I believe in the value of this change.
Oftentimes, we find that many people at the start, during, and even toward the end of a campaign for change in their organization will not say they believe in the changes being promoted by their leaders. The quote above came from an employee who was part of an organization that had successfully institutionalized a transformation in the way her organization did business. I will explore in this and subsequent chapters how such statements can be obtained from one’s workforce and how important they are to sustain major changes and transformation that can benefit the future viability of an organization.
We encourage you to stop and consider what fundamentally changes when an organization transforms from one way of existing to something different or a more extreme transformation. Stop. Because we are only a few sentences into the first chapter of this book, let’s consider if that is the right starting point for examining organizational transformation. Let’s try another way of thinking about sustainable organizational transformation. First, assume that if an organization could speak, it might say to its founders, customers, or competitors, “I am not the organization you knew in the past; how I think, act, and perform is all fundamentally different and by different I mean___________” (now you can fill in the blank).
According to a 2008 survey1 of 3,199 executives from a wide range of industries and regions worldwide, the objectives of transformational change attempts they’d witnessed and that could be reflected in the preceding fill-in-the-blank could include the following radical shifts (and analogs to personal transformations we experience in terms of our human existence):
• I now produce consistently great performance (36 percent) . . . like a person making the varsity team, graduating cum laude, or getting a well-deserved promotion.
• I’m no longer spending like crazy and have reduced costs (15 percent) . . . like a person trimming down after being overweight or figuring out how to be thrifty to afford her or his dream home.
• I have turned around a crisis situation; I’m a survivor (12 percent) . . . like a person coming back stronger or wiser after a severe illness or other personal tragedy.
• I have finished my merger and have integrated entities (12 percent) . . . like a person reporting a happy marriage long after the honeymoon is over.
Other transformation attempts in the survey might be reported by a personified organization as:
• I have expanded geographically; I’m global! (9 percent)
• I’ve been divested and am living successfully as a spin-off. Or I have divested a part of myself and am moving on with a more focused portfolio of personal human assets. (4 percent)
• I’m now privately owned. Or I’ve gone public! (2 percent)
Seven percent of the 2008 survey respondents were in an “other” category where we can imagine the need to adapt to radical shifts to an organization’s existence—like implementation of large-scale technology or equipment changes, moving headquarters, or rapid growth.
An organization could speak in a first-person voice, similar to what we have portrayed in the preceding list, when it has only one employee. Where it gets difficult or decidedly more complex to personify the perspective of the organization is where there are two, or 20, or 200,000 employees, each of whom may think differently about what has or has not changed in terms of a narrative and how he or she might describe that change first to him- or herself and then to others. Rarely do we find even a few voices within the same organization saying the same thing about how an organization is transforming or has transformed in the early states of change, especially in unsuccessful change efforts. This is frequently the case when the organization is just entering into, is in the midst of, and even is years into the unfolding change process.
Examining the individual experiences to explain how successful change happens in complex organizational transformations is our focus and unique contribution to your change tool kit. As suggested in the preamble, you need to decide and then examine the unit of analysis to go beyond conventional change management methods and models. For example, in macroeconomics the unit of analysis is the nation’s economy. The unit of analysis in business and financial markets is typically the firm. The unit of analysis in sociology is the group. In psychology, the starting point for the unit of analysis is oftentimes the individual. We are suggesting that leaders who achieve successful transformational organizational change will need to be flexible when examining initially and over the course of change the different units of analysis needed to foster and sustain a transformation. We recommend, as a starting point, that you zoom in and use the individual unit of analysis to address large-scale transformational change in your organization, in that such change is a function of individual-scale personal transformation in each organizational member.
Consequently, if our unit of analysis is the individual, then let’s start by examining how an individual changes. Do you know anyone who has fundamentally changed or transformed his or her life—a friend, a family member, a co-worker, a famous figure, or perhaps yourself?2 The person I have in mind is a leader whom I knew in my client network. Bill was an engineer who focused on numbers and technical systems as his basic principles for leading his organization. He was also a total workaholic, a hard-driving authoritarian leader who did not broker dissent. On one pivotal day, he had a massive heart attack at work and was rushed to the hospital. He survived and returned to work months later—a different and, in his words, “transformed” man.
