Four Critical Team Dynamics for Leading Change

                             

How many teams have we put together over the years to help us lead the change process only to realize several months later that nothing happened that was sustainable?  In John Kotter’s excellent book on Leading Change he gives four key characteristics that must be in place for the team to be successful.

1.      Position power:  Are enough key players on board, especially the main line managers, so that those left out cannot easily block progress?

 

2.      Expertise:  Are the various points of view- in terms of discipline, work experience etc.- relevant to the task at hand adequately represented so that informed, intelligent decisions will be made?

 

3.      Credibility:  Does the group have enough people with good reputations in the firm so that its pronouncements will be taken seriously by other employees?

 

4.      Leadership:  Does the group include enough proven leaders to be able to drive the change process?

 

When I have been responsible for leading major change initiatives all of these types of people must be involved.  The other important dynamic is that you must avoid people who will try to take over the group and lead by positional power and the other extreme of individuals who will not engage and confront the brutal facts with their active participation.

 

 

Seven Lessons for Leading in Crisis

 

Bill George

Lesson #2: “No matter how bad things are, they will get worse.” Faced with bad news, many leaders cannot believe that things could really be so grim. Consequently, they try to convince the bearers of bad news that things aren’t so bad, and swift action can make problems go away.

This causes leaders to undershoot the mark in terms of corrective actions. As a consequence, they wind up taking a series of steps, none of which is powerful enough to correct the downward spiral. It is far better for leaders to anticipate the worst and get out in front of it. If they restructure their cost base for the worst case, they can get their organization healthy for the turnaround when it comes and take advantage of opportunities that present themselves.

Lesson #3: “Build a mountain of cash, and get to the highest hill.” In good times leaders worry more about earnings per share and revenue growth than they do about their balance sheets. In a crisis, cash is king. Forget about EPS and all those stock market measures. The question is, “Does your organization have sufficient cash to survive the most dire circumstances?”

Goldman Sachs, where I serve on the board of directors, anticipated the difficult times and built up its cash reserves. When the markets got really bad, Goldman had adequate cash reserves to weather the storm.

Lesson #4: “Get the world off your shoulders.” In a crisis, many leaders act like Atlas, carrying the weight of the world on their shoulders. They go into isolation, and think they can solve the problem themselves. In reality, leaders must have the help of all their people to devise solutions and to implement them. This means bringing people into their confidence, asking them for help and ideas, and gaining their commitment to painful corrective actions.

Lesson #5: “Before asking others to sacrifice, first volunteer yourself.” If there are sacrifices to be made – and there will be – then the leaders should step up and make the greatest sacrifices themselves. Crises are the real tests of leaders’ True North. Everyone is watching to see what the leaders do. Will they stay true to their values? Will they bow to external pressures, or confront the crisis in a straight-forward manner? Will they be seduced by short-term rewards, or will they make near-term sacrifices in order to fix the long-term situation?

Lesson #6: “Never waste a good crisis.” This piece of advice comes from Benjamin Netanyahu, the next prime minister of Israel, at the panel I chaired in Davos.

When things are going well, people resist major changes or try to get by with minor adaptations. A crisis provides the leader with the platform to get things done that were required anyway and offers the sense of urgency to accelerate their implementation.

Lesson #7: “Be aggressive in the marketplace.” This may sound counter-intuitive, but a crisis offers the best opportunity to change the game in your favor, with new products or services to gain market share. Many people look at a crisis as something to get through, until they can go back to business as usual. But “business as usual” never returns because markets are irrevocably changed. Why not create the changes that move the market in your favor, instead of waiting and reacting to the changes as they take place?

The Bottom Line:
In a crisis we learn who the real leaders are, and whether they have the wherewithal to stay on course of their True North.

About the Author
Bill George, author of “True North,” is a professor of management practice at Harvard Business School. He is also the former CEO of Medtronic and serves on the boards of directors of ExxonMobil, Goldman Sachs and Novartis.

 

 

 

The Five Practices Of Leadership

 

I am constantly reading new materials on leadership and occasionally I review great books from the past.  One of the all time classics is The Leadership Challenge by James Kouzes and Barry Posner.

This very exhaustive book centers around these five simple but very powerful practices:

 Model The Way-Find your voice by clarifying your personal values and set the example by aligning actions with shared values.

 Inspire a Shard Vision-Envision the future by imagining exciting and ennobling possibilities and enlist others in a common vision by appealing to shared aspirations.

Challenge The Process-Search for opportunities by seeking innovative ways to change, grow, and improve and experiment and take risks by constantly generating small wins and learning from mistakes.

Enable Others to Act-Foster collaboration by promoting cooperative goals and building trust.  Strengthen others by sharing power and discretion.

 Encourage The Heart-Recognize contributions by showing appreciation for individual excellence and celebrate the values and victories by creating a spirit of community.        

