Firms that want significant growth and innovation will find that organizational transformation is an essential element in executing their strategies. Without this large scale change the factors which have been limiting growth and innovation will persist. Acting to promote growth and innovation without organizational transformation is the embodiment of the popular definition of insanity:
Insanity is doing the same things over and over while expecting a different result.
Organizational transformation is required to alter the organizational context and culture. To better understand the word context, think of it as assumptions, beliefs, and experiences which, while in the background, actively shape how a person perceives events and phenomenon as they occur. While we are largely unaware of our contexts, these contexts shape our experiences, perceptions and thinking. As an example, if you are in a business conversation, the term leadership will be shaped by your experiences in business as well as how the organizations with which you are engaged use the word leadership.
Context occurs in language. The context in which words are used clearly shapes the meaning of that word as well as the sentence in which it is used. Consider, for example, how the word beauty takes on very different meanings given the specific context. “Beauty” can be used to describe an attractive woman as well as “beauty products”. However, the same word (beauty) can be used to describe a physical injury to the eye (as expressed by “that shiner’s a real beauty”), and many physical objects such as an auto, classic sailboat, etc. Same word, but very different meanings given the context in which the word is used.
Growth and Innovation are two words with intense meaning in business. Growth is directly related to value creation, which is why businesses exist. Shareholders punish and reward executive and management teams based on growth achieved and sustained. Some management’s attempt to achieve short term growth through a combination of acquisitions, cost cutting and financial engineering. However, for long term sustained growth the organization must demonstrate organic growth, which is based in part on innovation. Organic growth and innovation require organizational transformation. Organizational transformation requires leaders throughout the organization.
Leadership in Growth & Transformation
A business exists to create value and the only sustainable way to create value is to continually expand the business’s capacity to grow, innovate and achieve results. Growth and expansion of capacity for results does not happen by accident, it is caused! The cause is leaders working intensely to engage others in making this happen. In most cases the actions required to achieve the growth and sustainable capacity occur because of the capability, good will and hard work of front-line workers throughout the organization. Leaders engage people and people in turn enable the business to achieve outstanding results while changing to meet the needs of customers and demands of competitive markets.
Leaders are the starting point. Leaders create clarity of purpose, appreciation of shared values, and an articulation of the future that engages everyone in the organization. The leaders enable employees to take actions that will lead to results. Leaders create clarity of purpose based on the results that are needed and promised for the organization. Leaders get their own being from their Foundational Commitments as well as the commitments that they have made in regard to the business. The shared values that are articulated and come to be appreciated by the people in the business come from the leader’s commitments as well. The values say what we believe in as an organization, what is important to us, and what we can be counted on. Values for leaders will always have a couple of elements. One is doing what we say we will do. The second is results, or as one leader told me “Results, Results, Results”. It is not that leaders are not compassionate people who don’t care about their employee’s safety and well-being. Most do care quite deeply. In addition, they appreciate that employees’ safety and well-being is intimately related to achieving excellent business results.
Leadership is the reason organizations achieve results that were otherwise not going to happen. If the desired level of results could be accomplished through doing nothing out of the ordinary or maintaining the status quo, there is not a need for leadership. Leadership is required when the needed results will not occur absent some intervention. The intervention that produces the results is the role of the leader, and the evidence that a leader was there. If the results are not being accomplished, then the leader is not getting the job done. While that statement may seem harsh or judgmental, I invite you to think along with me as to what that statement makes available and possible to a person who is committed to be a leader. It puts in stark relief the reason for the being of a leader and a measure that is most valuable.
“Being a leader requires being a leader.”
This simple statement goes to the heart of what is required for success in implementing a transformation. Those who are accountable for strategic execution must be leaders. That is, on a moment to moment basis the person in charge is called on to be a leader. Notice that this statement speaks to being. Being a leader is not the same as sitting in the office thinking about what should be done. It does not necessarily involve getting a group of people together to discuss what should be done next. Simply convening a group of people does not necessarily imply the presence of leadership. When a group of people are inspired and taking actions that will produce unprecedented and unexpected levels of results, that is the evidence that leadership is present.
Let’s look at some of the behaviors that you will want to look for in identifying real leaders.
