Organizational Transformation Questions & Answers

We have abundant evidence to suggest that organizational transformations occur through a process of continuity and change rather than disruptive upheaval. In this study, we identify the mechanisms that characterize the process and how they impact upon the organization’s potential to achieve the intended transformation. Based on an in-depth qualitative study of change in three case firms, we make three observations. First, in response to change initiatives the more strongly competing values for continuity and change are expressed, the stronger the simultaneous forces pushing back and pushing for the change, which generates an energy that propels the process of transformation. Energy permeates through the emotions that are provoked. Second, when the energy that develops through the expression of competing values is channeled into awareness-building, it compels actors to confront and debate contradictory perspectives which pave the way for a mutual exploration of change initiatives. On the other hand, when the energy is suppressed leading to awareness-blocking, there is no debate and the tussle between competing values intensifies as though in competition. Third, mutual exploration shapes continuity and change to unfurl as a synthesizing pattern, while competition between competing values invokes a polarizing pattern. A synthesizing pattern creates greater potential for the organization to reach the intended transformation than a polarizing one does. We found that when there is weak expression of competing values, little energy is generated to fuel the transformation, but it tends to stir up a preemptive defensiveness from those tending towards continuity in prevailing values. Continuity and change Management just drift along with little movement away from the status quo.

Introduction- Organizational change and the process by which it occurs continue to be of relevance and interest to both academics and practitioners. One area that has attracted considerable debate is whether organizational transformations that entail a fundamental shift in the core elements of structures, systems, strategy, values and culture (e.g., Nadler and Tushman, 1989; Miller and Friesen, 1984) occur in a revolutionary way or an evolutionary way. Revolutionary and evolutionary change differs on the scale and pace of upheaval and adjustment. Revolutionary change happens swiftly and affects virtually all parts of the organization simultaneously, whereas evolutionary change occurs slowly and gradually (Greenwood and Hinings, 1996). There has been mounting evidence that transformational change can and does occur more evolutionarily through a process of both continuity and change rather than that of rapid indiscriminate upheaval (e.g., Amis et al., 2004; Brown and Eisenhardt, 1997; Child and Smith, 1987; Cooper et al., 1996; Pettigrew, 1987; Pettigrew et al., 1992). Speed and rapidity are not a prerequisite; rather organizations can transform in a gradual and elongated manner (Ford and Ford, 1994; Greenwood and Hinings, 1996; Plowman et al., 2007). Continuity and change as a process of organizational transformation have been supported by studies in a variety of sectors, which signals its importance. We do not understand much about the mechanisms that underlie and shape how these two opposing forces evolve together. More specifically, how do we differentiate one process of continuity and change from another? What is it about managing these contradictory forces that could shape the unfolding process differently and in turn have a differential impact on the organization’s potential of achieving the attempted transformation?

Revolutionary change and evolutionary change have been the dominant and often competing perspectives to describe the scale and pace with which a process of transformation occurs. A revolutionary change perspective is echoed in the punctuated equilibrium model wherein the process of change unfolds as two distinct phases: an early phase of dramatic upheaval, followed by a period of convergence (Tushman and Romanelli, 1985; Romanelli and Tushman, 1994). Almost simultaneously, scholars began to question whether this may not be the only trajectory followed. Child and Smith (1987), in a study of transformational change at Cadbury’s, found “interleaves of change and continuity” involving a combination of managerial receptivity to new ideas with a deeply embedded set of practices that lay at the firm’s historic core. The Greenwood and Hinings (1988) theory of tracks departed from the punctuated equilibrium process and explicated multiple paths of evolution more akin to the notion of continuity and change. Cooper et al. (1996) showed how a change in law firms occurred evolutionarily through a layering of old and new organizational elements. Mintzberg et al. (1998) suggested that the punctuated equilibrium trajectory might apply, say, to large mass-production organizations, while innovative organizations might follow a more balanced trajectory of stability and change. Eisenhardt (2000, p. 703) confirmed that the punctuated equilibrium model conceptualizes change as a quantum leap from one frozen state to the next, but such a view is being superseded by a more evolutionary or continuous view of organizational transformations.

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These studies demonstrated that organizational transformations could occur evolutionarily through a process of continuity and change. However, a framework to facilitate a systematic understanding of how continuity and change as an evolutionary process drive organizational transformation is not sufficiently developed. Continuity and change are inherently paradoxical d elements that seem logical in isolation but irrational when appearing simultaneously (Lewis, 2000). Some scholars have been conceptually sharpening a paradoxical lens to understand organizational processes, but those theoretical insights have not been systematically applied to continuity and change processes. Both theoretically and empirically we know little about how a process embracing such contradiction and seeming polarity is managed to drive an organization toward an intended transformation. Our study provides an integrated understanding of how continuity and change mutually evolve by identifying mechanisms that differentiate one process from another and have different consequences for the potential of achieving the intended transformation.

We conduct a longitudinal comparative analysis of three case firms in the legal industry. We demonstrate that a process of continuity and change is one that may evolve differently; displaying different characteristics, with implications for the organization’s potential to achieve an intended transformation. We develop a theoretical model identifying specific mechanisms that influence how continuity and change evolve together toward the intended transformations and provide managerial implications of our findings. The study illuminates four characteristics of the process. First, in response to change initiatives the more strongly competing values for continuity and change are expressed, the stronger the simultaneous forces pushing back and pushing for the change, which generates an energy that fuels the process of transformation. The energy permeates through the emotions provoked. Second, when the energy that develops through the expression of competing values is channeled through a space of awareness-building, it compels actors to confront and debate contradictory perspectives which pave the way for mutual exploration of change initiatives.

On the other hand, when the energy is suppressed blocking opportunity for awareness-building (awareness-blocking), there is no debate, and the struggle between competing values intensifies as though in competition. Third, mutual exploration shapes continuity and change to unfurl as a synthesizing pattern while competition between competing values invokes a polarizing pattern. A synthesizing pattern creates greater potential for the organization to reach the intended transformation than does a polarizing pattern of continuity and change. Fourth, when competing values are weakly expressed little energy is generated to fuel the transformation, but it tends to stir up a preemptive defensiveness from those tending towards continuity.

Theoretical Framework

Continuity and Change as a Process of Organizational Transformation

Several studies confirm that organizational transformations occur evolutionarily through a process of continuity and change. Pettigrew (1987) illustrated the coexistence of change and continuity in ICI as deep-seated cultural and political rationalities or core beliefs set in motion forces of bureaucratic momentum that reinforced continuity over change. Managers had to build a climate receptive to change actively, and use contextual events to point out the enabling opportunity created by changes in the outer context and to reinforce the notions that proposed changes represented continuity with past values and practices. Eisenhardt and Tabrizi (1995, p. 107) found that firms did not achieve fast adaptation through product innovation by “wrenching, infrequent change punctuating long periods of inertia.” Instead, they observed that innovation was achieved through changes that were not disruptive and detrimental to the organization.

Based on a study of six computer firms, Brown and Eisenhardt (1997) found these firms changing continuously, reflecting “links in time” that address past, present and future time horizons and the transitions between them (Brown and Eisenhardt, 1997, p. 29). In a different setting, Cooper et al. (1996) observed a process of change in two law firms which moved away from the archetypal professional partnership to the managed professional business. Elements of structures and systems of both the old and the new archetypal forms were found to be “simultaneously present on the surface of organizational life” (Cooper et al., 1996). Other studies in healthcare (Montgomery and Oliver, 1996; Kitchener, 1999), sports organizations (Slack and Hinings, 1994) and legal firms (Morris and Pinnington, 1999) have also observed continuity and change, whereby old and new forms of organization and ideology coexist as change unfolds. Embedded in these studies is the notion of organizations as pluralistic settings often characterized by diffuse power and the expression of multiple perspectives, values and beliefs (e.g., Denis et al., 2007). In fact, pluralistic settings accentuate competing goals and inconsistent processes (Cohen and March 1974), making it almost impossible for change to be linear and straightforward.

