Leaders do not need to know all the answers.They do need to ask the right questions.

The Work of Leadership

by Ronald A. Heifetz and Donald L. Laurie

To stay alive, Jaek Pritehard had to change hislife. Triple bypass surgery and medication couldhelp, the heart surgeon told him, but no tt^chnicalfix could release Pritehard from his own respon-sibility for changing the habits of a lifetime. Hehad to stop smoking, improve his diet, get someexercise, and take time to relax, remembering tobreathe more deeply each day. Pritchard's doctorcould provide sustaining technical expertise andtake supportive action, but orily^Pritchard could^3apt bis ingrained habits to improve his]ong-termhealth. The doctor faceci the leadership task of mo-bilizing j h e patient to make critical behavjoralchanges; Jack Pritehard faced the adaptive workjsLfiguring out which spccihc changes to make andhow to inciMpiir;itL' tlicm into his daily life

Companies today face challenges similar to theones confronting Pritehard and his doctor. Th.eyface adaptive challenges. Changes in societies,markets, customers, competition, and technologyaround the globe are forcing organizations to clar-ify their values, develop new strategies, and learnnew ways of operating. Often the toughest task forleaders in effecting change is mobilizing peoplethroughout the organization to do adaptive work.

Adaptive work is required when our deeply heldbeliefs are challenged, when the values that madeus successful become less relevant, and when legit-imate yet competing perspectives emerge. We seeadaptive challenges every day at every level of theworkplace-when companies restructure or reengi-neer, develop or implement strategy, or merge busi-nesses. We see adaptive challenges when marketinghas difficulty working with operations, when cross-functional teams don't work well, or when seniorexecutives complain, "We don't seem to be able toexecute effectively." Adaptive problems are oftensystemic problems with no ready answers.

Mobilizing an organization to adapt its behaviorsin order to thrive in new business environments iscritical. Without such change, any company todaywould falter. Indeed, getting people to do adaptivework is the mark of leadership in a competitiveworld. Yet for most senior executives, providingleadership and not just authoritative expertise isextremely difficult. Why- We see two reasons.First, in order to make change happen, executiveshave to break a long-standing behavior pattern oftheir own: providing leadership in the form of solu-tions. This tendency is quite natural because manyexecutives reach their positions of authority byvirtue of their competence in taking responsibilityand solving problems. But the locus of responsibili-ty for problem solving when a company faces anadaptive challenge must shift to its people. Solu-tions to adaptive challenges reside not in tbe execu-tive suite but in the collective intelligence of em-ployees at all levels, who need to use one another asresources, often across boundaries, and learn tbeirway to those solutions.

Second, adaptive change is distressing for thepeople going through it. They need to take on newroles, new relationships, new values, new behav-iors, and new approaches to work. Many employeesare ambivalent about the efforts and sacrifices re-quired of them. They often look to the senior exec-utive to take problems off their shoulders. But

Ronald A. Heifetz is the director of the Leadership Edu-cation Project at Harvard University's John F. KennedySchool of Government in Cambridge, Massachusetts.Donald L. Laurie is managing director of Laurie Inter-national Limited, a management consulting firm inBoston, Massachusetts, that focuses on leadership andstrategic change. This article is based in part on Heifetz'sLeadership Without Easy Answers (Belknap Press of Har-vard University Press, 1994).

124 HARVARD BUSINESS REVIEW January-February 1997

those expectations have to be unlearned. Ratherthan fulfilling the expectation that they will pro-vide answers, leaders have to ask tough questions.Rather than protecting people from outside threats,leaders should allow them to feel the pinch of real-ity in order to stimulate them to adapt. Instead oforienting people to their current roles, leaders mustdisorient them so that new relationships can de-velop. Instead of quelling eonfliet, leaders have todraw the issues out. Instead of maintaining norms,leaders have to challenge "the way we do business"and help others distinguish immutable values fromhistorical practices that must go.

Drawing on our experience with managers fromaround the world, we offer six principles for leadingadaptive work; "getting on the balcony," identify-ing the adaptive challenge, regulating distress,maintaining disciplined attention, giving the workback to people, and protecting voices of leadershipfrom below. We illustrate those prineiples with anexample of adaptive change at KPMG Netherlands,a professional-services firm.

