7 Leadership Hurdles Executives Must Overcome to Transform a Business

The starting point for talking about business transformation is leadership. Leadership is the lifeblood of transformation. Transformation simply will not happen without leadership. This leadership begins with executives and senior managers. For this leadership to be successful, there are 7 hurdles which executives must overcome for success.

They involve understanding and accepting the following:

  1. Importance of Personal Involvement

  2. Leadership and Management are Different

  3. Embrace Feeling Odd or Strange

  4. Commit to Being a Team

  5. Engage and Unleash Informal Leaders

  6. Importance of Inspiring and Mobilizing People

  7. Prepare Your Team for a Breakdown

#1: Importance of Personal Involvement

The first obstacle they must overcome is understanding the importance of their personal involvement during the entire transformation, not just at the beginning. Too often executives assume they can begin a transformation and then delegate it to others. That assumption is a fatal flaw which will doom the transformation. Along the way somethings will happen which requires immediate intervention by the executives, which they will not see if not intimately involved. Using the analogy of leadership being the lifeblood of transformation, executives delegating and moving on to other things will result in the transformation “bleeding out” and dying at some point.

#2: Leadership and Management are Different

The second hurdle in changing the mindset of executives is regarding the differences in leadership and management. Leadership and management are NOT the same thing. Both are important, but distinct. Leadership provides courage to think differently and to challenge existing approaches, methods, strategies and techniques. Leadership demonstrates the willingness to explore new approaches and ideas. It encourages others to actively participate in the pursuit of breakthroughs for the business. Leaders encourage others to aspire to excel and to think innovatively. Transformations require leaders and leadership, not just more of the same management techniques which are already embedded in the organization. Commitment and courage are required for an executive to confront that they have been managing, not leading the organization. Those who do confront this can become excellent leaders. It is not that they give up their management capabilities, but instead expand their capabilities as executives by becoming leaders as well as managers. Executives who are committed to being leaders, not just managers, in the transformation is a crucial step.

This second hurdle is not easily overcome, as I’ve discovered the hard way. While most managers say they want those things from others in the organization, their actions often contradict their words. Most managers rely on being in control and having processes that inadvertently restrict change and innovation. Executives will say they want the organization to transform without appreciating how much they will need to change personally in order for the transformation to be successful. Saying the organization needs to change does not mean that “I also need to change”. Instead, what the executives are often thinking is “I want others in the organization to change and I will manage this transformation using my preferred management approaches and techniques”. While this is understandable, it is a recipe for failure.

#3: Embrace Feeling Odd or Strange

A third hurdle is that transformation feels odd or strange to executives. This is because most of their prior work in strategy was based on management principles of control and tight process to reduce surprises and variation. Again, designing transformation must be done primarily from a context of leadership in which the unexpected is expected. Transformative changes are not linear and tidy. Instead there will be periods of rapid acceleration, unexpected breakdowns, and stunning accomplishments … none of which fit in a tidy, linear package. By definition transformation is not easily controlled or predictable. This is why transformations require leadership. What makes this third hurdle difficult is that many managers say they want change and transformations, their actions often contradict their words. Most managers have gotten into their positions by being in control and having processes that work in stable situations, but inadvertently restrict change and innovation during transformation.

#4: Commit to Being a Team

A fourth hurdle is for executives to commit to collectively being a team that is accountable for the transformation. That is, being an executive team rather than a collection of individual executives who are each doing their own thing. Most executives understand that they are accountable for their specific function or business, but only give lip service to being accountable as an executive team for the overall performance of the business. While this is common in many organizations, it will not work in transformation. There must be a team of executives who hold themselves collectively accountable for design and execution of the transformation. Absent this alignment, the difficult challenges which the transformation is designed to change will be avoided and sub optimized. There are many reasons why three of four transformations fail, and I have found this to be a primary reason for the failures.

#5: Engage and Unleash Informal Leaders

A fifth hurdle is for executives to understand that the success of the transformation requires engaging and unleashing informal leaders through the organization. There are people in the organization who are capable and willing to step up to be leaders when allowed and asked to do so. The emergence of other leaders to form a cadre of leaders is essential for success in for transformation. Successful transformations happen because of the brilliance, commitment, and coordinated actions of people throughout the organization. People create and innovate in ways the executives could never imagine. Those inspired actions of others occur because of leadership coming throughout the organization. This inspiring action requires a cadre of leaders who are empowered and engaged to be and do things not normally done in that organization. Without a cadre of leaders, transformation will fail. Research data has consistently shown that most transformations fail to achieve the desired results. For example, a McKinsey survey reported that “transformations are three times more likely to fail as to succeed”.

#6: Importance of Inspiring and Mobilizing People

A sixth hurdle is for the executives to appreciate the importance of inspiring and mobilizing people through the organization. This inspiration reflects the quality of executive leadership as is the level of mobilizing people to participate in the transformation. Mobilizing an organization for transformational change cannot be mandated. Instead it is generated by leadership and may include participation in planning transformational actions, changing mindsets, etc. The importance of mobilizing an organization was described in a report by McKinsey & Company:

Notably, employee engagement as early as the planning process emerges as a key success factor. Indeed, in successful transformations executives say that identifying underlying mindsets that would need to change was the approach most often used. Moreover, three-quarters of the respondents whose companies broke down their change process into clearly defined smaller initiatives and whose transformations were “extremely successful” say that staff members were entirely or very able to participate in shaping those change initiatives. Collaboration and co-creation also are important: nearly a quarter of the extremely successful transformations were planned by groups of 50 or more, compared with just 6 percent of the unsuccessful transformations

In our practice, we also find that companies which are successful in transformation engage a cadre of employees to become informal leaders. As an example, employees are involved in identifying the mindsets which need to change and challenging the organization’s historical approaches to implementing change. These employees have important, needed perspectives on how best to design and implement transformation in the organization. This cadre of informal leaders provide valuable perspectives about what is required to drive change.