Reflecting back on this pivotal time in his career years later, Bill described himself as being completely changed. How? You might imagine that Bill cut back on salt in his diet or exercised more—and you might be right. But Bill also thought very differently about his work relationships. He now really valued and listened to other points of view, encouraging not challenging or fearing dissenting views. He respected different opinions in a new and deeper way. He endorsed more of a work–life balance. He discovered that he enjoyed the people he worked with and would often say he really loved his employees and, in turn, how they loved him, rather than being fearful. We might then ask, did Bill fundamentally change, and was he a different man? Bill might fill in the blank as follows: “I am not the man you knew in the past; how I think, act, and perform is all fundamentally different, and by different I mean . . . What is important to me has changed, how I view myself has changed, how I interact with others and value them has changed, how they view themselves has changed, and what they want to accomplish has changed.” Notice how this change in the leader’s narrative cascades to other individual’s narratives, In the case of sustainable and planned organizational change, we see this sort of cascading of self-to-other change in every employee’s narrative and self-concept. It is also worth noting in terms of what you can expect from this book; I am focusing on planned organizational change, meaning a choice the organizational leaders have made to do something different.
We see in Bill’s example a person whose core self-concept changed, as this can be seen as an exemplar for organizational transformation. The self-concept is the vessel that contains the narrative we all create to describe ourselves, to “tell us” who we are to ourselves and to others. We might refer to this type of transformation as “breaking good” versus “breaking bad,”3 in the sense that this leader went from someone who cared little about others who work for and with him to someone who was completely focused on the goodwill of his employees, while still striving to be a top performer.4 Bill learned he didn’t need to beat people down to be successful, but rather he could build people up instead. Moving to this new narrative, Bill created sustainable performance improvements in his organization over a period of years. It is this personal narrative in each individual within the organization that must change for an organization to create a sustainable transformation. Transformation sticks from the inside out—one person at a time.
Recall that my goal for this book is to demonstrate to you that the key unit of analysis for fully understanding organizational transformation is represented by how each individual in the organization organizes and adapts his or her self-concept in alignment with the organizational objectives for transformation. Prescriptive changes associated with an organizational transformation must align with a revision in the individual self-concepts and, by extension, the collective self-concepts of all employees in the organization.5 You might be wondering why everyone’s self-concept has to change to successfully transform an organization. Why is the self-concept the critical unit of analysis?
In our experience and research, it is not uncommon for organizational leaders to work very hard to get their employees to view the organization to which they belong as part of how they define themselves, who they are, or their self-concept and identity.6 In combination, these perceptions ultimately influence how they choose to perform in that people who have a stronger sense of identity that is aligned with their organization will generally work harder for that organization to succeed and will be committed to staying the course.7
The same is true for every profession in that a profession is represented in an individual member’s self-concept in terms of the way he or she defines being “a professional.” For example, what does it mean to be a professional physician or nurse? What does it mean to be a marine, a minister, a lawyer, an accountant, or a teacher? Professions are defined by their mission, guiding principles, their boundaries of knowledge and practice, usually their core values, how you are selected in or out of the profession, and what you must do to maintain your professional status. In turn, a professional’s self-concept is aligned with the beliefs of the profession. In combination, all of these facets become part of the individual’s narrative script that he or she develops to become a professional, again from the inside out adhering to agreed-upon values, principles, and standards. We might then ask, what has to happen if a person’s profession undergoes a fundamental shift? Must there be a corresponding fundamental shift in the self-concept of members of that profession? The answer is decidedly a yes.