Get on the BalconyEarvin "Magie" Johnson's greatness in leading

his hasketball team came in part from his ability toplay hard while keeping the whole game situation

in mind, as if he stood in a press box or on a balconyabove the field of play. Bobby Orr played hockey inthe same way. Other players might fail to reeognizethe larger patterns of play that performers likeJohnson and Orr quickly understand, beeause theyare so engaged in the game that they get carriedaway by it. Their attention is captured by the rapidmotion, the physical contact, the roar of the erowd,and the pressure to exeeute. In sports, most playerssimply may not see who is open for a pass, who ismissing a block, or how the offense and defensework together. Players like Johnson and Orr watchthese things and allow their observations to guidetheir aetions.

Business leaders have to be able to view patternsas if they were on a balcony. It does them no goodto be swept up in the field of action. Leaders have tosee a context for ehange or ereate one. Tbey shouldgive employees a strong sense of the history of theenterprise and what's good about its past, as well asan idea of the market forces at work today and theresponsibility people must take in shaping the fu-ture. Leaders must be able to identify struggles overvalues and power, recognize patterns of work avoid-ance, and watch for the many other functional anddysfunctional reactions to change.

Without the capacity to move back and forth be-tween the field of action and the balcony, to reflect

Business leaders need to get on the balcony if they want to see all the patterns.

DRAWINGS BY MICHAEL KLEIN 125

THE WORK OF LEADERSHIP

day to day, moment to moment, on the many waysin which an organization's habits can sabotageadaptive work, a leader easily and unwittingly be-comes a prisoner of the system. The dynamics ofadaptive change are far too complex to keep trackof, let alone influence, if leaders stay only on thefield of play.

We have encountered several leaders, some ofwhom we discuss in this article, who manage tospend mueh of their precious time on the baleonyas they guide their organizations through change.Without that perspective, they probably wouldhave been unable to mobilize people to do adaptivework. Getting on the balcony is thus a prerequisitefor following the next five principles.

Identify the Adaptive Challengewhen a leopard threatens a band of chimpanzees,

the leopard rarely succeeds in picking off a stray.Chimps know how to respond to this kind of threat.But when a man with an automatic rifle eomesnear, the routine responses fail. Chimps risk ex-tinction in a world of poachers unless they figureout how to disarm the new threat. Similarly, whenbusinesses cannot learn quickly to adapt to newchallenges, they are likely to face their own form ofextinction.

Consider the well-known case of British Air-ways. Having observed the revolutionary changesin the airline industry during the 1980s, then chiefexecutive Colin Marshall clearly recognized theneed to transform an airline nicknamed BloodyAwful by its own passengers into an exemplar of

to adaptive challengesreside not in the executive suitebut in the collective intelligenceof employees at all levels.

customer service. He also understood that thisambition would require more than anything elsechanges in values, practices, and relationshipsthroughout the eompany. An organization whosepeople clung to funetional silos and valued pleasingtheir bosses more than pleasing customers eouldnot beeome The World's Favourite Airline. Mar-shall needed an organization dedicated to servingpeople, acting on trust, respecting the individual,and making teamwork happen across boundaries.

Values had to change throughout British Airways.People had to learn to collaborate and to develop acollective sense of responsibility for the directionand performanee of the airline. Marshall identifiedthe essential adaptive challenge: creating trustthroughout the organization. He is one of the firstexecutives we have known to make "creatingtrust" apriority.

To lead British Airways, Marshall had to get hisexecutive team to understand the nature of thethreat created by dissatisfied customers: Did it rep-resent a technical challenge or an adaptive chal-lenge? Would expert adviee and technical adjust-ments within basic routines suffice, or wouldpeople throughout the company have to learn newways of doing business, develop new competeneies,and begin to work collectively?

Marshall and his team set out to diagnose inmore detail the organization's challenges. Theylooked in three places. First, they listened to theideas and concerns of people inside and outsidethe organization - meeting with crews on flights,showing up in the 350-person reservation center inNew York, wandering around the baggage-handlingarea in Tokyo, or visiting the passenger lounge inwhatever airport they happened to be in. Their pri-mary questions were. Whose values, beliefs, atti-tudes, or behaviors would have to change in orderfor progress to take place? What shifts in priorities,resources, and power were neeessary? What sacri-fiees would have to he made and by whom?

Seeond, Marshall and his team saw conflicts asclues-symptoms of adaptive challenges. The wayconflicts across functions were being expressed

were mere surface phenomena: theunderlying confliets had to be diag-nosed. Disputes over seeminglytechnical issues such as procedures,schedules, and lines of authoritywere in faet proxies for underlyingeonflicts about values and norms.

Third, Marshall and his team helda mirror up to themselves, reeogniz-ing that they emhodied the adaptivechallenges facing the organization.