More recent studies reiterate the argument that organizational transformations occur through a process of continuity and change, and some also acknowledge the multiplicity of values and beliefs that impact upon a change process. However, these studies do not give us a systematic insight into how these contradictory forces are managed simultaneously to drive a transformation. In a study of organizational change in a church, Plowman et al. (2007) showed how small individual adaptations became radical, transforming the organization in dramatic ways. While there is an evolutionary aspect to the process of amplification of actions leading up to a radical change the focus is not on the duality of continuity and change. Jansen (2004) argued for the need to look beyond strategic persistence to a more energy infused conceptualization of momentum in pursuit of change goals. The author focused on change based momentum rather than both persistence and change-based momentum simultaneously in an organization undergoing culture change.

The question that remains unanswered is: how are contradictory forces of continuity and change managed simultaneously to drive organizational transformations? More specifically, what is the mechanisms that underline and shape the trajectory?

Change and Continuity as a Paradox

Change and continuity as two poles of the same process present a paradox in that they are contradictory yet interrelated elements that are present and operate equally at the same time (Cameron and Quinn, 1988; Smith and Lewis, 2011, p. 382). There has been increasing attention paid to building a theory of paradox to understand aspects of organizing that entail managing competing demands simultaneously (Lewis, 2000; Smith and Lewis, 2011). These authors document a variety of examples of paradox in organizational life such as exploration-exploitation (Smith and Tushman, 2005); collaboration-control (Sundaramurthy and Lewis, 2003); institutional contradictions (Seo and Creed, 2002); communication and rhetoric (Jarzabkowski and Sillince, 2007). Lewis and colleagues, in particular, have been focused in recent work on building greater theoretical clarity about the notion of paradox. Smith and Lewis (2011, p. 766) point to the learning paradox which manifests as a tension between the old and the new struggle between the comfort of the past and uncertainty of the future d which is relevant to organizational transformations (e.g., Argyris, 1993; Bartunek, 1988; Miller, 1993). It reflects the tensions between radical and incremental innovation or episodic and continuous change (Smith and Lewis, 2011; Weick and Quinn,1999). Stoltzfus et al. (2011) show how institutional contradictions become simultaneously embedded in the processes of planned organizational change and affect the outcome. As this work draws attention to the paradoxical nature of organizational transformations we can see how a process of change with inherently contradictory elements of continuity and change involves paradoxical tensions.

Smith and Lewis (2011) develop a dynamic model that outlines responses to paradoxical tensions that may spur vicious cycles and those that trigger virtuous circles. They note that an individual’s need for consistency, emotional anxiety and defensiveness, and organizational forces for inertia spur a negative reinforcing cycle. Defensive reactions can take the form of splitting, which accentuates we/they distinctions, regressing to the security of the past, repression and even ambivalence (Smith and Berg, 1987; Vince and Broussine, 1996). Virtuous cycles are enabled through “cognitive and behavioural complexity, emotional equanimity and dynamic organizational capabilities” (Smith and Lewis, 2011, p. 391). They propose a managerial approach to paradox involving “complementary and interwoven strategies of acceptance and resolution” which are vital to set in motion virtuous circles. While this work sheds light on dynamics underpinning paradoxical organizational processes, we have little understanding of if and how these dynamics play out in a process of continuity and change. However, it offers us a rich array of concepts that served as a helpful theoretical backdrop to make sense of our empirical analysis of these processes in our case firms. In other words, it was a good starting point for us to make sense of how the duality of continuity and change is managed.

Our study contributes to two kinds of literature. First, to organizational change research, by opening the black box of the seemingly contradictory process of continuity and change. Given the overwhelming evidence of organizations undergoing transformations in an evolutionary way through continuity and change, our study provides a systematic and integrated elucidation of the mechanisms that shape the trajectory. Also, it deals with how we may be able to differentiate one process from another in terms of its potential to achieve the attempted transformation. Second, our study brings useful insights to the paradox literature by empirically unpacking a process that entails paradoxical tensions. While recent work significantly enhances our theoretical understanding of paradoxical phenomena and exposes us to the different dynamics that can trigger both vicious and virtuous cycles, we lack an empirical understanding of how such reactions may or may not manifest in the unfolding of continuity and change. We incorporate the ideas proposed in recent work about managing paradox and add to them by showing empirically how they shape and influence continuity and change processes.

In the next section, we provide a background of law firms that are the empirical context for this study. We emphasize the nature of the firms in order to provide a basis to understand the nature and significance of the changes these firms have faced and appreciate that these changes go to the heart of their core value system and have indeed called for a transformation.

An important issue in examining the process of organizational transformation is that we need a clear understanding of where an organization is coming from and where it is going. That is, the starting focus is upon the content of change in order to monitor what changes (Pettigrew et al.,1992). Tushman and Romanelli (1985) argued that substantial change is needed in all or most of the critical domains of organizational activity, including strategy, structure, power, organizational culture, and control systems. The archetype theory of change argues that key organizational elements such as structures and systems “are not purely instrumental, related only to task constraints, but are an expression of a set of values and ideas about the organization and appropriate ways of organizing” (Hinings and Greenwood, 1988, p. 23). It is this interconnectedness of beliefs and values, structures and systems that gives rise to an archetype. So, an archetypal shift from one coherent archetype to another provides a theoretically useful framework for examining transformational change (cf. Greenwood and Hinings, 1990; Greenwood and Hinings, 1996).

Transformational Change in Law Firms

Law firms are professional service firms and have historically been associated with a Professional Partnership (P2) archetype that emphasizes an ideology of professionalism and partnership as a form of ownership and governance (Cooper et al., 1996). Lawyers’ professional ideology is defined by a set of norms reflected in ethical codes enforced by professional associations and by values and preferences that are internalized in the course of their professional training (Leicht and Lyman, 2006). Professionalism is manifested in “civilized” behaviour and the application of esoteric knowledge to public interest activities to protect the interests of clients and society as a whole (Johnson, 1972; Cooper et al., 1996). This norm is often described as trusteeship (Brint, 1994; von Nordenflycht, 2010) and is contrasted with the more “economic” nature of commercial ideology. Other core norms are a preference for a high degree of autonomy among professionals, widely distributed authority among senior professionals, high consensus in decision making, strong personal links with clients, and respect for professional integrity (Alvesson and Karreman, 2006; Briscoe, 2007; Cooper et al., 1996; von Nordenflycht, 2010). This central value system is most saliently manifested in the partnership form of governance, where ownership and control are fused and the more commercially oriented non-professionals are not involved in the governance of the firm (von Nordenflycht, 2008). A non-separation of management and professional tasks is thus at the core of their governance structure and it discourages any emphasis on formal systems of management. Management positions are seen as part-time responsibilities with a managing partner retaining clients because of the centrality of the professional lawyer role. Each partner manages themselves and those in their team who are aspiring toward partnership (Cooper et al., 1996). All in all, the lawyers hold a dominant professional logic where the public interest is paramount as they apply their expertise while being a part of law firms that are economic profit-making units. A P2 law firm’s structures and systems, in particular, decision making and human resource systems, manifest this core normative value system. Structurally, it has a minimal hierarchy; it emphasizes lateral collegial structures such as committees or task forces; and has a low degree of formal differentiation as specialities are built around individuals. Human resource systems in the P2 firm include an up-or-out promotion “tournament” (Galanter and Palay, 1991) meaning that the goal is a partnership; those who fail to make partner leave the firm (Maister, 1993). The compensation system is a lockstep system that essentially rewards experience and seniority rather than performance (Gilson and Mnookin, 1989). Decision systems in the P2 model involve weak emphasis on strategic planning, particularly long-term planning, and there is little analysis of market trends and opportunities. Strategic management is a matter of guiding, nudging and persuading.

