Leadership and

Change Management
The Systemic Leadership Approach

Contributors: Annabel Beerel

Book Title: Leadership and Change Management
Chapter Title: "The Systemic Leadership Approach"
Pub. Date: 2009
Access Date: March 22, 2014
Publishing Company: SAGE Publications Ltd
City: London
Print ISBN: 9781847873415
Online ISBN: 9781446269336
DOI: http://dx.doi.org/10.4135/9781446269336.n4
Print pages: 83-117
This PDF has been generated from SAGE knowledge. Please note that the pagination
of the online version will vary from the pagination of the print book.
University of South Africa
Copyright ©2014 SAGE knowledge

http://dx.doi.org/10.4135/9781446269336.n4
[p. 83 ↓ ]

Chapter 4: The Systemic Leadership

Approach
Figure 4.1

Introduction
This chapter explains the Systemic Leadership approach in depth. We examine the
philosophy that underpins Systemic Leadership and discuss how this philosophy
translates into practice in getting leadership tasks done.

Chapters 1, 2 and 3 stressed that the fundamental tasks of leadership relate to

mobilizing the organization around new realities and change. In Chapter 2 we [p. 84
↓ ] discussed the systemic nature of new realities and the need for systems thinking
to grasp their organizational impact. In Chapter 3, we reviewed some of the normative
theories of leadership relevant to Systemic Leadership.

Page 3 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

In these next pages, after further developing the concept of Systemic Leadership, we
examine some important distinctions that set the Systemic Leadership approach apart
from other leadership approaches. These important distinctions include distinguishing
between leadership and authority, defining what it means to mobilize others, formulating
an understanding of followership, and outlining the critical difference between adaptive
and technical work. After a discussion of these important elements of Systemic
Leadership, we focus on the specific tasks of leadership and their purpose. At the
end of the chapter, the reader should have a good grasp of the notion of Systemic
Leadership and some of the challenges leaders face in getting these tasks effectively
executed.

The role of leaders is to keep the organization relevant by remaining in tune with new
realities. Systemic leaders are continuously alert to new reality signals from the external
environment. They need to ensure the organization remains an open system and that its
change initiatives respond to real rather than illusory realities. They are also attentive to
the patterns and relationships within the systems of which the organization is a part. By
tracking new realities, changing patterns and relationships, leaders raise the awareness
of others to the new realities that are always arriving. They do this by ensuring there is
time and space for discussions concerning new changes on the horizon and by giving
people an opportunity to discuss their reactions to these new realities. Systemic leaders
are sensitive to the levels of distress in the system and work with organization members
to diffuse this distress to optimal limits.

Key Leadership Concept

For Systemic Leaders there is nothing more important, compelling or urgent than
the existence of changing realities and wrestling with what that implies for the
healthy survival of a system or organization.

Systemic Leadership – The Concept

Systemic Leadership is an approach that addresses systemic challenges that arise in a
highly interdependent world. These systemic challenges arrive by way of new realities.

Page 4 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

Identifying these new realities and their complex nature requires systems thinking. It
also requires a continuous re-evaluation of existing mental paradigms, assumptions and
beliefs, plus a devotion to critical thinking.

The Systemic Leadership approach recognizes that groups, organizations and societies
comprise a plurality of stakeholders with competing interests and needs. Due to the
growing interconnectivity of nations, cultures, societies and groups, new realities
present complex systemic challenges that require recognition of the value [p. 85
↓ ] tensions that various stakeholder groups experience with their arrival. Systemic
Leadership tackles the challenge of change in an integrative and holistic way.

The Systemic Leadership approach:

• embraces systems thinking in order to understand the impact of new realities

on stakeholders – Systemic Leaders use a systems mindset to understand
the changing nature of reality;
• pays attention to the narratives of systems and observes the changing
networks and relationships within a system – this includes giving particular
attention to the values and roles different stakeholders take up in the system
and its sub-systems;
• understands the dynamism and intricacy of the interconnectedness of
systems and promotes a multi-perspective approach to problem solving that
includes perspectives in conflict with one another – scenario analysis is an
important tool for Systemic Leaders;
• recognizes that what we see depends on our perspective, and that multiple,
equally valid, perspectives exist and this plurality of viewing points cannot
be suppressed or ignored but must be held in dynamic tension as part of
the pulse of a vibrant diverse life (finding common ground among varying
perspectives – and therefore realities – is one of the recognized challenges
of leadership – no one person or group of people can know all perspectives
or hold all aspects of reality);
• focuses on enhancing the adaptive capacity of the organization by
optimizing its learning potential – Systemic Leaders grasp that adaptive
organizations are continuous learning organizations;

Page 5 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

• understands the nature of value tensions and the resistance to learning –

Systemic Leaders work with these resistances, using them as fodder for the
learning process;
• acknowledges that complex problems need the help of the group in order to
solve them – no one person has all the answers, and pretending this results
in a litany of empty promises;
• sees leadership and followership as ‘mirror images’ of one another, rather
than as subject and object in a linear engagement of impact and response;
• recognizes that expectations of leaders and leadership vary widely and that
one person or one group of people cannot meet all the expectations all the
time – there will always be failed expectations somewhere;
• understands that everything is not under the leader's control; nor should it
be – making progress on complex problems requires co-ownership by group
stakeholders, which is a vital motivating force that gets the group to mobilize
itself to find optimal solutions;
• distinguishes between adaptive and technical work and develops different
strategies for each type of work;
• does not assume responsibility for adaptive work, but, rather, gives the work
back to the group or organization for them to engage in;
• is concerned with developing people and organizational capacities rather
than capabilities;
• provides constructive feedback that facilitates individual and organizational
learning;
• provides a holding environment during periods of distress;
• creates a network of alliances across formal and informal authority
boundaries to help balance the roles of authority and leadership (as
explained in Chapter 5).

The Goal of Systemic Leadership

The primary goal of Systemic Leadership is to mobilize people to make progress on
challenging and difficult problems that arise as a consequence of new realities and in
so doing enhance their adaptive capacity (Beerel, 1998). New realities present adaptive

Page 6 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

challenges that require adaptive work (see below). Systemic Leaders take the lead in
ensuring that the adaptive work is done – something we explore in depth in this chapter.

As discussed in Chapter 1, new realities first and foremost challenge peoples' values
and invariably result in a perceived ‘loss’ of some kind. This reality frequently leads
people and organizations to deny or avoid dealing with new realities altogether, as if
they did not exist. Rather than deal with actual reality, there is frequently a tendency to
create another supposed ‘new reality,’ one they prefer to consider. The goal of Systemic
Leadership is to artfully and strategically hold people's feet to the fire so that they work
with real, rather than shadow or imagined, realities. This essential work of leadership
is not easy. New realities sometimes present seemingly unpalatable challenges and
people's (often) vehement resistance can present itself in a variety of forms; something
we discuss in detail in Chapters 5 and 6.

Key Assumptions That Underpin the

Systemic Leadership Approach
Four major assumptions underpin the concept of Systemic Leadership:

• Leadership is defined by the tasks performed rather than the skills or traits of
particular individuals.
• Leadership is not something that only those in positions of formal or informal
authority are able or expected to do. Therefore, in Systemic Leadership,
we refer to ‘exercising leadership’ rather than referring to ‘the leader’ or ‘the
leadership.’
• Anyone can conceivably exercise leadership from anywhere in the
organizational hierarchy. Function, discipline or level in the hierarchy should
not inhibit the opportunity to exercise leadership.
• The role of leader is distinct from that of authority. Not all people in positions
of authority automatically exercise leadership.

Page 7 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

Mobilizing others
One of the primary goals of Systemic Leadership is to mobilize others. The tasks
identified below are carried out in the service of getting people to act or respond to new
realities. To mobilize others does not mean to command, coerce, or even influence
them in the conventional sense. Mobilizing others requires getting them to see why they
need to act. It implies provoking or stimulating others' self-motivation based on their own
insight and realization that action is required. Mobilizing others means getting them to
channel their flow of energy, to take responsibility for the challenge of change and to
embrace it. Mobilization occurs as a result of learning.