Similar to professions, organizations are also defined by their missions, values, guiding principles, selection of members, and what is required when it is necessary to change or transform the organization. In health care today, organizations are being asked to extend their mandate and mission from focusing on healing to promoting healthy communities to avoid illnesses. Reflecting on this shift, and working with many health care practitioners, one knows that it represents a significant and transformative shift from dealing with health issues after the fact to the prevention of issues before they become a heartbreaking and expensive problem.8 At the core of this narrative, this is a transformative shift in helping people who are sick to helping people stay healthy. Consider how this shift changes the physician’s guiding ethos, “First do no harm to my patient.” It seems to set the bar higher, especially in terms of focusing on prevention. What does that mean for the self-concept of all health care providers? We argue that to successfully transform health care organizations, for them to thrive and survive in their current and future reality, will require a significant change in the self-concept of organizational members and the profession that represent those members.9
Consider that one day your organizational leaders may realize the need to dramatically change and transform your organization. Will you be able to shift your own self-concept? Will you be able to address this at the level of the employee self-concept? What would that look like? At Microsoft, the current CEO, Satya Nadella, is trying to do just that. He is attempting to motivate his employees to consider a fundamentally different Microsoft by focusing on each employee’s growth mindset and to create a more collaborative culture.10 Individuals who possess a growth mind-set (or learning orientation) believe their talents can be developed through hard work, trial and error, feedback from others, and other learning strategies at their disposal. These individuals are more likely to openly admit their talents are a work in progress and then to try something at which they might not initially succeed to experiment with and change. They are also more likely to engage with others to learn from them and collaborate.
In contrast, individuals who possess a fixed mind-set (or performance orientation) believe their talents are innate gifts that are set for life. These individuals are more likely to conceal gaps among their talents, experiences, and challenges, focusing on proving to others their competence by working only in their existing comfort zones. An organizational culture that nurtures a growth mind-set in employees will be notably different from one that fosters a fixed mind-set. A growth mind-set culture in each individual will exhibit a higher willingness in those individuals to explore and fail, whereas in a fixed mind-set culture taking such risks is not wired into the individual or collective self-concept.
Nadella’s ability to successfully transform Microsoft is fundamentally tied to how each employee views him- or herself and how each has to personally change—from the inside out. What if everyone in Microsoft did have a growth mind-set—either through employee selection or development? If that were achieved, then the collective self-concept would transform Microsoft into a very different organization, one that is characterized by audacious experimentation, insatiable curiosity, and a culture driving toward relentless levels of innovation and collaboration, rather than one that has been known in the past for its stack-ranked performance system and “infamous for its toxic corporate culture, where individuals use politics to advance and groups are always fighting one another.”11
Contrast Microsoft with another organizational icon of the Pacific Northwest—Alaska Airlines. Soon after the turn of the new millennium, Alaska Airlines was in deep financial trouble and on the brink of going bankrupt. All of the U.S. airlines and the travel industry writ large were suffering in the wake of September 11, 2001. Labor costs and fuel costs were adding to the roller-coaster ride being experienced by these airlines. During this time, the senior leadership realized that, although Alaska employees were unfailingly nice, they were not by any stretch efficient, and the reliability of its operations was in serious trouble.
Founded in 1932, Alaska had enjoyed a long history marked by unflappable passenger loyalty. By 2005, however, their formerly most loyal customers were opting to fly with other competitor airlines. Although they would still say, “We love you, Alaska,” in regards to staff and their memories of the past, they were fed up with delays at the gate and their luggage not appearing at baggage claim. Certainly, being nice was ingrained in the self-concepts of the Alaska Airlines employees. Being efficient, reliable, cost effective, and lean were not even hinted at in their narratives back in 2005.
By 2008, Alaska Airlines had risen to be ranked highest in airline customer satisfaction in the J. D. Power North America Airline Satisfaction Study among traditional carriers—and they have continued to hit these high marks for the last nine years. In 2010, to understand the transformational turnaround they had demonstrated in what many would consider record time, we interviewed close to forty executives and directors in Alaska Airlines and reviewed a wide range of publicly available information including articles, blogs, and airline performance data. We have kept a close eye on how this transformation has been sustained in ensuing years and will now share what we learned from this and similar investigations about the key role of the employee self-concept in achieving this amazing organizational transformation.
