Arecent study, published by the Center for Creative Leadership,

reported that between 66 and 75 percent of all public and private

change initiatives faila depressing statistic for those who

seek to change an organization.The study identified a resistant

organizational culture as the chief culprit.

We recently completed an intensive two-year study of large-scale

changes in six public and nonprofit organizations,which focused on the

roles leaders play in initiating and implementing change efforts.Our findings

suggest that change efforts typically fail as a result of the shortcomings

in change leadership, including the following:

Insufficient advocacy for the change or failure to understand responsibilities

in the change initiative

Insufficient attention to the complexity of the change itself and

the potential risks introduced by the change initiative

Inadequate engagement of critical stakeholders affected by the

change initiative Inadequate understanding of the organizational

culture in the leaders own organization as well as

in the organizations networked in the change effort

Inadequate understanding of the organizational

capacity needed to implement and sustain the


Our research helped us identify strategies and tools

for leaders entrusted with leading change and transformation

initiatives to combat these potential failings.We

offer a vision of leadershiptransformational stewardship

that calls for leaders to balance the imperative for

change with important organizational and stakeholder values,

while ensuring that the changes made are in the general

public interest.We draw from our work to offer guidance

for leaders charged with stewarding public resources

as they implement public- and nonprofit-sector change

initiatives.First,we discuss the attributes of effective change

leaders, or transformational stewards, and then we offer

strategies for leading change efforts.

We have geared our efforts to assist all leaders of

change efforts, including those with positional authority

in their public or nonprofit organization and those who

assume situational leadership roles in a change effort.Depending

on the nature of the change, different types of

managers may assume leadership roles, for example, the

chief technology officer in an e-government initiative or

the chief human capital officer in a pay-forperformance

proposal. Middle managers play an important

leadership role in communicating and translating

change initiatives to their supervisees and colleagues across

their organizations.We view all these individuals in a variety

of organizational roles as potential change leaders.

Attributes of

Transformational Stewards

Leaders cannot effectively initiate or implement

change unless they are fully involved.We suggest a middle

ground between top-down and bottom-up approaches

to change,which we calltransformational stewardship.

Rather than focus on the level of the organization

that should institute the change effort, this approach seeks

to find the proper balance, with the organizations leaders

serving as facilitators of change. Sometimes, the top

leaders in an organization need to make change decisions,

especially when external environmental pressures and resource

constraints do not allow for more employee involvement.

In most cases, however, because change

efforts in the public and nonprofit sectors are often completed

over a longer time frame,more participation from

all ranks in the organization can be cultivated. Dialogue

among all levels of leadership should be encouraged, but

not to the extent that the decision-making process is hindered

and the progress of the change initiative is slowed

or halted.

Transformational stewardship, our model of changecentric

leadership, is a leadership function in which those

exercising leadership have developed certain attributes that

provide a foundation for their actions.These attributes reflect

leaderspersonal outlooks or attitudes (their inner beliefs

or values), how they approach a situation (their operational

mindset), and how they involve others in the

function (their interpersonal abilities and interactions with

others).Table 1 shows the leadership attributes successful

change leaders share.One of the major strengths of transformational

stewardship is its ability to address the lack of buy-in and

resistance problems associated with top-down approaches.

The interaction between top leadership and various levels

of employees creates a sense of ownership for those involved

with the change process.Moreover, it requires leaders

to build trust and collaboration among affected interest

groups, users, communities, and potential partners and

stakeholders.Leaders attempting to change organizations

need to combine strategic goals from top leadership and

tactical involvement by informed and knowledgeable

members of the organization at all levels.

Strategies for Leading Change

Four critical leadership functions or responsibilities are

critical in change initiatives: (1) diagnosing change risk and

organizational capacity, (2) strategizing and making the case

for change, (3) implementing and sustaining change, and

(4) reinforcing change by creating a change-centric, learning

organization (Figure 1).Effective change leaders must

make a compelling case for the change and manage change

risk to protect their organization and its stakeholders.

The leadership responsibilities for change do not always

happen in sequence: they are interactive as leadership

effectiveness in one area affects the others.For example,

effective diagnoses of the change risk and organizational

capacity help leaders in strategizing and making the casefor change; creating a more change-centric organization

strengthens leaders abilities in the other three areas.

Understanding Change Complexity

and Risk

Changes often fail because leadership fails to fully understand

or underestimates the complexity of the change,

increasing the risk that the change will not yield the desired

results.A number of factors can influence change complexity

and the risks of change. For example, the change

itself may be complex,many stakeholders may be adversely

impacted by the change, the socioeconomic environment

may be hostile to change, or the organization may have

insufficient capacity to handle the change initiative.

Table 2 shows some of the chief risk factors typically

involved in a major public or nonprofit change effort.

What can change leaders do to improve the outcome

when they need to make a complex, risky change? First,

they must diagnose change complexity and risk and assess

how capable the organization is of coping with that

complexity and risk. Second, they must create a strategy

to deal with the risk. In the short run, this may mean limiting

the risk by reducing the scope of change or perhaps

creating a pilot project. In the long run, it means creating

a more change-centric, learning organization that is

comfortable and adaptable in complex change situations.