This idea of expanding the group involved in designing the transformation beyond those normally involved in strategy development often initially appears as a paradox to executives. From a typical management perspective these are not people who should be included in these meetings and this work. However, from a leadership perspective it makes “perfect sense”. Often without their unique perspectives, the discussions about transformation design devolves into how the organization has historically approached change. While it seems intuitive that had those previous change initiatives been successful, it is unlikely that a transformation would be needed at this time. Yet that logic is overlooked, and the group contemplating the transformation revert back to the comfortable and familiar approaches. Involving others in deliberations about design does not make the executive less powerful or take away accountability, but in fact often increases the credibility and effectiveness of the executives as leaders. The executives must be accountable even when a larger group is involved in developing the architecture.

#7: Prepare Your Team for a Breakdown

A seventh hurdle is for executives to remember that transformation projects and team invariably encounter breakdowns. In reality, these breakdowns are needed if breakthroughs are to occur. However, for those in the midst of the transformational projects, identifying these breakdowns if often hard to do. This is where the executives need to step in an assure the breakdowns are acknowledged, formally declared as breakdowns and then explored using the breakdown methods. Teams will often be clever if not outright devious in finding ways to ignore the breakdowns. Ironically, the successful resolutions of breakdowns is a major source of energy and momentum in business transformations.

Conclusion

In summary, leadership is the essential “lifeblood of transformation” and must overcome seven predictable hurdles, which are:

  1. Committing to their personal involvement during the entire transformation, not just at the beginning.
  2. Changing their mindsets regarding the differences in leadership and management, and commit to being leader
  3. Persisting to overcome the initial experience of the transformation feeling odd or strange
  4. Being a team of executives rather than a collection of individuals who are each doing their own thing
  5. Engaging and unleashing informal leaders through the organization is required for success of the transformation
  6. Appreciating the importance of inspiring and mobilizing people through the organization.
  7. Acting to assure that transformation projects teams declare and resolve breakdowns.

If these 7 hurdles are successfully overcome, the probability of success is much greater.

Growing a business is a daunting task for many, if not most, executives. While growth is considered fun, and what executives dream of being engaged in, achieving sustainable growth is another story. 

Download our PDF: “Executive Challenges” and learn the Execution of Growth Strategies and Organizational Transformation.

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Are Leadership & Management the Same?

Leadership is crucial for business. Leadership is a starting point of strategy. It’s the magic elixir for achieving sustainable growth and value creation. Leadership is at the heart of engaged employees, innovation and vibrant cultures. It is what makes organizations thrive and prosper. Yet for all its importance, leadership is widely misunderstood because many people consider leadership and management to be the same. This confusion is evident as these two terms are routinely used as if they were interchangeable.

While they are both very important for a business, they are not the same. Management and leadership are different, though both are important. Most businesses will not be successful over time without the contributions of both management and leadership. But make no mistake, they are different.

Common Misconceptions

The common misconception is that leadership and management are the same. Let’s look at three examples of this confusion and misconception:

  1. Leadership is determined by position, e.g., this person is a senior executive so therefore he/she must be a leader. Since leaders are at the top of the organization, the meaning of being a leader is seen as doing whatever senior executives do.
  2. Leadership only comes from people in management positions. In this case the term management positions include supervisors and mid-managers as well as executives. In reality, many of the best leaders in an organization are not in management positions.
  3. Leadership is a title. The use of the word leadership in titles for positions and teams has proliferated. Examples of position titles are sales leader and manufacturing leader. Examples of teams using the word leadership are “Executive Leadership Team”, “Regional Leadership Team” and “Plant Leadership Team.” In each of these cases the expectations of this team is heavily focused on management, not leadership.

Evidence of the Confusion Can Be Found in Conversations

Evidence for the confusion in the differences between leadership and management is widespread and easy to find. Try this little experiment. Ask people in the organization three questions:

Question #1: “Are management and leadership the same?”

Chances are high that you will get one of two responses to this question:

  1. Yes, management and leadership are the same. “Its two words we use to describe upper levels of management”, is a common response.
  2. “No, they are not the same”. If you ask for further explanation of the differences, the answers you hear will be muddled and unconvincing. It is likely that somewhere along the way this person has heard a discussion about the differences in management and leadership, but has not integrated the essence into their thinking.

Question #2: “Who are the leaders in your organization?”

The person answering this question will likely point toward incumbents in higher level management positions within that part of the organization. There is a common misperception that senior managers are leaders while those in middle management and supervisors are not.

Question #3: “Given who you identified as leaders in your organization, please describe what makes them a leader?”

The person will describe what makes them “leaders” by discussing their management roles and / or the level of their management position. Seldom is there an appreciation that a leader’s role is to make things happen that otherwise would not have happened. That is, leaders interrupt the status quo and redirect the business to a future which is much more compelling.

These questions also help to provide a line of thinking and reasoning for organizations to determine their thoughts on leadership and management. The answers received also provide feedback about the organization. As an example, it’s a good sign if:

  • Those in the organization articulated that management and leadership are different AND both are important to the business.
  • People were identified as leaders who are not in management positions.

Other less positive feedback about the organization would be if the responses were:

  • We don’t have any leaders in this organization.
  • We only have managers, as I am not sure our organization would tolerate actual “leaders”.

While these statements are seldom accurate, they are reflective of the negative views of  leadership in the organization. Put another way, it’s an example of “I know leadership when I see it, and I’m not seeing it”.

Differences in Management & Leadership

Given the confusion in how the two terms management and leadership are used, one might think it is a new conversation. That is, a recent set of conversations which has not yet reached executive and management ranks. Hardly. This conversation burst to the forefront of business management thinking in 1977 when Abraham Zaleznik published his classic article, Managers and Leaders: Are They Different? In this article, Zaleznik left little doubt that the two roles are quite different. This article was republished as part of the Best of HBR series in 2004 by Harvard Business Review. In the introduction to this classic article, the HBR editors wrote:

The traditional view of management, back in 1977 when Abraham Zaleznik wrote this article, centered on organizational structure and processes. Managerial development at the time focused exclusively on building competence, control, and the appropriate balance of power. That view, Zaleznik argued, omitted the essential leadership elements of inspiration, vision, and human passion—which drive corporate success.