Alaska Airlines executives were certainly aware of the political, economic, social, and technological (or PEST) factors of the external macroenvironment that were shifting their skyline. They set out to identify a laundry list of initiatives to enact in response to what they considered threats to their survival. However, what transformed the firm was the stunning realization that the shared self-concept of being an employee of Alaska Airlines meant being “nice,” which was now running operational efficiency into the ground. Being nice was so central to the shared collective identity of members of this organization that it could not be abandoned as part of the ongoing organizational transformation. Instead, the meaning of “nice” in the minds, self-concepts, and narratives of employees from the runway to the boardroom had to be redefined.
As part of the change process, being “nice” was redefined in the new narrative in a way that protected the employees’ collective self-worth while also accommodating the mandates of the strategic transformation that required radically changing operational procedures that didn’t initially feel so “nice.” For instance, under the old definition of nice, it was acceptable to delay a flight to wait for newlyweds who were running late from their wedding to board the plane for their honeymoon. Legendary stories that revealed defining narratives for Alaska about ways in which the ticketing, gate agents, and crew were “nice” to passengers had to be reexamined and reframed. A new set of nice behaviors had to be proposed and adopted to integrate them with efficiency and effectiveness. The “new nice” norms included pulling away from the gate on time, so that all passengers on board got to their destinations as expected—doing the least harm to the most people. Of course, Alaska agents would arrange as best they could for late-arriving newlyweds to take a later flight. This meant thinking about nice differently—not abandoning nice as a core part of the airline’s collective self-concept. Changing the narrative allowed them to “break better” and become a more reliable organization.
Over the course of several very challenging and intentional years of change, Alaska Airlines engineered a dramatic turnaround in operating efficiency, which can be sourced to astutely identifying the crux of the collective self-concept that needed to be addressed.12 They then gently, but relentlessly, reworked the self-concept through numerous town hall meetings, online “water cooler” discussions on the company intranet, and face-to-face interactions between the top executive leadership and every single employee. The employees became passionate about optimizing this organization’s performance and results while retaining and reshaping their niceness. In fact, this may be one of the most successful organizational transformations in the last fifty years, and one perhaps you’ve never heard of before.
In the process of changing, Alaska Airlines and its employees expanded their collective self-concept to include the idea of operational literacy as a means to being faster, better—and “nicer.” The self-concepts of employees became more complex in terms of efficiency, as well as generative, to enable this organization to incorporate a new way of doing things around here, to turn a failing enterprise into one of the most profitable and highly regarded U.S. carriers year after year. As of this writing, they are now the fifth-largest airline in the United States with the recent acquisition of Virgin America.
In this book, we will consider the change discussed in the previous pages as being fundamental or transformational versus representing incremental change. We center our focus on how employees change the way they view themselves and their roles and how those narratives change to become aligned with the planned or prescribed transformations in the organization. Accidental events (like the heart attack Bill survived that reframed his self-concept and leadership) certainly will happen in organizations and can create a pivot, which becomes part of the “story” of organizational transformation that we will share in this book. Yet we primarily focus on what you can intentionally control to promote successful and planned organizational change.13
Profound radical change occurs when organizational members understand why they should or need to change and what this means in the context of defining themselves and their individual and collective identities. Profound and radical change occurs when there is alignment with what the organization needs to do in the future to organize to effectively, efficiently, and consistently execute its vision, culture, mission, goals, and processes. Consequently, the focus of this book can be stated very simply: This is a book about how each individual’s self-view or concept changes and how those changes align with a new narrative and, in turn, organizational change and transformation.
To be clear, my principle goal is to help each reader navigate through the transformation process bringing into focus how you and others change your self-concepts in line with the changing narrative in your organization. To repeat, you can’t change an organization by starting with the organization as your unit of analysis. Indeed, an organization is simply a convenient label we use to refer to a collection of people working on a common mission that strives to do things each day and be successful. To change an organization, you must change the self-concept of people who represent what it means when they say to themselves or others, “my organization.”
Through each chapter, I will discuss the components of key states of change and the corresponding steps that are needed to successfully transform the self-concepts into the collective self-concept of an organization. At times, this discussion will no doubt appear sloppier than most books on organizational change, in that how people change will vary, even within the same individual over time, let alone across organizations. There is some legitimate messiness in change, so please suspend judgment until all of the arguments, examples, and narratives have been presented. However, I am confident that, by going through this step-by-step process, you will learn a finite set of truths about what triggers and sustains organizational change and transformation, starting with identifying the appropriate unit of analysis as a starting point—the individual self-concept. For most readers, this likely represents a new and different view of a time-worn topic.
