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:
Importance of Personal Involvement
Leadership and Management are Different
Embrace Feeling Odd or Strange
Commit to Being a Team
Engage and Unleash Informal Leaders
Importance of Inspiring and Mobilizing People
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.
In summary, leadership is the essential “lifeblood of transformation” and must overcome seven predictable hurdles, which are:
- Committing to their personal involvement during the entire transformation, not just at the beginning.
- Changing their mindsets regarding the differences in leadership and management, and commit to being leader
- Persisting to overcome the initial experience of the transformation feeling odd or strange
- Being a team of executives rather than a collection of individuals who are each doing their own thing
- Engaging and unleashing informal leaders through the organization is required for success of the transformation
- Appreciating the importance of inspiring and mobilizing people through the organization.
- 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.
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