Mobilizing others is not easy. It is easy neither for the person exercising leadership nor
for the ‘followers.’ Why is this so? Well, we know about the fear of loss, the sense of
being out of control, and the hard work required to keep apace with change by being
adaptive, creative and innovative. People resist change that demands reprioritizing
their values, changing their perspectives or world views, establishing new behaviors
or forming new relationships. Most people also dislike uncertainty and ambiguity. New
realities invariably make these demands and create these conditions.

In order to express their dislike or distress around change, people act out. They deny,
avoid, get angry, find a scapegoat, fixate on other issues, lose motivation, rebel,
disappear, or sabotage change efforts. There is also the fact that many people prefer to
be ‘told’ what to do. That way they have minimal personal engagement, and they have
someone to ‘blame’ for their actions and their consequences.

Systemic Leadership is about dealing with these psychological and emotional issues
as much as it is about dealing with the strategic, technical, procedural and structural
issues around change. Systemic Leaders need perspicacity, perseverance and a
great deal of energy. Dealing with people's resistance and ambivalence about change
requires self-confidence. Creating an environment that fosters self-development and
new learning can be an arduous process, especially in an organization where there
are many competing stakeholder groups with different interests. The payoff, however,
for both the individual and the organization can be huge. We discuss more about the

Page 8 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

Systemic Leadership tasks in the face of resistance to change below, and especially in
Chapter 6.

[p. 88 ↓ ]

Followers
The discussion of leadership always brings up the discussion of followership. It is often
said if there are no followers there is no leader. By contrast, the Systemic Leadership
concept does not emphasize the word ‘followers’ as if there is a leader who is leading
and guiding and others following his or her lead.

In Systemic Leadership the idea is that exercising leadership occurs from many
different vantage points. First, it may occur from a position either with formal authority
or without formal authority. It is not just those in formal authority positions who exercise
leadership. This means, for example, an insightful janitor, who has no formal leadership
responsibilities, can exercise leadership. He may have noticed changing patterns of
behavior of the people working on the night shift. He may have some ideas as to what
has changed or is changing, and why. By naming this new reality and bringing it to the
attention of others, he may indeed exercise leadership.

Second, exercising leadership is more about co-creation than one person defining a
reality or vision and others agreeing to follow that lead. The idea behind exercising
leadership is to gain widespread ownership of both the challenges the group or
organization faces and their solutions. In developing a co-created response to new
realities, the Systemic Leadership baton might be passed quite rapidly and frequently
among members in the group. The notion therefore of a distinct group of followers does
not quite apply. At times someone is a follower of others' guidance or ideas. At other
times the same person is the one exercising leadership by holding up new realities
or helping the group deal with denial and resistance. The distinction between those
exercising leadership and others is ‘more fuzzy’ and less easily distinguishable than in
other leadership philosophies. Those exercising leadership and those following their
lead are in a complex relationship with one another. The one needs the other and they
both have an impact on one another.

Page 9 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

We discuss the idea of ‘distributed leadership’ in Chapter 5 where we point out that
everyone in the organization needs to act as a change agent. This means everyone
is expected to exercise leadership at times while also being a ‘follower’ at other times
when someone else is in the leadership role.

Systemic Leadership as Transformational

Leadership
On the transactional-transformational leadership continuum discussed in Chapter 3,
Systemic Leadership falls close to the transformational end. Systemic Leadership is
less about the exchange between the person exercising leadership and ‘followers’, and
more about developing the leadership capacities both of those exercising leadership,
and of others. In line with the definition of transformational leadership, Systemic
Leadership advances shared motives and goals, is concerned with the needs of others,
and invites participation.

[p. 89 ↓ ] In working with changing realities and in genuinely confronting the value
tensions they represent, Systemic Leadership takes stakeholders affected by the
new realities to higher moral ground. Tussling with questions around value, meaning
and a sense of self is an ethical endeavor that results in greater self-awareness; self-
awareness for the individual and self-awareness for the organization and its culture.
Heightened self-awareness results in higher levels of morality. Leadership and ethics
are discussed in greater detail in Chapter 8.

Systemic Leadership as an Activity

Exercising Systemic Leadership means engaging in the tasks that address the adaptive
challenges facing the group and helping the group or organization make progress
on addressing those challenges. We recall that adaptive challenges refers to the
value tensions that arise as a result of new realities. Adaptive challenges require us
at the individual and the organizational levels to reclarify our values in the light of new
perspectives, new situations and new behaviors.

Page 10 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

Because the focus of Systemic Leadership is on the activity and not on the person or
persons exercising leadership, the style and traits of the person are not focal points.
While Systemic Leadership by virtue of its approach may seem to fit some leadership
styles more than others, it would be risky to prescribe any hard and fast rules that
ensure success. Different situations and different cultures call for different types of
Systemic Leadership strategy. As long as the adaptive tasks are effectively undertaken
and new realities are directly dealt with, the appropriate leadership style will find its
place. In Chapter 3 (p. 78) we reviewed some of the competencies likely to assist
someone in being an effective Systemic Leader. The one personal attribute that is
undoubtedly helpful is the ability to be attentive to the present and to be able to read the
present moment clearly. The present moment reveals the future that is always arriving.
If we pay attention to the present, the future will show itself.

Systemic Leadership Competencies

• Systems thinking mindset
• Mindfulness, awareness, attentiveness to present realities
• An ability to frame reality/new realities
• Process orientation
• People skills and emotional intelligence
• Ability to get people to self-mobilize
• Self-effacing disposition
• Self-confidence
• Courage

Capacity versus Capability

Systemic Leadership places greater emphasis on developing people's capacities than
advancing their capabilities. The difference between capacity and capability is that
the latter (usually) emphasizes technical ability such as intellectual acuity or physical
dexterity. It refers to talents or skills that can be learned, changed or enhanced.

Page 11 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

Capacity, on the other hand, relates to a power: a power to experience, learn, produce
or retain something. Capacity refers to innate potential. It is this potential that sets the
limits on capability. The greater a person's capacity, the greater his or her potential
to learn, grow and understand. People with great capacities can be taught to be very
capable. People who have limited capacities will soon reach the limits of their capability.
Capacity is therefore the power that defines capability. Capacities grow and recede.
Capabilities change or stagnate. Both improve with practice.

Effective leadership can contribute to the development of people's capacities by

giving them opportunities to practise and to stretch their limits. Skilled operational
management can then channel this capacity into the appropriate technical capabilities.
Management's responsibility is to ensure that people's capabilities do not stagnate but
remain aligned to changing organizational needs. The greater the capacity of the people
in the organization, the more easily this can be achieved. Effective leadership enhances
people's adaptive capacities.

The Role of Leadership versus the Role of

Authority
The roles of leadership and authority are often confused. Most people tend to presume
that anyone who has a position of formal authority is the leader. For example the
president, the CEO, the director, the supervisor and the boss are automatically
considered leaders. Particularly senior executives in business organizations are given
the title ‘leader’ regardless of any evidence of their ability to guide the organization
through transformative changes. A formal [p. 91 ↓ ] title does not guarantee that the
person will be an effective leader. In fact it does not even guarantee that the person will
assume the tasks of leadership at all! It is much easier for people to assume the task of
authority than leadership. People love to use their power and influence to command the
obedience of others. Getting them to change, with all the work that entails, is a different
story!

To clarify these assertions let us review how the functions of authority differ from those
of leadership. Authority figures are expected to provide direction and protection. They

Page 12 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

are expected to chart the course and hold boundaries. Those in authority are expected
to control conflict, uphold and maintain norms, and generally provide orienting functions
regarding group status and physical place. People in authority are expected to solve
routine problems, to alleviate distress, to mediate between competing stakeholders
or factions and ward off danger. They are expected to have certain answers and to
shoulder the responsibility for solving difficult problems (see Chapter 5).

Leadership is about the challenge and process of change. If there is no change there
is no need of leaders; authority figures will keep the organization on the straight and
narrow. Leaders, however, in their role as facilitators and agents of change, do things
that go directly counter to the function of authority. They are supposed to challenge
the status quo. They are expected to stimulate shifts in consciousness that create
opportunities for learning, that prompt new habits, new norms, different boundaries
and new courses of action. Leaders are supposed to allow conflict to emerge, and to
engender a certain amount of chaos and disequilibrium in the process of guiding the
group or organization to new territory and new ranges of equilibrium.