Notice that inspiration was considered a key driver of corporate success in 1977. We are clearly not dealing with a new concept. The introduction goes on to say:

The difference between managers and leaders, he wrote, lies in the conceptions they hold, deep in their psyches, of chaos and order. Managers embrace process, seek stability and control, and instinctively try to resolve problems quickly—sometimes before they fully understand a problem’s significance. Leaders, in contrast, tolerate chaos and lack of structure and are willing to delay closure in order to understand the issues more fully.

Zaleznik makes clear that in his mind managers and leaders are quite different. He points out that the differences are fundamental in both their personalities and temperament. He highlights the differences in dealing with chaos and lack of order. Managers are prone to want to quickly reduce chaos and move to an answer. Leaders on the other hand appreciate the need for chaos and prefer to dwell in the chaos in order to understand it, rather than rushing to cut it off. Employees often live in the chaos. Consequently, they appreciate leaders who do not pretend it does not exist and rush to a premature conclusion in order to reduce the discomfort brought on by “disorder and not knowing”. Conversely, managers often appear to employees as being “out of touch” and “living in make believe world” given their rush to judgement. The irony of course is that managers pride themselves in being grounded in reality and accuse leaders of being out of touch and living in make believe world, when in fact, it is them who wear those labels.

Zaleznik drives the final nail in the differences by asserting that:

…business leaders have much more in common with artists, scientists, and other creative thinkers than they do with managers. Organizations need both managers and leaders to succeed, but developing both requires a reduced focus on logic and strategic exercises in favor of an environment where creativity and imagination are permitted to flourish.

As you can see from this introduction, Zaleznik launched a full-frontal attack on the notion that management and leadership were the same. To get the sense of impact it made, consider the description from the editors of HBR.

Zaleznik’s article “caused an uproar in business schools. It argued that the theoreticians of scientific management, with their organizational diagrams and time-and-motion studies, were missing half the picture—the half filled with inspiration, vision, and the full spectrum of human drives and desires. The study of leadership hasn’t been the same since”.

In 1985, Warren Bennis and Bert Nanus added weight to this conversation when they stated that management typically consists of a series of contractual exchanges. They add “leadership stands in the same relationship to empowerment that management does to compliance”. They summarized their views with the classic phrase:

Managers do things right

Leaders do the right things

 

John Kotter is one of the best known thinkers and writers on management, organizational change and transformation. He has had an illustrious career as professor at Harvard Business School and co-founder of a consulting firm which bears his name. In 1990, Kotter added fuel to the fire with his classic HBR article What Leaders Really Do. The opening narrative is:

Leadership is different from management, but not for the reasons most people think. Leadership isn’t mystical and mysterious. It has nothing to do with having “charisma” or other exotic personality traits. It is not the province of a chosen few. Nor is leadership necessarily better than management or a replacement for it. Rather, leadership and management are two distinctive and complementary systems of action. Each has its own function and characteristic activities. Both are necessary for success in an increasingly complex and volatile business environment. Most U.S. corporations today are over-managed and under-led.

 

Over-Managed & Under-Led

In the quote in the previous paragraph, John Kotter asserted that North American organizations are over-managed and under-led. To be sure, Kotter was not being critical of the amazing skills of management, but instead was pointing to the lack of balance between leadership and management. Let’s look at how Kotter describes management and leadership:

Management is about coping with complexity. Its practices and procedures are largely a response to one of the most significant developments of the twentieth century: the emergence of large organizations. Without good management, complex enterprises tend to become chaotic in ways that threaten their very existence. Good management brings a degree of order and consistency to key dimensions like the quality and profitability of products.

Leadership, by contrast, is about coping with change. Part of the reason it has become so important in recent years is that the business world has become more competitive and more volatile. Faster technological change, greater international competition, the deregulation of markets, overcapacity in capital-intensive industries, an unstable oil cartel, raiders with junk bonds, and the changing demographics of the work-force are among the many factors that have contributed to this shift. The net result is that doing what was done yesterday, or doing it 5% better, is no longer a formula for success. Major changes are more and more necessary to survive and compete effectively in this new environment. More change always demands more leadership.

In modern business it is clear that for influential business thinkers, management and leadership are different. Both are important, but are also quite different.

Given the magnitude of this risk of being over-managed and under-led, one would think that this would be taken very seriously. Sadly, it is not and is frequently overlooked.

Consider the example of the experience of an energy company which was reacting to a major environmental event. This event was triggered by employees’ behaviors caused by cognitive biases in interpreting data. This company was in full press recovery mode and had a team redesigning their corporate risk profile and programs. The group talked about many potential physical risks. Some seemed real and threatening. Others were more obscure and seemingly unlikely. However, the single biggest cause of the event was never addressed; the people element. Further, the overbearing on management on their people during the critical moments appeared to contribute to the problem. The biggest positive influence that could have occurred was if the company would have stood up and pointed out the organizational culture and the stifling level of being over-managed and under-led. Of course, this did not happen, with the predictable consequences.

 

Tangible Evidence of Leadership vs. Management

Vineet Nayar offers three tests to understand the differences in leadership vs. management:

Test #1: Counting Value vs. Creating Value

The first question is, are you counting value or creating value? Nayar asserts that leaders create value while managers count it. Leaders give clear guidance on how an employee can add value and then takes additional actions to add that value. This allows the leader to generate value above and beyond what team can achieve. Also, leaders set an example and assures people are in action. Nayar asserts that managers only count value at best and can reduce value by micromanaging those who are potentially creating value at worst.

Test #2: Circles of Influence vs. Circles of Power

Leaders have followers while managers have subordinates. Managers create circles of power while leaders create circles of influence. Nayar points out that the quickest way to assess which role you are playing is to ask, “How many people outside of my formal authority and reporting hierarchy come to me for advice?” Nayar asserts that the larger the number who come from outside, the more likely that you are perceived as being a leader.

Test #3: Leading People vs. Managing Work

Management is designed to control a group of people or entities to accomplish a specific goal. Leadership is the influencing, motivating and enabling others to contribute toward organizational success. Nayar writes “Influence and inspiration separate leaders from managers, not power and control.”

“Management Team” or “Leadership Team”?