Early in the transformation of British Airways,competing values and norms were played out onthe exeeutive team in dysfunctional ways that im-paired the capacity of the rest of the company toeollaborate across functions and units and makethe necessary trade-offs. No executive ean hidefrom the fact that his or her team refleets the bestand the worst of the company's values and norms,and therefore provides a ease in point for insightinto the nature of the adaptive work ahead.

126 HARVARD BUSINESS REVIEW January-February 1997

with a highly fragmented organization, definingnew measures of performance and compensation,and developing sophistieated information systems.During that time, employees at all levels learned toidentify what and how they needed to change.

Thus a leader must sequence and pace the work.Too often, senior managers convey that everythingis important. They start new initiatives withoutstopping other activities or they start too many ini-tiatives at the same time. They overwhelm and dis-orient the very people who need to take responsibil-ity for the work.

Second, a leader is responsihle for direction, pro-tection, orientation, managing conflict, and shap-ing norms. (See tbe table "Adaptive Work Calls forLeadership.") Fulfilling these responsibilities isalso important for a manager in technical or routinesituations. But a leader engaged in adaptive workuses his authority to fulfill them differently. Aleader provides direction by identifying the organi-zation's adaptive challenge and framing the keyquestions and issues. A leader protects people bymanaging the rate of change. A leader orients peo-ple to new roles and responsibilities by elarifyingbusiness realities and key values. A leader helps ex-pose conflict, viewing it as the engine of creativity

Thus, identifying its adaptive challenge was cru-cial in British Airways' bid to become The World'sFavourite Airline. For the strategy to succeed, thecompany's leaders needed to understand them-selves, their people, and the potential sources ofconflict. Marshall recognized that strategy develop-ment itself requires adaptive work.

Regulate Distress

Adaptive work generates distress. Before puttingpeople to work on challenges for which there are noready solutions, a leader must realize that peoplecan learn only so much so fast. At the same time,they must feel the need to change as reality bringsnew challenges. They cannot learn new ways whenthey are overwhelmed, but eliminating stress alto-gether removes the impetus for doing adaptivework. Because a leader must strike a delicate bal-ance between having people feel the need to changeand having them feel overwhelmed by change, lead-ership is a razor's edge.

A leader must attend to three fundamental tasksin order to help maintain a productive level of ten-sion. Adhering to these tasks will allow him or herto motivate people without disabling them.

First, a leader must create whatcan be called a holding environ-ment. To use the analogy of apressure cooker, a leader needsto regulate the pressure by turn-ing up the heat while also allow-ing some steam to escape. If thepressure exceeds the cooker's ca-pacity, the cooker can blow up.However, nothing cooks withoutsome heat.

In the early stages of corporatechange, the holding environmentcan be a temporary "place" inwhich a leader creates the condi-tions for diverse groups to talk toone another about the challengesfacing them, to frame and debateissues, and to clarify the assump-tions behind competing perspec-tives and values. Over time, moreissues can he phased in as they be-come ripe. At British Airways, forexample, the shift from an inter-nal focus to a customer focustook place over four or five years

' and dealt with important issuesin succession: building a credibleexecutive team, communicating Leaders must turn up the heat while also allowing some steam to escape.

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Adaptive Work Calls for LeadershipResponsibilities Situation

Direction

Protection

Orientation

Managing Conflict

Shoping Norms

Terlinical o[ Routine

Define problems andprovide solutions

Shield tfie organizationfrom external threats

Clarify roles andresponsibilities

Restore order

Maintain norms

Adaofive

Identify the adaptivechallenge and framekey questions and issues

Let the organization feelexternal pressures withina range it can stand

Challenge current rolesand resist pressure todefine new roles quickly

Expose conflict or letit emerge

Challenge unproductive norms

and learning. Finally, a leader helps the organiza-tion maintain those norms that must endure andchallenge those that need to ehange.

Third, a leader must have presence and poise;regulating distress is perhaps a leader's most diffi-cult job. The pressures to restore equilibrium areenormous. Just as molecules bang hard against thewalls of a pressure eooker, people bang up againstleaders who are trying to sustain the pressures oftough, conflict-filled work. Although leadership de-mands a deep understanding of the pain of ehange-the fears and sacrifices associated with major re-adjustment - it also requires the ability to holdsteady and maintain the tension. Otherwise, thepressure escapes and the stimulus for learning andchange is lost.

A leader has to have the emotional capacity totolerate uncertainty, frustration, and pain. He hasto be able to raise tough questions without gettingtoo anxious himself. Employees as well as col-leagues and eustomers will carefully observe verbaland nonverbal eues to a leader's ability to holdsteady. He needs to eommunicate confidence thathe and they ean tackle the tasks ahead.

