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Leading and Managing Change

Implementing the new vision and executing the necessary strategies will end up being the most challenging aspect to leadership.  A survey suggests that the inability to implement change is the number one reason fro strategy-execution failures.  Implementing change fails because of one, or all of the following reasons:

  • Coordination and control are extremely difficult to achieve when many changes are happening at the same time;
  • The cause-effect relationship, so vital to explaining deviations in performance, become impossible to isolate;
  • Consequently, organizations cannot learn from their mistakes; and
  • Organizations are unwilling, or reluctant, to reduce the number of performance criteria against which individuals are held accountable, which is a guarantee of poor performance.

Failing to address change requirements will guarantee the perpetuation of the status quo and the failure of any plan, or strategies.  Many executives talk about managing change.  According to the world’s authority in change leadership, John Kotter, Change Management is somewhat of an oxymoron.  It is not possible, he argues, to manage change; it is only possible to lead change.  This seemingly semantic difference is profound.  In larger organizations, it becomes very rapidly impossible to manage (i.e. control) all aspects of change initiatives.  Kotter suggests(10) some key steps that organizations need to follow to implement lasting change. 

8-Stage Change ProcessAlthough each step is absolutely critical, and none can be reordered, skipped or dropped, we will not review all these points here, but simply comment on points not already covered elsewhere in this framework.

The most critical step for activating change is creating a sense of urgency.  Clearly, people do not change only for the sake of it.  Then, even if you convince people to change, you have to convince them to change now.  If the implementation of a new vision is in response to deteriorating market conditions, or a matter of survival, the Board of Directors and the CEO need to make this very clear.  Fear and greed are the most effective drive of change, particularly fear.  An excellent way to create a sense of urgency is make staffs see and experiment the harsh reality firsthand. 

Regardless how effective the Board of Directors and the CEO, important change will only occur if there are several preachers throughout the organization, irrespective their hierarchical levels.  Such guiding coalition has to the represent the power base, and has to drive the implementation of a culture of change.  In establishing the guiding coalition, the leadership team needs to make all attempts to leverage angels, silence or turn around devils and getting consiglieri on the management team. 

The communication of the new vision, strategies, and culture is just as critical.  This is not about writing a memo, mounting a mission statement plaque in the lobby or even monthly employee conference calls.  It is about the thousands of conversations that occur within a business’ daily activities.  The envisioned future, the vision statement, the strategies, the fears, the progress, the successes, the failures, the ordinary conversations about ordinary parts of the business, the water-cooler conversations, all have to be supportive of the whole game plan – with an insane amount of coherency and consistency – by all. 

To ensure likelihood of success, change plans have to be atomized into bite-size projects and resources rebalance so to create a broad-base of smaller accretive changes. 

Most telling of all are the actions of senior managers other members of the change coalition.  Senior managers have to walk the talk.  Real life day-to-day conversations – not conversations concerning the vision – and daily actions – not framed into a project related to a change initiative – are where rubber really meets the road.  The ordinary topics of discussions in a management meeting, the sales pipeline as an example, need to be tainted with the flavor of the change initiative.  Instead of, or in addition to pontificating on the expected benefits of a new initiative on the sales pipeline, perhaps a question for the management team to table is how we will track the effectiveness of the new initiatives in the quality, progression or closure rate of the sale pipeline.  Pontification is “the talk”, implementing tracking mechanisms is “the walk”.

Tremendous power exists in continuous improvement and the delivery of result.  Point to the tangible accomplishments, however incremental at first, and show how these steps fit into the overall plan.  When you do this, employees see and feel a buildup in momentum will get reenergized.(2)

Anchor New Approaches in Culture

The alignment of the culture with execution methods fosters execution success.  Culture defines behavior and behaviors drive organizational performance.

First, the Board of Directors and the CEO need to fully understand the existing culture, decide what are the expected culture and behaviors and plot a plan to change it.

To understand the culture, we need to survey the organization to determine the values now perceived, and how the new core values are present.  Core values must become part of the recruitment, reward and performance management systems. 

To change the existing culture, particularly if the organization is declaring a culture of profitability, requires a deep understanding the cause-effect relationship between the past performance and the past values-behaviors.  Only once a cause-effect analysis is done, can one be able to define an appropriate course of action.  For change to be effective, we need to revert to Kotter’s model: create a sense of urgency, create a guiding coalition, define a change strategy and vision, communicate …  The logic behind the contemplated changes must be fully understood and communicated adequately.

Changing the culture is done by changing behaviors.  Not only is it true that Culture defines behavior and behaviors drive organizational performance, corporate performance also influences culture and behaviors.  Place performers in the right places, reward them appropriately and they will help morph the culture in one of performance.  Tolerate under-performers in key positions and they will morph the culture into one of laissez-faire.  Therefore, to change the culture, we must focus on reinforcing the proper behaviors.  Rewards, controls, social pressures and leadership actions in general must be aligned to support the desired behaviors.  The Board of Directors and the CEO must be aware that attempting to convince complacent people to change may be a long process.  Quite often, a sense of urgency is created much more quickly when new blood is brought into the organization.  Changing people, organizational structures, incentives and controls are amongst the levers the Board of Directors and the CEO can use to drive new behaviors.

Finally, people tend to imitate one-another.  The Board of Directors,  the CEO, the management team and the change coalition, have to walk the talk.

A unique culture may not exist inside a large organization.  A large organization will naturally develop subcultures in different groups, or division.  This is normal, but must be managed to create alignment with the corporate culture.  For example, a production unit may have, as part of its subculture, to foster trials-errors for improving production throughput, yet it must also align with, say, the corporate credo that calls for quality first.


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Published at 20:01

11 March 2011

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