In the past couple of decades, growing market and institutional pressures and greater awareness among clients created through greater access to financial information about competing legal providers have been pushing law firms to become more commercially oriented or “businesslike.” These firms have been pushed to emphasize very different traits of a professional, such as businesslike entrepreneurial behaviors, responsiveness to the client, dynamism and punctuality. Cooper et al. (1996) articulated these radical changes as a transformation from the P2 to a new businesslike archetype, called the Managed Professional Business (MPB). Even though partnership continues to be the governance form, the partners now need to be team players readily transferring work to other people in the firm based on competence and workloads. Importantly, the values of efficiency and management control are emphasized more than those of democracy and professional autonomy. There is a push toward separating management and professional roles in the interest of greater efficiency through the division of work. The Executive committee’s and the managing partner’s role is redefined to include full-time management tasks. Firms even entertain the idea of non-lawyer professional managers running the firm. Corporate titles such as chief executive, chief operating officer and directors of Executive committees are adopted. Structures and systems in this new archetype reflect the new set of professional values. Structurally, the degree of differentiation in the MPB increases in two ways. First, there is more specialization among professionals who are grouped into formal units. Second, functional differentiation occurs as support functions such as marketing, finance, and human resource management become formalized. The hierarchy becomes more pronounced with more authority vested in managing partners and others in managerial positions. These structural changes are a significant departure from the traditional P2 structure. The up-or-out system is less prevalent as salaried partners and the idea of retaining permanent senior associates become acceptable. Compensation is merit-based resulting in the greater differential between partners. Decision systems change toward developing more strategic capability and long-term strategic planning. There is less tolerance for failure to meet stated targets. Since the two archetypal forms for law firms d the traditional professional partnership (P2) form and the managed professional bureaucracy (MPB) d are already well documented (Greenwood et al., 1990; Cooper et al., 1996; Kitchener, 1999; Gray, 1999; Greenwood et al., 2002), framing the organizational transformation in these firms as a shift from the P2 to the MPB archetype is useful to anchor the starting point and the intended destination. Equally, it gives clarity on what the transformation involves. Specifying the content of change is an important prerequisite to identifying movement from one set of organizational elements (old) to another (new) and consequently, for tracking the process of continuity and change. In the next section, we describe our research context and methods. In the following section, we present a detailed analysis of the process of change in each case firm.

Methods

Research Setting and Sample

The study examines processes of change in three major North American law firms. These firms, which we label Alpha, Beta and Omega, had 190, 225 and 350 lawyers respectively. All three firms performed similar work, emphasizing litigation and commercial law as key practice areas. Moreover, all three fit the traditional P2 archetype but were exposed to an increased intensity of competition in response to deregulation, growth in inter-provincial mega-firms, and an economic downturn. All three firms were doing well in that they were above average relative to trends in the industry in the relevant practice areas, but these external triggers made it unavoidable for them to fundamentally reassess their service creation and delivery practices to become more efficient and businesslike. Accordingly, the firms embarked upon changes addressing key domains of governance, structure and systems. In each organization, efforts were made to communicate the need for greater efficiency and the need to become more “businesslike.” The target of these communications was the lawyers, through Partners’ meetings, Associates’ meetings and the Executive Committee meetings. It was argued that the separation of professional and management roles, more planning and marketing, and different modes of compensation were necessary to manage the firms more effectively, efficiently and competitively.

Hence, these were good comparative cases in terms of similar starting points and pressures for change. Further, we had access to data in all three firms in a way that processes of change could be observed “on the ground” enabling us to build detailed case studies. In terms of drilling down to the fine-grained process, we had a strong starting point in our prior understanding of where the firms have been with regards to their structures, systems and underlying values and beliefs and where they were being persuaded to move.

Data Collection

The main source of data was a program of 64 interviews supported by internal firm documents such as strategic planning, marketing, human resources and partnership policy documents. In each firm, respondents included a sample of partners and senior associates, and all administrative positions such as finance, marketing and human resources. Interviews were conducted over a period of four years and multiple interviews were conducted with key individuals over the time span. Given that the interviewees were also reporting on what had happened in the 12 to 18 months before the interview process began, the time period analyzed is five years. Five years is an adequate period of time to see and analyze the processes of continuity and change; indeed, it is longer than many studies of change (Langley, 1999). Amis et al. (2004) and Lawrence et al. (2012) suggest that ten years is a reasonable window for examining a complete transformation. And Hinings and Greenwood (1988) showed that over a 10-year period there was still considerable variation with regard to success in transformational change. Our aim was not to evaluate the success, or lack thereof, of the change process but to unpack mechanisms that shape the trajectory of continuity and change and have consequences for the potential of achieving the transformation.

The internal firm documents were used to build background information for each firm, which helped us to go into the interviews with a solid context. Further, a perusal of the documents confirmed that these firms fit the P2 profile at the time the pressures for change emerged.

Our choice of interviewees was not random, we used a snowballing and purposive approach. We started by talking to the Managing Partner and a couple of senior partners, who were central to the change initiatives, who then connected us to other partners and senior associates across the key practice areas. It became apparent to us very early on that not everyone among the lawyers (partners and senior associates) was in agreement with the change initiatives and there were different views. Further, tensions were surfacing between lawyers and non-lawyers. The Managing Partner in each firm helped point us to and make contact with lawyers (across areas of practice and functional responsibilities) echoing the different views, as well as with non-lawyers (especially directors of different functions). Our sample of interviewees evolved as the change was unfolding. As for repeat interviews, we talked to key individuals such as the Managing Partner again and those who had taken on new roles as part of a prior set of change initiatives and could give us a sense of how they were feeling and if there had been changes to how others were receiving their role. Table 1 provides a summary of interviewees for each firm. The interviews were semi-structured. The structured component focused upon changes to governance, structures and systems. We drew on previous work on the two archetypes, P2 and MPB, to ensure that we tracked changes to the different elements. The unstructured part allowed the interviewees to relate their responses and reactions invoked by the change initiatives. The study was partly deductive since it drew on well-developed concepts to drive empirical analysis, and partly inductive in trying to understand how the process of change unfolded. The interviews lasted from one and a half to two hours each. Each interview was taped and transcribed.

Data Analysis

In order to capture continuity and change, we first needed a clear sense of what changes were initiated, what triggered the changes and the sequence in which they were initiated. Following this, we focused on the fallout of those change initiatives that shaped the unfolding change process. We started with concepts relating to governance, structure and systems, to code our interview data. These constructs are used to articulate the P2 and the MPB archetypes for law firms, and shifts in these elements are important to understanding change. We used N6 qualitative software (Richards, 2002; Bazeley and Richards, 2000) which has an indexing system that holds segments of data by different concepts and categories as different “nodes.” One of the criticisms of qualitative studies is that it is often not clear how researchers get from data to the final conclusions (Eisenhardt, 1989; Langley, 1999; Miles and Huberman, 1994). N6 assists in making the process of analysis and theorizing more transparent through a system of building a visual tree, comprising a hierarchy of nodes denoting different theoretical constructs, and by enabling exploration of relationships between different nodes or constructs. We built such a nodal tree to reflect the unraveling concepts at each stage of analysis and gain greater clarity and specificity of constructs and relationships between them.

As an example, we first created nodal categories for Governance (ownership and control issues, professional and managerial roles); Structure (differentiation and integration); and Systems (human resource systems and decision systems). We indexed all segments of interview text that alluded to changes in governance under the “Governance” node and likewise for “Structure” and “Systems.” Since the interviews spanned several years, we ensured that the transcripts had identifiers that enabled indexing of segments of the interview text in chronological order under each concept or node. In segmenting data by these constructs, we also noted repeated references in interviews to external market and competitive factors that generated two types of pressures on each firm: the need for more efficiency, and the need for systematic marketing and business development. On further analysis, it became evident that governance changes in each firm were triggered mainly by the pressure for more efficient management, and structural changes were prompted by the pressure for a more systematic approach to marketing. There was no evidence of changes to systems being prompted by these pressures directly but followed the governance and structural change initiatives in each case. So, in tracking the changes to governance, structure and systems we were able to unravel the triggers and uncover the sequence of changes and accordingly start building a nodal tree for each case (Bazeley and Richards, 2000): We first developed the N6 tree for each firm separately to get intimately familiar with each case (Eisenhardt, 1989, p. 540). An in-depth understanding of the process of change in each case set the stage for then comparing and generalizing across cases. Importantly, the process of segmenting data under different theoretical concepts and developing a tree of nodal categories enabled us to build a consistent format for analysis of each case.

