Who’s On Board?
First get the right people on the bus, the wrong people off the bus and the right people in the right seats. They will figure out where to drive it.
Jim Collins (2011) — Good to Great
Any urgent and large-scale transformation in a company facing a crisis situation will require more than the willingness of just one person to make it happen. Large organizations are complex and have hundreds if not thousands of people in many different locations with the ability to either make things happen or to remain still.
Therefore, the alignment stage of a massive transformation is a key element. Alignment requires a strong leader to get things going, requires clear channels of communication and basic agreement within the top team, and it requires reaching out to everyone else in the company, even related third parties who may be outside of the organization.
Figure 3.1 Who’s On Board?
Thousands of books have been written about leadership and leaders, and many definitions of both can be found. It is not my intent to cover all of the dimensions behind leadership. I have chosen for this chapter the findings that I have found most useful in my own experience.
To keep it simple, I would like to think of a leader as a person who can influence and work with others in order to achieve a certain desired state. This by definition requires change! A leader will set the right vision, will determine the direction, will align the team, and motivate and inspire others to follow. And yes, a leader is expected to take bold and sometimes risky decisions.
If we think of a company, the leader is the CEO. It is the person who is leading the whole of the organization.
The leader must want to make the change at hand, must be willing to make tough calls and have difficult conversations. The leader has to dedicate time to make the change happen. He or she cannot shout out for change and expect it to occur overnight without spending a great deal of energy in the process.
The person leading the transformation process needs to be ready, willing and able to do it! Ready means it is the right time for the leader to initiate and lead the transformation effort; willing means he or she is ready to step up and give all the necessary energy to make the tough calls and make the changes required; and able means that he or she has the right capabilities, reputation and credibility to lead the process.
If the leader does not lead, change will not happen. We cannot expect someone else to carry out the change for the leader without his or her complete engagement. Furthermore, one cannot instate someone without any formal empowerment or authority to implement change. If we do so, we may actually kill that person in the process!
Often we have heard that to get things done leaders should have the ability to persuade and influence third parties by bringing them on board. If the leader has charisma and can do things in a positive way, all the better, but this will not be enough. What if people don’t want to get on board? Does that charismatic leader have any other tool to make things happen or help convince others to change their behaviors? I have learned that having real empowerment is a must for getting things done. Be suspicious if anyone who is placed in a certain position to get things done has no other empowerment abilities than his or her “interpersonal skills”.
I like Prof. Luis Huete’s framework on “Twelve levers to manage Power” because it really lays out the important issues that need to be taken into account when setting someone up to lead a transformation project.
Twelve levers to manage POWER
1. Control of important resources for others (budget, staff, information, etc)
2. Decisions about carrots and sticks (punishments and rewards)
3. Move on different fronts and create a critical mass
4. Surprise the rest with unexpected and quick initiatives
5. Bring the opponents on board
6. Get rid of “enemies” in an elegant manner, if possible
7. Focus on important and long-term issues and avoid opening unnecessary projects
8. Personal charm and human touch to connect
10. Make the key relationships work
11. Have an inspiring future vision
12. Self control
This is a very useful checklist that I have used in the past to test whether I was going to be able to make things happen or whether I was risking dying in the process.
I would like to make a distinction between who is really leading the transformation and who may at some point be acting as the head of a Program Management Office (PMO). These are two very different roles. The head of a PMO should be able to persuade, convince and bring people on board, but usually the person who has appointed the head of the PMO is the one behind the transformation and its true leader.
My observation after seeing many successful and also many unsuccessful transformation programs is that the true leader needs to be the highest ranked person covering the area where the transformation needs to take place. To be more specific, if you need a transformation effort in the IT department in country A, the Chief Information Officer (CIO) for country A needs to lead the transformation effort. If the transformation for the IT function needs to be global, the global CIO needs to be leading the effort. If the transformation effort requires not just a change in the IT function but changing the way many other parts of the business work, the CIO must either be fully empowered and have authority over other areas or the leader for that process needs to be the CEO or Chief Operating Officer (COO) of the company. Rank, in this case, matters.