It is essential that the leaders are personally involved and demonstrating personal commitment to the employees and the business. Employees are inspired by seeing their leaders personally involved and committed. At MacMillan Bloedel, Tom Stephens met directly with the various union leaders to challenge them to get involved in transforming the company. Some of the leaders cooperated while others did not. However, to the employees it was clear that Tom was stepping out and personally getting involved in taking on the hard issues related to the transformation. Tom also had meetings with environmentalists from Greenpeace and other environmental constituents as well as governmental leaders to chart a path by which MB could be successful. In all of the situations, the employees could see that the leader was making a personal commitment to the employees and the future success of the business.
Committing to a Desirable Future
Leaders think from a future that will be created for the business and the employees. Further, leaders look for other leaders who are already committed to a bright future for the business. Ironically, those who will be the most effective leaders may be quite different than you. They may not articulate it like you do, but their commitment is authentic and intense. You are not looking for people who need PowerPoint slide decks to be able to talk about the future and their commitments. You want those who are so authentic and genuine that they are their commitments. When they talk, people listen. They do not need props. They speak from their commitments and their heart. These leaders are so respected that when they speak about the future, employees feel like they can trust and they can listen. I heard a description for a leader like this. The statement was “If he tells you it is Christmas; you can go hang your stocking”. That is the kind of credibility that you are looking for.
In addition to credibility, you are looking for leaders who can commit to a future without knowing all the details of how that future will be achieved. This person is able to communicate a future that will be the basis for communication and engagement of others.
Completed the Past
Leaders are focused on the future, not the past. Ironically, the leaders you are looking for have often had difficult experiences with this organization, or a similar organization in the past. The knowledge of the prior difficulties makes these leaders more credible with some groups of employees. What makes these leaders powerful is that they are able to complete experiences from the past. The leaders you are looking for have completed the events of the past. They are not influenced or shaped by events of the past. They do not hold a grudge or are seeking retribution for events from the past. People who do hold a grudge and/or seeking retribution are not trusted by their colleagues and will not be effective as leaders.
The kind of leaders you want will acknowledge mistakes of the past. This acknowledgement does not require involvement of these past events. Rather, this person works from the business future in responsible ways, whether they happened to be individually involved or not. This willingness to be responsible is essential for credibility and effective communication.
If the leaders were involved in past mistakes, that needs to be addressed clearly and forthrightly. I am often surprised by how many people are unwilling to admit that they made a mistake, or that mistakes were made “on their watch”. People will pay an enormous price to maintain the “illusion of infallibility”. What is sad about this is that it is an illusion, and not a well-hidden illusion at that. Usually it is widely known that the incident or situation occurred, and yet much energy is spent in maintaining the illusion. It is like the old story of the king who is walking around naked, and yet the loyal subjects complement him on his beautiful suit of clothes.
Leaders often find that they also have to deal with events and perceptions from the past for which they were neither involved nor responsible. You can imagine how much resistance I receive from people about this point. It is common for managers to blame the employees and the union for the problems of the past. Of course, the employees sit around in the lunchroom and the union halls and blame the managers for the same problems.
The task is to get whatever happened in the past resolved for those involved. The term I use for this is completed. Completed means that whatever needs to be said and done to complete the past is done. If there is misbehavior from the past, it needs to be acknowledged and addressed. In most cases an authentic apology is appropriate. In some cases, there is action that needs to be taken as well. The leaders should take whatever actions are appropriate to be able to resolve matters from the past and get them complete. Getting matters resolved is essential so that these topics do not continue to come up in discussions. The leaders want for all to have matters from the past left in the past, and not injected into conversations and deliberation of the future.
For example, at MacMillan Bloedel Ltd., at the time Canada’s largest forest products company, one aspect of Tom Stephen’s leadership was that he discussed openly that the past failures in business was not the fault of the employees. In the first meeting with employees and union leaders, the executive running the business unit made a plea for involvement of the unions in a Co-Design™ project. After the executive spoke, a union leader gave a well-documented treatise on the prior failings of management in dealing with the employees and running the mill. In the midst of the treatise, Tom interrupted the speech with a very colorful and direct acknowledgement that prior management had thoroughly messed things up. The union leader was shocked at the candor of the acknowledgement and speech, and a possibility for transformation was established.
The closed mills and mediocre performance was attributed to management, and Tom was open that he was accepting the shortcomings of the past so that the employees and management could move forward to achieve better results. What Tom was doing was role modeling the desired mind-set of taking responsibility for what had happened in the past, even though he was not part of the company at the time. However, when he became CEO he “inherited the good and bad of the past” and thereby could take responsibility for what had happened in the past. By accepting responsibility himself, he was able to avoid the blame and finger pointing that otherwise was predictable and move on to transforming the situation and creating a future that was not possible prior to his intervention.
