Change – the turnoff to the Future

 

Theodore Roosevelt

 

Change – the turnoff to the Future

 

Like the weather change never goes away.  Sometimes it is foisted upon us by circumstances like recent events in the financial markets; sometimes it is the result of carefully crafted strategies to enter new markets and withdraw from others.  So change is both proactive and reactive.  However, unless we are leading an organisation that seeks change, can alter shape to take advantage of events and strive for growth and higher performance then we will be forever doomed to the ever increasing tides of change and will one day end up on some faraway beach marooned in the past with no hope of recovery or survival.   The most difficult time to contemplate and excite any organisation to change is when it is enjoying a period of relative success and sound financial performance.  It is easy to become complacent when things are going well.  And surely it is a human characteristic to ‘sit back and enjoy the moment’?   Yet in reality those ‘moments’ are short lived as there is always some change appearing elsewhere, and before you know it a competitor is taking your share or launching a new product which will capture a sizeable slice out of your market share.    Competition, at the end of the day, is a contact sport.   And for the true leaders it is exactly what we want it to be.  So how can we approach change in a proactive way?
 

Coming from a relatively stable position the first entry point is normally through some form of ‘thought leadership’.  Take advantage of time available to paint a picture of the future based upon some credible assumptions which should grasp the audience either through curiosity or perhaps downright fear.  There is nothing more powerful to gain attention from people than when their very survival is at stake.   A thorough discussion on enhancing shareholder value probably won’t get you there in a wider audience, but the possibility of losing double digit share points most certainly will.   The launch of a new and highly innovative product by a competitor which has the legs to drive scale fast will send the shivers up the spines of most marketers and product specialists.  Maybe the potential collapse of the mortgage backed securities market might have been a subject that if confronted by serious intellectual and strategic debate may have averted the collapse of some global names in recent times.    Maybe this did happen but too many were probably surfing the lucrative waves of the present and heading back inshore with their nets brimming with treasures unwilling to look out to sea at the tsunami that was building.  
 

Within the context of introducing a major strategy change there are two important research facts that need to be considered.  Firstly 80% of all change programmes and initiatives fail – in other words they fail in terms of underperforming against the premise upon which they were conceived, financial and otherwise.  Secondly you need to convince at least 70% of your organisation that the change you are introducing is crucial for survival and that continuing to remain with the current strategic or portfolio model will ultimately be catastrophic.   Note there are 2 aspects to this last sentence and both need due attention.
 

It is important to paint a picture of the current situation – its strengths and weaknesses within the sector and against the relevant competitor set.  The scenario can then be altered by introducing some possible themes which if true will change the dynamics somewhat.  These overlays if done imaginatively can arouse interest and curiosity.  By making them more incredible (even a view of half the devastation caused in the financial sector if proffered pre meltdown would have been seen as incredible) then interest will most certainly transfer to engagement.  So by suggesting through a valid build up that the status quo is unlikely to be sustainable you will have taken people over the line from the present to the future.  Of course the future can be to a greater or lesser extent what you want it to be.  This is where the leader has to create permission for or encourage people to think radically and completely out of the box.  It depends very much on the culture of the organisation as to whether people are prepared to fully participate.  I have seen a variety of responses at this point.  Nonetheless you can’t leave them in the twilight zone.  You have to take them to the future.  Some will embrace the future whilst others may need assistance or encouragement to do so.
 

I have alluded to this next point but will expand upon it here.  It is critical to spend quality time convincing people why you are taking a new direction; why you are diverting the organisation to another flight path.  For many people all they can see is that the business is doing well, making healthy profits and the like – so why are we contemplating a fundamental change of direction?  It is a fair point.   Essentially the communication challenge, therefore, is to convince people at all levels that maintaining the status quo – doing what we do in the same way we have always done it – is a dangerous place to be.  Circumstances will undoubtedly have changed upon which the current model was premised.  What the leader needs to achieve is to communicate clearly the new set of circumstances or forces driving competition which in turn drive new opportunities and threats.  Until this point is emotionally and intellectually accepted then there will only be marginal engagement with the exciting new direction.  I cannot over emphasise the importance of this point as experience in change programmes over 20 years has convinced me that the seeds of failure reside in this very point.
 