I have seen great professionals try and fail to lead transformation programs in which the boundaries have been too broad and way above their direct level of influence. They were very good professionals trying to do what was best for the company, but they did not have all of the levers to pull it through. I remember having many conversations at the time about the interpersonal skills of these leaders. They may have had a certain uninspiring style, but for sure, they were senior leaders. But not having the proper articulated support from above, ie not having full empowerment, was a key factor in their failure. It is a sad truth that the level and intensity of internal fighting had created hate and mistrust! Under these conditions, good people can get burnt in the process.
The leadership to produce urgent and large-scale transformations needs to come from the very top of the company. So, what is the role of any other person not sitting at the highest position in an organization? Is there anything to be done? The answer is yes! Everyone can play a significant role in a transformation process. There are two very clear roles for any other person within an organization that is facing a necessary turnaround process: the evangelist role and the tester role. Anyone can help the senior leader through the difficult journey of the transformation by helping to create and spread the Story behind the company’s transformation. Evangelists can come from any level and corner of the organization. Some will be discretely effective, others bombastic and perhaps overbearing at times. There is, however, almost no limit to how often or how much we want to spread the word, get the Story out there. There is no such thing as bad press when it comes to the transformation story. The second role, the tester, can also be done from anywhere in the organization. Testers take the big idea, the Story, and apply it to small actions and projects. This serves as discreet road testing that highlights potential pitfalls and also creates numerous quick wins, albeit small ones, that can then be heralded throughout the organization. The leader (and/or PMO) is well served to nurture both evangelists and testers.
We have already mentioned that change will not occur overnight and that leaders need to be willing and able to confront the challenges. Once again, the more successful the company has been in the past, the lower the sense of urgency, the longer the same executive team has been around, the higher the effort and energy required to make things happen.
I have personally at times underestimated the level of emotional and physical energy needed to perform a successful transformation.
Do leaders and change structures have a limit to the amount of energy they can create to make change happen? Can someone who has been around for more than a decade succeed? In my personal opinion, the answer to both questions is YES. We just have to make sure that the leader is totally convinced of the need to change and has the right level of emotional support to make the tough calls, and I would also add that he or she requires the right level of physical energy to sustain the long and tiring journey.
No rest for the weary
Did you know that holding a desk job is one of the most dangerous occupations you can have? A sedentary, information-overloaded, 24/7 lifestyle is hazardous to your health, and by association hazardous to the health of an organization. But ironically what seems to be most needed, according to research, is not exactly rest: what busy executives need, to be at peak performance intellectually, is a healthy body. “Mens sana in corpore sano” [a healthy mind lies in a healthy body] is not a new concept, and yet we do not work this symbiosis seriously enough into our practice as leaders. I would like to briefly describe one model for building wellness and sustainability into our leaders’ performance and suggest a way forward in incorporating these notions into our “must haves” for transformation.
Can we take the heat?
As I consider who is on board with me to drive change in my organization, it does occur to me that I am asking a lot: I am asking for passion and commitment, going beyond our already demanding jobs, sticking our necks out, “certa bonum certamen” [fighting the good fight], etc. All of this takes stamina and strength, and leads me to consider whether we will be drawing on a well that is already dry. A significant part of organizational transformation finds useful, even necessary, stores in the realm of our own physical awareness. Attention to the mind–body relationship is still underdeveloped and under-prioritized in traditional crisis management, at least in traditional companies.
Starting a movement
An organization that is poised and ready for change, is literally and metaphorically ready to move! Emphasizing notions of movement, recovery, fuel, focus and even (for those who are willing and able) physical training can lead to “sustained leader performance” that can benefit individuals, companies and society at large.
Basic human needs are often compromised within the professional domain, with detrimental effects on health, wellbeing and ultimately performance. In the same way that athletes take care of their whole self to be at their best, shouldn’t we, as “corporate athletes”, do so as well?
Ever since Maslow articulated his hierarchy of human needs, mental performance has been seen to be dependent on physical status; creativity and problem solving skills come only after meeting the need for essentials such as food, water and sleep. If we apply this to today’s round-the-clock lifestyles, we might find the need for people to improve their physical fitness in order to increase cognitive performance.