Walking the Talk
You want to spot leaders who “walk the talk”. If you are considering someone as a possible leader and they do not walk the talk, take them off your list of candidates. You have neither the required energy nor time to rehabilitate people’s reputations. Employees are very savvy about who walks the talk and who does not. You cannot “spin” or smooth talk credibility for those who have lost it on their own. You want people who are known to walk the talk because other employees will challenge everything in the transformation, including well established practices and processes. The leaders must be credible and willing to engage in the same challenging thoughts and discussions. If the leaders are not credible they will not get candor and openness from employees, and there is little chance that the employees will engage and participate.
Willing to Make Personal Changes
Leadership of a business in transformation requires personal change. A transformation requires dramatic change by the people in the organization to learn to work in a different way, to alter processes and most of all, to raise the level of performance. Most employees will experience some discomfort with giving up old ways of working and having to learn new ways. Leaders are not immune from this change, and in fact need to be out front in making the personal changes. Employees are aware of many of the changes that their leaders will need to make if the transformation is to be successful, and often keep a close eye on the leader to see what happens. The leader’s actions speak much more powerfully that their words.
Being leaders will require personal change and leaders often experience this change as uncomfortable. I must admit that I am still amazed at how frequently leaders are unwilling to face their own discomfort with changes and dig their heels in rather than make the needed changes. Needless to say, change efforts led by those who are unwilling to make personal changes are severely hampered if not doomed. Gandhi’s famous quote is:
“If we are to change, first we must change”
Committed to Communication
Leaders are the communication. They are the future and the transformation that will be required for the business to achieve that future. Their communication reflects their being committed to the organization, the people and executing the strategy. The leaders you are looking for may not be eloquent speakers. You might not select them for a debate team. You would however want them “in the trenches with you”.
Communication translates the leadership messages to the employees and helps them see the future, how the strategy being executed will deliver that future, how each employee fits into that future, and what is wanted from them. Effective communication speaks to where employees are, not where you wish they were. Let me share an example.
Tom Stephens is among the most effective communicators I have ever seen. It is not that he is unusually eloquent, but rather he speaks to the heart of the matter and connects with employees around their concerns. He then effectively builds a bridge from the employees’ concerns to what is important for the business. While he was in Canada as CEO of MacMillan Bloedel Ltd, he asked the employees to work with him to make MB the safest and the most respected company in their industry. He went on to ask that they also work with him to make the company outrageously successful. What made this message dramatic to the employees was that at the time MB had at best a mediocre safety record and little apparent concern for the employees’ well-being. Further, there was a history of acrimony with the towns in which the company did business as well as with the unions. More notable was that the company had been the target of numerous pickets by Greenpeace and other environmental groups for its practices of clear cutting the forest and harvesting old growth rainforest trees. For Tom to say, “Help me make us the most respected company in our industry” was shocking, and yet was clear that he was committed to making a transformation with the help of the employees. Each employee came to see that their role was to be responsible for their own safety, and the safety of others. That made the transformation meaningful for each person, and was the platform on which the other aspects of the transformation were based.
Naturally Engages Others
The leaders you are looking to spot are very effective in engaging others. This is important since strategic execution and transformation is successful only when a critical mass of employees decides that it is in their best interests that the transformation succeeds, and join in. Employees are “engaged” or enrolled when they see that the transformation is meaningful for themselves and the business. Each employee who becomes involved in the transformation will engage with a series of questions, e.g., what is the company trying to do, why now, what does this mean to me personally, will I have a job when this is over, etc. Employees engage with a transformation on a very personal level. If the leader speaks about the transformation as a concept, and does not make the translation for the employees, it will make it more difficult for the employees to determine if the transformation is a good thing and if they should become involved. The leader must “build the bridge” from the concept of the transformation to the specific requests for actions and involvement.
The transformation is made meaningful by the leader engaging and inspiring groups of people, who in turn engage and inspire others. For success in execution the employees need to be more engaged and committed than they were prior to the beginning of the transformation. This engagement will not occur if they do not consider the strategic execution and transformation to be personally meaningful, and essential to the future success of the business.
Addressing Those Whose Actions are Inconsistent
You are looking for leaders who are willing to have difficult conversations. In particular, you are looking for leaders who will address the actions of others that are inconsistent with the future and the transformation. “Truing up” others’ behavior will be essential. Leading requires causing disruptions as well as taking difficult positions with those whose actions are inconsistent with the intent of the strategic execution.