As Peter Drucker so aptly stated, ‘At some point all thinking and planning has to degenerate to work’.  Once the change of direction has been announced and the vast majority of the organisation convinced by the new Story the hard work of recasting the Execution model begins.  Transitioning a business from the existing format to a new model is extremely difficult, packed full of both overt and covert resistances and fraught with all manner of business prevention practices.  Strong and dynamic leadership on both an individual and collective basis is required.
 

We know that the further down the organisation we can push the ownership for change the more likely become the chances of success.   So often we hear about ‘talent’ and ponder how to utilise this valuable resource.  Well, this is exactly where they should be deployed.  The young emerging leaders can get their teeth into this vital stage in the cycle of change and do some heavy lifting.  It will be a hugely beneficial learning exercise in their development and like any young officer going off to war for the first time, the chance to pin a medal to his or her chest.    The road to the future is never a smooth one.  It is full of potholes, speed bumps and many blind corners.  Welcome to the real world – listen and learn and history will decide whether you did a good job or not.  This is the chance to get on the leadership bike without the stabilisers.  Possibly for the first time.  I doubt if it will be the last.
 

Once momentum is started then the process needs to be kept going – by the Chief Executive and the Board who must own the overall strategy. They have to get their hands dirty as well.  They have to be visible in the organisation and not just reading updates and mindless reports about progress.  They have to get off their perches and into the middle of things to see for themselves, to recognise the efforts of the many people who are going the extra mile trying to make this transformation a success.  They can appreciate the level of stretch and perhaps realign resources to the task where necessary.  Speed and momentum are of the essence here.  When Directors next stand tall before the organisation they can recount real experiences and expand upon their observations using live examples of what they discovered, to whom they spoke and the advice and thoughts they received from real people along the way.  They can reward and recognise people in open forum which is far more useful and meaningful than some dull pie chart highlighting the changes.  I remembered being punished once in the Great Room of the Grosvenor House Hotel in London by a CEO who was presenting a plethora of coloured pie charts, return on capital employed numbers, shareholder value analysis and regression charts to support his ‘big idea’.  As the presentation continued suicide by almost any means started to become an attractive option.  I longed for pictures of new products, new displays, and comments from real live customers, suppliers and fellow employees full of excitement about what we were achieving and in many cases going through hell to achieve.  Change is really about people – and we forget that at our peril.
 

Celebrating success too early is another reason for failure.  The salmon is never won until it is on the deck or the riverbank.  So often the salmon of change is in the keep nets and can so easily swim away back to the dark sunken pools of comfort and safety.  It takes more time than we recognise to make the changes stick.  Yes, we have to remind people of what we have achieved and produce a variety of interesting qualitative and quantitative evidence to make the point.  In military terms just arriving on the objective isn’t a win – we have to occupy and put down roots to prove we are in control and have truly won the battle.  Once the objective is taken senior people are off to find a new crusade – but the battle is far from won.   The implementation of a new execution model is no different.
 

A point has to be made about the people within this process of change.   Not everyone will want this transition to work and some will be secretly hoping for it to fail so they can return to the peace of the past content in the view that it might not have been perfect but they knew how to work it best.  It was their comfort zone and they want it back.  Some may kick against it openly or even covertly and some may just not fit into the new world order.  This has to be recognised and confronted along the way.  Many will be converted to the new way of doing things and some may, with the help of training and mentoring, get there with help.  For those who can’t or won’t then action must be taken to exit them from the business for the good of everyone.  People with a negative approach or bad behaviour have a disproportionately negative impact upon the performance of teams, departments and individuals. Strong leaders have no choice but to confront this challenge and deal with it effectively, swiftly and sensitively.  Too often this situation is avoided and the sub optimal outcome is considerable.
 

Transitioning a business from one model to another is incredibly difficult.  Only a minority of leaders can claim true success in this arena.  Success can never be guaranteed, but there are some key principles which must be followed to avert certain failure.  Even by complying with these principles success will only be possible if underpinned by the dynamism of strong, inspirational and resilient leadership at many levels.  So before you contemplate taking your organisation into this battle zone you need first to assess your organisation’s leadership capabilities.  If there is any doubt – then there is no doubt.  You will need to fix this problem before D-Day – otherwise defeat will be assured, costly and possibly final.