity; networks are but a part of
Bonding Social Capital (Network Closure) – embeddedness within a structure of group relationships; protective; by nature drives out variation
Bridging Social Capital (Brokerage) – cross-cutting connections, access to new ideas; competitive advantage; speed (aka cost)
Which is better? It depends. Ties that bind can blind. 6

7. “Know Who” can be as important, if not more important than,
“Know How” and “Know What” 7

8. Research Methods
Interviews with 30 executive level change leaders, primarily from multi-billion dollar commercial enterprises
60-90 minute “inter – views” to an 18 question (50 probe)
semi-structured protocol based on a conceptual model
Balanced sample of:
Insiders and Outsiders
Radical and Continuous Improvement change projects
Successful, neutral and/or unsuccessful projects
Hierarchical/top down and Open/collaborative cultures
Total of 42 high impact projects discussed
Over 650 pages of transcription open coded using an iterative, grounded theory approach 8

9. Findings – Identity Topology
Beliefs Values and Guiding Principles
Doing what is right Commitment/loyalty Owner operator/Autonomy
Change is positive Personal accountability Change team
Change is a way of life High standards Teacher
Transform Future focus Develop others
Will to succeed Push change (command) Learning
End justifies the means Pull change (enable)
Motivation Behaviors Attributes
Challenge Entrepreneurial Enthusiastic
Unknown/pioneer Enterprising Inspirational
Excitement Maverick Communication skills
Fun Risk taker Decisive/confident
Big impact Prone to action Persistent/assertive
Fulfillment Personal sacrifice Self-sufficiency
Altruism People astute
Self-awareness
Note: Blue 80% of all Insiders/Outsiders; Green Outsiders only 9

10. Findings – Context Type of Change Project – Difference!
Radical Change – Time, risk mitigation as forcing functions
Outsiders – Contending with negative attractors
Insiders – Relying on trusted colleagues
Continuous Improvement – Patience and strategizing
Organizational Culture – No Difference!
A “crisis is a crisis”
Career Planning and Career Network Development while leading change – Not Relevant!
Not consciously done by either Insiders or Outsiders
Outsiders – My career has taken care of itself
Insiders – Assignment was a “job” 10

11. Findings – Insiders and Outsiders
Insider
Outsider
Assignment
Orientation
Bounded; “Job”, series of tasks; Sustainable outcome for affected unit
Unbounded; “Role”, one amidst series; Venue for launching big things; Transfer capability
Sphere
of Influence
Local; Loyal to the enterprise
and unit
Global; Loyal to change profession; Dedicated to enterprise
Sponsorship
Passive; Legitimization, Voice, Roadblock removal
Active; Access, Entrée, Value most obvious when lost
Social Capital
Relationships; Bonding, some bridging
Information; internal networks for a purpose; bridging for counsel
Source of Ideas
Inside; Outside for special skills
Outside; Inside to co-opt and learn history 11

12. Findings – Change Leader/Project Outcome
Successful
Unsuccessful or Neutral
Insider
Personal Model for Change;
Bonding social capital leveraged/expanded, long-standing;
Bridging networks for ideas;
Sponsorship assumed, invoked for radical change
Lack of internal bridging; Reputation only within unit;
Project lost sponsorship (not necessarily the leader);
Externality perceived as cause of project failure
Outsider
Personal Model for Change, External know how and awareness;
Bonding social networks; Bridging social capital expanded;
Sponsorship invoked as bonding social capital
Bonding social capital not built; Exclusion;
Leader lost sponsor;
Change model not in harmony with the organization;
Externality should have been addressed by change leader 12

13. Findings – Change Leader Outcome
Insider Afterwards
Outsider Afterwards
High bonding social capital protects
against negative attractors;
“One of Us”;
Transformed beyond ability to
regain social capital; Renegade;
Insider
Onset of Project
Learned new skills, personal
development regardless of
project outcome;
Expanded networks in and out;
Willing to lead sustain effort
Legacy of how, not what was done;
Means may have caught him
in the end;
Bridging networks attract to leave
Outsider
New change leader role in firm;
Expanded internal networks, some
bonding social capital;
Strong sponsorship as protection;
Acute self-awareness; Transformed to fit
build social capital;
Behaviors rationalized as being
driven by situation;
Legacy of how, not what was done; Means caught him in the end;
Lack of bonding social capital leads
to exclusion and rejection;
Loss of sponsorship 13

14. Implications for Leadership Practice
Bonding Social Capital is critical for successful change leader outcome
In absence of sponsorship, Outsiders seldom become
Insiders post radical change due to social capital
destruction
Bonding social capital serves as insulation from the
negative outcomes of leading change
Consider “warming up” Outsiders via leadership of
continuous improvement before radical change
Surround Outsiders with respected Insiders
Senior sponsorship is necessary, but not sufficient 14

15. Implications (continued)
Leading change changes leaders
The mission can become bigger than the person
Personal transformation can lead to “outgrowing” the
organization
Personal sacrifice to lead to personal growth
Passion to lead change can mitigate interest in
sustaining the change regardless of project outcome
Acute self-awareness recommended via routine, honest
assessment, feedback, coaching 15

16. Summary Leading change changes leaders
Leading change and retaining leaders calls for social capital, not just social networks
From the Eyes of the Organization
Insiders and Outsiders are different
Increasing Change Capacity influenced richly by both
categories of leaders
Hiring Outsiders and “risking” Insiders calls for careful
discernment of Radical vs. Continuous Improvement
Projects, Coaching and attention to the Roll Forward
process (project exit strategy)
From the Eyes of the Change Leader
Leading change changes leaders 16

17. Recommended Readings
Burt, Ronald S Brokerage and Closure: An Introduction to Social Capital. Oxford University Press.
Klein, Janice A True Change: How Outsiders on the Inside get Things done in Organizations. San Francisco, CA: Jossey-Bass.
for three related research studies (references embedded)
Dr. Zara F. Larsen
(520) or (877) toll free
Text DrZara to 69852 17