Our next step was to further study the interview texts at the governance, structure and systems nodes to capture the nature of change initiatives. We found that governance changes in all three cases were primarily aimed at a separation of professional and management tasks. Structural changes were mainly about changes to professional and functional differentiation. In all three cases, the nature of changes to systems included human resource practices (compensation and promotion) and decision systems (marketing and business development plans, strategic planning, and practice management). Systems changes followed changes to governance and structure in all cases.

The next step was to track in detail the fallout of each change initiative. We identified various reactions to the change initiatives pertaining to governance, structure and systems. We separated those pushing back on the change initiative and those supporting it. We then delved into what and how exactly the different actors were articulating their concerns or support. This helped us to get to the root of these reactions which we found were specific values and beliefs held by the actors. They either echoed P2 and MPB values and exerted a simultaneous push back (continuity) and a push forward (change) on the change. We segmented out all relevant text to capture these dynamics and their outcomes. It is this part of the analysis that shed light on how continuity and change evolved in each case and to be able to compare that process across the cases. The following nodal tree depicts how we approached the analysis of each case. Findings

We present our findings by comparing change initiatives and their fallout with respect to each key dimension of the archetype across the three cases: Alpha, Beta and Omega. We discuss change initiatives and their fallout in the order in which they were made starting with governance. Structural changes were spearheaded almost simultaneously or immediately after the governance changes. Systems changes followed after the governance and structural changes in each case.

Governance: Separation of Professional and Management Roles

Alpha

Alpha embarked on important governance changes to separate professional and management roles. A Chairman was appointed. The Managing Partner had a full-time management role. An Executive Committee (EC) of three people was created to deal with strategic and operational matters except for compensation and admission of new partners. The new governance structure involved a non-lawyer Chief Operating Officer (COO) as a full voting member of the EC. Non-lawyers were also appointed to managerial roles such as finance and marketing. In response to these initiatives, competing reactions emerged. One set of partners and senior professionals pushed back on the separation of roles creating tension over four issues. First, partners resented delegating power to those in management positions. They reacted negatively when the COO was appointed and made a full voting member of the EC because of the discomfort with devolving authority to that role. It offended the traditional belief that authority should be widely distributed among partners. The COO noted that “people in the firm are afraid of losing control of their destiny and fearful of losing control to a management process.” Second, the ambiguity surrounding roles of these newly-created management positions created contention. There was a lack of consensus in the partnership about these roles making it frustrating and difficult for those appointed to management positions to effectively perform their tasks. The partners wanted effective management only to the extent that it did not directly affect them. They wanted to manage themselves and not be managed, a belief of the P2 archetype.

The third source of strain emerged around the use of non-lawyers in management positions. There was widespread distrust of non-lawyers by lawyers because of a view that the central task is the application of professional knowledge by lawyers. A fourth tension arose because lawyers were not convinced of the value of management tasks. One partner said, “When lawyers start getting cost-conscious, especially in less prosperous times, the first strike at the management overhead.” In summary, partners and senior professionals pushed back on the separation of role initiatives by reasserting their P2 beliefs that authority should be widely distributed among partners; that lawyers manage themselves; and that non-lawyers are not acceptable.

Simultaneously, several influential senior partners echoed support for the change initiatives pushing toward corporate-like models. They argued for moving beyond the notion of democracy that underlies P2 beliefs, towards a strong leadership supported by the silent majority. As one partner said, “We need a benevolent dictator.” They also supported the role of the non-lawyer COO, and that the role should be vested with authority for day-to-day management. All of these reactions were expressions of MPB values. Table 2 gives examples of the separation of roles for all three firms.

Alpha pressed on with the MPB-type governance changes despite the strong voices pushing back. Over three years, the EC had expanded, with the position of the COO becoming increasingly stable. Non-lawyers were formally in specific management roles. Suppressing opposition was not without consequences. There was growing frustration among management as they faced a form of passive-aggressive behaviour from certain partners and senior professionals. Some in those roles expressed exasperation with partners and their impact: “I don’t want to do this anymore” (Finance Director). So, there were visible changes toward an MPB form of governance to enact a separation of roles but the P2 values that were expressed from the start, but suppressed at the time, did not go away. Rather, over the three years, they constantly surfaced to undermine the separation of roles from having the desired effect. Continuity and change pulled against each other exacerbating the paradoxical tensions.

Beta

At Beta, two critical decisions were aimed at separating roles. First, the appointment of a CEO who was a non-lawyer. Second, a Managing Partner was retained who had a highly dictatorial style. Managing the firm became his full-time job, and he made a radical decision to do so with the help of a team of non-lawyer professionals. Strong reactions surfaced in response to these changes. Some partners and senior professionals saw these changes as threatening their widely-held authority, the need for consensus building in decision making, and informality; they opposed the idea of non-lawyers in positions of authority. However, this strong push back was simultaneously met by other senior partners forcefully pushing for the changes. They urged that there was a real need to break away from a high degree of consensus building, to accept non-lawyers in management roles and, in general, for lawyers to let go of control and to delegate.

Unlike Alpha, where similar governance changes were pushed through despite opposition, things unfolded differently at Beta. Strong competing reactions compelled the firm to go back to the drawing board to reevaluate and rethink the change initiatives in the light of different viewpoints that had surfaced. The outcome of this process was: first, the CEO left and the position was abandoned; second, the Managing Partner was replaced by a partner with a more “consultative” approach. The firm moved away from a dictatorial management-focused Managing Partner to a new consensus-driven portfolio management. The portfolio system meant that every EC member (the Management Committee was renamed an Executive Committee) had a portfolio for which they would be responsible. That is, there was a “Portfolio Partner” for marketing, finance, professional personnel, premises and planning. Each Portfolio Partner picked people for their committee membership and, importantly, the non-lawyers were made Directors of the portfolio committees.

Certainly, there was a narrowing of the separation of roles, in that the Portfolio Partners were key decision-makers compared to what was intended in the first round of changes, but these further changes were not a reversal by any means. Rather the firm produced an innovative way of achieving separation of roles while preserving fundamental P2 values, especially the need for consensus decision-making, widely-held authority among partners and senior professionals, and a sense of lawyers “being in control.” In this round, actors with competing perspectives confronted the different viewpoints and the fallout was that both those supporting the original changes and those opposed, became more open and forthcoming to exploring new solutions. The solution achieved was creative in blending prevailing P2 and emerging MPB values and equally importantly, it generated harmony between those with competing views. Continuity and change became mutually reinforcing, mitigating paradoxical tensions.

Overall, the separation of roles manifested blended P2 and MPB characteristics.

Omega

Omega had multiple offices across several cities. There was some variation in roles between offices because of their different size and as a result of a previous merger of two firms with different management traditions. Each office had an Executive Committee (EC) comprising a Managing Partner and other senior partners. The change initiatives in each office were about the separation of roles, by clarifying and highlighting the role of the EC vis-à-vis the Partnership and having clearer roles and portfolios for members. Another initiative involved the appointment of an Executive Director in one of the offices. Even though these initiatives were quite conservative and non-threatening to the core P2 form, compared to those at Alpha and Beta, the reactions from lawyers were defensive. The wider partnership wished to restrict the authority of the EC and nip in the bud any attempts at enhancing it. Defensive reactions emerged on four accounts. First, that control and authority lie squarely with the partnership with the EC as “subordinate,” as one Partner described. Second, the need for consensus building was very high as partners expected to be consulted and involved in all decisions, which limited the EC’s decision-making authority.