Perhaps the confusion between management and leadership is most evident in the practice of renaming management teams as leadership teams. After observing the roles expected of the so-called leadership team, typically one would find that the actual purpose of the group is to manage. There is little, if any, intent to provide leadership nor is there any action which reflects leadership. As a consequence, many of these so called “leaders” aren’t leaders at all. They are managers. They have no interest in being leaders and offer little capability to lead. They are often capable managers, but not leaders.

Risks of Confusing Leadership & Management

The risks of confusing leadership and management are only as great as the risk of not identifying and adapting to challenges with customers and threats in the external environment. For most organizations that risk is huge. Yet in spite of this risk, management in these organizations is focused on maintaining the current approaches. Keeping the same approaches means that the trajectory of the business will remain the same. Of course, these managers look for ways to tweak the organization in order to increase the velocity. However, tweaking business approaches in the face of the need for large scale change is not likely to achieve the desired results. This tweaking could mean hurling the organization continuously faster toward a cliff or at least in the wrong direction. Leadership, in contrast, sees the oncoming challenges and enables those in the organization to explore other possibilities. This intense effort continues until a viable opportunity is determined.

Management Is Critically Important

In some organizations there is the belief that leadership is better and more important than management. This belief fails to appreciate the enormous contributions made by management to the modern business organization. We take global corporations for granted. We overlook that the sheer concept of a global corporation would not be possible were it not for the amazing advancements in management.

My grandfather worked on railroads as a conductor in the caboose. His view of the world was shaped by the view from the back of the train. His world experience was essentially one day’s train ride from Memphis, TN. If as a boy I tried to tell him about the emergence of the internet and new technologies, or how corporations would be able to effectively serve customers around the world … he would have thought me crazy. His response would have been akin to “Boy, you’ve been out in the sun for too long…”. Yet those remarkable accomplishments are possible due to advances in management practices. Of course, leadership was blended in to enable some of those advancements in what we today see as management practices.

The evidence for leadership being better than management can be found with an internet search. A Google search entered as “Are management and leadership the same?”, there are many sites which infer that leadership is better than management. This is inaccurate and unfortunate. Management is very much needed. The capabilities of companies to manage complex business on a global scale is truly amazing. This incredible capability is often taken for granted. It was not that long ago when managing a business with more than one location was thought difficult, if not impossible.

Reflect on this final analogy for the amazing contributions of management.

The American comedian Louis CK talks about how the general populous takes the amazing technology around them for granted. He gives example of being on an airplane when the person sitting next to him turns to complain about the speed of Wi-Fi on an airplane. Louis CK says we have no appreciation of the miracle of flying on airplane. He says “You are sitting in a chair in the sky!!!” Louis CK points out that rather than being in awe of this experience, people take it for granted and somehow assume that it is “their right”. He says the evidence for this is how frequently people come back from a flight with complaints about the slightest alteration in expectations and inconveniences.

This is a wonderful analogy for how people experience management. The advances in management capabilities are truly amazing. The importance of management must be acknowledged while at the same time recognizing that leadership is a different capability. Both are essential for business success!

Management and leadership are both very important. Yet they are different. To reiterate, management and leadership are NOT the same. Some individuals are capable of being effective both as a manager and a leader. Many are not.

Leadership is not given by the level of a person’s position in the organization. Being in an executive, management or supervisory position does NOT infer that one is a leader. Not being in a management or supervisory position does not mean that a person is not a leader. Some of the most inspiring leaders in an organization are not in management positions. These non-managerial employees bring heart to the organization and reinforce the culture.

Conclusion

Leadership and management are both important but are distinct capabilities. Many companies have well developed management capabilities and processes. Yet these came companies often do not have such well-developed leadership capabilities and processes. This shortage shows up when facing the need for growth and change.

Growing a business is a daunting task for many, if not most, executives. While growth is considered fun, and what executives dream of being engaged in, achieving sustainable growth is another story. 

Download our PDF: “Executive Challenges” and learn the Execution of Growth Strategies and Organizational Transformation.

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Anyone Can Be A Leader

By Larry G Hoelscher, Partner & Bob Chapman, PhD, Managing Partner of KingChapman

Leadership is the starting point for strategy, execution and transformation. Building a cadre or core of leaders is a critical success factor. Yet too often leadership is thought to be exercised only by executives and a few other chosen individuals. We say that is not only wrong, but it robs organizations of a most precious resource for executing strategic change and transformation. How then does this mistake keep occurring?

Where to Start?

The place to begin is by expanding one’s view of leadership beyond the narrow views that…

  • Leadership is the “private reserve” of executives and senior managers
  • Leadership is done by people in management and supervisory positions
  • Leadership and management are the same thing

As we have worked with clients around the world for decades, we continue to hear some if not all of these assertions. A most common expression is that leadership is performed by executives or “those people on top”. When employees are asked “What are the things these executives do that show leadership”, we most often here “I don’t know”. In most challenging settings the “I don’t know” is often followed by “not much given the shape we are in”.

It is very common to hear that “our leaders are our managers and supervisors”. Again, when employees are asked what this means, the most common answers have to do with management roles performed by this individual. This includes:

  • Forecasting
  • Planning
  • Organizing
  • Commanding
  • Coordinating
  • Controlling

Each of these are important functions of management, yet this is not leadership.

Leadership is Different from Management

We have written a number of blogs and articles on the differences between management and leadership. For the purposes of this article, we would like to paraphrase John Kotter from one of his videos “The Key Differences Between Leading and Managing”:

“Management is fundamentally a set of processes, most core of which are planning, budgeting, organizing, staffing, controlling, and problem solving. Leadership is a set of processes involving creating a vision of the future and strategies to get there, communicating out to people in a way that gets them to buy in to the vision and strategies, creating an environment that motivates those people, and inspiring the people to want to make the vision a reality.”

By distinguishing between Management and Leadership, it becomes clear that Management occurs as a result of the business structure, and the people in management roles are designated to manage a group of people, functions, etc. It also becomes clear that leadership is not the result of any structure or function, or even of the level someone happens to be in on the organization chart. Instead, leadership can be seen by the inspired actions of others, and with this concept in mind, anyone can be doing their jobs and having a positive and inspiring impact on others around them – that is, being leaders.

