Who is more effective at leading a major change initiative: an outsider coming in with fresh ideas and new perspectives? Or an insider who knows the culture and can leverage their networks? The answer at MIT today is neither ... and both.

Change leaders have to wear two hats. To lead change, you have to be able to stand back and look at your world as an outsider. But you also need to be on the inside and own the change.

Jan Klein, author of ‘True Change: How Outsiders on the Inside Get Things Done in Organisations’ (2004), led the first session on my MIT course today. Jan is a former practitioner as a senior manager at General Electric, and earned her PhD at MIT Sloan and taught at the Harvard Business School before joining the faculty at MIT.

An ‘outsider-insider’ can:

  • see a problem or challenge where internal assumptions are getting in the way of overcoming that challenge
  • see how outsider views can help overcome that challenge
  • leverage the culture to get others to accept alternative assumptions and approaches to solve their problem.

I found this a useful session, made real with the story of ‘outsider-insider’ Kenyan Nobel Peace Prize Laureate 2004 Wangari Maathai, who combined her local knowledge with her overseas education and connections to mobilise a women-led tree-planting movement in her home country. Her experience of working across different sectors is directly relevant to the collective impact approaches that we are considering for public policy initiatives in New Zealand.

One interesting question was whether it is possible to retain an outsider perspective as you settle into an organisation and it becomes your own? Living in two worlds over time requires you to keep the two hats in balance, to rejuvenate your outside perspectives (for example through reading, courses, new assignments or including outsiders in your projects) and to maintain bridges between the two worlds through your relationships.

In the afternoon, Nelson Repenning from the Systems Dynamics Group at MIT led a session on systems thinking including a simulation exercise where we could sit on a computer and try to replicate the failures and successes of discount airline People Express. People Express was a discount airline in the 1980s that initiated many of the strategies used by leading tech start-ups today ? share offers and bonuses for staff, cost efficient operations, a streamlined business strategy, and rapid growth in a market niche. The group had a lot of fun becoming bankrupts and billionaires as we tested different strategies for an airline's success.

Systems-thinking takes an engineering approach in which factor has a balancing state. This approach breaks down the world into feedback loop patterns:

  • reinforcing or positive feedback loops ? increase growth / improvement
  • balancing or negative feedback loop ? provide counterweights to growth.

The computer game simulation exercise was a great way to test the impact of ideas into action. While our example was one from the commercial sector, a fellow participant from the European Commission told me that they also run management training using simulations that run dynamics for public policy initiatives. A great way to test strategy and group decision making dynamics against outcomes.

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