Clearly the roles of authority and leadership are diametrically opposed. The one fights
for order, the other for disorder. The one ensures that existing norms hold, the other
strains for new norms. The one focuses on stability, the other on instability (change).
The one provides answers and shoulders the responsibility for others, the other (in the
case of Systemic Leadership) gives the work of finding solutions back to the group.

Misunderstanding of the nature of leadership often arises as a result of the confusion

between authority and leadership. Because people in positions of authority are
expected to alleviate the distress of others, to show the way, and to take responsibility
for mistakes in the process, people often seek authority rather than leadership. They
want those in authority to take away their burdens rather than challenge them to do their
part in resolving the issues. Many leaders are not appreciated if they do not wield their
power and authority by telling others what to do.

Exercising leadership from a position of formal authority as opposed to from a position

with informal or no authority raises different authority and leadership issues. We explore
these in detail in Chapter 5, ‘Authority, Obedience and Power.’

Page 13 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

[p. 92 ↓ ]

LEADERSHIP AUTHORITY
Hold up changing realities Provide direction
Challenge the status quo Uphold and maintain norms
Generate creative tension Control conflict
Set new boundaries Hold existing boundaries
Identify the adaptive challenge Chart the planned course
Provide a holding environment Provide protection
Heighten distress and urgency Alleviate distress
Mobilize for adaptive work Solve technical problems
Give the work back Provide answers
Be open to dissenting voices Clarify group authority and status

Personal Exercise
• 1. As someone who has a position of authority, do you also exercise
leadership? When? How?
• 2. Select one or two ‘leaders’ who impress you. Are they good at exercising
authority or leadership or both? List your evidence to support your
conclusions.
• 3. Write down the instances when you have tried to exercise leadership but
others have wanted you to stay in your role of authority.
• 4. What can you learn from these reflections?

Adaptive versus Technical Work

The distinction between adaptive and technical work is based on the insights of
psychiatrist Ronald Heifetz and his work on leadership at the J.F. Kennedy School

Page 14 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

of Government at Harvard University. Heifetz suggests that the leadership strategies

required by the two types of work are different. He observes that adaptive challenges
are often inappropriately identified as the need for more technical work. The
consequence of this misdiagnosis is ineffective leadership or no real leadership at all.
For Heifetz, real leadership is about dealing with difficult questions that challenge the
very nature of our meaning and value systems. This, he claims, is the heart of adaptive
work.

[p. 93 ↓ ]

Adaptive Work
Heifetz's insights are based on his work with highly experienced but burnt-out
community leaders. Many of them had lost their jobs or been rendered impotent in
their ability to effect change, often for so-called political reasons. While studying their
experiences, Heifetz arrived at a new understanding of the issues and challenges
facing those who endeavor to exercise leadership. His interpretation of the causes
of failed leadership is different from more conventional analyses. The latter tend to
focus on the ineptitude or inadequacy of the leader. He or she is usually diagnosed
as having failed by having the wrong temperament, selecting the wrong program,
lacking political sensibility, lacking appropriate technical or industry experience,
demonstrating poor timing or poor strategic skills, or being insufficiently thorough in the
actual implementation of change. Consider the many programs, courses and books that
have been designed and written to ‘fix the leader!’

By contrast Heifetz's approach focuses on the leader's ability to grasp changing realities
facing the community or organization and to understand the value tensions they
represent. Exercising leadership is not about coming up with easy answers to complex
problems, but, rather, about getting the community or members of the organization to
face its value tensions and to make practical progress on those value tensions. The
real measure of leadership is the ability to mobilize people to work on difficult questions
that radically challenge their lives and affect their ways of making meaning. This implies
that exercising leadership entails gaining appropriate trust from one's constituents
and encouraging them to recognize and deploy their own agency without encouraging

Page 15 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

moral dependency. Exercising leadership means getting stakeholders to put their own
shoulder to the plough in order to effect the adaptive changes the group or organization
requires. It does not mean devising a vision on their behalf and then persuading them
to be supportive and/or compliant. Leadership is about getting people to do their own
work in an environment where they are suitably focused, encouraged and supported.
Exercising leadership is essentially about encouraging others to do the adaptive work
they need to do.

Effective leadership is concerned with distinguishing between adaptive and technical

work. Adaptive work is concerned with grasping the nature of a new reality and working
with the gains and losses it represents. The gains and losses are first and foremost
psychological and emotional. An organization that has to recreate or reinvent its
technology (which is a continual challenge, given the acceleration of science and
technology) has to keep asking the questions, ‘Who are we? Who do we want to be?
What kind of added value do we bring to our customers?’ These are very personal
questions as they challenge the very core of an organization's existence. These
questions raise important issues about self-definition, competence, and contributing
value. They get at whether or not the organization is still really relevant and if so how;
and, if not, what it can do about it. These are uncomfortable [p. 94 ↓ ] questions that
organizations (and people) would rather not have to ask. Management wants to assume
the organization's self-definition has been established, that it is competent, and that of
course the organization adds value! How dare anyone challenge or question this!

Effective leadership means getting the organization or group to face these questions
and not sidestep them. Effective leadership is about working with others to ensure the
adaptive work is done before technical solutions are rushed into. Effective leaders make
sure that the adaptive work responds to the new realities, and that it guides and informs
the technical response.

Identifying that adaptive work may be required often begins with perceiving that
something is discordant between the organization's performance and what is occurring
in the environment. A number of signals may indicate that the organization needs to
radically reposition itself. These signals must be carefully examined to see what they
indicate about the new reality. Regrettably many organizations, like Hunt and Blake
(case study below), become distracted and fixate on the symptoms of problems without

Page 16 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

getting at what lies underneath and behind the problems. Accurately perceiving the true
nature of the adaptive challenge is often the most difficult part of adaptive work.

Technical Work
Technical work is a critical part of any organizational activity. Technical work addresses
intellectual, procedural and routine problems. The important issue is that it must be
appropriate to the problems it is trying to address. The efficacy of technical work lies in
the appropriateness of its timing, its congruence with the adaptive work, and of course
the skill and efficiency with which it is executed.

Some forms of technical work are more easily identified than others. Every organization
in every type of industry has typical types of technical work. Banks upgrade their
cash machines, accountants revise their audit manuals, software companies update
their software, and retailers revise their purchasing and inventory policies. Most
organizations develop strategic plans, create budgets, and develop and refine their
policies and procedures. Technical work! Technical work keeps the organizational
engine performing, and performing efficiently. While technical work takes care of
the functioning body of the organization, adaptive work takes care of its heart and
mind. Adaptive work ensures the organization remains relevant through heart-mind
engagement that nurtures the organization's energies and passion to be true to its
mission. Adaptive work keeps the organization attuned to new realities. Technical work
provides the essential follow-through. When technical work replaces adaptive work it
has the same effect as rearranging the deckchairs on the Titanic!

Performing adaptive work and distinguishing between adaptive and technical work
can best be illustrated with the help of examples. Refer to the case study [p. 95 ↓ ]
below of Hunt and Blake, a once extremely successful South African business that
failed to recognize and meet its adaptive challenges. Instead it favored technical work.
The result: Hunt and Blake lost relevance to its customers and was discarded into the
dustbin of history. It no longer exists.

Page 17 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

The Tasks of Systemic Leadership

Exercising leadership entails undertaking adaptive work. Several tasks fall under the
heading ‘adaptive work.’ We have already discussed some of these tasks, such as
identifying, naming and reality testing new realities, acknowledging value tensions, and
identifying the adaptive challenge. Working with adaptive challenges and mobilizing the
group to respond to those challenges requires various types of activity that help reframe
issues or direct the group to pursue certain actions.

The tasks of Systemic Leadership are summarized below. While these tasks have been
outlined as if they follow sequentially, this is misleading. Adaptive work rarely takes
place in logical, linear or sequential fashion. It is best to think of the activities of adaptive
work as being steps in an improvisational dance. Each activity represents a step or
a sequence of steps. So, for example, at one time, there might be two steps forward,
three to the side, and possibly one to the back. A little later, the sequence could be
entirely different. A step forward might imply that progress is being made. A step to
the side might represent turning down the heat. A step back may mean giving space
for the group to regress before turning up the heat again. With this image in mind, we
can see that the pace of the dance and the sequence of dance steps are determined
by the music created by those on the dance floor. Whilst the dance will begin with
acknowledging the impact of new realities and the associated adaptive challenges,
the rest of the dance will flow from the reaction of the dancers, the anxieties they are
experiencing, how these are contained, and the transformative learning taking place.