Maintain Disciplined AttentianDifferent people within the same organization

bring different experiences, assumptions, values,beliefs, and habits to their work. This diversity isvaluable beeause innovation and learning are theproducts of differences. No one learns anythingwithout being open to contrasting points of view.

Yet managers at all levels areoften unwilling-or unable-to ad-dress their competing perspee-tives coUeetively. They frequent-ly avoid paying attention toissues that disturb them. Theyrestore equilibrium quiekly, oftenwith work avoidance maneuvers.A leader must get employees toconfront tough trade-offs in val-ues, procedures, operating styles,and power.

That is as true at the top of theorganization as it is in the mid-dle or on the front line. Indeed, ifthe executive team eannot modeladaptive work, the organizationwill languish. If senior managerscan't draw out and deal with divi-sive issues, how will people else-where in the organization changetheir behaviors and rework tbeir

relationships? As Jan Carlzon, the legendary CEOof Scandinavian Airlines System (SAS), told us,"One of the most interesting missions of leadershipis getting people on the exeeutive team to listen toand learn from one another. Held in debate, peoplecan learn their way to collective solutions whenthey understand one another's assumptions. Thework of the leader is to get eonfliet out into theopen and use it as a souree of creativity."

Beeause work avoidance is rampant in organiza-tions, a leader has to eounteraet distractions thatprevent people from dealing with adaptive issues.Scapegoating, denial, foeusing only on today's tech-nical issues, or attacking individuals rather thanthe perspeetives they represent - all forms of workavoidance-are to be expected when an organizationundertakes adaptive work. Distraetions bave to beidentified when they occur so that people will re-gain foeus.

When sterile conflict takes the place of dialogue,a leader has to step in and put the team to work onreframing the issues. She has to deepen the debatewith questions, unbundling the issues into theirparts rather than letting eonfliet remain polarizedand superfieial. When people preoeeupy them-selves with blaming external forces, higher man-agement, or a heavy workload, a leader has to sharp-en the team's sense of responsibility for carving outthe time to press forward. When tbe team frag-ments and individuals resort to protecting theirown turf, leaders have to demonstrate the need forcollaboration. People have to discover the value ofconsulting with one another and using one another

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as resources in the problem-solving process. Forexample, one CEO we know uses executive meet-ings, even those that focus on operational and teeh-nical issues, as opportunities to teach the team howto work collectively on adaptive problems.

Of course, only the rare manager intends to avoidadaptive work. In general, people feel ambivalentabout it. Although they want to make progress onhard problems or live up to their renewed and clari-fied values, people also want to avoid the associateddistress. Just as millions of U.S. citizens want to re-duce the federal budget deficit, but not by giving uptheir tax dollars or benefits or jobs, so, too, man-agers may consider adaptive work a priority buthave diffieulty sacrifieing their familiar ways of do-ing business.

People need leadership to help them maintaintheir foeus on the tough questions. Diseiplined at-tention is the currency of leadership.

Give the Work Back to People

Everyone in the organization has special accessto information that comes from bis or her particu-lar vantage point. Everyone may see different needsand opportunities. People who sense early changesin the marketplace are often at the periphery, butthe organization will thrive if it can bring that in-formation to bear on tactical and strategic deci-sions. When people do not aet on their specialknowledge, businesses fail to adapt.

All too often, people look up the chain of com-mand, expecting senior management to meet mar-ket challenges for which they themselves are re-sponsible. Indeed, the greater and more persistentdistresses that accompany adaptive work makesueh dependence worse. People tend to become pas-sive, and senior managers who pride themselves onbeing problem solvers take decisive action. Thatbehavior restores equilibrium in the short term butultimately leads to eomplaceney and habits of workavoidance that shield people from responsibility,pain, and the need to ehange.

Getting people to assume greater responsibility isnot easy. Not only are many lower-level employeeseomfortable being told what to do, hut many man-agers are aeeustomed to treating subordinates likemaehinery requiring control. Letting people takethe initiative in defining and solving problemsmeans that management needs to learn to supportrather than eontrol. Workers, for their part, need tolearn to take responsibility.

fan Carlzon encouraged responsibility taking atSAS by trusting others and decentralizing author-ity. A leader has to let people bear the weight of

HARVARD BUSINESS REVIEW )anuary-February 1997

responsibility. "The key is to let them diseover theproblem," he said. "You won't be successful if peo-ple aren't carrying the recognition of the problemand the solution within themselves." To that end,Carlzon sought widespread engagement.