Third, leaders must implement their strategy and mitigate

risks. Finally, they must continually reinforce the behavior


needed to successfully address the change.

Communicating and Collaborating

with Stakeholders

Stakeholders are the individuals and organizations that

perceive they have a role in, or are affected by, an organizational

change.This includes internal and external stakeholders

(those located outside the organization undergoing

transformation,usually including Congress, the executive

branch,private interest groups,other governmental or nonprofit

organizations, and citizens). In a multisector environment,

private contractors to public and nonprofit sector

organizations are also considered external stakeholders,

but are becoming increasingly integrated with public employees

in serving public purposes.The key elements to be assessed regarding stakeholders

are (1) the degree of diversity among them, in terms of

profession,worldview, and mission orientation; (2) their

perceptions regarding their potential gain or loss from the

change initiative; and (3) the existence (or lack of) collaborative

networks to facilitate communication among

leaders and important stakeholder groups.

When leaders intentionally and consistently communicate

their vision of collaboration to stakeholders

through various formal and informal channels, they promote

a shared vision that generates common, public interests

and a level of trust.New collaborative synergies can

be fostered that are critical to facilitating the implementation

of even massive changes in ways of providing public


Leaders cannot afford to overlook the views and motivations

of their staffstheir internal stakeholdersor

their contractors and other external stakeholders. In the

increasingly complex networks of organizations that supply

public services, leaders pay a high price if they fail to

secure stakeholder buy-in and collaboration from the outset

when strategizing for change.

Learning how key stakeholders view the impact of

change can help change agents develop their common

case for change. For example, Kizer wrote Journey of

Change, which became the reference manual for the staff.

The document was disseminated throughout the organization

to address internal stakeholder perceptions

about potential gains and losses.The involvement of key

stakeholders in developing the change strategy and in formulating

the domains of value that would drive the

change initiative provided the opportunity for collaboration,

reducing stakeholder fears about the proposed


Building Organizational Capacity

An organizations internal capacity to initiate and sustain

a major change effort involves a number of aspectsand is affected by both human and material resources.Kaplan

and Norton, for example, argue for the importance

of organizational capital, consisting of leadership, culture,

alignment, and teamwork in change efforts. In our

analysis of organizational capacity,we have identified and

defined the following key elements as necessary to facilitate

major change and transformation:

Organizational leadership, at the top and throughout

the organization

An organizational culture that values and supports

change initiatives, reinforcing change-centric


Change implementation mechanismsstrategies,

policies, procedures, structures, and systemsthat

support and are aligned with a change initiative

Performance measurementthe use of performance

data to inform key stakeholders about why

and where change is needed, to focus on aspects of

programmatic performance likely to be affected by

the change, and to reinforce and reward intended

outcomes of change efforts.

Within each of these areas, change leaders should go

through the four-step process of diagnosis, strategy, implementation,

and reinforcement to (1) better understand

and mitigate the risks of the proposed change and (2) develop

approaches to enhance the long-term change capacity

of the organization.Table 3 provides an overview

of each of the elements of organizational capacity.Addressing organizational culture,or the cultures within

multiple organizations working together in a change

initiative, is especially challenging, as the Center for Creative

Leadership noted.Cultures that are more status quo

oriented and resistant to change may present a significant

challenge in leading change efforts. Leadership thus has

a twofold challenge: in the short run, it must address potential

obstacles to change; in the long run, it must devise

strategies to make the culture more change centric.

Changing Employee Habits

If a leader is dissatisfied with the organizations existing

capacity,what can he or she do about it?Much more

than the right mix of incentives and controls is needed

to change employee behavior.The key to culture change

is changing the habits of employees in the organization

by appealing to both their hearts and their heads, as

suggested by the strategies inTable 4.

Building a Cathedral

Leaders must continually reinforce what they want

to accomplish.This means creating a reward structure and

reinforcement mechanisms (such as performance measures)

that support the sought-after behavior. In the long run,

it means creating a learning organization that is comfortable

with change. If this seems like a daunting task, it is.However,

our case studies and the literature demonstrate that

culture change is possible with good leadership, employee

involvement, and patience.

An old but timely story dating from theMiddleAges

and the Monte Cassino monastery of St. Benedict perhaps

says it best.As told by George Gordon, a traveler came

upon a group of three hard-at-work stonemasons and asked

each in turn what he was doing.The first said,I am sanding

down this block of marble.The second said, I am

preparing a foundation.The third said,I am building a

cathedral.Effective stewardship of change is like building a

cathedral.While organizations must pay attention to the

details, the marble, and the foundation, leaders must inspire

a shared vision of the cathedral they are building and

thus appeal to the hearts and heads of the people doing

the building.


Although many change efforts fail, large-scale public

and nonprofit sector change is possible.Our case studies

illustrate that leading major public and nonprofit change

efforts is complicated,unpredictable, and risky.But, if done

with the right amount of analysis and preparation, leadership

can bring about successful change in the public interest.

Our work is aimed at providing those leading change

efforts with the knowledge,methods, and assessment instruments

leadership, risk, and organizational capacity

necessary to help them accomplish their change goals.