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BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE
To address these problems, Praxair appointed a new management team in 2000
headed by Wayne Yakich, previously PDI’s VP of sales and operations, and char-
tered his new team with delivering on the promise of the new business model.
TWO TYPES OF DESIRED OUTCOMES
The Yakich team communicated a clear vision, explained the strategy required to
execute the business model, and set forth a new set of core values. Among the
emphases of the new values was a realization that “this is a people business.”
Previously, this concept had been given lip service, but was not taken seriously.
It became the cornerstone for an entirely new leadership strategy, one that
would enable employees to become part of the differentiation equation in the
marketplace. Now the leadership strategy would be as widely implemented as
the business strategy and enable nearly 3,000 customer contact employees to
truly differentiate themselves from those of all competitors.
Therefore senior managers championed the work to develop a new leader-
ship strategy just as seriously as they drove the business strategy. In both cases
differentiation was the goal. The new management team had to transform a
loose confederation of businesses with different cultures, different operating
procedures, different values, and different ways of managing employees into a
market leader that combines the speed advantages of being small with the scale
advantages of being large.
In order to execute both the business strategy and the leadership strategy,
two skill sets were required. The first consists of traditional business skills—
determining what the marketplace wants and how to deliver it. The second con-
sists of leadership skills used to mobilize people so that they have an
understanding of the requirements for market success and how to deliver on
them.
2
Although the ultimate business goal for PDI’s new senior management
team was successful implementation of the business strategy, their ultimate

over 325 employees—across all fifteen regional businesses.
Assessment Tools
The assessment tools were the following:
• An employee survey solicited feedback on the extent to which the busi-
ness strategy and leadership strategies were effective.
• A tool was used for comparing the current leadership strategy with the
one required to differentiate employees in the marketplace.
• An assessment tool called a Leadership Philosophy Map
4
was used to
define the core assumptions behind the portrait of a new manager.
• A leadership cultural assessment tool for use with senior managers and
division general managers (DGMs) clarified the change in leadership
culture required to support the newly emerging leadership strategy.
5
• Customer focus conferences
6
conducted in each of the fifteen divisions
brought representative customers together with customer contact
employees. The purpose of these conferences was to clarify the cus-
tomer contact behaviors, in terms of both attitudes and actions, that
would differentiate PDI employees from all other competitors.
Assessment Steps
The assessment was conducted in the following four steps:
1. All senior managers participated in a six-hour session to apply the
leadership strategy design tool to crystallize their own thinking about
needed changes.
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leadership strategy and how to improve it. Resistance during the implementa-
tion phase was virtually nonexistent. Nearly every leader in the top three lev-
els of management understood why his or her current ways of managing
employees was deficient. And they all were willing to implement the action
plans that they themselves adopted, including prioritized management train-
ing, revised performance review procedures, and new performance-based com-
pensation schemes—all changes not normally supported by line managers.
Below is a summary of the major findings of the assessment phase.
The assessment phase was far more than a few surveys or focus groups. It
was an intensive set of actions, engaging more than five hundred employees
and simultaneously laying the foundation for implementation actions endorsed
by those whose behaviors were expected to change.
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PRAXAIR
353
1. Senior management
leadership strategy design
session
2. DGMs conducted four-
hour leadership strategy
design sessions
3. DGMs and senior team
consolidate input from all
leadership strategy design
sessions
4. Customer focus confer-
ences to determine differ-
entiating customer contact
behaviors
Exhibit 15.1. Assessment Steps

contact employees in differentiating PDI from
other suppliers
• Employees are surprised that their opinions count
and are being taken seriously
• Employees leave feeling highly engaged and will-
ing to change their own behaviors. The message
that employee opinion matters ripples throughout
the company
• Employees feel frustrated that some managers tol-
erate weak to mediocre customer contact behaviors
• Specific attitudes and actions are developed for
the different groups of employees who contact
customers
• Barriers to improved customer focus are identi-
fied and local action plans adopted
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DESIGN: AN ITERATIVE PROCESS
Organizational change of the magnitude undertaken by PDI is often likened to
changing the tires on a car that is traveling at 70 miles per hour. The metaphor
is quite apt. No change plan, no matter how well designed, can possibly antic-
ipate all the bumps and curves in the road. Consequently, PDI followed an iter-
ative design process. Each step of the change was designed, implemented, and
then evaluated. The next step was designed based on the outcomes of the pre-
vious one. Along the way, business performance, budget constrictions, and mar-
ket dynamics, to name just a few of the “bumps” in the road, had to be
considered in designing the next steps. For instance, no one anticipated need-
ing customer focus conferences to help clarify customer contact behaviors. They
were designed as a result of an unforeseen outcome from the previous step—