Accepting the fundamental differences between Management and Leadership, we are making the following assertions:

  • First – that anyone can be a leader
  • Second – if employees are being leaders, they have a greater sense of commitment to delivering the outcomes of the business, have greater effectiveness, have more ownership of why they are doing the things they are charged to do, and have a greater sense of their impact on others around them
  • Third – if employees are operating as leaders, they will perform in ways that create greater value to the organization

For executives of any organization to desire a fully engaged workforce, they must commit to doing the things necessary to generate this kind of inspired and generative group of employees. If the executives are creating this kind of environment, there are a few fundamental distinctions we have found that are necessary for employees to fully embrace the full power of “Anyone Can Be a Leader”.

How Can Anyone in an Organization Be a Leader?

There are fundamentally 3 steps in creating the kind of engagement demonstrated by a workforce of leaders:

1.  Commitment to Being a Leader

Commitment to being a leader comes in two parts:

  1. The executives of the organization commit themselves to creating this kind of environment
  2. Each employee commits themselves to think and behave as a leader in the business

2. Ownership / Accountability

3. Communication

Commitment to Being a Leader

The first step in getting everyone engaged as a leader is for the executive(s) to make a clear and public commitment to this concept. When people are empowered to demonstrate their leadership in the organization while doing their jobs, their engagement levels in executing the vision and strategies of the organization goes “sky high”. It is essential that the senior executives are fostering this kind of mindset and behavior from everyone in the organization, and that examples of “being a leader” are recognized and appreciated.

For everyone in the organization, their first step is similar – they must decide that they are going to be a leader in the organization. This decision is a personal choice, that once made, unleashes their creativity, spirit, energy – all the good stuff that are demonstrations of a highly engaged workforce.

Ownership

Any leader in the business must be fully aware of the OUTCOMES for which they are accountable. With this awareness, committing themselves to deliver the outcomes in a way that is inspiring to others. Let’s look at some definitions:

  1. One with an interest in and often dominion over property
  2. One with the right to exclusive use, control, or possession of property

With this kind of ownership, leaders’ passion to deliver results is immediately apparent. One motto that we suggest the leaders plant in their heads: “Good excuses do not equal results!”. Leaders’ ownership and accountability for delivering the business results, and ownership and accountability of HOW they deliver results, are powerful indicators of being an inspiring leader.

Communication

For this concept of “anyone can be a leader” to work, an increase in communication by each leader is essential. A significant increase in:

  • Communication up (to supervisors, managers, execs),
  • Communication laterally (to peers and co-workers), and
  • Communication down (to others on teams, in the organization, suppliers, contractors, customers)

This heightened level of communication elevates each of the leaders to be aware of how they fit into the big picture, with a commitment to keep the other parts of the organization aware of their status, issues, breakdowns, etc – so that more leaders are involved to maximize success.

An interesting analogy on how this plays out can be found in any team sport. Let’s use American football:

Imagine a college football team, the offensive unit, and further that one of the offensive linemen sprains his ankle. Whose problem is that player’s sprained ankle?

Clearly, it is the player’s problem. After all, it is his ankle.

However, his sprained ankle is also the team’s problem. Because now, the team does not have one player at 100% capacity.

The main job of the injured player? Communicate their problem with the team, so that the team can figure out how to execute and work around the injured player. Or the communication could result in the player being replaced by another player. Etc.

The point – the offensive lineman is demonstrating his leadership by being accountable for the success of his position, and is communicating to the team so that future plays can be adjusted to take into account the injured player.

Anyone Can Be a Leader

“Anyone Can Be a Leader” is absolutely true! We see it all the time with our clients. The value created by people not in management positions is amazing. Some of the most powerful breakthroughs and growth stories occur because of leadership from nonmanagers. Further, committing to making anyone and everyone in the organization a leader is among the most powerful interventions to increase engagement than any we have seen. It is well worth the time and effort to foster this level of engagement!

 

If you want to learn more about what characteristics and roles leadership plays in the success of any organization, download our whitepaper: ‘Successful Strategic Execution Begins With Leaders’.

In it, you will learn:

  • The two hallmarks of an effective leader
  • The most crucial value for leaders to possess
  • The greatest contribution a leader provides
  • The most valuable ‘tool’ for a leader to wield
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Fingerprints of Organizational Transformation

I frequently hear the question, “How do I know that we are doing the right things to execute our growth strategies and transform our organization?” What a great question! To have the insight to craft such a question, one has to be aware that executing strategies and transforming organizations requires something “out of the ordinary”. Success in creating value through growth strategies and transformation requires an exceptional approach. Simply doing more of the same is unlikely to be successful, so something out of the ordinary is required. This level of change requires strong leadership. It will not happen simply through good management. Strong leadership must be actively involved.

This brings us to the question of “how do I know we are doing the right things?”

The answers center around:

* “Are you being a leader?”

* “Can your leadership fingerprints be seen on the execution actions and change efforts?”

Leadership is not a position, role or title. It is a state of being by a person who is committed to exceptional results / value creation and knows that success will require intense involvement of others. Thinking about how to involve others brings us to the fingerprints, or more specifically the thumbprints of transformation. We at KingChapman have used the term “Thumbprint” to refer to the important elements for success in organizational transformation. We began asking “when we look back at successful transformations, what evidence do we see which identifies successful practices?” This is akin to how forensic scientists look for evidence of fingerprints at a crime scene. Fingerprints are the chemical traces of the impressions from the frictional ridges of the hand which are transferred onto a surface. The best surfaces are hard, like glass or wood.

Importance of “Prints”

So why has fingerprint been the gold standard for identification for well over one hundred years? It is because human fingerprints are quite detailed, difficult to alter and change little during the life of an individual. This makes fingerprints a good identifier of identity over the long term. Thumbprints are particularly effective as identification. As an example, the Texas Bankers Association developed a fraud prevention program called the Thumbprint Signature Program.

Under this program people who wanted to cash a check were asked to place an impression of their thumbprint on the face of the check using a small inkless touchpad. This program found that few who were intentionally seeking to commit check fraud would leave their thumbprint. Of course, those who did left a positive identification which could be turned over to the police for further investigation and prosecution.