One type of interaction is with people who are complaining and have a persistent complaint. The first step is to listen to the complaint. In some cases, the complaint is an accurate description of a circumstance that is in need of attention. Those are the easy ones. A second category of complaints is actually a poorly formed request. The person is asking for something, and often wants to contribute to the transformation but is speaking in a manner that makes it difficult to hear. Generous listening by the leaders will usually allow this complaint to be re-expressed as a request for inclusion, and from that point it is also easy to accept and get the person included. The tough ones are when a person or group has a persistent complaint. When the leader listens to the complaint there sometimes is not a viable circumstance in need of attention nor is there a poorly expressed commitment. Rather, what is present are undifferentiated complaints, also known as whining. This situation eventually calls for the leaders to address those who are complaining and ask them to be responsible for their speaking and to find a way to contribute. Easier said than done in some cases.
A special group of people whose actions should be watched closely is the management team. In working with companies that are wanting to achieve a transformation, the biggest and most frequent stumbling block I see are members of the management team whose actions are inconsistent with the commitments of the transformation. That is, managers who are unable or unwilling to lead and are actively sabotaging the transformation. This appears to occur when the person discovers what it will cost them personally to lead. I cannot stress how essential this point is. Too often leaders attempt to “limp along” with members of management who are not strong, not committed, and in some cases, both. While there are always extenuating circumstances and good reasons, it is nonetheless a mistake.
One of the behaviors of managers that cannot be tolerated is blaming past failures and mistakes on the employees and implying that the same thing will happen again. Leaders of transformation must continue to reinforce that management is accountable for the quality of the results, that management cannot achieve anything without the active support of employees, and together they can be much more successful that working apart or against each other. After this clarity on accountability, the leaders should then make sure that the transformation is connected to business results in the minds of the employees. A transformation that is not connected to specific business results will soon turn into a corporate program and lose effectiveness.
Accepting Chaos and Risk
Leading a transformation will from time to time involve accepting chaos and taking risks. Leading a transformation is a recipe for living in unpredictability. You are looking for leaders in the organization who can tolerate if not thrive in chaos and risk.
Often members of management will be uncomfortable with these conditions. These managers will try to intercede to reduce these unpleasant conditions by stopping the transformation. The leaders of the transformation cannot allow this to occur, and if it does, not to let it persist. If it does persist, the leaders will be taken off course and the transformation will slow or stop.
Strategic execution involves chaos and risk. Leaders assist others in getting past the chaos and responding appropriately to risk. Ironically, managers are often upset at taking actions that are perceived to be high risk, when actually a larger risk comes from NOT taking action. John Kotter has written a number of excellent books on transformation. One of his primary assertions is that the role of leaders is to create a sense of urgency. That is, to have managers see that doing nothing is a greater risk to the business than taking the risks associated with the transformation. Involvement comes when managers see that there is greater risk to the business from not acting rather than the transformation. This is a critical role for leaders since if managers are left to their own resources and views, they will act in a way that is in their own best interest rather than what is best for the business.
Willing to Share Power
You are looking for leaders who are comfortable with power. You do not want people who will let the power of leadership roles “go to their head”. You want individuals who are committed to the future and transformation, not their own glory. Leading a transformation will require sharing power. In some cases this is sharing power with hourly employees and may include sharing power with union leaders. The benefit of the sharing of power is that teams comprised of hourly employees are often able to implement changes much faster than the normal “management chain of command”. The sharing of power by leaders is often upsetting to middle managers who see their positions threatened by the different order.
Leaders have to decide if it is worth upsetting middle managers to achieve a business result or is maintaining the “normal order” of greater importance. The upset middle managers will often argue that the leader is losing power as a result of this power sharing. The irony is that the opposite actually occurs. The leader gains credibility and power by sharing with a broader range of employees in service of business results.
Encouraging Others to Get the Glory
Leading a transformation involves creating inspired actions in others to produce outstanding business results. You are looking for leaders who will actively encourage others to excel and “look good”. This includes having others excel, gain notoriety, and be rewarded.
You want to be cautious of prospective leaders who are concerned with personally “looking good” and getting all the credit. These people will not be effective, as this trait will severely hamper their effectiveness in transformation. You do not want people who will be torn by the choice to go for business results or personally be in the limelight. You want to confront the unfortunate reality that many bright skilled people cannot lead because of their own desires for personal recognition. While these people are charming and talented, they miss a key ingredient for leadership. I have seen many of these type people selected for leadership positions, and usually it does not work out well. Even if they start off well, they are not able to sustain the changes and the transformation does not persist.