   

When To Light The Fuse For Change

Most leaders understand there are powerful forces in place to maintain the status quo both on a personal level and with an organizational culture as well.  Therefore choosing the timing of when to start a change process that you want to be successful is critical.  

If you don’t have any of the following priorities in place then do not light the fuse because it will blow up in your face:

1.      Problem to be solved—at the very basic level of motivation for any change is the reality  that something  is clearly wrong and you know it needs to be fixed.  I am overweight and if I do not start an exercise program and change my diet I am going to be in serious trouble.

2.      Opportunity to be taken—sometimes doors seem to open that we were not expecting and the benefits gained far outweigh the risks involved.  A good friend offers to pay my membership in the health club for a year if I will commit to go.

3.      Crisis to be avoided—in this situation you recognize the perfect storm is brewing and if you don’t act immediately the consequences of my inaction could be catastrophic.  I have now had a heart attack and my doctor says without major change I will have another one and it will probably be fatal.

4.      Need to be met—this moves the motivation point high up on the scale because there are hurting people involved and the change process will directly benefit them.  If I am not willing to act based on what I need surely because of the people I love the most I will do whatever is necessary to be there for them.

5.      Calling to be followed—as a Christian I am called to represent Christ to the world in all that I do with my life.  If I do not take care of the body He has given me to be used in His service then I can lose my testimony and damage my effectiveness in helping other people.

These priorities also apply in our professional lives as we seek to lead the change process in the context of a company culture that tends to react after it is too late rather than respond to what should be obvious.  Leaders must be willing to cast a clear vision that the benefits of leaving the current reality behind far outweigh any pain involved in moving to a new and better place for all involved.

 

 

 

How The Mighty Fall

Jim Collins follows up his all time best selling leadership book Good to Great with this incredible new work on why some of these once great companies now have fallen as well.  He writes, “Whether you prevail or fail, endure or die, depends more on what you do to yourself than on what the world does to you.”

Based on his thorough teams research there are five major stages that lead to failure:

1.       Hubris Born of Success:  This stage kicks in when people become arrogant, regarding success virtually as an entitlement, and they lose sight of the true underlying factors that created success in the first place.

2.      Undisciplined Pursuit of More:  Companies in this stage stray from the disciplined creativity that led them to greatness in the first place, making undisciplined leaps into areas where they cannot be great or growing faster than they can achieve with excellence, or both.

3.      Denial of Risk and Peril:  At this stage leaders discount negative data, amplify positive data and start to blame external factors for setbacks rather than accept responsibility.

4.      Grasping for Salvation:  The sharp decline now becomes visible to all and the common saviors include a charismatic visionary leader, a bold but untested strategy, a radical transformation, a dramatic cultural revolution, a hoped-for blockbuster product or maybe game changing acquisition.

5.      Capitulation to Irrelevance or Death:  At this stage accumulated setbacks and expensive false starts erode financial strength and individual spirit to such an extent that leaders abandon all hope of building a great future.

All companies go through ups and downs but if you are willing to admit your mistakes and make the necessary changes early then this death spiral cannot only be overcome it can be avoided entirely.

Role Of Short Term Wins

One of the major mistakes we make in major change initiatives is that we oversell the long term goal at the expense of dealing with the short term realities.  People do want to know where they are going but they want to know even more what does all this mean for me right now?

Once the new change plan has been implemented it is critical for everyone involved to experience the benefits of short term wins so they can stay motivated for the future and the change that is yet to come.  John Kotter list several roles that short term wins play:

1.       Provide evidence that sacrifices are worth it:  Wins greatly help justify the short term cost involved.

2.      Reward change agents:  After a lot of hard work, positive feedback builds morale and motivation.

3.      Help fine-tune vision and strategies:  Short term wins give the guiding coalition concrete data on the viability of their ideas.

4.      Undermine cynics and self-serving resisters:  Clear improvements in performance make it difficult for people to block needed change.

5.      Keep bosses on board:  Provides those higher in the hierarchy with evidence that the transformation is on track.

6.      Build momentum:  Turns neutrals into supporters, reluctant supporters into active helpers.

Therefore it becomes critical in any change planning to build into the strategy several things that can be done within the first six months that may be small in scale but clear wins that everyone can celebrate.

 

 

In Search For Silver Bullet

In Jim Collins latest book How The Mighty Fall he talks about companies that start on a systematic downward spiral that leads ultimately to total failure as an organization.  One common problem he found is that when they finally realize they are in serious trouble rather than dealing with real problems they search for the quick fix approach of finding the right silver bullet.

When full blown panic sets in there is a frantic search for several silver bullets that can be dramatic big moves such as game changing acquisitions or a risky new strategy or an exciting innovation or new leadership, anything that can save us.  The following is list of several silver bullets observed:

1.       Grasping for a Leader as Savior:  The board responds to threats and setbacks by searching for a charismatic leader and an outside savior.