HOW DID THIS BOOK AND ITS NARRATIVE EMERGE?
In my study of organizational change, I reviewed the primary literature on organizational change and transformation, including theories that are “deep in the weeds” through to the most practical books on the topic of organizational change.14 My primary goal was to build on the prior body of knowledge and practice that identifies the fundamental principles that you need to learn to transform an organization. In that regard, I want to join the legion of prior authors who have grappled with answering the question, how do organizations change?
To be completely transparent, I had a major “aha!” experience when I came to realize that any significant transformation of an organization has to be fundamentally rooted in each individual in the firm. Similar to our approach to democratic elections, we need to assume that every vote for change matters. Running for election means that you have to understand who the voter is and what she or he wants to change, as well as what that voter wants to not change, to win an election. Also, your self-concept is what forms how you view who you are and who you need to become to change. Your self-concept contains your unique identities, which are ostensibly distinct from everyone else, except when we want you to be connected to something like a profession or an organization. Indeed, the ideal of many organizations is to have employees see themselves as being identified by the organization they belong to such as the following: I am a NASA engineer, I am an Amazonian, I am a Mayo Clinic provider, I am a Costco associate, I am a Valve game designer, and I am on the University of Washington faculty.15
A transformative change in an organization must ultimately change your self-concept regarding how you identify with your organization and what meaning that has for you relative to the multiple identities you house in your self-concept. For example, a woman who worked for AT&T for over three decades once said about her job and career that “I am AT&T.” However, after the court ordered the breakup of this massive organization, she had a difficult time saying, “I guess I’m Lucent,” adding, “whatever that means.” When any organization goes through such an externally driven fundamental change, it invariably is linked to how each employee comes to describe who she is and why she is that way. To repeat, successful organizational transformations occur in the workforce, one self-concept at a time.
In addition to walking through four fundamental states (not stages) of change, this book also covers the type of leadership and ownership required to move through these states of change. Including the concepts of leadership and ownership helps us to understand and explain how we can build a reliable, repeatable practice of engaging with employees differently as the organization moves from one state of change to the next. Toward the end of each state, we will also detail the predominant leadership and ownership orientations that we have witnessed during planned organizational change.16
We begin the next chapter by further exploring why the self-concept is fundamentally important to initiating and sustaining organizational transformation. In subsequent chapters, we will break down the transformation process to provide a clear line of sight or arc of change on what you need to do to initiate, execute, and sustain fundamental change.
Some questions for you to reflect on as you move into the first principle of change:
• Consider an organization that you worked with that attempted to change, but whose approach did not affect the way you viewed yourself. What do you feel failed in your organization’s efforts to change you and then itself?
• Look back to an earlier period in your life, perhaps before you started your career. Can you recall a time when you were trying to describe to someone what comprised the career you aspired to enter? How is the narrative you used then different than the one you use today to describe that career?
• Have you worked for a leader who fundamentally changed the way he or she saw him- or herself and what impact that had on the leadership style you observed, as well have experienced? What caused that leader to change his or her self-concept, and how did that impact the leadership style you observed?
• Most fundamentally, think about something you changed in terms of your behavior, and then consider how the narrative that guided that change also was transformed. This change can relate to any aspect of your life both in and out of work.
The type of statements that typically represent the awareness that change was imminent included the following:
Prototypical Comments in the Identifying State: A Transportation Company
• “We have a miserable reputation with our customers.”
• “We had fallen to the bottom of the pack in on-time service; we had fallen to 20 out of 20.”
• “Customers would say if you can’t fix this in four months we are switching.”
Protoypical Comments in the Identifying State: A Health Care Organization
• “It wasn’t a specific event, although there were several big events that have occurred that now we look at as serious safety events. It was the confluence of events and the leadership.”
• “The federal change in pay-for-performance has definitely been a driver.”
