In business, we tend to spend a lot more time thinking about the problems than the triumphs. People need to know that what they’re doing is making a difference, and that their leaders notice and appreciate their efforts.

Every leader, to be effective, must simultaneously adhere to the symbols of change and revision and the symbols of tradition and stability.

Most brain activities don’t systematically distinguish between an activity and the avoidance of that activity. When someone repeatedly thinks, “I should not break this rule,” they are activating and strengthening neural patterns related to breaking the rule.

Therefore, to engender change among people in an organization, it’s important to keep attention focused on the desired end state, not on avoiding problems. This goal-directed positive reinforcement must take place over and over. The most effective way to achieve this is to set up practices and processes that make it easy for people to do the right thing until it becomes not only second nature, but an ethic taken to heart (and to the brain) by the entire company.

Culture is multifaceted, and every company has many subcultures. At the top, there might be an executive subculture, trained in finance, which wants good numbers above all else. There’s also probably an engineering subculture, which assumes that crises can be prevented only with fail-safe, redundant systems that kick in automatically. There are other subcultures for middle management, supervisors, the union, and marketing. Every company combines those subcultures in very different ways that have become ingrained over decades. In any change program, when you encounter resistance, you have to then ask, “Is this just an individual resisting, or are group norms at play, based in a particular subculture?”

I characterize [organizational] responses in three zones. In Zone 1, we had transformers and go-getters. The people in Zone 2 were lost souls, taking energy away from the organization. They tended to project the idea that things would not work or that I was just trying to get rid of people. Zone 3 had fence sitters, who took no risks or positions. In any transformation journey, you have to first convince the transformers to follow you and ignore the lost souls. Then you have to get more fence sitters to become transformers. That is easier said than done. But one way to achieve this is pushing the envelope of transparency by sharing the financials so people can figure out for themselves whether they are contributing to the growth of the company or not.

I’m convinced that one of the big reasons for the failure of so many change programs is that by focusing almost solely on what’s wrong with their organizations, and by importing off-the-shelf strategies devised by outside experts consumed with what’s new, leaders undervalue what’s right with their organizations, and overlook home-grown strategies rooted in the wisdom of the past.

Progress is impossible without change, and those who cannot change their minds cannot change anything.

As Charles Handy has pointed out, the “paradox of success” occurs because we need to change before we have to change. However, “when things are going well we feel no reason to change.”

Many companies try to change themselves by benchmarking other organizations and borrowing their procedures or practices. The irony of benchmarking is that we’re essentially telling organizations to be more like GE or Apple or Nike. As Dev Patnaik, the author of Wired to Care, said to me one time, we know this doesn’t work on a personal level: we resist when members of our families say, “Be more like your brother.” The principle of bright spots is that you shouldn’t try to be more like Apple; you should try to be more like yourself at your best moments. Think about what you’ve done in the past, or what you’re doing now, that has worked tremendously well.

Jim March says there are two very different kinds of logic for making decisions. One is the logic of consequences. We’re great in business at changing behavior by changing consequences. If we want customers to buy more, we lower prices. If we want salespeople to sell more, we increase their bonuses. But the second kind of logic is the logic of identity. Many of the most profound decisions we make in life are made because of identity, not consequences.

That’s useful in business, especially in a change situation: if we can harness the power of identity, it helps motivate the Elephant to undertake a long, arduous journey. In a change situation, you want creativity and flexibility—and that’s more likely to come from identity than from consequences. Consequence-based logic is great at narrowing people’s focus, but it can backfire for the same reason. If you give people incentives to sell a lot of mortgages, for instance, they will do so. But they’re not necessarily selling the right mortgages to the right people.

Hate is the consequence of fear. We fear something before we hate it.

Failure is not fatal, but failure to change might be.

Our rational brain has a problem focus when it needs a solution focus. If you are a manager, ask yourself, What is the ratio of the time you spend solving problems versus scaling successes? We need to switch from archaeological problem solving to bright-spot evangelizing.

The capabilities of business units reside in their processes and their values, and by their very nature, processes and values are inflexible and meant not to change.

Overcoming complacency is crucial at the start of any change process, and it often requires a little bit of surprise, something that grabs attention at more than an intellectual level. You need to surprise people with something that disturbs their view that everything is perfect.

It is far more productive to study human behavior – why people do the things they do – and to seek benefit from the learning than it is to try to fight it.

Self-image at work is a critical and often overlooked factor in the process of change. People change jobs and careers, but rarely do they think about changing their self-image. Perhaps that’s because self-image operates just below awareness, but still colors our perceptions, emotions and actions. Leaders who are not conscious of this fact tend to cling to their old self-image that keeps them from changing. There are plenty of examples -- like the CFO who becomes a CEO and still acts like a numbers guy, not as a leader with a broad vision of the company.

And the antidote to fear? Pull people out of their panic and self-protective impulses by first acknowledging the difficulties, then raising their eyes and hearts to a possibility of success.

At that point you can take advantage of their newly available and hopeful energy to make that possibility a reality.

Sitting monarchs don’t usually lead revolutions. Yet most management systems give a disproportionate share of influence over strategy and policy to a small number of senior executives. Ironically, these are the people most vested in the status quo and most likely to defend it. That’s why incumbents often surrender the future to upstarts. The only solution is to develop management systems that redistribute power to those who have most of their emotional equity invested in the future and have the least to lose from change.

Change is a door that can only be opened from the inside.

In times of change, learners inherit the earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists.

I started thinking about how to manage transformations in 1981. I read every book on transformation and distilled their essence by identifying common themes and eliminating outliers. On the basis of this intellectual exercise and personal experience, I created a four-step transformation loop. I use acronyms all the time, so I call this ESEE—because “easy” is the one thing change isn’t.

The first E stands for envisioning. Before you start any transformation, you have to create a vision of the future. You have to say, “This is where the world is going, and this is where I want to take my company.” The vision has to make sense to you; in other words, you must be convinced that your organization fits into the future that you envisage. Then—and I had to do this time and again—you have to create a structure. You have to decide what your company will look like; you have to know how to place your troops—where the generals will be, where the lieutenants will be, what the formations will look like.

The third step is enabling. You have to populate the structure with the right people and give them the financial resources they need. This process is akin to laying the supply lines before a battle. Once you’ve done that, you must get out of the way as the army starts moving. However, as chief executive, you still have one task to perform: You have to energize the corporation, which is the last E. You drop in on dealers to interact with customers and visit plants to meet employees—that galvanizes the corporation. Just the presence of senior executives on the company’s front lines is enough to energize people.

If there’s anything we’re wired to do, it’s learn. That means even folks arguably difficult by nature can become less so—at least most of them. It also means we shouldn’t assume, as we almost always do, that someone’s incapable of change just because our efforts to make them change fail. The biggest reason people don’t realize their full potential for change is that we focus so much on their innate traits we fail to see how our behavior is contributing to patterns of interaction that lock those traits in place.

Much sociological research suggests that the desire to avoid embarrassment, to maintain an acceptable public image, might be an even more powerful motive for human behavior than financial incentives. Organizations seeking to galvanize people to action—getting them to embrace new ideas or stimulating the personal initiative that often fuels innovation—should take this research...to heart.

Leaders aren't good merely at decision making. In a multi-polar world, "CEO" also stands for "chief education officer." A stumbling point for many organizations on a major change journey is that the top level of management has often moved on emotionally toward the new destination before many others have even started on the journey.

An effective CEO needs to step back and bring people along, to educate them, even if doing so is a distraction, or even boring. The new world is not one where an executive can simply say, "Do this." There is a critical educational component that must be exercised first. Leaders must be both learners and teachers.