E X E C U T I V E F O R U M
THE LEADER
AS CAPACITY
BUILDER
Ronald N. Ashkenas and Robert H. Schaffer
W
hat differentiates senior leaders who success-
fully drive change in their organizations
from those who struggle to get out of first
gear? Our experience working with dozens of CEOs and
senior executives over the past three decades convinces us
that a key factor is the ability to create change capability
at every level. That means enabling hundreds or thou-
sands of people—from senior management to the grass
roots—to play effective roles in modifying work pro-
cesses and organizational performance. No matter how
brilliant a new strategy or how powerful a new informa-
tion system, major innovations always depend for success
on large numbers of people who are not just following
instructions but creatively modifying their own sphere of
activities to get the new processes working.
Consider this case: The senior management of a large,
functionally organized manufacturing company decided
to reorganize into three product groups, each aimed at a
unique customer market. With the help of a consulting
firm, senior management eventually succeeded in get-
ting the main pieces of the puzzle to fall into place.
44 LEADER TO LEADER
But now shift the focus down to the first few levels of
employees and supervisors. While the main systems
and structural changes had been achieved, many of the
detailed changes to each person’s job had to be figured
out by that person—while everyone else was also trying
to figure out theirs.
In Order Entry, for example, major overall system and
process changes had been introduced. But every day the
salespeople, order entry clerks, manufacturing sched-
ulers, logistics staff, engineers, and accountants faced
thousands of actions for which no detailed instructions
had been or could have been issued. The people them-
selves were left to their own devices to work out these
thousands of details of re-creating their jobs and mak-
ing sure they meshed with one another’s.
But in this organization as in most, it was a fact of life
that the grassroots levels had limited capacity to imple-
ment such changes—not because people resisted new
ways of working, but because they did not know how
to change their work in concert with everyone else. To
assume that it will just happen is a prescription for fail-
ure. Thus, even though the overall change process in this
case was well designed, the demand that hundreds of
grassroots-level people reformulate their own jobs seri-
ously undermined its success. Virtually every large-scale
transformation effort that requires significant changes
in what people do is subject to this hazard.
Capacity-Building Leaders
Capacity-building senior leaders recognize that lofty
goals, new directions, expensive systems, and visionary
strategies mean very little unless dozens, hundreds, or
thousands of people have the ability to make creative ad-
justments in the way they work from day to day, both on
their own and with others. What kind of leadership fos-
ters this change capacity at the grassroots level? From
our experience with dozens of capacity-building leaders,
we have observed four specific actions that are deeply
engrained in the way they work:
1. They shape business challenges to serve as developmen-
tal opportunities.
Capacity-building leaders realize that achieving major
business advances and developing organizational capacity
to change are activities that need to be done in tandem. As
with skiing, people learn this by doing it. Theoretical in-
sights mean nothing until you strap on the skis and actu-
ally go down the hill. Moreover, for every hour that people
participate in training sessions they are at work 50 or 100
or 200 hours. Capacity builders draw on this insight and
treat every business challenge as an opportunity to make
sure their people develop change capability. They know
that along the way there will be moguls and rough
patches, not to mention other skiers, and that their peo-
ple will need to learn to make adjustments on the fly. By
helping them learn to make these adjustments, leaders de-
velop their people’s capacity and confidence to tackle even
more difficult challenges—over and over again.
Capacity builders are explicit about this relationship be-
tween achievement and development, and they shape
their response to business problems accordingly. Thus
when tackling new business challenges, capacity builders
involve a wide circle of people and engage them in think-
ing about what to do. They challenge teams to come up
with solutions, rather than give them solutions. And then
they take it a step further—beyond just recommenda-
tions—and give people an opportunity to put their solu-
tions to the test. And they make sure people are learning
from these experiences, not just “being involved.”
For example, several years ago when Emil Frankel be-
came commissioner of transportation for the state of
Connecticut, he was faced with the challenge of reduc-
ing costs and bureaucracy while providing better service
to the public. It was clear that major innovation would
require the department’s managers and unionized em-
ployees to work in fundamentally new ways—with more
teamwork, flexibility, and cross-functional collaboration,
while making faster decisions—with more customer (cit-
izen) input. Frankel realized that success depended as
much on developing these new skills as on the wisdom
of the strategy. And he knew that these skills would have
to be learned in the context of implementation. Thus
instead of the traditional approach of creating new pro-
grams and then assuming (or hoping) that managers and
employees would somehow figure out how to achieve
them, Frankel decided to build development into the
very process of formulating and meeting the depart-
ment’s objectives.