Founded on the above context, one program that has been successfully integrated into leadership development at several leading companies around the world is Sustaining Executive Performance (SEP), created by the Sustainable Executive Academy. SEP includes the following main elements:
1. Move: incorporates physical movement and mobility, helping combat the negative effects of a sedentary lifestyle. Small things can make the biggest difference: take the stairs, park far away from the door, go and talk to someone down the hallway instead of sending an email, walk while you talk (on the phone or with a colleague), rig your own stand-up desk. Why not have a standing or walking meeting? I have done it. It works!
2. Recover: includes physical and mental exercises that can be practiced within the workplace and at home. Small things can make the biggest difference: prepare conscientiously for bed time (wind down, no sugar, alcohol or emails for 1 hour before bed, and ensure a quiet, dark environment), remember to breathe and stretch during the day, take naps in the early afternoon if possible (may not work at your desk!), take time to disconnect, rest your mind and body.
3. Fuel: involves not only nutrition, but also all other energy sources that fuel performance and sustain action over the longer term. Small things can make the biggest difference: keep an eye on the glycemic index of foods to manage your energy peaks and valleys, take active breaks to restore energy, hydrate, and find activities that are fun for you.
4. Focus: considers the appropriate use of technology and overall approach to work for high performance. Small things can make the biggest difference: have quality time “off” as well as “on”, protect certain hours from constant information overload, smartphones and interruptions, and limit the desire to “multitask”. Over 50 per cent of the population keep their smartphones less than 1 meter away 24 hours a day. That means it is the last thing they see before going to sleep and the first thing they see when waking up. If that is your case, make sure you configure the sounds in such a way that you can disconnect.
5. Train: addresses different ways of incorporating physical fitness into busy lives. Small things can make the biggest difference: find training/exercise that suits you and that you enjoy, include a partner or friend, practice interval training (it changes things!) and add in incremental steps.
A new generation of leaders
Sustainable leaders — who intend to be able to stay on board with the transformation — should be capable of taking the long-term view of their own performance and position within a firm. From sustainable leaders come sustainable and agile companies. There are a number of approaches to working these concepts into our workplaces. What are we waiting for?
Different leadership styles may work better in some contexts and worse in others. No one approach is necessarily better than the other. Mother Teresa of Calcutta was a fantastic leader under certain circumstances and Winston Churchill was also a very successful leader. They each led with a different style and under very different circumstances.
We’ve established that it is very important to understand the level of urgency required for your transformation. If there is no crisis and therefore the level of urgency is low, managing in a very direct and authoritarian way may burn the teams out and by extension everyone in the organization. This type of overbearing leader creates a level of stress that is not necessary for that context and may even impede the sustainable growth of the business. In such cases, a more open style would be more appropriate, reaching decisions by consensus, given that there is less time pressure.
Figure 3.2 Different leadership styles are required in different contexts.
A good sea captain is sober on a fair-weather day sail and light in an overnight, stormy sea crossing. He adapts. The captain brings necessary caution to the revelry and then dissipates fear, while still providing firm leadership when the night winds haunt and howl. When everything is growing and things are going fine, the leader can lead in one way. When the same leader needs to implement a transformation program, he or she will have to lead differently. Style and speed will depend on the urgency needed to meet the challenge and weather the storm.
Leadership is always important, but in the context of “Defying Doom,” we must assume that the company requires an urgent and large-scale transformation process if it is to avoid perishing. In this crisis scenario, the leader needs to be more present than ever, taking decisions and making sure that they are executed without anything getting in the way. Consensus at this stage, when the level of urgency is very high, is not going to work. At this point, our sea captain needs to stand on the bridge and make the calls. Often the challenge for those working below this pressured leader is to help him or her understand (if he or she does not already) that he or she needs to make the tough calls, give the orders, trust his or her instincts and trust his or her authority. Like our sea captain, the leader has to adapt and those around him or her can transmit the trust that will give him or her the confidence to do so.
The legacy of historical team dynamics makes this very difficult. The team surrounding the leader may have been with him or her for many years and under very different circumstances. They expect fair-weather captainship, when what they need is a storm fighter.
Can the same leader manage the transition to a different context? History shows us that great leaders can, but not everyone leading a particular company or division will be able to make the personal choices that the transition requires. If we are aware of this challenge and take it into account, we may be able to avoid changing the leader altogether by working towards a change of leadership style.