Third, skepticism about the need for management was rampant in the firm. This was evident in repeated references to the doubts lawyers had about the value of management. As a Managing Partner in one office commented, “I think quite frankly we are a bit over-governed.” The fourth was the nonacceptance of non-lawyer managers. Interestingly, there was little tension around the appointment of the Executive Director because he did not challenge lawyers and seemed to be reconciled to having little authority: “You really cannot change things d that are how lawyers are. If you are not a lawyer you are not accepted.” He was resigned to: “I don’t think the partners in this firm will ever accede authority.” Simultaneously, some lawyers who had been on the EC, or had been an office Managing Partner, supported the move to a greater separation of roles but were cautious and understated. They highlighted “how lawyers think” (they themselves were lawyers) and the need to change that mindset. but it generated little movement. Compared to the first two cases, competing values manifested rather feebly. Defensiveness on the one hand and muted support for the initiatives on the other resulted in little to no separation of roles. The Executive Director appointed in one of the offices survived but was resigned to having limited authority. There was a little more role clarity and a move toward the EC sharing the administrative burden with a Managing Partner, but there was constant demand upon the “management” to include Partners in all domains of decision making.

To summarize, at Alpha and Beta initiatives to separate professional and management roles went to the heart of lawyers’ identity traditionally defined by P2 values. At Omega, the initiatives were less threatening. In all three cases, competing values surfaced for continuity and change simultaneously. The way the paradoxical tensions were managed in each case resulted in different outcomes. At Alpha, MPB-type changes were pushed through and implemented in spite of strong opposition echoing P2 values. Change and continuity unfolded as though in a tussle with each other. At Beta, a period of reevaluation and debate followed, with some of the initial initiatives retracted but replaced by a more creative solution that cleverly blended P2 and MPB elements. Continuity and change appeared to interweave and support each other toward achieving the separation of roles. At Omega, competing values surfaced but there was little engagement or struggle. Continuity in existing governance arrangements was reinforced. Table 3 provides a summary.

Structure

Alpha

At Alpha, the need for systematic marketing triggered structural changes in the form of increased professional differentiation involving reorganization around practice groups. These changes emphasized specialization and working in teams rather than as independent practitioners. One senior associate commented, “The new structure was designed to avoid ‘dabbling,’ that is, a lawyer doing work they were not specialized in and then screwing up so that the client leaves.” The Managing Partner observed, “I consider organized and effective business development most critical. I really think that in turning the ship and setting the course of the ship, the focus has to be on the course that is going to take us to business development.” Competing values surfaced with some senior lawyers contradicting the rationale for the structural changes by reiterating traditional ideas about what marketing means: it is individualistic and about taking a client out for lunch. Notwithstanding, the new structure aimed at formalizing marketing, and deemphasizing the one-on-one lawyer-client relationship was put in place. Simultaneously, several senior partners and associates expressed MPB values of more client focus and they contemplated ways to make the new structure more effective. A general feeling developed that the practice groups were too large and that smaller clusters should be formed based on industry.

There was an adjustment period as competing values played out. The practice groups were organized so that the structure could be more client-oriented and would encourage more communication amongst lawyers in different specialities. But the impact on marketing, the focus of the reorganization, was very limited; at the end of two years, traditional ideas about marketing seemed firm. So, the net effect was that although there was a change toward an MPB structure, its effectiveness in changing the marketing approach was tempered by continuity in P2 ideas. There was again a tussle evident between change and continuity. Table 4 gives examples of all three firms.

Beta

At Beta, the second wave of changes (after the initial governance changes) produced significant structural changes. Functional specialization increased through an elaborate committee structure. Most notably, vertical decentralization increased as the Managing Partner and Portfolio Partners on the EC delegated administrative tasks to the Directors (non-lawyers) of portfolio committees and further down the hierarchy. There was a clear emerging hierarchy. There was little opposition to these structural changes in spite of the strong MPB elements. The shift to a portfolio system and a greater degree of decentralization of administrative tasks appeared to resolve the contradiction in lawyers’ thinking: “We do not want non-lawyers to manage but, for lawyers, management roles damage their career” (Partner). Vertical decentralization left Portfolio partners and the Managing Partner with time to practice law and keep in touch with their clients by delegating while still feeling in control. The structural changes can be summarized as formal functional specialization achieved through the creation of separate committees for each function, and an increased degree of decentralization to Directors of committees and further down the hierarchy, but with decision-making power residing with Portfolio Partners. This was again a blended form of solution between P2 values and the emerging MPB values. Continuity and change were unfolding in tandem.

Omega

In Omega, as for professional differentiation, the firm did not have formal departments but the term department was used loosely to refer to a particular “group” (e.g., litigation). An initiative was taken to create formal departments and appoint departmental heads. These structural changes provoked opposition from those holding traditional P2 values, who wanted groups of independent practitioners with no formal head. One Partner observed, “We really function more as independent practitioners.” Another structural change initiative was to have a member on the EC look after the Business Development Portfolio and to create Business Development committees. This initiative was not a significant departure from the current structure which was in any case dominated by committees (e.g., allocation, professional development) and so it did not provoke overt opposition. But there was a clear defensive stance: “in our group, there isn’t any organized approach to get business as a group; we don’t function that way d never have.” In one of the offices, they even got rid of a marketing position on the pretext that the infrastructure at law firms is driven by cost containment, reinforcing the P2 belief that management functions are an overhead. There were partners who supported the structural initiatives aimed at formalizing and focusing on business development efforts. The Business Development Partner himself expressed the need to decentralize some responsibility for business development to the sections (practice areas), unlike a typical P2 form. But, he simultaneously added P2 overtones, as he noted, “My biggest concern is we’ll have one section off doing their own thing without the other sections knowing about it and that can be a disadvantage.” Unlike Alpha and Beta, structural change initiatives at Omega were variations of a P2 structure. Those for P2 structures immediately defended continuity over change.

To summarize, at Alpha and Beta there was significant progress toward structures incorporating MPB features, while the changes were conservative and less threatening to the P2 format Omega. The fallout of structural changes was different in the three firms because of the way paradoxical tensions were managed, as competing values surfaced for continuity and change, simultaneously. In Alpha, while MPB-type structural changes were made in spite of strong opposition, they were not accompanied by a shift in values that were required for the new structure to have the intended effect. In this sense, over about three years the change to MPB structures mainly to support marketing and business development seemed to be wrestling with the continuity in the P2 mindset about marketing and client management. At Beta, in response to the MPB initiatives, the majority embraced the merits of the changes. The awareness of competing perspectives developed in the prior process of separation of roles trickled into the structural solutions devised. There was a change toward MPB structures while ensuring continuity in some of the core P2 values. These structural changes were effective in supporting the separation of roles in achieving more efficient management. At Omega, continuity in P2 structures was evident. Table 5 summarizes these processes.

Systems

Alpha

At Alpha, changes to human resource systems and decision systems followed the creation of the EC and the appointment of the COO. Changes to systems were aimed at reinforcing both governance and structural changes but provoked strong competing values. Changes to compensation were triggered by a simmering dissatisfaction with the prevailing lockstep system and a need to recognize and compensate for non-billable activities because of the increased importance of management and marketing. Partners on the EC played a key role to convince people of the value of non-billable work and moving away from lockstep. However, another set of partners and senior professionals surfaced simultaneously, pushing back on widening the scope of the compensation systems to include non-billable activity. They were all for preserving the lockstep system and this was related to a strong P2 notion that the application of professional knowledge to client problems is the primary task. As for the promotion system, the other crucial human resource system, which was a traditional up or out, was not even considered as an arena for change to fit the MPB archetype. As for practice management, the importance of monitoring work-in-progress, allocation of work among partners, discouraging hoarding files, and following up collections of bills was recognized among partners. But at the same time, there was the opposition that strongly expressed concerns such as, “We don’t want them (management) controlling us.” As for decision systems, the firm’s move towards more formal planning was supported strongly by the EC’s initiative to produce a business plan. In addition to strategic planning, steps were taken to put in place individual and group marketing plans to support the reorganization around practice groups. But the introduction of marketing plans was undermined by a P2 mindset of an individualistic approach to liaising with clients. One of the Partners who was pushing for making these plans effective expressed his frustration, “There is still an instinct to hoard files rather than pass them along.” Table 6 gives examples of human resources and decision systems.