The effort began with a full-day working session attended
by more than 40 people from the Department of Trans-
portation, including all levels of management, plus union
and nonunion workers. Five groups brainstormed and
then developed specific recommendations for reducing
bureaucratic waste and delays. One of the teams, for ex-
ample, recommended a streamlined process for granting
new permits and rights of way, reducing the time by sev-
eral weeks. Another team developed an innovative way
to reduce road congestion and increase worker productiv-
ity by piloting new work schedules. At the end of the day,
each of these cross-functional teams presented its recom-
mendations to the commissioner and senior staff, and
most of them received on-the-spot approval to go ahead.
Implementation of the approved actions was led by man-
agers from the relevant departments. They were helped
to set specific goals and milestones, to create written
work plans, to hold efficient team meetings, and to in-
volve the people and functions needed to help them
achieve their goals. The commissioner conducted peri-
WINTER 2007 45
odic reviews with the teams. Implementation happened
quickly. Team leaders were helped to break down their
more complex projects into a series of experiments that
Many senior executives are
could be tested quickly. For example, a proposed change
in roadway maintenance to reduce traffic jams and in-
crease worker productivity was tested on one highway
trapped by a self-defeating
project. When the pilot proved successful, union and
management (who had collaborated to develop the idea) management pattern.
agreed to write the new procedure into the work rules
of the next union contract.
By taking this approach, Frankel not only got results
more quickly, but he also ensured that his managers and And why do them sequentially when they can be done si-
employees learned all sorts of new skills about cross- multaneously? Capacity-building leaders implement
functional collaboration, union-management teamwork, major change by commissioning dozens or even hun-
innovation, measurement, and change management. dreds of parallel short-term projects—each of which is a
From that point forward, the department functioned at miniature organization development effort as well as a
a new level of competence and speed. vehicle for driving the large-scale change.
2. Capacity-building leaders break down large corporate For example, in late 2002, adhesive materials company
initiatives into dozens of short-term, results-focused proj- Avery Dennison was determined to break out of its pat-
ects—to stimulate both learning and achievement. tern of relatively slow organic growth. CEO Phil Neal
and President Dean Scarborough realized that this was
To serve as a learning laboratory, a business initiative
a business challenge that also had developmental com-
needs to take place in a relatively short time so that peo-
ponents. Simply increasing the R&D budget would not
ple can try something, see how it works, and learn from
make enough difference. Instead the company needed
the experience. Large-scale, long-term programs that
to develop a growth mind-set at every level, so that hun-
involve many elements simultaneously do not permit
dreds of people would be constantly identifying and
this focused learning. Capacity-building leaders intu-
testing innovative growth ideas.
itively attack large-scale change in an incremental man-
ner, generating not only rapid results but also the To make this happen, Neal and Scarborough, with the
continuous development of the organization’s change assistance of one of our colleagues, launched a test where
management skills. they asked several divisions to each establish a few cross-
functional growth teams. Each team was to come up
In our book Rapid Results! we documented the power of
with one innovative growth idea and then get some ini-
focused, short-term projects to achieve immediate im-
tial results from it in 100 days or less. Within a few
provements and to give participants a developmental ex-
weeks a dozen projects were under way, with more than
perience. When facing an urgent need for large-scale
90 people involved. At the end of the test, when Neal
change across an entire organization, however, most ex-
and Scarborough reviewed these projects, they were as
ecutives have no patience for what they perceive as “small”
impressed by the enthusiasm, high spirits, and fresh in-
projects. They say that working on limited changes in
sights of the teams as they were by the very substantial
one location, or with one product, or with one customer
bottom-line gains that almost every team had achieved.
would be too trivial an effort—it would take too long for
its impact to reach the entire organization. Capacity We then helped the company scale up the concept
builders turn this argument on its head. If a small proj- around the world in a way that would produce both
ect in one place will produce real results and build local growth results and the grassroots capacity for continuous
change skills, then why not do these projects everywhere? innovation. As the process was introduced into each di-

46 LEADER TO LEADER
vision, one or two divisional “growth champions” were
quickly trained to facilitate it. Thus, not only did the
team participants learn from their experiences, the in-
ternal consultants were learning how to support the ef-
fort without outside support.