What if the same management team has been in place for many years and many different phases of the company? This may create a stagnant environment for the leader. The leader must be sure to develop the right alignment of his or her team.
Who can the leader rely on during this transition apart from his or her team? Leadership can be very lonely at times. The leader needs to make sure he or she finds the right support. In many cases, the use of external support may be very helpful as a sounding board to relieve some of the pressure around the transformation effort.
In some cultures the use of external coaches is widely accepted but is not common practice in others. Ideally, everyone should be able to have someone they can talk to openly and express concerns about the process of change and the challenges. An experienced senior person who has actually dealt with similar situations can be very helpful. Whether you are the one who needs to lead the transformation or your role is to help a senior leader in the process, you could consider using some external support if needed.
Kids pay more attention to what we do than what we say. In the business world, people will listen to their leaders but they will also scrutinize their every move to make sure it is consistent with their discourse. This is how the behavior of the leader defines the culture of the company.
Bad signals and not walking the talk will destroy credibility and culture. As we can see from countless political and celebrity scandals, it can take 10 years or more to build up credibility, and it can all be destroyed in one “moment of truth” gone wrong.
If the leader is not visiting customers, don’t expect everyone else in the senior team to be doing so. The leader can shout as loud as he or she wants that customers are the most important thing for the business, but it will fall on deaf ears. Similarly, in a cost cutting phase, if the leader decides to travel coach, you can bet everyone else will follow!
Training and development can be an interesting testing ground for people’s readiness to change. When managers attending leadership development programs ask for their bosses to attend the same course, we have a symptom of inconsistent leadership. Should this not be the other way around? Instead of forcing teams to attend certain leadership development programs, senior leaders should be the first ones to attend and then the rest will willingly follow. This practice is very well established in professional services firms, where the history of the company is based on a strong culture of attending leadership programs as a stepping stone in someone’s career in the organization. In this case, people look up and see that all partners in the firm have attended certain programs and understand that it is part of the career path.
I will come back to this aspect when I talk about execution later on, but we have to remember that cultural barriers can get in the way of any great strategy and prevent its successful implementation. The best strategy can be offset by the wrong culture, making the role of the leader in defining the right culture one of the most crucial aspects of a transformation.
Again, the leader will have to call the difficult shots and make tough choices. Do you have the right culture to make the tough decisions required in an urgent transformation process?
A historically paternalistic company culture may present an additional challenge for whoever is leading the transformation. Things will have to change if we want to shake up the company and react to the urgent situation.
Drawing on the lessons I have learned so far, I will summarize what I think is needed from a leader, using the same framework that I am proposing in this book:
- A leader needs to be able to take the company on to the next successful cycle, and in order to do so, the leader needs to be able to formulate a story explaining why change is needed, creating a sense of urgency, setting the right vision for the future and a roadmap to get there.
- The leader must be passionate about the transformation ahead, and must be ready, willing and able to perform.
- The leader must create a team surrounding him or her that is totally aligned with the project, and must be willing to make difficult decisions and remove barriers when he or she encounters direct opposition from a member of the team.
- The leader needs to be eager to openly communicate the Story throughout the whole of the organization, as well as to reach outside to customers, suppliers, partners and public opinion makers, sharing the same Story with all of these key stakeholders.
- The leader must have the energy and persistence to remain focused in order to execute the established plan.
One single person cannot take on all the work by him or herself. The leader will need a close team that is 100 per cent aligned with the effort that is needed.
If you are reading this book, you will have had personal experiences leading projects or teams in the past. You may even have had contrasting experiences: some of alignment in your direct team and others without it. Life at work, when teams are aligned, is enjoyable, fun and everything seems to move smoothly, at any speed, in the right direction. But think of those projects where there was no alignment in your team. Life at work becomes a stormy, treacherous sea. Every tack is a challenge, every wave a threat, every mate an uncertain ally.
There are some signposts for such treacherous seas: are you spending most of your time and energy trying to sort out internal politics rather than solving real business problems? I personally have faced situations in my professional experience where I recognized that I was spending almost 80 per cent of my time trying to sort out internal conflicts between divisions instead of trying to solve the real challenges we were facing. A second negative consequence of focusing on internal politics is that energy is being drained and people are spending time on other aspects of work or, even worse, on other projects that are not in the best interests of the company.