The interplay of competing values manifested in three ways over the following two and a half years. First, the Compensation committee that had existed for some years was disbanded, and the EC took on compensation decisions. A Partner observed, “A fundamental thrust behind that recommendation was to try to make a clear statement that compensation was a management tool.” Second, the system was restructured to reward younger, hardworking partners earlier, and to not reward people who were seen not to work generation and running the firm. Third, there was a greater acknowledgement of the importance of rewarding both billable and non-billable activities, but there was no departure from the lockstep system of compensation. So there were small MPB changes to compensation but overall continuity of a P2 lockstep system. In terms of implementing marketing plans, even though over the two years there was a greater commitment, in that practice group coordinators were given more responsibility for marketing plans by the Business Development Chairman, they struggled to make the plans effective because of the continuing P2 mindset. As for practice management, there was greater awareness but continued opposition from lawyers to being controlled. This also undermined the effectiveness of separating management and professional tasks. Overall, there was a flavour of MPB-type systems added but the core of the systems continued to be P2. It was apparent in this stage of the change process that the very values that were suppressed when the first set of governance changes were made resurfaced to pose a constant challenge or battle against any subsequent changes made.

Beta

At Beta, in the second round of changes, there was significant discussion of compensation, promotion, and training programs for associates. The compensation system changed from being purely lockstep to a performance-based one. The performance was not restricted to financial performance but included criteria such as sharing of work, business development and active community involvement. Involvement in management was also weighted when evaluating performance and compensation. There was strong support for a performance-oriented compensation system, but there were also those who expressed reservations in that remunerating non-billable work posed a contradiction within a firm that strongly valued billable work, the primary task being the application of professional knowledge. This was resolved by deliberating upon these concerns and arriving at the idea of making the compensation system open with the opportunity for appeal which was valued by lawyers who were sceptical and made them more positive toward the change. Beta also started making a break from the traditional up or out promotion system which was indeed radical. Several partners supported the view that people developed at different rates and they should not be made to leave if they did not make Partner in the first attempt. As one Partner observed, “Some people may be perfectly good lawyers but just not quite there yet.” There also was a growing recognition that the up or out system was wasteful of the firm’s resources.

As for decision systems, Beta took more concrete steps towards efficient practice management by putting formal systems in place to monitor Partners’ work-in-progress and billing collections. What was noteworthy at this point in the change process was the way a non-lawyer Finance Director was able to assert him: “I write missives to partners asking them what exactly they’ve been doing to follow up their clients.” Sometimes he met with individual partners and suggested that they seek assistance from the Collections Manager: “I don’t do this in a blatantly strong-armed fashion and most of the time once caught in the open, they are more than willing to have whatever help they can get.” Again this is a subtle non-dictatorial approach in implementing a role in a way that does not work against the partners’ core identity. Emphasis on strategic planning, formal budgeting systems, and formal training programs for associates was apparent. Overall, compared to Alpha, Beta was able to achieve bolder changes to their systems making a significant break from P2 systems. The response in the firm to these fairly radical systemic changes was mainly positive and particularly striking was the comfort level of actors in different roles, lawyer and non-lawyer, and also greater unity of thought developing among partners. This appeared to have been facilitated by the awareness of different perspectives that was built in the first round of change initiatives, aiming at governance, when the firm took a step back to deliberate. Where there was a push back (e.g., compensation issues) the process of debating, exploring and rethinking was repeated until a new solution emerged. At Beta, the seemingly paradoxical process was evolving in a mutually reinforcing way.

Omega

At Omega, the firm had a traditional lockstep compensation system. Some partners tried to get an appreciation for the value of the non-billable activity and a move away from focusing on what lawyers did as individuals. There was no major initiative to depart from the firm’s current orientation toward billable hours except that the Allocations Committee allocated points for non-billable activity, including management tasks. For example, in response to a broader view of compensation, questions arose, “How do you reward people involved in management when it is an intangible, what is the true benefit?” This was triggered by an inherent skepticism about the value of management reflecting a core P2 belief that applying professional knowledge to client problems is the primary value-adding task in a law firm. There was high turnover on the Professional Development side of the EC, and one of the reasons was, as one of the Partners said, “this does not count d I am going back to full-practice.” Tension also emerged around how you reward a person who brings a file through the door but does not work on it. The P2 approach is to work on what you bring in yourself. Promotions continued to follow them up or out model.

In terms of decision systems, practice management was tightened. Initiatives were taken to develop Business Development plans that included developing plans and guidelines for lawyers and devising ways of involving practice groups. In contrast to the first two cases, change initiatives around systems were gentle nudges. The most aggressive initiative was in business development and in clarifying performance evaluation criteria for partners. But there was opposition, with some lawyers questioning the need for elaborate marketing and business development when in their view their job was to build one-on-one relationships with a client. The Business Development Partner who sought ideas from people in the firm felt it was like “herding cats and very tough.” The Business Development Partner in one office expressed frustration about the response of some Partners when they argued, “Well, there is plenty of work, so what’s the point.” A tension emerged around business development seminars, where people from administration tended to “treat marketing of lawyers the same way as they do marketing generally.” The Business Development Partner felt that “that does not work. It is not that kind of organization. I think you have to have some legal training to understand what’s involved.” This example reflects the Business Development Partner’s inner struggle in pursuing an MPB approach to marketing while holding a P2 orientation about non-lawyer managers. As for strategic planning, there was no real initiative except an expression of the need for planning. The firm had a short-term rather than a long-term focus. As one Partner noted, “Lawyers aren’t great at looking five years ahead. We had a solid one-year plan.” There was evidence of some competing voices echoing MPB ideas for creating specific targets and guidelines for building new client relationships. However, these voices were too weak and understated to be able to provide any significant energy for change.

To summarize, the fallout of systemic changes attempted in the three firms was quite different. At Alpha, MPB features were incorporated to the extent of handing over compensation decisions to the EC, but the core of the compensation system continued to be P2. Changes to marketing and practice management systems were all MPB, but in an ensuing couple of years, there was a continuous struggle with the persisting P2 values that undermined the systems’ ability to serve their purpose. Over time, the paradoxical tensions became more intense as continuity and change seemed to wrestle with each other. At Beta, significant MPB changes to compensation, promotion, practice management and systematic marketing all met with support resulting in greater change over continuity. At Omega, the nature of change initiatives was conservative, not threatening the P2 foundations of the systems, yet it was met with a defensive stance by several senior professionals, and those who rendered support did so mildly and ambivalently. Continuity overwhelmed change. Table 7 provides a summary.

Discussion and Conclusions

Mechanisms Underpinning the Process of Continuity and Change

Our analysis shows that even though in all three cases the triggers for change were the same, the nature of change initiatives was similar, with an impetus on MPB features, and the trajectory of change unfolded as “continuity and change”, the outcome was different in each case. The extent of change towards the MPB archetype was significantly greater in Alpha and Beta than Omega. Further, compared to Alpha, Beta achieved a greater degree of change. Further, continuity and change unfolded as different patterns d polarizing at Alpha, synthesizing at Beta and drifting at Omega. Table 8 provides overarching examples reflecting these evolving patterns.

These different patterns and different outcomes can be understood by looking at the mechanisms that underpinned and shaped the trajectory of continuity and change that emerged in each case. Figure 1 presents a model of processes of continuity and change. We elaborate below on the mechanisms encapsulated in the model and highlight how these mechanisms help to recognize why continuity and change is not a generic process. Expression of competing values is a powerful catalyst.

Actors respond differently to change initiatives depending upon the values and beliefs they hold. Greenwood and Hinings (1993) noted that the pattern of value commitments within the organization creates the possibility of transformational change. Seo and Creed (2000, p. 230) argued that, when contradictions within a social system deepen and permeate actors’ social experience, the likelihood of collective action toward change increases. Benson (1977) similarly argued that actors are mobilized toward change when they continually and collectively experience tensions arising from contradictions in a given socio-historical context. Our study shows that it is not the mere existence or deepening of competing and contradictory values but what is also important is how strongly or forcefully those values rise to the surface and are expressed. We argue that the stronger the expression of competing for values the stronger the forces pushing back and pushing forward on the change simultaneously, which generates an energy that fuels the process of transformation. We observed a stronger expression of competing values in response to change initiatives at Alpha and Beta, and this we argue contributed to the greater extent of movement toward the MPB archetype compared to Omega. For example, at Alpha, there was a change toward MPB governance and structural elements albeit with greater continuity in P2 systems. At Beta, changes to the separation of roles and structures reflected a creative blend of P2 and MPB characteristics and changes to systems were dominated by MPB characteristics. At Omega, there were changes on the periphery of the P2 form suggesting little movement toward the MPB form. Continuity overwhelmed change.