Systemic Leadership Tasks Outlined

Identify New Realities
The primary task of leadership is to get the organization to continuously face new
realities as they arrive. Just as sailboats always face the wind, so organizations must
always face the winds of change.

Page 18 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

Identifying new realities, as we have discussed in Chapters 1 and 2, is not always

easy. An important point to note is that exercising leadership does not require any one
person to clarify or name the new reality alone. In fact it is preferable if the identification,
naming and framing is a group process. This activity in itself generates important
learning.

[p. 96 ↓ ] Along with the identification of new realities comes resistance in all its forms
– denial, anger, confusion, blaming, scapegoating and so on (see Chapter 6). Working
with new realities, therefore, is not a simple cognitive exercise. It affects people's sense
of self and their cherished world views, which invariably prompts an emotional reaction.
Beware too of those who say they love change. People who fly wherever the wind blows
may seem helpful to the process, but may not in fact be doing the deep learning of
adaptation. Exercising leadership means holding space for people to reflect on and
articulate the value tensions they are experiencing. Even positive new realities deserve
time and attention as part of the adaptive process. Rapid acceptance of new realities
and change may indicate that the adaptive work has not really been done.

Identify and Name the Adaptive Challenge

New realities most often present new or different values. These create value tensions
within organization members or stakeholder groups. Naming the value tensions is
known as identifying the adaptive challenge.

Once the adaptive challenge begins to be formulated, further reality testing is required.
The best way to do this is to engage system stakeholders (employees, customers,
suppliers, members of the community, possibly competitors) in discussions regarding
the newly perceived realities and the value tensions they imply. Reality testing is the
attempt to grasp the problem fully by repeatedly clarifying the values and current
behaviors being challenged and establishing which stakeholder groups are affected and
how. (Refer back to the open systems approach in Chapter 2 (p. 48) to help with this
step.)

Rushing the reality-testing process, a frequent tendency of those anxious to get on with
the more comfortable technical work, will prove detrimental in the long run. Some time

Page 19 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

(not forever!) is needed to elicit conflicting views or challenging perspectives. Once

people engaged in the reality-testing process consider the adaptive challenge has been
sufficiently clearly identified and articulated, the adaptive work is well under way.

Orient Stakeholder Groups to Deal with

Value Tensions
Once the adaptive challenge has been identified, the next stage of the adaptive work is
to actually shift the organization's attitudes, beliefs and behavior to make it consonant
with the values of the new reality. This part of the adaptive work concerns addressing
the conflicts between the values that people currently hold and the new values required.
It includes mirroring, coaxing, encouraging, challenging and motivating management
and employees to embrace the new reality for what it is and what it means to the life of
the group or organization.

Dealing with value tensions includes distinguishing between illusion and reality,
resolving conflicts, and placing the perceived difficulties of the new reality into
perspective. It demands innovation and learning. Often the most difficult part of learning
is the unlearning of old values that have served well in the past and no longer serve as
well in the changed reality.

[p. 97 ↓ ]

Identify Who Has What to Gain and What to

Give up or Lose
Part of the activity of identifying value tensions includes clarifying the stakeholder
groups affected by the new realities and what each has to gain and to lose as a result of
the value tensions. This aspect of the adaptive work is important as it provides insights
into the degree of resistance that can be expected as well as the motivating leverage
possible with each stakeholder group.

Page 20 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

A stakeholder analysis invariably reveals many more stakeholders than initially

imagined. By delving deeper into the needs of various stakeholders and their relative
positions of power in the organization, one can observe that different stakeholder
groups experience different gains and different losses. Being in tune with the
differences between the groups is important. This helps assess where the greatest
resistances lie, which stakeholder groups are likely to form alliances and which groups
might be in conflict with one another.

In this phase of the adaptive work exercising leadership means helping identify the
learning required for adaptation. Based on the effect of change on different stakeholder
groups it will become clear that some groups may have to do major repositioning work
to remain relevant. This may require a new mindset, new values, and new ways of
being competent.

Recognize Signals of Distress – Hold

Steady and Turn up the Heat
We know change is always accompanied with some element of distress. Systemic
Leadership pays attention to the signals of distress and exhibits sensitivity to what
those signals represent. Ignoring people's distress or becoming angry with them
is not helpful! On the other hand, giving in to their distress, trying to comfort them
by disavowing the true nature of the new reality is not helpful either. Good leaders
know how to hold steady in the face of distress by showing understanding without
encouraging backsliding into states of unreality. Finding the right balance between
patient understanding and holding people's feet to the fire to deal with what is
uncomfortable while also instilling an appropriate amount of urgency to deal with
the situation is tricky. The likelihood of doing this effectively and sustaining positive
momentum is radically enhanced if leadership is distributed. This means that more
than one person is holding up the new reality, dealing with the distress and trying to
push forward. For a lone leader to take this on single-handedly is not only extremely
emotionally demanding, but can also be extremely politically dangerous!

Page 21 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

Distinguish between the Group's Adaptive

and Technical Work
Because people and organizations fundamentally do not like change they try to respond
to the demands of change in a technical or functional manner. Rather than take the
time or energy to understand the emotional and psychological impacts of [p. 98 ↓ ]
the gains and losses associated with change, the tendency is to rush headlong into
technical solutions. Most often the technical solutions address the symptoms rather
than the root causes of change. For example an organization might be experiencing
loss of market share because the new reality is that a new and different technology is
luring away traditional customers. Instead of taking the time to understand the nature of
the new reality and the need for the organization to reinvent and then reposition itself,
it falls into the trap of seeing the loss of market share as a pricing problem or a sales
team management problem. In this way the organization avoids doing its adaptive work
– adapting to the new reality – by looking for quick fix, rationalist solutions that do not
really address the problem. Typically the more elaborate the technical solution, the
greater the avoidance of adaptive work.

Think of your own organization. In the face of change how many new technical systems
are hastily implemented? New projects and initiatives embarked upon? What about
those new positions with elaborate titles that are created? Then there are the new
HR bonus schemes, the new procedure manuals and quality control policies. Then
of course we must not omit those hundreds of mergers and acquisitions for gazillions
of dollars that invariably fail to add any true value at all. Undoubtedly many of these
initiatives are technical solutions to adaptive problems! These types of response do
not really take the organization forward. They represent examples of ‘bad change’, as
discussed in Chapter 1.

Page 22 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

Provide a Holding Environment or

Container for the Distress
Systemic Leaders help the group or the organization deal with distress caused by
change by providing ‘release valves’ for that distress. If one uses the analogy of the
pressure cooker, good leaders can gauge the intensity of the pressure building up in
the system and have the ability to help the system let off steam without totally coming
off the boil. Good leaders find ways to alleviate the distress by engaging in discussions,
encouraging humor, and allowing some escape into technical work so as not to let the
system exceed its limits of disequilibrium. Leaders need to listen carefully to what others
are saying; they need to be attentive to the behaviors of others; and they need to be
aware of the stresses and strains they are experiencing. By keeping their attention
on the organizational pulse they are able to read the climate and, with the help of
others (see below), keep the system within manageable stress limits. If the stress in
the system exceeds tolerable limits, learning will not occur. Chaos can ensue, often
resulting in highly dysfunctional behaviors, possibly followed by the ultimate ‘demise’ of
the leader.

Make Constructive Interventions to Keep

People on Track
Exercising leadership includes continuously bringing the organization back to the task
of doing adaptive work around new realities. This requires constructive feedback to
stakeholder groups or organization members in an effort to keep them oriented to
adaptation and learning. This attentive feedback ensures the goal of change is not lost
and that progress continues to be made at a pace the organization [p. 99 ↓ ] or group
can tolerate while still responding appropriately to the urgency of the new reality.

Page 23 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

Get on the Balcony to Gain New

Perspectives
To retain effectiveness leaders need to find ways in which they can distance themselves
from the day-to-day demands of organizational and group dynamics. They need to
develop strategies to enable them to take a step back so they can remove themselves
from the dance of organizational life and have an opportunity to observe it without being
caught up in it.