I remember once being part of a very dysfunctional team. Every meeting or work session we had turned into a conflict. A few of us would in fact agree before the meeting to try to make it last the minimum amount of time just to get it out of the way. Our expectations were so low that we knew from the very beginning that we would get nothing positive or agreed by the end of the meeting. Typically, people were invited to present projects and the progress around them in each of these meetings. We got to a point where those leading a project would come to me several days before a meeting to ask me to please remove their project from the agenda. They did not want to sit through that meeting and suffer from the negative dynamics.
It can be difficult to detect whether a critical point has been reached in the functioning of a team. Do people still want to present projects and progress, and share the difficulties that projects face in the meetings we are holding? And if you are the leader of those meetings, how can you be sure to create a good and open environment where everyone can share and challenge?
When the lack of alignment is too big, the team risks becoming dysfunctional. Dysfunctional teams will not make change happen. The level of energy required to make even the smallest decision is huge. And when even the smallest decision is finally made, there will always be a sense of winners and losers. Every small decision needs to be escalated to the leader for resolution, turning the decision-making process into a quagmire. But the worst part is not necessarily what happens during these kinds of meetings, but rather what gets filtered down to the rest of the organization.
We have to keep in mind that people in an organization will always be looking at their senior leaders to see what they do and how they react to different circumstances. Every time I have been aware of any tensions in a senior team, these tensions are unfortunately known by most people in the company, and in many cases it creates additional tension in the ranks when the different areas or departments need to work through common issues. When Mum and Dad don’t get along, the kids know it!!
“Non-aligned” teams hurt the company and its ability to execute a decision when it has been taken and not everyone contributes to its implementation. We tend to assume that agreement and compliance with key decisions happens automatically. But if teams are not closely aligned, many decisions will be blocked a few steps down the line and things will just not happen. Under these circumstances, internal communication is usually not very open and therefore it will even take a long time to find out that a manager somewhere in the organization has stopped a decision that was clearly approved by the Executive Committee. And what is worse, there are often no consequences when, a few months later, it is well known that the decision has been stopped.
Alignment in the Top Team for any company is as important as alignment in any sports team. Unless the team is really aligned and committed to the objective (usually to win the game), it will not happen.
As in all teams and large companies, there will be natural tensions between departments. Finance and control will place more weight on financial indicators or will try to keep the business evolving with fewer resources. Marketing and sales departments will always be debating the right way to go to market with the overall product portfolio and of course operations will be complaining about all of the above departments. These tensions are natural and will occur. But we should never let those tensions get so strained as to paralyze the company.
As a fan and player of several team sports, I have long heard the complaints that get batted back and forth between forwards and defensemen. The forwards complain that the defense is not doing a good enough job at winning the ball and giving it in a timely fashion to the forwards, and of course the defense complain about the forwards not scoring every time they have the ball. But this level of tension is manageable and part of the game. What we would not allow to happen on a sports team is to have different players from the same team wanting to score in different goals! What is very clear is that the opponent is the other team and we want to score more goals than them in order to win.
When organizations get messy in a crisis, we do not always have a clear and common goal for our team. I have found it useful at times to identify a common enemy out there that can help us come together as a team and see how we can win the real battle and thereby stop the internal fighting.
Clear and strong alignment among the top team is a must before going out and trying to engage everyone else (we will cover the communication element in the next chapter). There is a very natural temptation to try to start communicating things down into the whole of the organization before being sure that the leader and his or her direct team are 100 per cent “in sync”. There is no perfect solution to this: in practical terms, most of the time I have seen that transformation programs or parts of them start to be communicated widely throughout the organization while the leader is still trying to align his or her direct team. It is the leader’s call to decide how far to spread the word while still trying to build the core coalition surrounding him or her.
When in doubt, I would strongly recommend not advancing too far in communicating the full story until there is a general sense of alignment in the top team. The worst thing that can happen is to start communicating the Story and the key decisions taken and later on have to withdraw because there was no alignment at the senior level in the company. This happens often, destroying credibility and making it even more difficult to launch the next wave of the transformation effort.