The term thumbprint is also used to say that it has a distinctive identifying characteristic. Harper Collins Dictionary adds “If you say that something such as a project has someone’s thumbprint on it, you mean that it has features that make it obvious that they have been involved with it”. It is in this light that we refer to our Transformational Thumbprint.

KingChapman’s Transformational Thumbprint

The elements in the Thumbprint initially came from our team asking, “what factors have we seen in the successful transformations in which we were involved?” At first, we were simply making note of these factors, without trying to draw inference to what drove success. Then, over time we observed that when we were able to get the client to include these elements, the projects were more successful. Additionally, we have collaborated with other consultants and have learned from their experiences as well.

KingChapman’s Transformational Thumbprint include:

1. Strong Leadership

2. Communicating a Clear and Compelling Business Case for Change

3. Achieving a New Context

4. Establishing Urgency for Action

5. Selecting Aspirational Outcomes

6. Inventing a Compelling Future for the Business

7. Rigorously Assessing Current Conditions and Performance

8. Formulating Strategies to Create Value and Achieve the Invented Future

9. Creating Scorecards with Clear Metrics & Milestones

10. Building an Accountability Structure for Leading the Transformation

11. Implementing Transformational Strategies via Breakthrough Projects

12. Just-In-Time Training in Producing Breakthroughs

13. Communicating, Communicating, Communicating

14. Enrolling Stakeholders

15. Changing Mindsets

16. Assuring Frontline Employees Feel Ownership of the Transformation

17. Choosing the Best Talent

18. Building Capabilities in the Organization

19. Sustaining Energy for Involvement & Transformation

20. Delivering Results & Not Accepting Excuses

21. Sharing Learning Throughout the Organization

22. Evaluating Results Achieved and Planning Next Steps

Conclusion

The ‘Thumbprint’ represents the features that confirm leaders have been involved in executing strategies which transform organizations. None of these features is beyond the wit of man to implement. Successful implementation of these features requires commitment, passion and time.

 

Just as police investigators search for fingerprints at a crime scene, we were interested in identifying the “fingerprints” left behind by a successful organizational transformation.

Download our whitepaper:
“Transformational Thumbprint” and learn more about the 22 critical success factors for implementing organizational transformation.

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Interdependence is Transformation in Action

This article is co-authored by Bob Chapman & Larry Hoelscher

Think back over the last month. How many times have you heard any of the following statements or something close to it?

  • “We operate in silos, and that is blocking us from getting the needed improvement!”
  • “We are continually waiting on them to deliver … there is nothing we can do.”
  • “The right hand doesn’t know what the left hand is doing.”
  • “I need the organization to work together better.”

Can you see a theme present in all these statements? Even though action could be taken to improve performance in the business, it is somehow blocked. Absent that blockage, those speaking or thinking these statements would initiate the appropriate action.

So what is stopping them? Usually, the blockage occurs because others need to agree on the actions needed and take them. There is dependence on others to take action, and for whatever reason the desired action is not occurring. The people and groups with whom the dependency exists are either unaware of the desired action or have thus far been unable or unwilling to act.

Most business people do not like being dependent on anyone or anything. We like to think we are ‘captains of our own ship’ and free to act. Although this is a nice fantasy, it is not reality for most of us, as we are dependent on others for virtually everything we do.  And, in most cases, others are dependent on us for virtually everything they do.  In implementing large scale, transformative changes recognizing this is essential. We are dependent on others – transformational performance requires unique skills in interdependence.

Interdependence

The Oxford English Dictionary defines interdependency as “the fact or condition of depending each upon the other; mutual dependence”. Depend is a verb which means “to rest entirely on for what is needed”.

So, interdependence can be thought of as mutual reliance between two or more groups. Of course, there are varying degrees of interdependence.

“It is worth noting that in an interdependent relationship, participants may be emotionally, economically, ecologically and/or morally reliant on and responsible to each other.

A key takeaway is that in a relationship with interdependence, both parties are reliant on and responsible to each other.  In achieving transformational actions, the quality of this relationship must be exceptional. It should reflect ‘Being Accountable For’, ‘Reliant On’, and ‘Responsible To’ each other!

Needless to say, that level of accountability and responsibility in interdependency is not to be taken for granted. Instead it is created and sustained with much hard work. This hard work comes from inquiry into crucial questions:

  • What are we (am I) accountable for?
    • What we are looking for here is the outcome that is to be produced, rather than the process or the set of actions agreed to. Often, there is a lack of clarity on the specific outcome that is expected, while there is high visibility on the action plan prescribed.
  • On whom are we (am I) reliant?
    • The transformation we are seeking in this question is FROM “I can’t do it until they …” which equals victim, TO “I am relying on them” which can equal partnership, collaboration, working together, assistance … alliance or partnership.
    • This transformation changes the nature of the interactions among the various people/teams/groups/functions, so that we observe people pulling together to deliver the desired outcome.
  • To whom are we (am I) responsible?
    • Insights gained from this inquiry include ownership of our impact on others in the total organization, and consequences of this impact.

You may be thinking, “that is all well and good, but it does not happen in a complex, tough business such as mine”. Let’s look at a case example:

Case Example of Commercial Aviation

Commercial Aviation as an excellent example of a very complex and fast-moving system, with significant interdependencies.  With the aligned commitment of complete safety with zero accidents by everyone involved in this system, Commercial Aviation is one of the safest modes of transportation worldwide.

For illustrative purposes, take any one of the 8 groups of players in commercial aviation shown in the diagram below, and ask:  Regarding safety:

  • For what is this group accountable?
  • On whom is this group reliant?
  • To whom is this group responsible?