Relationship to Results
There is a unique relationship between business leaders and results. As you look to spot leaders, this one attribute must stand out. Each prospective leader is unique, and yet you want results orientation to be central to the person. Many things drive leaders, as each person has their unique experience and history that leads them to be willing to “give themselves over” to the demands of being a leader. Results are what are important to leaders. Leaders are not concerned with perks, privileges and special relationships. Leaders want results. Period. End of conversation, or as the Brits so elegantly word it, “Full Stop”.
In developing the leaders in your business, it is important to remember that the leaders’ reason for being is to mobilize people to achieve results. Leaders achieve results by seeing that people in the organization are inspired to act in a way that produces results. In particular, acting in whatever ways that are required to have the organization achieve the promised level of results. Anything that distracts a leader from that mission and passion is a disservice to the leader and the organization.
Managers who are concerned with their own comfortable life and want to make sure that they have all of the perks, privileges and special relationships are likely not being real leaders. Further, they are probably doing a disservice to the organization by taking up a position that needs a leader. They are not only not doing what is needed, they usually are actively blocking and undermining those who are trying to provide leadership and do what is right for the organization. Often, I hear these people described as good people who are well intended and just not capable of doing what is needed. It is as if they are actors who have lost the plot but are expected to regain it in the next act. In reality, they are not focused, but the hope is that they will regain it “any day now”. While it is true that caterpillars will turn into butterflies with the passage of time, it is not true that these unfocused and self-serving people will turn into leaders with the passage of time.
Organizations achieve results that were otherwise not going to occur because of the being and actions of leaders. Leadership is required when the results that are wanted and needed will not occur absent some intervention. The intervention that produces the results is the role of the leader and the evidence that a leader was there. If the results are not being accomplished, then the leader is not getting the job done. While that statement may seem harsh or judgmental, I invite you to think along with me as to what that statement makes available and possible to a person who is committed to being a leader. It puts in stark relief the reason for being of a leader and a measure that is most valuable.
There is a strong tendency to tell excuses when an organization or team fails to deliver the expected results. While there are always extenuating circumstances, I am going to encourage you to work from a factual perspective that the result was achieved or it was not. Being factual makes a huge difference. If we say the reason for being of a leader is to produce results that were otherwise not going to happen, we then see that what the leader is always and ONLY about is producing results. Business leaders are not Renaissance people who are fully developed in every aspect of life. No, they are men and women who have devoted their careers to learning how to accomplish unexpected results through others. It is a finely-honed skill that wants to be cherished, developed and protected.
Perhaps the biggest threat to leaders getting results is reasonableness. Leaders are frequently told that they are unreasonable. In a normal business setting when someone is told that they are “unreasonable”, it is very seldom a compliment. It usually is a critique or criticism and tied to a request that the person stop asking for what they are asking, or doing what they are doing. The “pinch” is that being reasonable and listening to all the good reasons will only produce what is already going to happen, and nothing more. Anything other than that which was already going to happen will require someone interfering with what is perceived as reasonable, or in more convention language, disrupting the status quo. A leader must remain vigilant in guarding against becoming reasonable or being convinced to stop being “unreasonable”.
The question then is how this trait of reasonableness occurs for or shows up for the leader. Occasionally it is self-induced. This comes from having some doubt or question about some element of the result and what will be required to achieve it. Generally, reasonableness is presented by those around the leader. Worst of all, it may come from a consultant and/or project manager who is supposed to be supporting the leader.
Maintaining Focus on Achieving Results
The leaders you are looking for are passionate about business results. They had rather get results than eat or sleep. This attribute is important since the leaders will keep reminding employees of the business results that the transformation will accomplish. The leaders will need to continually connect the transformational actions to the business results, as employees have a tendency to let the two become disconnected.
At MB, Tom Stephens continually discussed the need for financial results that were to come from the transformation. He continually reinforced that the reason for the transformation was to create a substantial improvement in business performance. In addition, the company sponsored business literacy training for all employees. These training courses were designed by and delivered by employees from within the operations. Some of the trainers were hourly workers and union members. You can imagine how much more credible financial information about the operation is when it is provided and taught by a colleague.
Identifying the prospective leaders to assist in the transformation is the place to start the preparation. It is important to be candid about these prospective leaders, and not to have hope. Someone’s potential is not usually a good conversation to have about leaders. Either “they do or they do not” is far better than potential.
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