For example, in bis first two years at SAS, Carl-zon spent up to 50% of his time eommunieatingdirectly in large meetings and indireetly in a hostof innovative ways: through workshops, brain-storming sessions, learning exercises, newsletters,broehures, and exposure in the publie media. Hedemonstrated through a variety of symbolic ac ts -for example, by eliminating the pretentious execu-tive dining room and burning thousands of pages ofmanuals and handbooks-the extent to whieh ruleshad come to dominate the company. He made him-self a pervasive presence, meeting with and listen-ing to people both inside and outside the organiza-tion. He even wrote a book. Moments of Truth(Ballinger, 1987), to explain his values, philosophy,and strategy. As Carlzon noted, "If no one else readit, at least my people would."

A leader also must develop collective self-confi-denee. Again, Carlzon said it well: "People aren'tborn with self-confidence. Even the most self-con-fident people ean be broken. Self-confidenee eomesfrom sueeess, experience, and the organization's en-vironment. The leader's most important role is toinstill confidence in people. They must dare to takerisks and responsibility. You must back them up ifthey make mistakes."

Protect Voices of Leadershipfrom Below |

Giving a voice to all people is the foundation ofan organization that is willing to experiment andlearn. But, in fact, whistle-blowers, creative de-viants, and other such original voices routinely getsmashed and silenced in organizational life. Theygenerate disequilibrium, and the easiest way for anorganization to restore equilibrium is to neutralizethose voices, sometimes in the name of teamworkand "alignment."

The voices from below are usually not as articu-late as one would wish. People speaking beyondtheir authority usually feel self-conscious andsometimes have to generate "too much" passion toget themselves geared up for speaking out. Ofcourse, that often makes it harder for them to com-municate effectively. They pick the wrong timeand place, and often bypass proper channels of com-munication and lines of authority. But buried in-side a poorly packaged interjection may lie an im-portant intuition that needs to be teased out and

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considered. To toss it out for itsbad timing, lack of clarity, orseeming unreasonableness is tolose potentially valuable infor-mation and discourage a poten-tial leader in the organization.

That is wbat bappened toDavid, a manager in a large manu-facturing company. He had lis-tened when his superiors encour-aged people to look for problems,speak openly, and take responsi-bility. So he raised an issue aboutone of the CEO's pet projects-anissue that was "too bot to han-dle" and had been swept underthe carpet for years. Everyone un-derstood that it was not open todiscussion, but David knew thatproceeding with the project coulddamage or derail key elements ofthe company's overall strategy.He raised the issue directly in ameeting with his boss and theCEO. He provided a clear descrip-tion of the problem, a rundown ofcompeting perspectives, and asummary of the consequences ofcontinuing to pursue the project.

The CEO angrily squelched the discussion andreinforced the positive aspects of his pet project.When David and his boss left the room, his bossexploded: "Who do you think you are, with yourholier-than-thou attitude?" He insinuated thatDavid had never liked the CEO's pet project be-cause David hadn't come up with the idea himself.The subject was closed.

David had greater expertise in the area of theproject than either his boss or the CEO. But his twosuperiors showed no curiosity, no effort to investi-gate David's reasoning, no awareness that he wasbehaving responsibly with the interests of the com-pany at heart. It rapidly became clear to David thatit was more important to understand what mat-tered to the boss than to focus on real issues. TheCEO and David's boss together squashed the view-point of a leader from below and thereby killed hispotential for leadership in the organization. Hewould either leave the company or never go againstthe grain again.

Leaders must rely on others within the businessto raise questions that may indicate an impendingadaptive challenge. They have to provide cover topeople who point to the internal contradictions ofthe enterprise. Those individuals often have the

Managers need to support rather than control, letting othel:s solve problems.

perspective to provoke rethinking that people inauthority do not. Thus, as a rule of thumh, whenauthority figures feel the reflexive urge to glare at orotherwise silence someone, they should resist. Theurge to restore social equilibrium is quite powerful,and it comes on fast. One bas to get accustomed togetting on the balcony, delaying the impulse, andasking. What really is this guy talking ahout? Isthere something we're missing?

Doing Adaptive Work atKPMG Netherlands

The highly successful KPMG Netherlands pro-vides a good example of how a company can en-gage in adaptive work. In 1994, Ruud Koedijk, thefirm's chairman, recognized a strategic challenge.Although the auditing, consulting, and tax-prepa-ration partnership was the industry leader in theNetherlands and was highly profitable, growth op-portunities in the segments it served were limited.Margins in the auditing business were beingsqueezed as the market became more saturated,and competition in the consulting business was in-creasing as well. Koedijk knew that the firm neededto move into more profitable growth areas, but be

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didn't know what they were or how KPMG mightidentify them.