The idea of getting on the balcony (another important Heifetz concept), forces the
leader to try to take the role of ‘observer’ and thereby see the larger picture of what is
truly going on in the organization. This respite from the daily needs of others provides
opportunities to gain new insights and new viewing points of how the organization is
truly functioning, to see points of harmony and disharmony, and to understand changing
patterns and new relationships that are evolving or dissolving. Being able to get on
the balcony aids systems thinking and is essential for a deeper understanding of
organizational life.

Give the Work Back

When the going gets rough, people like to look to those in positions of authority, or
to those who are willing to assume the role of leadership, for answers. Rather than
wrestle with their own challenges or assume responsibility for their own decisions, they
prefer to turn to someone who will assume the responsibility for telling them what to
do. Particularly when people have to face tough questions that require tough answers
they hope that someone else will do their work for them and thus lessen the discomfort
or personal sacrifice. This is a very seductive situation for leaders. Because people
want to depend on them, the leaders are made to feel omnipotent, wanted and needed,
and excessively competent. This fatal attraction between people and erstwhile leaders
is more often than not doomed to failure. Leaders cannot and should not assume
responsibility for the adaptive work of others. Not only is it misleading and irresponsible,
it is also unethical (something we discuss in later chapters).

Page 24 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

Effective leadership is about giving adaptive work back to those to whom it belongs.
Part and parcel of good leadership is the ability not to be seduced into believing one can
assume the adaptive work of others. Good leadership is about reflecting or deflecting
the ‘savior’ projections back to the people who are doing the projecting and getting
them to assume responsibility for their own work. This does not mean that good leaders
should lack interest or concern for the challenges that others face. On the contrary, they
are aware and supportive of the stresses and strains of adaptive work, and they assist
by providing a holding environment that helps contain the distress and discomfort being
experienced.

A key role of leaders is to help others frame the challenges they are facing and to inject
perspicacious questions into discussions. Their challenge is not to become providers of
answers and solutions but, rather, to become a resource for good questions [p. 100 ↓ ]
and for assistance in wrestling with the truth. The act of giving the work back to others
is one of the most challenging for all leaders and for all of us. We love to be seen as
experts, as people who have answers, and as problem solvers. Regrettably we do not
realize that providing solutions for others seldom provides real solutions at all! It is often
self-serving without showing any real care for the other.

As mentioned earlier, Systemic Leadership is best classified as transformational

leadership. The transformational leadership approach focuses on the transformation
of others. By getting people to take ownership of their own adaptive work, you develop
their adaptive capacities. Although the experience of adaptive work is frequently
distressing, finding the inner strength and confidence to take up one's own agency has
huge personal benefits. Developing individual and organizational adaptive capacities is
the hallmark of effective leadership.

Form Alliances across Group Factions and

Constituencies
As we have discussed, it is difficult to exercise leadership alone. Lone warriors and
saviors seldom survive. Systemic leadership understands that mobilizing people
from various constituencies toward a common goal requires distributed leadership –

Page 25 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

a leadership that is shared with representatives from different groups who can help
reality test the new vision prompted by change and who can represent the multiple
perspectives that each group brings to any change initiative. Effective leaders are able
to form strategic partnerships and alliances across stakeholder groups that assist in
mobilizing others to embrace change with understanding, energy and commitment.

Mobilize Resources
Ultimately the role of leaders is to mobilize others to embrace their value tensions
around change and then take up their own autonomy by self-mobilization. The Systemic
Leadership approach prefers the term mobilize to lead, influence, convince or direct.
Mobilizing people means freeing them up to move. Systemic leadership frees people
up by helping them untangle the knots that immobilize them, such as unresolved value
tensions, distress and fear. We discuss this further in Chapter 6.

The Tasks of Systemic Leadership

• 1. Identify new realities.
• 2. Identify and name the adaptive challenge.
• 3. Orient stakeholder groups to deal with value tensions.
• 4. Identify who has what to gain and what to give up or lose.
• 5. Recognize signals of distress.
• 6. Distinguish between the group/organization's adaptive and technical work.
• 7. Provide a holding environment or container for the distress.
• 8. Make constructive interventions to keep people on track.
• 9. Get on the balcony to gain new perspectives.
• 10. Give the work back.
• 11. Form alliances across group factions and constituencies.
• 12. Mobilize resources.

Page 26 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

Case Study: Old College University

Old College University is celebrating its 100th anniversary and is faced with a ‘new
reality’ it has been avoiding for some time. The new reality is that its Business School
requires special accreditation in order to make it academically on a par with competing
business schools. The accreditation it requires places emphasis on scholarship and
research. Under these standards all faculty members are expected to possess a
doctorate and to carry out research and publish books and articles in scholarly journals.
This emphasis has a major impact on the curriculum of the school and on the workload
of faculty. Further, it means that faculty members need to have an interest in and the
aptitude to carry out research and write.

Old College University Business School has hitherto placed high emphasis on
teaching. Faculty members have been attracted to the school because of the low
pressure for scholarship in favor of high teaching loads and intensive classroom
interaction. Students who are attracted to Old College University are also those who
are interested in pragmatic, down-to-earth learning with less emphasis on scholarly
rigor. The accreditation ‘new reality’ creates considerable value tensions for Old College
University. It also presents major adaptive challenges to several stakeholder groups.
The challenge for Old College University Business School is how to mobilize its various
stakeholder groups to embrace this new reality.

Let us work through the Systemic Leadership tasks:

Step 1: Identify New Realities

Old reality New reality
A culture of easygoing pragmatic learning. A culture with an emphasis on scholarly
excellence.
Little competition between faculty for Increased competition between faculty for
status. status.

Page 27 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

High teaching load. Lower teaching load with emphasis on

scholarship.
Classroom ratings matter most. Scholarship matters most.
Pragmatic, hands-on faculty favored. Scholarly faculty favored.
Middle of the road students attracted. More intellectually demanding students
attracted.
Senior management competence based Senior management competence based
on collegiality and accessibility. on ability to inspire scholarship and
research.

Step 2: Identify Adaptive Challenge of Old

College University
How to transition from a friendly, low-key teaching university to a more intellectually
rigorous, demanding and competitive scholarly university? How to inject different types
of rigor into faculty and increase the intellectual ‘quality’ of students?

Step 3: Orient Stakeholder Groups to Deal

with Value Tensions
Some key value tensions:

• pragmatism, hands on, easygoing versus intellectual, scholarly, performance-

driven;
• classroom popularity versus publications success;
• friendly, non-threatening culture versus intellectually challenging/threatening
culture;
• low entry-level requirements for students versus more demanding entry-level
requirements;

Page 28 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

• new business model: low-end fees, more students versus higher fees, fewer
students.

New value orientation required:

• new culture of scholarly focus and competition;

• new values important to get ahead;
• changing expectations of students;
• new leadership style and competencies required.

[p. 103 ↓ ] One can see from this analysis why Old College University has been
delaying acknowledging the accreditation reality for some time. The implications of
embracing this reality are enormous and resistance from both the leadership and many
faculty members is understandably high.

Step 4: Identify Who Has What to Gain and

What to Give up or Lose
Old College University stakeholders include:

• the university as a system;

• current Dean of the Business School;
• faculty members with PhDs;
• faculty members without PhDs;
• faculty members who have an aptitude and enjoy scholarship;
• faculty members who do not have an aptitude or do not enjoy scholarship;
• faculty who have been at Old College for many years;
• relatively new faculty;
• brand new faculty;
• administrative staff;
• existing students;
• potential new students;
• alumni;
• other university services.

Page 29 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

As we can see, the new reality of accreditation for Old College provides a mixed bag.
Some stakeholders have more to gain and some more to lose than others. That is often
the case with new realities. Dealing with the ‘losses’ that arise for those who cannot do
scholarship or who are not adept at writing books and articles is of course challenging.
The art of exercising leadership is helping stakeholders understand their losses and
gains, and helping them see gains even in the most challenging circumstances.

For example, a sixty-year-old faculty member at Old College University who does
not have a PhD and/or does not wish to engage in scholarly pursuits will conceivably
have to look for another job. This could seem a huge loss. Maybe he has been there
for twenty years and he sees himself being [p. 104 ↓ ] forced into early retirement.
Consider his anger and sense of humiliation or being unappreciated. Providing creative
alternatives can be challenging. This is some of the work the group needs to do. It is not
the responsibility of the leadership to provide the answers.