 

To illustrate how these interdependencies work, let’s look from the perspective of one of the bubbles (Flight Crew), with a focus on one member of the Flight Crew – The Pilot:

  1. Regarding safety, what is any pilot accountable for?
    • The pilot is accountable for the safety of the passengers and crew onboard, as well as the safety of the aircraft.
    • In addition, the pilot is also accountable for the safety of the system as a whole, by observing, assessing and communicating any issues that could be a safety risk, even though that safety risk may not pose any immediate threat to his/her aircraft.
  2. Regarding safety, who is any pilot reliant on?
    • The pilot is reliant on:
      1. All other members of the flight crew, for their management of the passengers and the interior of the aircraft.
      2. The passengers, for following any instructions from the flight crew given for their safety.
      3. The ground crew, for external checks to the aircraft, proper loading and unloading of baggage and cargo, for safe arrival into the gate, for safe departure from the gate into the taxi flow, etc. Around the gate, the ground crew serves as the pilot’s eyes behind and around the aircraft.
      4. Air traffic control, for slotting them into a position with all other aircraft in the area, for safe flights, takeoffs, and landings.
      5. Other aircraft, for communicating issues such as bad weather, changes in altitudes, etc – especially during flight.
      6. Maintenance, for making certain that the aircraft is maintained properly for safe flights, and for evaluating and correcting any technical issues when both on the ground and in the air.
      7. The pilot is also reliant on all of the other groups shown in the picture.
  1. Regarding safety, to whom is the pilot responsible?
    • The pilot is responsible to:
      1. The passengers for a safe flight.
      2. Air traffic control, for following instructions (altitude, direction, landing, taxiing, etc)
      3. Ground crew, for following their instructions on baggage, cargo, refueling, inspections, etc.
      4. Other aircraft, for alerting them with issues such as flight changes, altitude changes, up to date information regarding weather, etc.
      5. Maintenance, for alerting them to issues experienced with any component of the aircraft.
      6. The pilot is also responsible to all of the other groups shown in the picture.

Obviously, this is a very simplistic view of a complex system, but it does show the importance of the people in the system working in interdependent ways.  That is, they are accountable for safety, using appropriately all information from those on whom they are reliant, and they must be responsible to others who are counting on information from them to fulfill their roles in the system.  If any one member of any of the groups does not behave in an interdependent way, then bad things can happen.  Imagine the chaos at the very least, and danger in very real terms, if one pilot does not follow the instructions of flight control.

We could review members in all the bubbles shown in the picture.  In fact, it could be an interesting exercise by putting yourself in the shoes of anyone in any of the bubbles, and asking yourself: For what am I accountable, on whom am I reliant, and to whom am I responsible?  It can shed light on areas that need improvement, and specific things that can be done that will make a difference.  This examination is particularly enlightening when the same three questions of interdependence about any team, function, or part of an organization are honestly and thoroughly understood.

Bottom Line

Exceptional results occur when those involved in the business intendency are being accountable for, reliant on, and responsible to each other!  Working Interdependently is a crucial aspect of delivering outstanding results in systems that are getting more and more complex.

What interdependent relationships are currently hampering the performance of your business? What is possible for improving those relationships? The proper leadership to foster interdependence is critical.

 

If you want to learn more about what characteristics and roles leadership plays in the success of any organization, download our whitepaper: ‘Successful Strategic Execution Begins With Leaders’.

In it, you will learn:

  • The two hallmarks of an effective leader
  • The most crucial value for leaders to possess
  • The greatest contribution a leader provides
  • The most valuable ‘tool’ for a leader to wield
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How the Tangram Became Our Metaphor for Transformation

We were blown away – so simple and yet so . . . perfect!

When we began working with Neos Marketing, we posed a simple request – is there a way to demonstrate “transformation”, either visually or physically? Neos took up the challenge. And the result was brilliant!

First – a brief definition for transformation (from Webster’s Dictionary):

transform, v.

Etymology: < Latin transformāre, < trans- prefix + formāre to form, < forma form. Compare French transformer (14th cent. in Godefroy Compl.), also Old French tresformer

1. a. trans. To change the form of; to change into another shape or form; to metamorphose.

b. transf. To change in character or condition; to alter in function or nature.

2. intr. To undergo a change of form or nature; to change.

1. The action of transforming or fact of being transformed.

– a. The action of changing in form, shape, or appearance; metamorphosis.

– b. A changed form; a person or thing transformed.

2. transf. A complete change in character, condition, etc.

So how we can show people a visual representation of that? By using a metaphor.

Metaphor for Transformation

When we speak about organizational transformation, which is the bread and butter of our practice, we are using the definition:

“To change in character or condition; to alter in function or nature.”

We have been fortunate as a firm to have worked with many organizations over the past thirty years with their transformational efforts. Any organization wanting to “transform” is really wanting to realize a complete change in their character, condition, etc.

A few examples, expressed in the client’s words:

  • “from a declining business in a declining market, to a growing business winning in the marketplace”
  • “from a product centric business, to a customer centric business”
  • “from a business struggling to survive, to a darling of Wall Street”

As you can see from these simple expressions, the organizations pursuing their transformation were not interested in incremental improvements, which definitely have their place in any successful business. The transformational aspect for these organizations represented significant changes, in order to deliver a step change in performance. These were big changes, and big deal changes. As KingChapman’s tag line suggests:

Big Growth Requires Big Change

Big Change Demands Big Leadership

So, our request to our partners at Neos Marketing was with this understanding of transformation in mind.

When Neos came up with the idea of tangrams, to be honest, I had to look the word up before I knew what they were talking about!

What is a Tangram?

The tangram is a dissection puzzle consisting of seven flat shapes, called tans, which are put together to form shapes. The objective of the puzzle is to form a specific shape (given only an outline or silhouette) using all seven pieces, which may not overlap. It is believed to have been invented in China and carried over to Europe by trading ships in the early 19th century. A Chinese psychologist has termed the tangram “the earliest psychological test in the world”, albeit one made for entertainment rather than for analysis.

This is an example:

 

Why were we so excited with this idea?

We at KingChapman believe in the people inside our client organizations, because we have seen for decades how much people can do if they are given the right mix of best practices and expertise that we bring to our clients. We have seen people achieve amazing results, make great changes in the approaches to their businesses, think about themselves and their companies in new and different ways – all in the pursuit of making the transformation happen in their organizations.

So just like the tangram can change into different shapes, so too can organizations make major changes happen that add material value to themselves, their owners, their employees, their communities and their customers.

Same components + different shape = a transformation

Part of our ‘secret sauce’ in working with organizations that are engaged in a transformational effort is making certain that leaders in the organization are also transforming in the process. As our tagline above says, ‘big change demands big leadership’ in any transformational effort.