Koedijk and his board were confident that theyhad the tools to do the analytical strategy work:analyze trends and discontinuities, understand corecompetencies, assess their competitive position,and map potential opportunities. They were con-siderably less eertain that they eould eommit to im-plementing the strategy that would emerge fromtheir work. Historically, the partnership had resist-ed attempts to ehange, basieally because the part-ners were content with the way things were. Theyhad been successful for a long time, so they saw noreason to learn new ways of doing business, eitherfrom their fellow partners or from anyone lowerdown in the organization. Overturning the part-ners' attitude and its deep impact on the organiza-tion's culture posed an enormous adaptive chal-lenge for KPMG.

Koedijk could see from the baleony that the verystructure of KPMG inhibited change. In truth,KPMG was less a partnership than a eoUection ofsmall fiefdoms in whieh eaeh partner was a lord.The firm's sueeess was the cumulative accomplish-ment of eaeh of the individual partners, not the uni-fied result of 300 colleagues pulling together to-ward a shared ambition. Suecess was measuredsolely in terms of the profitability of individualunits. As one partner described it, "If the bottomline was correct, you were a 'good fellow.'" As a re-sult, one partner would not trespass on another'sturf, and learning from others was a rare event. Be-eause independence was so highly valued, eon-frontations were rare and conflict was eamouflaged.If partners wanted to resist firmwidechange, they did not kill the issue di-rectly. "Say yes, do no" was the oper-ative phrase.

Koedijk also knew that this senseof autonomy got in the way of devel-oping new talent at KPMG. Direc-tors rewarded their subordinates fortwo things: not making mistakes anddelivering a high number of billablehours per week. The emphasis wasnot on creativity or irmovation. Partners were look-ing for errors when they reviewed their subordi-nates' work, not for new understanding or freshinsight. Although Koedijk could see the broadoutlines of the adaptive ehallenges facing his orga-nization, he knew that he could not mandate be-havioral change. What he could do was create theconditions for people to discover for themselveshow they needed to change. He set a process in mo-tion to make that happen.

HARVARD BUSINESS REVIEW lanuary-February 1997

To Start, Koedijk held a meeting of all 300 part-ners and focused their attention on the history ofKPMG, the eurrent business reality, and the busi-ness issues they could expeet to face. He then raisedthe question of how they would go about changingas a firm and asked for their perspeetives on the is-sues. By launching the strategic initiative throughdialogue rather than edict, he built trust within thepartner ranks. Based on this emerging trust and hisown credibility, Koedijk persuaded the partners torelease 100 partners and nonpartners from theirday-to-day responsibilities to work on the strategicchallenges. They would devote 60% of their timefor nearly four months to that work.

Koedijk and his colleagues established a strategicintegration team of 12 senior partners to work withthe 100 professionals (ealled "the 100") from differ-ent levels and disciplines. Engaging people belowthe rank of partner in a major strategic initiativewas unheard of and signaled a new approach fromthe start: many of these people's opinions had neverbefore been valued or sought by authority figures inthe firm. Divided into 14 task forces, the 100 wereto work in three areas: gauging future trends anddiscontinuities, defining core competencies, andgrappling with the adaptive challenges facing theorganization. They were housed on a separate floorwith their own support staff, and they were unfet-tered by traditional rules and regulations. HennieBoth, KPMG's director of marketing and communi-cations, signed on as project manager.

As the strategy work got under way, the taskforces had to confront the existing KPMG culture.Why? Because they literally eould not do their new

Leaders have to providecover to employees who pointto the internal contradictions

of the enterprise.work within the old rules. They could not workwhen strong respect for the individual eame at theexpense of effeetive teamwork, when deeply heldindividual beliefs got in the way of genuine discus-sion, and when unit loyalties formed a barrier tocross-functional problem solving. Worst of all, taskforce members found themselves avoiding conflictand unable to discuss those problems. A number ofthe task forces became dysfunctional and unable todo their strategy work.

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To focus their attention on what needed tochange. Both helped the task forces map the culturethey desired against the current culture. They dis-covered very little overlap. The top descriptors ofthe current culture were: develop opposing views,demand perfeetion, and avoid conflict. The topcharacteristics of the desired culture were: create

The task forces compared theold KPMG to a sluggish hippoand the new one to a dolphin-playful and eager to learn.

the opportunity for self-fulfillment, develop a ear-ing environment, and maintain trusting relationswith colleagues. Articulating this gap made tan-gible for the group the adaptive challenge thatKoedijk saw facing KPMG. In other words, the peo-ple who needed to do the changing had finallyframed the adaptive challenge for themselves:How could KPMC succeed at a competenee-basedstrategy that depended on eooperation across mul-tiple units and layers if its people couldn't succeedin these task forces* Armed with that understand-ing, the task foree members eould beeome emis-saries to the rest of the firm.

