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September - 2012 - issue > In My Opinion
Leading through Change
Gautam Thakar
Sunday, September 9, 2012
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I have worked in or led strategy changes a few times in my career now and believe that some key principles can dramatically increase the odds of successful change management.

Every company and culture is different so this is intended to provoke insights to help leaders on a similar journey of change rather than be a formula for all situations. Many of these are based on experiences in smaller companies (200-400 people), but the principles cut across all types of organizations. Shifting strategy is hard work. It requires that a company change a business model, a customer set, a product line, and go to market strategy or its people. So what can CEO’s, leaders or managers do within their own areas to make this painless? More significantly, even make it an energizing process?

1. Be Authentic: treat people the way you want to be treated.

It sounds clichéd but is hard to do. The CEO of a global company I worked, at changed the business target audience from “mass market” to “top 10 percent “of consumers. He couched it as a prioritization exercise instead of calling out a strategy shift – with the good intention of avoiding churn in the organization. However as the change in priorities led to a product portfolio revamp and a dramatic shift in marketing budgets, it was hard to defend that this was not a strategic shift. Your people are smarter than you believe.

It’s best to be direct and address the tough questions openly (including being transparent if you don’t have all the answers). This is a great first step for employees to embrace the change. Most employees respect transparency even if they do not always like the message. On one significant strategy change occasion I announced that our current strategy needed to change but did not offer a new path. I invited the team to partner with me to reshape our mission over the course of 30 days. Despite the uncertainty, I got great feedback; as an example, one teammate said, ‘you treated me like an adult and allowed me to influence the outcome. Whatever you decide now, I am behind the new plan’.

2. The power of engagement (before a final strategy decision is made):

I have seen very powerful results when the broader employee group is engaged in influencing a new direction. At one company where I worked, the CEO created a business plan competition where different functional teams were asked to pitch a new customer value proposition. Over the course of a month, this energized people to brainstorm and come up with outstanding ideas. Most importantly, it got people to challenge status quo in a productive bottoms up fashion. What made this very successful was that the CEO had set expectations that the final proposition would not necessarily be the winning idea from the competition but would likely be a variation that took the best work from all groups.

This is an extreme example but it demonstrates the importance of broad based and early input. One caveat: if you have already decided the new direction, please do not create ‘fake input’ opportunities as that will backfire. Again, people are smarter than you think. In that situation it’s best to declare the strategy early and fine tune tactical elements based on feedback.

3. Disengage with the past. ASAP.

Teams will need some time to grieve the loss of what is changing, but you need to keep that time frame very short. People who do not buy into the new strategy need to be nudged out of the organization at the earliest. It is okay to disagree before the decision is made but once that is done, it is time to commit. I have let folks stay on for too long; mostly because I felt that they should not be penalized due to a change that was no fault of theirs. This is probably one of the biggest mistakes I have made. It is not fair to the company (cynicism affects the believers, hampering execution), it’s not fair to the believers (they resent that they are pulling more than their fair share of weight) and it’s not fair to the non- believers (sooner or later they will leave, and likely with poor references). Disengaging with the past and those who are stuck in the past is the toughest and yet the fairest thing to do for all concerned.

4. Set clear near term milestones and ensure early wins:

Leaders often fall into the trap of confusing inspirational BHAG’s with operating plan metrics. It’s critical to inspire and it is also important to have stretch goals. However, it is important to break down the long term BHAG into simple operating milestones that allow teams to showcase early wins. Employees are looking for the smallest signs of validation for the new strategy to determine whether they should commit to the new way or abandon ship. Even small wins build confidence and inspire teams to take on harder and bigger challenges. I once worked in a company with a very inspirational mission; something that everyone absolutely believed could take on google in one of its businesses. And we probably could have done this. However we set year one goals that were so ambitious that when we missed them by a mile, the same employees who loved the bold mission now started double guessing our plan and lost faith. Unfortunately this meant that we had to abandon what could have been a very exciting strategy.

5. Communicate early, often and then some:

Irrespective of your level in the organizational hierarchy, if you are a people manager, your employees are craving for information on progress. It is very important to communicate even when things are not going per plan. Employees would rather hear bad news than no news at all (in which case they assume the worst anyway). It's ok to not have all the answers but you must have a path to get them. Turn this into an opportunity to solicit broad based help on ideas to get back on track. In a recent all hands meeting I shared areas of the plan where we were 'red'. I found that I got many comments after the meeting on "we'll find a way to help you solve the problem". That is such a great position to be in and comes only if you have been sharing information transparently along the way. It builds trust and everyone around you wants to do everything they can to help you succeed.

Change is hard. It is tempting to maintain status quo, focus only on successes and communicate only the buttoned up plan. In my experience, this is the exact opposite of what works. Treat your teams as you would expect to be treated, share more than necessary, be direct and transparent whenever possible and engage them through the journey. Ultimately change is only as successful as the teams who need to change allow it to be. And if your team believes they can influence and shape change, hear the good and bad along the way in an authentic fashion, they will not only allow that change to be successful but will also do everything they can to make that change successful.

The opinions expressed in this article are purely his own and are not necessarily the views of his company.
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