How do the leaders change? They grow / expand / develop their leadership capabilities and competencies.

And why do they do this? Because this is what it takes for any organization to truly transform – everyone in the company must transform as well, starting with the leaders of the organization.

Our many thanks to the team at Neos Marketing. This tangram idea is a brilliant demonstration of what KingChapman is all about – transformation of organizations to drive big time gains in value.

 

Another way to drive transformation in organizations is through a ‘breakthrough project’.  To learn more about how to implement this in your organization, download our white paper, “7 Elements for Chartering a Breakthrough Project”.

In it you will learn:

  • what a ‘Breakthrough Project’ is and why it’s critical to organizational transformation
  • why creating a ‘charter’ is a critical step in the process
  • the critical roles that key people must play in the project to enhance success
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Five Secrets of Successful Post-Acquisition Integrations

Success in post-acquisition integration is essential to the success of any M&A. Even if the strategy behind the acquisition is brilliant, it must also have brilliant leadership in execution to achieve success. Based on our experience and research, we have identified five critical success factors for leaders in post-acquisition integration, in implementing organizational change and integrating new organizations.

These factors are:

  1. Communication, communication, communication
  2. Maintaining stabilities
  3. Integration of management processes and systems
  4. Organization design
  5. Winning hearts and minds

Communication

In post appraisals of acquisition integrations, the one item which stands out is communication. Employees say there was not enough communication, even when those leading the acquisition think “we over-communicated”. In planning an acquisition, it is important to remember that communication is a critical element. Too often communications are thought of after the fact, and become a “bolt on” to the overall integration planning. That is an often-fatal mistake. Communication provides stability, which is essential to people during change.

Communication is the primary tool of leaders. The leaders must see communications as coming first and be in the forefront, rather than an afterthought. Communications and those delivering the communicating must be authentic, committed, and passionate about success of the business. The employees must see high levels of congruence and consistency between their leader’s ways of being, communications and actions.

Maintaining Stabilities

An often-overlooked element in successful change is maintaining stabilities during the change. This is important for all individuals experiencing change. Those leading organizations during acquisitions can assist their people by talking about the importance of maintaining personal stabilities as well as reinforcing organizational commitments, policies, practices and values.

Acquisitions are stressful for all concerned. There is tremendous uncertainty for employees on both sides of the deal. Some people benefit from reinforcing of boundaries and controls during these times of change and uncertainty. Clarity of policies serves as a “safety rail” to people during change. As an example of why reinforcing policies is useful, I have seen that during this period of uncertainty sales people consider making “special deals” with customers as a means of gaining favor and possibly a new job. These “special deals” are usually discovered at some point, and create an awkward situation between the company and its customers.

Once the acquisition closes, it is important to rapidly clarify policies and processes for the new organization. An effective way to accomplish this is to have process simplification / work elimination sessions to streamline policies that work best for the new company. I have facilitated a number of there around the globe, and have found it to be excellent tool for bringing the two organizations together to focus on how they can “win together”. It also brings to the surface other integration issues which need to be dealt with. Following alignment on policies and processes, it is important to quickly get communication out to every employee. Clarity on policies and practices is important for maintaining stabilities.

Integration of Management Processes and Systems

Successfully integrating management processes and systems is both a people and technical issue. This is the area where post-acquisition integration projects “hit the rocks”. I am often surprised how invested people are in these processes and systems. So much so that any change occurs like a personal affront and attack. People often complain about these processes and systems, and then become upset by any attempt to change them. By its nature, an acquisition means that people in at least one of the companies will be upset by the changing of management processes and systems. It is often seen as the real communication about winners and losers, which of course is deadly in post-acquisition integrations.

As part of planning the integration process, it is useful to rapidly identify those processes which must be addressed. This includes identification of processes to be eliminated or retired, reports which will be retired, and meetings that will be eliminated. Streamlining processes from the perspective of the customer will improve the business and help manage issues with customers. As an example, if the two organizations have common customers, how will sales relations, pricing, inventory numbers and supply agreements be handled? This information allows the customers to experience the workability of the combined organizations, rather than waiting to see if it will actually work out.

Integrating management systems is often a huge challenge. There are two types of management systems to consider:

  • Policy based, e.g., benefits, compensation, etc.
  • Computer systems, e.g., As one company uses Oracle while the other SAP. There are often good business reasons for these differences. Planning the integration of computerized systems is crucial for success.

Organization design

Organizations have designs which determine how they function. Coming into an acquisition, the two organizations each had a unique organizational design. Hence the importance of examining the existing organizational designs in order to create new organizational alignment to be used going forward.

Organizational design is a concept that is undergoing considerable change. For many the term, organizational design was considered to be synonymous with structure. Managers often think the place to start thinking about organizational design is to identify the desired structure, with key positions. Organizational structure is important, yet is probably the last factor to consider rather than the first. Instead, we recommend using design thinking to assist in developing the new organizational design. Design thinking begins with an inquiry such as:

  • What are these organizations designed to accomplish today?
  • What changes can we already see occurring, e.g., customers’ preferences, competitors, digitation of the industries, market dynamics, etc.?
  • What organizational design will best serve us in the future?
  • How can we create this new design which best fits our needs?
  • What future and strategic intent shapes our thinking about this design?
  • Who should be involved in creating this design?

Winning Hearts & Minds

People engagement and mobilization ultimately requires winning the hearts and minds of all stakeholders. Absent that, meaningful change does not occur. Engagement seldom occurs until the person has handled their question of “what is the impact of this on me” and “what do I feel/think about these changes”. At the same time, having the opportunity to be involved and participate is an important opportunity for becoming engaged. Winning hearts and minds is a reflection of leadership, for both the full engagement of the mind and the full-on commitment of the heart can only be achieved by a leader who is fostering this kind of ownership and engagement in this major change effort.

 

Half of M&A transactions fail to create value. Ever wonder why? Download our whitepaper ‘The Conundrum of People in M&A’, and understand the critical elements that impact mergers and acquisitions success or failure.

In it, you will learn:

  • Eight common flaws in decision-making often made by executives in M&A transactions
  • Why the integration process is so critical
  • Tactics in organizing, planning, and communicating that lead to successful integrations
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