On a more personal level, each memher wasasked to identify his or her individual adaptivechallenge. What attitudes, behaviors, or habits dideaeh one need to change, and what speeific actionswould he or she take? Who else needed to be in-volved for individual change to take root? Acting ascoaches and eonsultants, the task force membersgave one another supportive feedbaek and sugges-tions. They had learned to confide, to listen, and toadvise with genuine care.

Progress on these issues raised the level of trustdramatieally, and task foree members began to un-derstand what adapting their behavior meant ineveryday terms. They understood how to identifyan adaptive issue and developed a language withwhieh to discuss what they needed to do to improvetheir eoUective ability to solve problems. Theytalked about dialogue, work avoidanee, and usingthe colleetive intelligenee of the group. They knewhow to "call" one another on dysfunetional behav-ior. They had begun to develop the culture requiredto implement the new husiness strategy.

Despite the critical breakthroughs toward devel-oping a collective understanding of the adaptive

challenge, regulating the level of distress was a con-stant preoccupation for Koedijk, the board, andBoth. The nature of the work was distressing. Strat-egy work means broad assignments with limitedinstruetions; at KPMG, people were accustomed tohighly struetured assignments. Strategy work alsomeans being ereative. At one breakfast meeting, a

board member stood on a table toehallenge the group to be more cre-ative and toss aside old rules. Thisradical and unexpected hehavior fur-ther raised the distress level: no onehad ever seen a partner behave thisway before. People realized that theirwork experience had prepared themonly for performing routine taskswith people "like them" from theirown units.

Tbe process allowed for conflict and focused peo-ple's attention on the hot issues in order to helpthem learn how to work with conflict in a eonstruc-tive manner. But the heat was kept within a tolera-ble range in some of the following ways:• On one occasion when tensions were unusuallyhigh, the 100 were brought together to voice theirconcerns to the board in an Oprah Winfrey-stylemeeting. The board sat in the center of an auditori-um and took pointed questions from the surround-ing group.a The group devised sanetions to discourage un-wanted behavior. In the soccer-crazy Netherlands,all participants in the proeess were issued the yel-low cards that soccer referees use to indicate "foul"to offending players. They used the cards to stop theaction when someone started arguing his or herpoint without listening to or understanding the as-sumptions and eompeting perspectives of otherparticipants.n The group created symbols. They compared theold KPMG to a hippopotamus that was large andcumbersome, liked to sleep a lot, and became ag-gressive when its normal habits were disturbed.They aspired to be dolphins, which they character-ized as playful, eager to learn, and happily willing togo the extra mile for the team. They even paidattention to the statement that clothes make: itsurprised some clients to see managers wanderingthrough the KPMG offices that summer in Ber-muda shorts and T-shirts.D The group made a deliberate point of having fun."Playtime" could mean long bicycle rides or laser-gun games at a local amusement center. In onespontaneous moment at the KPMG offices, a dis-eussion of the power of people mohilized toward acommon goal led the group to go outside and use

132 HARVARD BUSINESS REVIEW January-February 1997

tbeir colleetive leverage to move a seemingly im-movable concrete block.n The group attended frequent two- and three-dayoff-site meetings to help bring closure to parts ofthe work.

These actions, taken as a whole, changed atti-tudes and behaviors. Curiosity became more valuedthan obedience to rules. People no longer deferredto the senior authority figure in the room; genuinedialogue neutralized hierarchical power in the bat-tle over ideas. The tendency for each individual topromote his or her pet solution gave way to under-standing other perspectives. A confidence in theability of people in different units to work togetherand work things out emerged. The people with themost curious minds and interesting questions soonbecame the most respected.

As a result of confronting strategic and adaptivechallenges, KPMG as a whole will move from au-diting to assurance, from operations consulting toshaping corporate vision, from business-processreengineering to developing organizational capabil-ities, and from teaching traditional skills to its ownclients to creating learning organizations. The taskforces identified $50 million to $60 million worthof new business opportunities.

Many senior partners who had believed that afirm dominated by the auditing mentality couldnot contain creative people were surprised whenthe process unlocked creativity, passion, imagina-tion, and a willingness to take risks. Two stories il-

Many managers treat adapchallenges as if they weretechnical problems.

lustrate the fundamental changes that took place inthe firm's mind-set.