By fostering this kind of organization development at the
grassroots level and engaging thousands of people in the
learning process, Neal and Scarborough drove their growth
agenda effectively, and they created an incredible amount
of capacity for sustainable change at the same time. In the
first two years more than 1,000 projects were launched in-
volving over 4,000 people. More than $200 million of in-
cremental sales were generated—and an ongoing
momentum and capacity for growth was developed in
every part of the company around the world. (Note: Since
the events described here, Dean Scarborough has become
CEO of Avery Dennison and Phil Neal has retired.)
3. Capacity-building leaders treat large-scale change as a
series of evolving stages rather than as a grand plan.
Effective capacity builders also realize that large-scale
transformational change is an iterative process, which
needs to be regularly assessed, revised, and reenergized,
no matter how many projects or how much success has
already occurred. It is managed as a series of develop-
mental stages—each of which might run anywhere from
12 to 18 months. At the end of each stage, leaders as-
sess what’s been learned from the many short-term proj-
ects carried out. They decide broadly what’s needed to
take the organization to the next level. And within this
framework, they begin to organize the next round of ac-
tion projects while also identifying who needs to be in-
volved from a capacity standpoint. Thus they do not try
to lead major change as a preordained process; instead,
they move through successive approximations toward an
overall vision that is itself being clarified and redefined.
The Mill Improvement Process (MIP) at Georgia Pacific
is a good illustration of this staged approach to large-
scale change and how it creates a continuous process of
grassroots development.
Starting in 1995, each mill in Georgia Pacific was re-
quired to improve productivity by launching a number
of rapid-cycle projects on a tight 10-week schedule. After
each round of projects was completed and its learning
incorporated into the plant’s routines, a new round of
projects was launched. Over the years many thousands
of projects have been carried out. In 2003, $380 mil-
lion in incremental profit improvement was generated
through the MIP effort.
Periodically, CEO Pete Correll and the senior manage-
ment team assess progress of the overall process and make
modifications, expansions, or shifts as needed—or apply
the process to other areas or challenges in the business.
For example when, after the first year, it was noticed that
the mills tended to use the same small group of capable
people on all of their improvement projects, new ap-
proaches were enacted to encourage the engagement of
many other people. After a further year or so of experi-
ence, the process was modified to include hourly and
unionized workers. Then, when MIP had demonstrated
its power in the mills, it was extended to marketing and
business strategy as well as operations. And when the
company made an acquisition, such as the Fort James
Corporation, MIP was used to create common processes
and ways of working across facilities. Thus instead of
thinking of capacity development as a one-time effort,
Correll and his team manage it as an ongoing strategic
priority and a way of creating competitive advantage.
4. Capacity-building leaders insist that their staff experts
share the job of building capacity.
To be truly successful at the continuous process of build-
ing grassroots skills while also driving business results, ca-
pacity-building senior leaders engage their staff
functions—Finance, Information Technology, Human Re-
sources, and others—as partners in the process. They insist
that staff people collaborate in producing business results
and building capacity—and not just deliver professional
expertise, tools, controls, and standards to line managers.
For most leaders of staff functions and their people this
is a huge shift. Staff people generally spend the bulk of
their time developing programs, tools, systems, controls,
or other units of “expert input” that they offer up to line
managers who, they assume, will then use them to get re-
sults. As senior executives generate increasing numbers of
rapid-cycle projects and create a continuous develop-
mental process, they need staff specialists to be with
them every step of the way, not just whispering in their
WINTER 2007 47
ears and going away but getting out on the field and tak-
ing joint accountability for making the change happen.
When line and staff executives work together effectively
to get results while building capacity it can be a power-
ful combination. Patrick O’Sullivan, the group finance
director for Zurich Financial Services, provides a good
example. When O’Sullivan took on this role in 2002,
CEO James Schiro was in the midst of an aggressive
turnaround effort. Previously, the Finance group had
played a traditional staff role: studying and analyzing the
company’s situation and issuing recommendations but
taking little ownership for achieving better results. Schiro
and O’Sullivan, however, agreed that Finance should
partner with the business units to produce results and
change some of the key ways that work was done.
To make this happen, O’Sullivan quickly identified a
few core areas where Finance could play a more results-
producing role. One of those areas was cash manage-
ment. O’Sullivan and his team then took the initiative to
bring together more than 50 people from certain Zurich
businesses—including both Operations managers and
both local and corporate Finance people—to shape a
global approach to managing the company’s cash. The
aim was to improve the amount of cash flowing from
units around the globe into the corporate center for bet-
ter deployment. The Finance staff had been discussing
the need for better cash management, but this was the
first time they had worked directly with Operations to
make it happen. The result was a set of actions that, in
less than three months, freed up an additional billion
dollars in cash—worth millions in bottom-line savings
and additional income opportunities.