2.      Panic and Haste:  Instead of being calm, deliberate, and disciplined, people exhibit hasty, reactive behavior, bordering on panic.

3.      Radical Change and Revolution with Fanfare:  The language of revolution and radical change characterizes the new era: New Programs! New cultures! New Strategies!

4.      Hype Precedes Results:  Instead of setting expectations low—underscoring the duration and difficulty of the turnaround—leaders hype their visions initiating a pattern of overpromising and under delivering.

5.      Initial Upswing Followed by Disappointments:  There is an initial burst of positive results, but they do not last; dashed hope follows dashed hope; the organization achieves no buildup, no cumulative momentum.

6.      Confusion and Cynicism:  People cannot easily articulate what the organization stands for; core values have eroded to the point of irrelevance; the organization has become just another place to work.

There are no quick fixes or silver bullets for organizations that have complex long term problems that have built up for decades.  The new realities of the global economy did not create these problems it merely acted as a catalyst to reveal them.

 

The Building Blocks Of A Strategy

One of the best books I have read on developing a strategic plan and all that is involved in the execution of that plan was written by Larry Bossidy and Ram Charan called Execution.  It is a must read for any organization that uses teams to accomplish planning and execution.

A strategy is the key steps or methodology that you are going to use to accomplish your goals or mission.  Many times the goal seems to be clear and necessary but the breakdown occurs at the point of determining how we are going to accomplish what we want to do.

In this book he lists several critical questions that should be answered during the development of your strategy to ensure a high probability of success:

1.       How good are the assumptions upon which the plan hinges?

2.      What are the pluses and minuses of the alternatives?

3.      Do you have the organizational capability to execute the plan?

4.      Are the short term and long term balanced?

5.      What are the important milestones for executing the plan?

6.      Can you adapt the plan to rapid changes in your environment?

The two most important questions are do you have the organizational capability to execute the plan?  Just because it is the right thing to do may not mean we have the right people in place and this is the right time for implementation.  If we add something major to our process without additional manpower it must be assumed that something else needs to go.

The last question is even more important in the culture we live in today.  Just because something looks great as a strategy today and even works for awhile does not mean that it will be viable in the next twelve months.  This means that nothing must become so sacred that it cannot be changed if necessary when a better plan is discovered.

 

Organizational Culture Change

According to John Kotter there are many reasons change initiatives fail especially in large organizations.  The number one reason is there is not a clear sense of urgency for change that makes everyone willing to pay the short term price of pain due to change to gain the long term benefit of progress.

Many times the communications part of the process breaks down and the implementers do not get enough information to really buy in.  The importance of creating short term wins for establishing credibility for the entire process cannot be overstated. 

When the new of change becomes the norm there are several key factors that let you know it is now firmly in the D.N.A. of your organizational culture:

1.       More change, not less:  The guiding coalition uses the credibility afforded by short-term wins to tackle additional and bigger change projects.

2.      More help:  Additional people are brought in, promoted, and developed to help with all the changes.

3.      Leadership from senior management:  Senior people focus on maintaining clarity of shared purpose for the overall effort and keeping urgency levels up.

4.      Project management and leadership from below:  Lower ranks in the hierarchy both provide leadership and specific projects and manage those projects.

5.      Reduction of unnecessary interdependencies:  To make change easier in both the short and long term, managers identify unnecessary interdependencies and eliminate them.

When everyone in the organization starts to articulate the new vision in their own words as if it were their idea then you know they own the process.  It is time to start looking for what needs to be changed next, the process never stops.

 

 

Corporate Shepherd

There are many leaders today that want to move beyond just making a profit to really making a difference.  They want to be successful and that’s great but they also want the significance that only comes from adding value to other people.

When leadership is approached from a Christian perspective a new model starts to develop where the leader becomes more of a shepherd to their people than a boss to their employees.  They do care about performance and productivity but they also feel responsible for developing alignment around core values and creating the right culture for work-life balance for their people.

They also see life beyond the immediate pressures of planning, project management, staffing, goal setting and execution.  The legacy they want to create for their life and organization includes eternal metrics that must be included when talking about the ultimate bottom line.

The clear plan for every Christian is to use your professional life as a platform for ministry because we are all in full time Christian service.  Our lives should no longer be seen as segmented into faith, family, friends, recreation and entertainment but become totally integrated into being one life on mission for God.  The various roles that we fulfill are no longer competing with each other but complimenting the calling God has for our lives.

In the end there is only one performance review that really matters.  The evaluation criteria is simple, How faithful were you with all that I entrusted to your care?  Thinking about that moment should overwhelm us with gratitude and give us a renewed sense of passion to hear well done my good and faithful servant.

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