On the other hand, a younger faculty member, without a PhD may decide he or she
is prepared to get that extra degree so that he or she may continue teaching at Old
College Business School. Here the discussion would center on how this faculty member
might be assisted during the transition.

There will also be mixed reactions from various student groups. Some existing students
may be displeased with higher standards while others might like them. Potential new
students may feel more or less attracted to Old College University, depending upon
their own interest in education.

A detailed stakeholder analysis would reveal many stakeholder groups in conflicting

positions – some with far more to gain or lose than others in this situation. We can
imagine this new reality would raise the anxiety and tension across the university and
create a great deal of pressure on the senior administration.

Step 5: Recognize Signals of Distress

The Old College Business School new reality certainly presents many challenges to
the entire system and all of the sub-systems. Fear and anxiety about the future of the

Page 30 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

school and the professional careers of the faculty are likely to be uppermost in their
minds. This will have an impact on the quality of teaching at the university and the
experience of the students. All kinds of emotional behavior will likely be displayed, both
overtly and covertly across the campus. Exercising leadership will mean recognizing
behavior as a signal of distress and working with that distress while not deflecting from
the new reality. We discuss dealing with distress in great detail in Chapter 6.

Step 6: Distinguish between Adaptive and

Technical Work
Old College Business School has a great deal of adaptive work to do around the new
accreditation reality. Those who engage in exercising leadership around this issue
will pay attention to discussing the value tensions different stakeholder groups are
experiencing and what they have to ‘learn’ in order to adapt. This will not be easy
as people find it difficult to discuss their feelings concerning their self-esteem and
sense of competence. Groups [p. 105 ↓ ] would far rather do technical work as this
makes them feel less vulnerable and they feel they are getting something done. The
challenge for leadership here, as always, will be to get the timing right about doing the
adaptive work before moving into the technical work. Examples of technical work in this
situation include assigning new titles to people or departments, creating new classroom
assignments, new curricula or new outcomes assessments. While these all have their
place, the adaptive work needs to be engaged in first in order to speed up the adoption
of change and heighten its chance of success.

Step 7: Provide a Holding Environment or

Container for the Distress
Exercising leadership will require monitoring the levels of distress in the system and
ensuring it does not reach untenable levels. If the distress is too high, Old College
Business School will cease to function effectively and will devolve into destructive
in-fighting, heightened inter-stakeholder conflict, scapegoating and all kinds of other

Page 31 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

regressive and dysfunctional behaviors (see Chapter 6). The emotional life of the
organization will require support and succor without misleading organizational members
into the false belief that the new reality has disappeared. Managing the tension
optimally will require time, empathy from management, and open discussions across
stakeholder groups. These will have to be well managed so that space for emotions is
provided without the sense of urgency about change being lost. This is not an easy task
and requires patience and steadiness on the part of both those in authority roles and
those exercising leadership.

Step 8: Make Constructive Interventions to

Keep People on Track
Exercising leadership will mean continuously intervening in positive ways when the
momentum toward the goal of embracing the new reality is lost. At times, constructive
intervention, comments or feedback may simply alleviate distress or allow for some
emotional give around the discomfort of the new reality. As mentioned earlier, there may
be a ‘dance’ in that not every action will seem as if things are moving forward and this
could be very frustrating to some who just ‘want to get on with it.’ Finding the optimum
balance between give and pushing forward is part of this dance.

[p. 106 ↓ ]

Step 9: Get on the Balcony to Gain New

Perspectives
To understand the group dynamics likely to take place at Old College Business School
requires taking a step back and getting out of the fray. Getting on the balcony can take
many forms. It may mean staying away from some meetings; it may require changing
one's role in meetings; it could include engaging in discussions with others more
peripheral to the immediate Business School system; or it may mean just taking a few

Page 32 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

days off for self-renewal. Any activity that enhances the ability to engage in systems
thinking invariably provides new insights.

Step 10: Give the Work Back

One of the major leadership challenges in any change initiative is finding how to
avoid being responsible for the emotional remedies and the technical solutions.
Systemic Leadership, which aims at enhancing the adaptive capacity of others, is
an approach that invites those engaged in the change process to devise their own
remedies and solutions. This means in the case of Old College Business School that
various stakeholder groups need to get together to discuss ‘the problem.’ They need to
talk to one another about what it means to them; what they believe they are gaining and
losing; what they think they can do to alleviate the discomfort and move things forward.
They should be encouraged to come up with ideas and suggestions and given some
room to test these out. All the while leadership requires holding their feet to the fire,
maintaining a sense of urgency, yet containing the levels of distress.

Step 11: Form Alliances across Group

Factions and Constituencies
Exercising leadership alone can be a burdensome and dangerous endeavor. It can be
burdensome in that the psychological and emotional work required to deal with multiple
stakeholders' responses to change can be huge, frustrating and tiresome.

In the case of Old University Business School, exercising leadership would require
dealing with the reactions of frightened faculty members who know they have to
educate themselves further or lose their jobs, with frightened deans who do not know
how to create a culture of scholarly excellence, and with anxious students (existing and
potential) who are afraid they will no longer have the competence to perform adequately
at the [p. 107 ↓ ] Business School. There will also be the anxious university treasurer
who has to chart the university through financial challenges as the university alters its
business model.

Page 33 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

These examples simply scratch the surface of all the dynamics likely to be taking place
at Old College University. Taking this on alone is frankly suicidal! Effective leadership
will depend upon an alliance of people across the university and the Business School
engaged in dealing with both the adaptive and the technical work. Some members of
the alliance will focus on the adaptive work and some on the technical. Some members
will assist in holding people's feet to the fire around the new realities, while others will
focus on alleviating distress and creating a holding environment. The adaptive work
should be well under way before any type of technical work is embarked upon. Also
members of the alliance should engage in discussions on progress being made.

Step 12: Mobilize Resources

In order for Old College University Business School to adapt to the new reality it will
need to mobilize its resources to embrace change as openly and constructively as
possible. While there will always be stakeholders who will not be able to get on board
with the demands of change, Old College will need to mobilize a critical mass in order to
survive the new demands.

Part of the leadership challenge at Old College is to hold up to faculty in the Business
School the new reality that the new accreditation standards present a new reality to all
business school faculty at any respectable college and that if they do not face it at Old
College they are most likely to face it somewhere else. The writing is on the wall that
faculty members without PhDs who do not publish and carry out research are going to
find it more and more difficult to get jobs even in average universities.

Postscript: Alas, Old School University found the resistance to the new accreditation
standards too high and the adaptive work too complex. The president and senior
administration blamed their reluctance to embrace the new reality on the cost
associated with changing the culture of the Business School. Sadly, Old School
University will continue to struggle along as yet another mediocre educational institution
desperately trying to balance its budget on tuition dollars. How long will it survive?

Page 34 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

The Importance of Vision

Leadership research results reflect an almost universal expectation by people that
leaders are those able to create a compelling vision. People want inspiring, enthusiastic
and hopeful visions. These are the types of vision [p. 108 ↓ ] they value and want to
align with. Alas, this is so often Alice in Wonderland thinking. New realities need to
underpin all visions. A vision for the future that does not respond to the realities the
group or organization is facing is simply pie in the sky. Enthusiastic, optimistic vision
statements can be dangerous. New realities may deliver hard, even brutal news. Any
visioning of the future must be a realistic, sober statement of what is true and really
possible in light of that truth. Desirable or idealistic vision statements invite extreme
caution.

A vision statement developed in isolation by the CEO with the aid of her senior
management team is far from the ideal. The process of creating a vision for the group or
organization should be something that evolves from the adaptive work described above.
Adaptive work is distributed work; it requires participation across the organization. If
the vision statement and the adaptive work are not in sync, the vision statement will
lack coherence and traction in the life of the organization. It will simply become an
intellectual document to which people pay lip service. Part of the reason for giving the
work back to the group or people in the organization is for them to devise a vision that
reflects the values and real-world tensions that exist and they can own. Giving anyone a
vision statement they are expected to comply with will hardly motivate or mobilize them.