We saw one middle manager develop the confi-dence to create a new business. He spotted the op-portunity to provide KPMG services to virtual orga-nizations and strategic alliances. He traveled theworld, visiting the leaders of 65 virtual organiza-tions. The results of his innovative research servedas a resource to KPMG in entering this growingmarket. Moreover, he represented the new KPMGby giving a keynote address discussing his findingsat a world forum. We also saw a 28-year-old femaleauditor skillfully guide a group of older, male seniorpartners through a complex day of looking at oppor-tunities associated with implementing the firm's

new strategies. That eould not have occurred theyear before. The senior partners never would havelistened to such a voice from below.

Leadership as Learning

Many efforts to transform organizations throughmergers and acquisitions, restructuring, reengi-neering, and strategy work falter because managersfail to grasp the requirements of adaptive work.They make the classic error of treating adaptivechallenges like technical problems that can besolved by tough-minded senior executives.

Tbe implications of that error go to the heart ofthe work of leaders in organizations today. Leaderscrafting strategy have access to the technical exper-tise and the tools they need to calculate the benefitsof a merger or restructuring, understand futuretrends and discontinuities, identify opportunities,map existing competencies, and identify the steer-ing mechanisms to support their strategic direc-tion. These tools and techniques are readily avail-able both within organizations and from a variety ofconsulting firms, and they are very useful. In manycases, however, seemingly good strategies fail to beimplemented. And often the failure is misdiag-nosed; "We had a good strategy, but we couldn'texecute it effectively."

In fact, the strategy itself is often deficient be-cause too many perspectives were ignored duringits formulation. The failure to do the necessary

adaptive work during the strategydevelopment process is a symptomof senior managers' technical orien-tation. Managers frequently derive"their" solution to a problem andthen try to "sell" it to some col-leagues and bypass or sandbag othersin the commitment-building pro-cess. Too often, leaders, their team,

and consultants fail to identify and tackle the adap-tive dimensions of the challenge and to ask them-selves. Who needs to learn what to develop, under-stand, commit to, and implement the strategy?

The same technical orientation entraps restruc-turing and business-process-reengineering initia-tives, in which consultants and managers have theknow-how to do the technical work of framing theobjectives, designing a new work flow, document-ing and communicating results, and identifying theactivities to be performed by people in the organiza-tion. In many instances, reengineering falls short ofthe mark because it treats process redesign as atechnical problem: managers neglect to identify theadaptive work and involve the people who have to

HARVARD BUSINESS REVIEW January-February 1997 133

THE WORK OF LEADERSHIP

do the changing. Senior executives fail to investtheir time and their soul in understanding theseissues and guiding people through the transition. In-deed, engineering is itself the wrong metaphor.

In short, the prevailing notion that leadershipconsists of having a vision and aligning people withthat vision is bankrupt because it eontinues totreat adaptive situations as if they were technical:the authority figure is supposed to divine wherethe eompany is going, and people are supposed tofollow. Leadership is reduced to a combination ofgrand knowing and salesmanship. Such a perspec-tive reveals a basic misconception about the waybusinesses succeed in addressing adaptive chal-lenges. Adaptive situations are hard to define andresolve precisely beeause they demand the workand responsibility of managers and people through-out the organization. They are not amenable tosolutions provided hy leaders; adaptive solutionsrequire members of the organization to take re-sponsibility for the problematic situations thatfaee them.

Leadership has to take place every day. It eannotbe the responsibility of the few, a rare event, or aonce-in-a-lifetime opportunity. In our world, in ourbusinesses, we face adaptive ehallenges all thetime. When an executive is asked to square con-

flicting aspirations, he and his people faee an adap-tive challenge. When a manager sees a solution to aproblem-technical in many respeets except that itrequires a ehange in the attitudes and habits of sub-ordinates - she faces an adaptive challenge. Whenan employee close to the front line sees a gap be-tween the organization's purpose and the objectiveshe is asked to achieve, he faces both an adaptivechallenge and the risks and opportunity of leadingfrom below.

Leadership, as seen in this light, requires a learn-ing strategy. A leader, from above or below, with orwithout authority, has to engage people in con-fronting the challenge, adjusting their values,ehanging perspeetives, and learning new habits. Toan authoritative person who prides himself on hisability to tackle hard problems, this shift may comeas a rude awakening. But it also should ease the bur-den of having to know all the answers and bear ailthe load. To the person who waits to receive eitherthe coach's call or "the vision" to lead, this changemay also seem a mixture of good news and badnews. The adaptive demands of our time requireleaders who take responsibility without waiting forrevelation or request. One can lead with no morethan a question in hand. ^

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