• “Equally motivating is the expectation of our general public, our patients, and our consumers for transparency. There are websites, health grades; there are all kinds of places where you can go online and see what we’re doing well and what we’re not.”
RESEARCH LINK: A DEEPER DIVE
As noted earlier, there are dramatic signals in the space of health care that are causing many professionals in our health care system to consider the need to change. One such signal in the Canadian health care system indicated a need for physicians to change from the sole contributor model to being part of an integrated team model.17 In the case of transformative change ongoing in the Canadian health care organizations, researchers showed that these organizations had to change the set of institutional logics that comprised the narratives and self-concepts of physicians. By examining microwork processes, the researchers were able to show that, by changing these processes, the organizational leaders could create challenges with the existing logic of how an individual’s work gets done, which led to challenging the dominant logic associated with being a physician to move them from describing themselves as autonomous experts to valued members of a patient care team. By reembedding this new logic into the individual and collective self-concepts of physicians, the organizations demonstrated how challenging the dominant logic changes individuals and organizations.
1. McKinsey Global Survey Results: Creating Organizational Transformations. 2008. Available at http://gsme.sharif.edu/~change/McKinsey%20Global%20Survey%20Results.pdf.
2. R. J. Thomas. 2008. “Crucibles of leadership development.” Sloan Management Review 49 (Spring): 14–18.
3. “Breaking Bad is an American crime drama television series . . . [that] tells the story of Walter White (Bryan Cranston), a struggling high school chemistry teacher diagnosed with inoperable lung cancer. Together with his former student Jesse Pinkman (Aaron Paul), White turns to a life of crime, producing and selling crystallized methamphetamine to secure his family’s financial future before he dies, while navigating the dangers of the criminal world.” Available at https://en.wikipedia.org/wiki/Breaking_Bad; Poniewozik, James. 2010. “Breaking Bad: TV’s Best Thriller.” Time. June 21; Bill Nevins. 2013. “Contemporary Western: An Interview with Vince Gilligan.” Local IQ. March 27; and “‘Breaking Bad’ Finale: Lost Interviews with Bryan Cranston and Vince Gilligan.” The Daily Beast. September 29, 2013.
4. The title for the TV show Breaking Bad comes from a southwest slang for raising hell, defying authority, and skirting the edges of the law. In the show, the hero uses his talents as a scientist to make money illegally. Our use of the reverse idea, breaking good, is meant to suggest that talents can be used to break with convention in a positive way. Posted by Jake Jawesome on September 27, 2011, at www.urbandictionary.com/define.php?term=Break%20Bad.
5. M. B. Brewer and W. Gardner. 1996. “Who is this ‘We’? Levels of collective identity and self-representations.” Journal of Personality and Social Psychology 71: 83–93.
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10. M. Rosoff. June 25, 2015. “The buzzy new term at Microsoft is ‘growth mindset’—Here’s what it means.” Business Insider. Available at www.businessinsider.com/satya-nadella-instilling-growth-mindset-at-microsoft-2015-6.
12. B. J. Avolio, C. Patterson, and B. Baker, 2015. Alaska Airlines: Navigating change. Ontario, CA: Ivey Publishing.
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15. M. G. Pratt and P. O. Foreman. 2006. “Classifying managerial responsibilities to multiple organizational identities.” Academy of Management Review 20: 18–42.
16. B. J. Avolio. 2017. “The leadership development blueprint.” CLST Briefings, vol. 1. Seattle: Center for Leadership and Strategic Thinking, University of Washington; B. J. Avolio. 2011. Full range leadership development. Thousand Oaks, CA: Sage; J. B. Avey, B. J. Avolio, C. D. Crossley, and F. Luthans. 2009. “Psychological ownership: Theoretical extensions, measurement and relation to work outcomes.” Journal of Organizational Behavior 30: 173–191; and J. L. Pierce, T. Kostova, and K. T. Dirks. 2001. “Toward a theory of psychological ownership in organizations.” Academy of Management Review 26: 298–310.
17. T. Reay, E. Goodrick, S. B. Waldorff, and A. Casebeer. 2017. “Getting leopards to change their spots: Co-creating a new professional identity.” Academy of Management Journal 60: 1043–1079.