The future vision of the organization needs to be co-created by the group as they
grapple with new realities and engage in adaptive work. Co-creation will create buy-in
and will also provide reality testing as people question, challenge, disagree, or present
different visions. Peter Senge, in The Fifth Discipline (1990), asserts that shared visions
emerge from personal visions and that it does not work just to establish an official
vision. Senge also suggests that the role of the leader, rather than espousing a vision
for others, is to hold the tension between the group's visions and the world's reality,
thereby facilitating others to work toward closing this gap (Senge, 1990: 226). Senge's
ideas resonate with the Systemic Leadership approach.

Page 35 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

Executive Summary
The prime function of Systemic Leadership is to orient the organization to new realities
and to hold up the value tensions being created. Systemic Leadership requires both
insight and foresight in reading the changing environment and translating its effects
into the mission, values and core competencies of the business. New realities set the
agenda for the adaptive work required to align the work of the organization with the
requirements of new realities.

• 1. Systemic Leadership focuses on new realities a system is facing.

• 2. New realities affect different stakeholder groups differently. These
differences need to be identified.
• 3. A critical part of Systemic Leadership is to identify the value tensions that
each stakeholder group faces. Sometimes the value tensions may be similar
and sometimes they may be different. Identifying the value tensions is not
easy. Either they may not be obvious and/or people try to hide their distress
by denying or even disavowing the value tensions they are experiencing.
• 4. Systemic Leaders help the system reality test value tensions that various
stakeholder groups are experiencing. Reality testing means talking with
people about their losses and gains. It means understanding their struggle
around what they have to give up and helping them to see what they have to
learn in order to adapt. Being adaptive means understanding the loss-gain
tension and working with it in a conscious way.
• 5. The next task of Systemic Leadership is to help people deal with their
distress. This will come in the form of denial, anger, blaming, scapegoating,
passive-aggressive behavior and fleeing into technical work. Part of the
task of leadership around distress is trying to understand its cause and its
intensity. The higher the distress, the greater the tendency to turn to technical
work – hire new people, give new titles, change the benefits system, move
the car park – do anything other than deal with new realities. Observe how
rapidly senior management can move into technical mode long before they
have really grasped the impact of the change.
• 6. Systemic Leaders are adept at holding people's feet to the fire to do their
adaptive work. This too is not easy, as they will resist. The person exercising

Page 36 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

leadership has to be careful that he or she does not become the issue and
attract the blame, anger and so on.
• 7. Exercising Systemic Leadership means leading with oneself. One has to
model one's own adaptive capacity and one's own ability to deal with one's
adaptive work before one has a chance of mobilizing others.
• 8. A critical task of Systemic Leadership is to give the work back. This means
mobilizing others to do their work. They will resist. They do not want to do
adaptive work. They prefer someone else to take responsibility for this work.
• 9. Systemic Leadership mobilizes others to embrace change in an energetic
and committed way. This is the true measure of effective leadership.

Key Concepts
• Adaptive capacity
• Adaptive challenge
• Adaptive and technical work
• Capacities, capabilities
• Distributed leadership
• Failed expectations
• Followership
• Holding environment
• Mirror images
• Vision

Case Study: Hunt vs. Blake

Hunt and Blake, a well-established timber and building products business, had
branches throughout South Africa. It had been in operation for over a hundred years
and boasted a list of loyal customers. Its main market was the farms and small towns
or rural areas. Hunt and Blake had served its customers with care and concern for
many years. Its strategy had been good friendly service, high inventory levels so that
customers rarely had to wait for stock, and a very lenient credit policy. It claimed to be a
values-driven company, and made every effort to be a socially responsible corporation

Page 37 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

and a good employer. Its employees were loyal, content, and considered Hunt and
Blake to be their lifetime employers.

By the late 1980s, Hunt and Blake managed more than eighty outlets, spread
hundreds of miles apart. It purchased timber products directly from plantations and,
once purchased, these products were hauled to other locations to be cut, treated or
processed. Most of Hunt and Blake's timber products required very basic carpentry
skills in order to be installed. Its other building products were purchased direct ex-
factory from three or four regular suppliers.

Hunt and Blake's turnover exceeded R500 million. Its board and senior management
comprised family members, all descendants of the founding partners. Middle
management was selected from the local community and the criteria for selection were
based on the ability to communicate Hunt and Blake's friendly, family values.

During the early 1990s, Hunt and Blake began to face what, according to it, was
unexpected competition. Competing outlets appeared in some of its major selling
areas. All of these competing suppliers were owned by the same large timber company
whose original market had been limited to supplying railways, mines, and other large
construction projects. Little by little, Hunt and Blake's customer base was eroded. Soon
it began to lose its most loyal customers. Investigation revealed that the competition
offered lower prices a greater range of products, and more DIY assembly items. Over
a [p. 111 ↓ ] period of three years, Hunt and Blake's turnover dropped slightly and then
stagnated, despite several price increases. In contrast, the competitors' businesses
appeared to be booming, as they opened new, bigger outlets in the larger towns.

Hunt and Blake's management team decided to engage consultants to help diagnose
the problem and to advise on how to stem the tide of deserting clients. After several
months of analysis, the consultants made three key strategic suggestions. These were:

• more modern, easy assemble products be stocked for resale;

• lower levels of inventory be held, incorporating a wider range of items; and
• a more stringent credit policy be introduced to reduce accounts receivable
from an average of 90 days outstanding to a more tolerable level of 45 days.

Page 38 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

The rationale for these suggestions was that Hunt and Blake was unable to be price
competitive with such high inventory holding costs and the long delays in collecting cash
from its customers. The consultants claimed that the competitive prices of the other
firms were the critical reason for the decrease in sales and loss of market share.

With support of the board and senior-level management Hunt and Blake strove to
implement these changes. It invested in a new inventory management computer system
and appointed a new director of purchasing. It hired a number of credit control staff
to monitor the levels of accounts receivable and set new inventory holding levels.
It revised its pricing structure, lowering the prices on some of the most successful
product lines. Despite all of these efforts, the organization was unable to stem the loss
of customers, which was followed soon by the resignation of disgruntled employees.
After the fifth year of falling profits, the reluctant families sold their stockholdings to the
competitors. Hunt and Blake, the faithful, honorable building supplier, was no longer in
existence.

This story is a typical example of an organization and its consultants failing to

understand the nature of new realities and adaptive challenges. Struggling managers
and quick-fix consultants so often focus on symptoms rather than on underlying causes
of problems and then seek relief in technical solutions to what is actually an adaptive
problem.

The new reality for Hunt and Blake was that the values of the world were changing.
Even farms and small country towns were progressing to a modern world. In a modern
world, the traditional values of family and loyalty find it difficult to compete with the
rationality of the marketplace. The company's adaptive challenge was to recognize
the new reality and the ensuing value tensions. Customers now wanted to shop in
modern, efficient, price-competitive [p. 112 ↓ ] stores, with a wide range of comparable
products. The new reality included a world of increasing customer sophistication,
where customers want to have choices so they can consciously exercise their buying
power. Instead of loyalty, price and comparability have become the greatest purchasing
discriminators. In the past, people may have appreciated wood products that require
at least some basic carpentry skills to install. Modern people do not have the time,
and/or no longer wish to make the time to develop their carpentry skills. The traditional
approach to doing business (concerned, friendly and familial), is also perceived

Page 39 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

as anachronistic in its ways, especially if it fails to clearly communicate that it has

embraced modernity.

Hunt and Blake was facing an adaptive challenge of major proportions. The culture of
the surrounding society had changed from one which held traditional values to one in
which, modernity dictated, new marketplace values be held. As an organization in that
society, it would be expected to reflect those same values. Its founding values, based
on a traditional culture, were no longer the key values held by its customers. Its staff
members, chosen for their sympathy with the traditional values, were caught in the
culture clash. They had identified with the organization's value system, and resisted new
modern ideas and systems. Their values, attitudes and behavior remained embedded in
the old ways. They feared that the company was becoming like their non-caring, money-
grabbing competitors, but they also realized that modernity was an inevitable trend.
Over time, many of them were modernizing their values too. Not knowing how to bridge
the gulf between old and new values, the distress was too much. Many of them left the
firm.

Hunt and Blake and its consultants did not begin by identifying the ‘new reality’ and
the values at stake. What makes identifying the adaptive challenge so different from
the other techniques of analysis is the emphasis on values and meaning making. This
approach rests on the belief that the first work to do is to identify value conflicts and
tensions and to clarify the value changes that are needed. To proceed with technical
work (e.g. introducing new systems without re-examining values) is, at best, premature.
The value analysis may reveal that systems are not the critical issue anyway.