Are we working as a single team searching for a common future and aligned behind our main objectives and projects, or are we working in very different and isolated silos? As we have seen, heightened levels of politics and fighting for turf and airtime are hazards to a transformation process.
Figure 3.3 Silos only connect to each other through the top
Having spent many years of my youth on farms, I love the analogy of departments as grain silos. The silos you find on farms are not only isolated from each other, making it possible to keep different types of seeds in each silo, but in order to transfer seeds from one silo to another they must be moved upwards to the very top and only then can they be transferred to another silo. This second element offers a very evocative parallel with some of the dynamics in organizations. How does communication occur between different departments? Are people talking to each other to solve problems and capture opportunities or are all communications being escalated to the senior leader before going to the person next door? If you are leading a company, what behavior do you expect between members of your direct team? What can make your life easier as a leader? It is clear that we do not want everyone going to the leader about issues that could be sorted out amongst peers.
Trust is a key element that can actually act as glue within the team. And building trust among people requires a lot of time and effort, and it can disappear very quickly due to small incidents. It is one of the leader’s functions to build this trust among the top team. A team working as one aligned body can be very powerful and effective. The opposite of this situation — when teams are not aligned — leads to life at work becoming miserable.
I cannot overestimate the challenge and effort required to create this all-important trust among team members. If the relationships within the existing team are not working and the climb looks just too steep to create the desired new dynamics, I would recommend bringing someone in from the outside to help as a facilitator. Caution! This only works if the leader is prepared to back up everything the facilitator may suggest. I have seen too many cases where someone has come in to help, recommended by a member of the team or by the HR department, and it has not worked. The leader must suggest, help and decide who needs to be brought in, when and to what end.
Creating trust within a team is not easy, but not impossible. It requires effort and dedication from the team leader. In order to increase the level of trust among team members I suggest a combination of different types of solutions.
To start, I will mention the classical formal mechanisms to improve trust among team members. I would consider in this category all team dynamics exercises usually run by consultants who specialize in these types of activities. The objective is usually to get the team members to work on something in a very different situation or context, and away from the office. This allows people to get to know each other better and to think of other team members in a different way than they may have in the past. Depending on the type of activity that has been selected, you may suddenly be surprised by the hidden skills of some colleagues.
As an example, the following activity struck me as different and memorable. There were 10 of us as permanent members of the Board of a company and we wanted to create a better relationship amongst ourselves. We went offsite for 2 days to a hotel close to the office but far enough away to be in a totally different environment. We were not briefed about any activity until we were on the bus on the first morning heading to a fire station. We went through a firefighting course (I still have the certificate) where we were not only given the necessary theory and basic knowledge on how to deal with different types of fires, but also went through two practical exercises, where the risk and danger were real.
The first exercise was to put out a massive fire. A large open tank approximately 30 feet in diameter had a fuel fire on its surface. The objective, working in teams of four, was to approach the tank with a fire hose (it needed four of us to hold it) and put out the fire. We needed to be entirely dressed in appropriate clothing and the heat coming from the fire would burn the slightest bit of skin exposed. There was no option for failure and the last thing we wanted was an accident. We were all looking out for each other and had a very clear objective in mind. Put the fire out without anyone getting hurt. It worked fine. All teams were able to complete the task.
The second exercise was to walk into an old abandoned building that was absolutely filled with black smoke. There was no air to breath and zero visibility. We were all carrying our masks and oxygen tanks, and the objective was to find the way out on the other side as a single team. Very interesting dynamics developed around how we had to hold on to our buddies at all times to avoid getting lost in the smoke. There was no option but to place total trust in your colleagues during the whole exercise: our lives were in each other’s hands.
The objective in these types of activities is of course to take people out of their comfort zones and to create trust among team members in a way that did not exist previously. The hope is that this new level of trust will help the group later on to trust other team members’ decisions. I had placed my life in someone else’s hands, while someone else’s life depended on me. Why would I not trust one of these team members to make a decision for the company? At the very least, it helped me to establish a new relationship with several team members.
It is not always necessary to be fighting real fires to create a different context and build trusting relationship among team members. There are other “in the room” exercises that can work almost as well.