In addition to using existing staff groups as partners,
sometimes capacity builders need to create a new inter-
nal staff group with the explicit job of developing grass-
roots performance and change capability. At
Avery-Dennison, for example, high-potential managers
were assigned as “growth champions.” At Georgia Pa-
cific, the Mill Improvement Process is supported by a
rotating team of MIP consultants who help each mill
and function design and implement its MIP program.
These internal consultants help stimulate managers to se-
lect and launch an unending stream of rapid-cycle proj-
48 LEADER TO LEADER
ects and to integrate the learning from these projects into
the broader strategy formulation of each stage of change.
These coaches also rotate back into the line organization,
thus seeding it with even more capacity for change. Not
only do these internal consultants help others develop,
the experience is a great capacity builder for them, and
they are frequently selected for promotion.
Change as Rapidly as Needed
Capacity-building senior executives provide a powerful
model of how to succeed in a world of accelerating
change. The notion that line managers can be responsi-
ble for an organization’s achievements while its HR ex-
ecutives try to anticipate what capabilities will be needed
in the future and then inculcate those capabilities into
the organization seems quaint in the chaotic environ-
ment of the world today. Achievement and development
must be linked for immediate reinforcement.
This linkage between results and development sounds
so straightforward—to consider business problems to
be developmental opportunities; attack large-scale chal-
lenges through many simultaneous results-producing,
developmental short-term projects; assess progress peri-
odically and recalibrate as needed; support grassroots ca-
pacity development with staff partners and internal
coaches. So why don’t more senior executives approach
major challenges in this way?
One answer is that many senior executives are trapped by
a self-defeating management pattern: The more difficult
a company’s situation and the more challenging its goals,
the more likely it seems to be that senior managers, over-
whelmed by anxiety, will go for a big fix and pay little at-
tention to developing implementation capacity. They may
intellectually understand that the organization will have
difficulty absorbing large-scale change, but they still feel
that there is not enough time to work with hundreds or
thousands of people to get them ready for it. Even think-
ing about such a task seems daunting, so they dismiss it.
Another reason why many senior leaders avoid capacity
building is that it requires new skills on their part as well.
For example, making clear demands for the rapid deliv-
ery of tangible, measurable results is often the most fun-
damental innovation in capacity building. Senior man-
agers almost always fall for the arguments their people
offer: that studies, training, new system development,
and a host of other preparatory activity must first be car-
ried out before any real results can be attempted. Learn-
ing to make these demands is a capacity-enhancing step
for the senior executives who try it.
The senior executives who opt for the big-picture trans-
formation track usually work with only a few key people
and some outside consultants, taking many months to
plan the big change. Everyone else continues on their
daily rounds, neither contributing to the transformation
nor learning how to implement it. The capacity builder,
Ronald N. Ashkenas is a managing partner of Robert
H. Schaffer & Associates, a management consulting
firm based in Stamford, Connecticut. The firm’s
unique results-driven change management process
was described in the book “Rapid Results! How 100-
Day Projects Build the Capacity for Large-Scale
Change,” which he coauthored with Robert Schaffer
and other members of the firm. He is also a coauthor
of “The Boundaryless Organization,” “The GE
Work-Out,” and dozens of articles on change man-
agement and leadership that draw upon his extensive
consulting and leadership coaching experience.
in contrast, provides a way to put the other 95 percent
or 97 percent of the people to work on the change at
the same time. Projects are launched and results ensue,
with an emphasis on short-term achievements based on
experimentation, learning, skill-building, and leadership
development—and not just on creating strategies or sys-
tems for later use. Everybody in the organization devel-
ops a fundamental sense of being a vital part of the
process, with a real responsibility to keep it moving, in-
stead of waiting for detailed instructions from above.
The capacity builder can unleash this energy and thus
build an organization able to succeed at major change—
not once, but over and over.
Robert H. Schaffer is the founder of Robert H.
Schaffer & Associates, and coauthor with Ronald
N. Ashkenas and others of “Rapid Results!” His
pioneering work in organizational transformation
and the dynamics of effective consulting have been
the basis of more than 60 articles on management
and consulting, including a half-dozen in Har-
vard Business Review. He is also the author of
“The Breakthrough Strategy” and “High-Impact
Consulting.”
WINTER 2007 49