Jansen (2004, p. 278) used the notion of energy in the context of strategic change to describe stasis-based momentum, which highlights energy expended to persist with a current trajectory and change-based momentum which represents energy associated with moving along a new trajectory. The author argued that there needs to be enough initial energy in the direction for change to overcome the stasis-based momentum, and such energy for change-based momentum may be born simply from actions taken that move the organization on the new trajectory. In a study focusing on early stages of organizational change, Jansen (2004) found the critical role of organizational events (e.g., announcement of change by a change leader, or other events reaching out to a wide spectrum of people), conveying social information that encompasses urgency, feasibility and drama, in establishing initial energy levels for change-based momentum. Our study finds that in a paradoxical process of continuity and change it is the responses and reactions to the change initiatives and actions surfacing as strong expressions of competing values that generate energy endogenously and energizes the ensuing process of transformation. We argue that the energy that develops through the expression of contradictory values and beliefs permeates through strong emotions that are provoked. For example, when a separation of professional and management roles was initiated both at Alpha and Beta the expression of competing perspectives engendered strong emotions: “We (lawyers) don’t want management to control us”; “I (lawyer) don’t want these managers telling me what to do”; “We (lawyers) don’t want them making decisions”; “Who are these guys (managers) interfering in my life”; “These guys are a bunch of idiots. They are not going to lead us.” Another set of voices simultaneously and passionately expressed: “We need effective management – that is the way forward”; “We need a benevolent dictator”; “We need strong leadership.” “It is time for us to break away from consensus building for every decision.” “We need clear executive management and operating management and delegate to them to promote efficiency and put us on track.” In contrast, at Omega competing values were weakly expressed with little energy developing through the subdued emotions which we argue was not enough to fuel its transformation process. For example, those pushing back on the separation of roles which was only about strengthening the EC expressed: “We have always been a democratically-run firm.” “The EC always takes issues of significance to us partners.” Those for the change had a tone of resignation: “I am appointed ED, but I don’t think partners will accede much authority to me”; “I am a lawyer, and I know how ‘lawyers think’ and that mindset does need to change but.” Emotions have been acknowledged to play a key role in strategies to manage paradoxical tensions (e.g., Huy, 2002; Luscher and Lewis, 2008; Vince and Broussine, 1996), but we elucidate further how strong emotions stirred through the expression of competing values, in response to change initiatives, serve as a medium for energy that fuels the continuity and change process. This insight from our study that surfacing and expressing competing values energizes or catalyzes the process of transformation raises the question: What triggers a stronger expression of competing values, and why did that not occur at Omega? We found that a stronger expression of values at Alpha and Beta compared to Omega was triggered by the gravity of the change initiative itself. By gravity, we mean the extent to which the initiative is a departure from the status quo. It is akin to what Lewis (2000, p. 767) identifies, in studies about managing learning paradoxes, as “shock” that violates a frame of reference persuading actors to take note of the limitations of existing practices and recognize the need for potentially challenging and painful change (e.g., Bartunek, 1988; Miller, 1993; Westenholz, 1993). In the cases of Alpha and Beta, change initiatives that significantly challenged the P2 archetype caused a perceptible disturbance in the organization and provoked the surfacing and strong expression of values calling for continuity in P2 characteristics, and simultaneously those urging change toward MPB features. In contrast, at Omega, the change initiatives were conservative chipping on the periphery of the P2 archetype. Competing values surfaced in a way that those supporting the change were expressed laced with caution and those for continuity were not stirred enough. The impact of the gravity of a change initiative could be described by the analogy of a tidal wave. A strong incoming tide (change initiative) brings with it large amounts of new sediment and when it retreats it takes away some of the new and some of the old sediment but also leaves behind elements of both the new and old. This suggests significant movement and variation developing through the surface. When the incoming tide itself is weak, it brings with it little new sediment, and when it retreats it leaves the old sediment mostly intact. There is little movement and little disturbance through the surface of the sand. We argue that change initiatives at Alpha and Beta were like a strong tidal wave, creating significant disturbance through the firms provoking a strong expression of competing values for continuity and change. From a managerial perspective, this means that even though the process of continuity and change is a gentler evolutionary process this does not mean that the change initiatives need to be non-challenging and non-provocative; rather managers need to propose change initiatives that are a significant departure from the prevailing status quo. The gravity of the initiatives provides the necessary trigger especially critical to energize a process that is inherently paradoxical.

So, our first insight is that strong expression of competing values for change and continuity is a catalyst for the process of transformation. The mechanism that facilitates this is the energy that permeates through the emotions that are stirred up in the surfacing and expression of competing perspectives. In both practitioner and academic writings on change, there has been much focus on issues of resistance to change and the need to overcome it that it tends to ignore the more positive role of conflict and contradictions in propelling change (Ford et al., 2008). Our study shows that it is healthy to allow competing values to be expressed forcefully, sooner than later, for greater gains in the change process. However, those gains will manifest depending on how the firm harnesses that “energy.” One could argue that allowing the energy permeating through strong emotions to be unleashed may actually stall or slow down (e.g., Lewis, 2000) the process of transformation as it would be ridden with conflict or could even spiral out of control. Our second insight illuminates mechanisms to manage or harness that energy which may have a differential impact on the potential of the organization to achieve the intended transformation. We draw the second insight from a comparison of Alpha and Beta shedding light on why their change trajectories may have unfolded differently. How the energy developed through the surfacing of strong competing values is harnessed matters

We observed two different mechanisms of awareness-building and awareness-blocking at Beta and Alpha respectively. In response to the first set of change initiatives at Beta, the firm responded to the strong energy generated through the surfacing of competing values by taking a step back to reconsider and reevaluate that separation of roles initiatives. We argue that this immediately created a space where actors with opposing perspectives had the opportunity and were even compelled to become aware of the different perspectives held in the firm. Put another way, it channeled the energy into awareness-building. Scholars looking at paradoxical tensions have suggested that emotions play an important role in responding to paradox especially in engaging with anxiety (e.g., Luscher and Lewis, 2008; Vince and Broussine, 1996). In a changing context, we argue that it is critical to creating a space and opportunity for such engagement to occur. Awareness-building of competing perspectives needs to precede any inclination toward engagement. Awareness-building serves as a mechanism to open up discussion and debate which is what occurred at Beta. Importantly, the move to step back and reevaluate was both politically and psychologically astute in that it connected with lawyers’ traditional value of democracy in decision-making. Ostensibly, this appears to be a counterintuitive move in the context of progressing toward the intended transformation but it resonates with Cameron and Quinn’s (1988) argument that counterintuitive moves are often necessary to escape the negative dynamics of a paradoxical situation.

At Alpha, in spite of the strong expression of competing values in response to change initiatives aimed at separating roles, the changes were implemented as is, notwithstanding strong opposition. Suppressing one end of the polarity did not allow any space for confronting and becoming aware of different perspectives and thus no debate over change. In a sense, suppression is the opposite of awareness-building d it is awareness-blocking. At Omega, initial conditions for awareness-building or blocking did not materialize, as low-key change initiatives did not stir strong emotions and ensuring energy. Lukewarm reactions of initial defensiveness from those for continuity and ambivalence (Smith and Berg, 1987; Vince and Broussine, 1996) from those supporting the change did not energize a debate over change. Safe and conservative changes were made, keeping the core of the status quo intact.