Hunt and Blake needed to orient the organization to the changing world. Management
and staff should have been challenged to adapt their values to the new values of
society. This required the exercise of a kind of leadership that the Hunt and Blake
management team did not perform. Management and staff should have been included
in the discussions of the ‘new world out there’ and what it meant for their business.
Everyone should have been engaged in discussions about how they might bring their
values of family and friendly, long-standing commitment to the new world of modernity,
price competitiveness and efficiency. There should have been discussions on what
they, as an organization with united goals, had to learn and what compromises they
could and should make. Management and staff should have been encouraged [p. 113

Page 40 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

↓ ] to be innovative in coming up with a strategic solution which would still give them
unique meaning, purpose while developing a sustainable business model. Without
this emphasis on value analysis and meaning making an organization is tinkering with
superficial, short-lived quick fixes.

Identifying the adaptive challenge is the heart of any work on strategic change and is
prior to strategic analysis. It is critical to the achievement of an effective transition from
the old to the new. Hunt and Blake resisted doing its adaptive work and fell into the trap
of chasing technical solutions to solve adaptive problems. The demise was inevitable.

Exercise: Work through the Systemic Leadership tasks (see p. 101) to see how one
might act as a consultant to Hunt and Blake to do its adaptive work.

Organizational Exercise: Mind the Gap

It could be argued that parts of the recent history of The Gap retail group reflect a
lamentable story of market opportunities thwarted by complacency on the part of its
leadership. In the last 10 years, the merchandise group that owns more than 3,100
stores under the Gap, Old Navy and Banana Republic brands, has lost literally billions
in shareholder value.

Don Fisher and his wife opened the first Gap store in San Francisco over forty years
ago. They began by selling Levi Strauss jeans and a large assortment of gramophone
records. By 1998, the Gap had developed a distinctive brand of jean that reflected a
classic American style of clothing. The huge success of the Gap clothing brand was
credited to Mickey Pressler, formerly from the Ann Taylor store chain.

The Fisher family is deeply steeped, some might say obsessed, with tradition. Don
Fisher and his wife of fifty-four years, Doris, and their three sons, Bob, Bill and John, all
live within a few blocks of one another. All three sons attended Princeton and Stanford
Business School and all three sons have worked for the family business. This tightly knit
San Franciscan family still holds a significant percentage of the Gap's stock and three of
the twelve board seats.

Page 41 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

In 1976 the Gap faced the first big new reality when the Federal Trade Commission
accused Levi's of price fixing. It soon became clear that discounted jeans would flood
the market. The Gap's fortunes declined and Don Fisher was challenged to formulate
a new concept. One attempt was to try to partner with Ralph Lauren. This failed as the
organization was unable to manufacture clothes to fit Lauren's specifications.

In another attempt to shore up sales, Fisher purchased the Pottery Barn. This purchase
proved a disaster and he sold it several months later at a $14 million loss. Around the
same time he bought a small chain of safari wear stores known as Banana Republic.

[p. 114 ↓ ] In 1983, Fisher appointed Mickey Drexler to take over merchandising.
Drexler made huge changes to the Gap formula. He brought in natural fiber clothes
that were stylish, comfortable and long lasting. Gap's fortunes returned; the company
grew to 2,428 stores by 1999 and the stock split eight times and returned over 46,000
percent. Mickey created a new and exciting Gap culture. The acquisition of Old Navy
proved another feather in Mickey's cap as its sales soared rapidly to over $1 billion.

In 1995 Drexler was officially appointed CEO. Don Fisher moved over to be chairman of
the board that comprised many childhood and college friends. Fisher and Drexler were
often at odds and over time things between them deteriorated. Family ties inevitably
got in the way of Drexler's future at Gap. Don's two sons, Bob and Bill both worked
for the company. The elder son, Bob, who headed the Gap brand stores, had no real
interest in retail. His work ambivalence, added to a lack of management decisiveness,
contributed to his quitting his position in 1999. Don took this hard as his other son, Bill,
had quit a year earlier. Relations between Don and Drexler soured. Soon after Bob left,
Drexler invested in certain fashions becoming trendy; an investment which was never
returned. During this period Don engaged in huge store expansion, signing deals for
over a thousand stores in a two-and-a-half year period.

It could be argued that the timing of such confidence precipitated disaster. As Gap
merchandise ceased being competitive in a highly competitive retail market, Don was
faced with closing a great number of stores, some of them only recently opened under
the new expansion. Debt ballooned, store sales slumped for ten straight quarters and
the stock price collapsed from over $50 to $8. Fisher fired Drexler and after months
of research appointed Paul Pressler of Walt Disney Parks & Resorts as the new

Page 42 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

merchandiser. Paul and Fisher had similar personalities. They may have been seen as
overly rational, penny pinching and lacking in creative and intuitive flair.

On being appointed Pressler soon got to work, reduced debt and increased store sales.
Fisher decided he could now relax. He appointed son Bob as chairman of the board
while he remained on the board as director intending to take a back seat. Meanwhile
Pressler changed the entrepreneurial culture of Gap to one obsessed with rational
calculations and financial returns. Creative people in the organization quit and morale
plummeted. After the initial improvement, sales continued to fall and in 2006 Fisher fired
Pressler. Bob, the eldest son, was appointed interim CEO. He tried to boost morale and
entice creative people back to Gap, with minimal success. At the same time Bob and
Don began pushing forward on a plan to remodel eighty of Gap's existing stores.

The search for the new leader was not easy and took more time than anticipated.
Finally in July 2007, Gap announced it had appointed veteran food and drug retailer
Glenn Murphy as its new CEO to succeed son Bob Fisher. Glenn, a Canadian, claims
two decades of retailing experience in grocery stores and [p. 115 ↓ ] book retailing. He
is credited with turning around the Canadian store Shoppers Drug Mart.

When the board committee first launched its search it insisted it was going to find an
apparel merchant as its new leader. Its plan was to attract someone who understands
the creative process and who can execute strategies in complex environments. After an
exhaustive search, the board hiring committee appointed Glenn Murphy insisting he is
just the right man for the job!

In April 2008, after less than a year at the helm, Glenn Murphy was awarded a $39.1
million compensation package, most of it in stock grants. The award is intended to
give him an added incentive to help the company recover some of the $32 billion in
shareholder wealth that has disappeared over the past decade.

According to The New York Times, Gap also paid Murphy $2.1 million in bonuses,
including $1 million for taking the job, to supplement his salary of $755, 769 for a half a
year's work. He received miscellaneous compensation of $363, 593 including $50,000
to pay the lawyers who negotiated the contract, and $182,301 for personal usage of

Page 43 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

a company plane. Because his family still lives in Toronto, Gap will spend $400,000
during the current year to cover air travel.

Gaps profits and stock price have improved since Murphy's arrival, but its sales
continue to slip. Murphy has warned that the weak economy will make it difficult to
revive sales this year (2008/2009).

Questions:

• 1 What new realities has Gap been avoiding?

• 2 Is Don Fisher a Systemic Leader? Whatever your perspective, how do
you support your reasoning?
• 3 What technical work did Gap engage in, in the face of change?
• 4 If you were to exercise Systemic Leadership, what advice would you
give Don Fisher and his board?

Further Reading
Beerel, Annabel. Leadership through Strategic Planning . London: International
Thomson Business Press, 1998.

Heifetz, Ronald A. Leadership without Easy Answers . Cambridge, MA: Belknap Press
of Harvard University Press, 1994.

Heifetz, Ronald A. and Donald L. Laurie. “The Work of Leadership” , Harvard Business
Review , January-February 1997.

Heifetz, Ronald A. and Marty, Linsky. Leadership on the Line . Boston, MA: Harvard
Business School Press, 2002.

Parks, Sharon Daloz. Leadership Can Be Taught . Boston, MA: Harvard Business
School Press, 2005.

William, Dean. Real Leadership . San Francisco, CA: Berrett-Koehler, 2005.

Page 44 of 45 Leadership and Change Management: The Systemic

Leadership Approach
University of South Africa
Copyright ©2014 SAGE knowledge

http://dx.doi.org/10.4135/9781446269336.n4

Page 45 of 45 Leadership and Change Management: The Systemic

Leadership Approach