Awareness-building and awareness-blocking shape the pattern of continuity and change through different mechanisms

We found that awareness-building shapes the continuity and change process by evoking mutual exploration of competing values and awareness-blocking does so through competition between competing values. Some scholars have argued that managing paradox in organizational life that openly and critically engages with opposing reactions and emotions, opens up the possibility of discovering a link between those apparent contradictions enabling greater creativity than is possible by avoiding or suppressing the contradictions (e.g., Lewis, 2000; Eisenhardt and Westcott, 1988; Vince and Broussine, 1996). We find that awareness-building is a critical mechanism that creates the opportunity for actors to confront different perspectives which can open the possibility of discovering those links through mutual exploration. Mutual exploration enabled second-order thinking (Watzlawick et al., 1974) at Beta that produced an innovative solution for separating roles through a portfolio system that addressed the efficiency issues while preserving fundamental P2 values important to lawyers’ identity. In other words, the firm found a way of relating the two seeming opposites: P2 and MPB values. Importantly, mutual exploration at this point set in motion a virtuous cycle of greater openness toward each subsequent set of change initiatives. Changes to structures were a careful blend of the P2 and MPB forms which aligned with the separation of roles, and finally, the changes to systems were predominantly MPB for which there was strong support. As the process unfolded, there was an increased comfort level among actors to mutually explore and arrive at innovative blended solutions. What was especially conspicuous is how non-lawyers gained a deeper understanding of lawyers’ sensitivities about certain aspects of their identity and adapted the way they engaged with them. For example, when it came to changing and implementing systems, the Finance Director candidly said with respect to monitoring billing collections that he was direct and assertive, but “don’t do this in a strong-armed fashion and the partners are more than willing (to listen).” Another manager in strategic planning function said (laughing), “I sometimes present an idea to them (partners) as though it was actually their idea in the first place.” At the same time, lawyers started to appreciate the role of managers which was evident in later interviews in the change of tone from a “them versus us” to greater harmony and respect, as evident in what the Portfolio Partner for human resources said of the non-lawyer Director, “I trust him in the way the Managing Partner trusts me.” We propose that mutual exploration was the enabling mechanism for continuity and change to unfold as synthesizing forces. By “synthesizing” we mean a pattern that recognizes links between competing perspectives d not a compromise of meeting halfway.

In contrast, at Alpha awareness-blocking prevented the possibility of exploring and discovering a link between competing perspectives, which only served to accentuate competing values as separates. Change initiatives proposed to separate roles were implemented as is, notwithstanding strong competing perspectives expressed. Ostensibly, the firm was able to put in place the proposed MPB-type governance and structural changes, but as time went on it became apparent that the implementation of these changes was being hampered by the very competing values that had been initially suppressed. The tussle between competing values incited at this point only intensified subsequently. For example, in the three years following the separation of roles several partners and senior professionals continued to resent interference and control in their day-to-day professional tasks, frustrating the efforts of management. Similarly, the structural changes that were aimed at professionalizing marketing did not have the intended effect, because traditional P2 values about what marketing means in law firms hampered it. Essentially, actors who strongly pushed back on the governance and structural changes were silenced, which may have created the illusion of speedy progress initially toward the MPB archetype, but they resurfaced to frustrate those changes. What we observed at Alpha confirms Lewis’s (2000) observation that suppressing one side of the polarity may temporarily reduce anxiety and even create an illusion of temporary truce, but it actually intensifies pressure on the other side and silenced voices may hamper the process later.

The ongoing tussle between MPB changes made and P2 values rearing their head each time had direct ramifications for the way continuity and change unfolded at Alpha. What emerged is an uneven, patchy trajectory with complete replacement of some aspects of the status quo while other aspects remained entrenched or did not have the desired impact on the day to day work of professionals. As opposed to a mutual exploration, the mechanism that shaped the trajectory was competition between competing values. As a result, continuity and change evolved as a polarizing pattern rather than the synthesizing one observed at Beta. What emerged at Alpha is continuity versus change in contrast to continuity and change at Beta.

In the case of Omega, the change initiatives only invoked defensiveness and ambivalence on the part of those for continuity and change respectively. This culminated in regression, which is about lapsing back to understandings and beliefs that have been the reality in the past (Vince and Broussinne, 1996; Smith and Berg, 1987). Continuity and change seemed to be drifting along with continuity overwhelming change.

Contribution and Managerial Implications

Our study contributes both to the organizational change and the paradox literature. It identifies specific mechanisms that would enable or impede a process of continuity and change. It adds to our current understandings of evolutionary change processes by illuminating mechanisms that could differentiate one process from another in terms of its potential to achieve the intended transformation. Further, it contributes to the paradox literature by systematically examining a particular paradox organization face in managing change. Recent work on building a theory of paradox highlights the tensions, the negative dynamics, and the means of managing paradox in a way that unleashes its positive potential (e.g., Lewis, 2000). We provide an empirical exposition of how paradoxical forces of continuity and change evolve through specific mechanisms that either enable a synthesizing pattern (virtuous cycle) or a polarizing one (negative cycle). Further, we confirm how defensiveness and ambivalence pointed out in the paradox literature play out in a continuity and change process; especially, why those reactions arise in the first place and then how their interaction triggers regression, making change difficult.

Our study shows that the process of continuity and change is not a generic process and can be proactively managed. It offers several useful insights for managers trying to manage the paradox of continuity and change in organizational transformations. First, it emphasizes the importance of surfacing and expressing competing values in response to change initiatives. Further, it highlights that the strong expression of competing values will serve as a catalyst only if the energy that permeates through the emotions that are provoked is harnessed constructively. Channeling the energy into awareness-building of different perspectives can enable debate and enhance the possibility of discovering links between opposing ends of the polarity. Put another way, emotions and the ensuing energy can be a resource for managers to use in catalyzing the process of continuity and change. Creating a space for awareness-building can require oscillating back to reevaluate change initiatives in light of the competing perspectives which may seem like a loss of momentum. But such oscillations earlier in the process can help gain speed later because they help build a willingness among actors with competing perspectives to cooperate. This takes us to the second insight: Awareness-building can pave the way to the mutual exploration of competing perspectives that is a powerful enabling mechanism for arriving at innovative solutions when it comes to change initiatives. Third, being attentive to the channeling of energy right from the beginning of the change process can set in motion a virtuous cycle facilitating greater openness toward subsequent change initiatives in the unfolding process. Fourth, we reiterate the importance of challenging and provocative initiatives, signaling a tangible departure from the status quo, to push the competing values to the surface. Fifth, change is difficult often due to time pressures which can compel those initiating it to suppress voices pushing back, but our study confirms that any time gained is only an illusion because the polarizing pattern that emerges only slows the process.

We expect the model summarizing key mechanisms underpinning a process of continuity and change to be generalizable to other professional services organizations such as architecture, engineering consulting, and health care organizations. Similar to law, these professions also have strong professional values and identities and are pluralistic settings. However, we have evidence from existing studies of other types of organizations, including municipalities, computer firms, confectionary, chemicals, and sports, undergoing transformations through a process of continuity and change (e.g., Brown and Eisenhardt, 1997; Child and Smith, 1987; Hinings and Greenwood, 1988; Pettigrew, 1987; Slack and Hinings, 1994). We would expect our insights about underpinning mechanisms shaping the paradoxical process being relevant to these firms. The prevalence and expression of competing values in response to change initiatives and the capacity of surfaced emotions to energize (or not) is not unique to professional organizations. Similarly, one could see mechanisms of awareness-building, awareness-blocking and defensiveness having significant repercussions for a process of transformation in different types of organizations. One could argue that our model may be more relevant to organizations with widely distributed power, and less so to more hierarchical and centralized organizations where typically one would see more instances of top-down change and where having “non-compliant” people exit an organization is a relatively easier option. At the same time, there is increasing evidence to show that disruptive, wrenching change is often myopic in that it damages morale and is generally unhealthy for an organization (Ford et al., 2008; Kotter, 1995). In that light, we propose that fine-grained models that illuminate how paradoxical processes such as continuity and change can be managed to enhance the potential of successfully achieving a transformation are likely to be useful to any organization. Future research could replicate this study for a wider range of organizations.

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