Firefighting and other less complicated activities are a good start, but they are not enough to guarantee success. Emotional experiences need to be reinforced by day-to-day behaviors within the team. Again, the leader is the key person everyone will be looking at to model the desired team behaviors. Do you as a leader really understand and know each of your team members in depth? What are their fears? What are their real concerns? What are they really good at? What do they really want to do? These in-depth conversations need willingness on both sides to share and open up. This process also requires that the leader open him or herself up to the rest of the team, sharing his or her own fears, joys, challenges, weaknesses and strengths.
A leader who allows side conversations before or after meetings sends a signal that those side conversations — and not the discussions during meetings — are the way to get things accomplished. Team members will then go directly to the leader to get things done, avoiding the challenging conversations during meetings. I strongly believe that managing this second type of behaviors has as much impact or even more than the team-building exercises described above.
It is, however, key for those leading a senior team to make sure they have listened to every member. If you have participated in senior leadership teams you will have noticed that not everyone speaks up as frequently and as intensively as others. This is fine, provided we encourage everyone to participate actively and make sure that we engage everyone when they do speak. Is it usually the same people who speak up? Don’t assume the silent ones are agreeing. Make some room for them to speak and buy in as well. A practical way to do this is before closing the debate on a difficult decision or project to go around the table asking every single person to comment or to openly express whether they personally agree with the decision or not. It is a very simple but powerful tool to make sure people are aligned and it also creates a stronger commitment to the decision that is being made.
Great leaders act as a coach for each one of the individual members of a team. In doing so, the leader helps each individual to perform at his or her best in order to get the best results for the organization. As part of that process, regular feedback can help all team members tremendously. In reality, however, the more senior the team, the less time is spent giving formal feedback to its members.
I have always struggled between two different approaches to giving feedback to senior leaders. Should one focus on the individual’s strengths or the individual’s weaknesses? There are good reasons why you could justify either or both of these approaches. With very senior roles, there is little time for giving feedback. Naturally, it is easier to talk about the positive aspects of a given leader, but that will not necessarily help anyone to improve. Some time ago, I had a conversation with Marco Van Kaleveen, a good friend who used to be a partner at McKinsey and later became a partner at Bain Capital. I asked him how he helped the CEOs running the different portfolio companies when it got down to behaviors and feedback. He was very pragmatic and I quickly took note because it helped me simplify and structure my own approach. Marco would only spend time on a person’s weaknesses, but only when a weakness might eventually become a derailer in that person’s career.
There are five simple elements that Marco would consider when running his assessment on a CEO: i) people or interpersonal skills (wants to be nice to everyone and expends great effort on building personal relationships with people); ii) results driven (usually a “no excuses!” person, focusing only on the end result); iii) strategic vision (someone who understands the overall picture of the industry or business); iv) process oriented (understands how to improve the current model by changing the ways things are done); and v) purpose and passion (loves his or her work, knows why he or she is doing it and transmits this level of positive energy to the rest of the team). It is almost impossible to find someone who excels in all five dimensions. Indeed, no one should expect to be the best in all five. We will probably find that each person is better in one or two of the five dimensions and weaker in the other three or four. By definition, therefore, there will be room for improvement in several dimensions. But since you will rarely spend much time giving feedback to senior people, the idea is to avoid nagging at those weaker spots unless you consider that the flaw might bring a problem in the long run.
Teams usually align naturally when things are going well (growth scenarios, positive progress and we are all happy) or in very extreme situations of survival (plane crashes, accidents or major natural disasters). In a middle-of-the-road situation, which is where most companies are when facing challenging times, people tend to prioritize their own objectives and are not willing to give up their individual or divisional priorities for the benefit of the group. It is also true that most of the time the leader of a division will try to obtain the best outcome for that particular division, managing the resources accordingly and trying to maximize the output and results.
Sometimes what is best for the whole is not necessarily the sum of the best for each part. In order to capture the next level of efficiency or profitability we need to look at the system as a whole: lots of protein may be optimal for developing fast explosive muscles in our legs, but an excess of protein is detrimental to the heart. Making each individual part of a company more efficient will not be enough for the next quantum leap in efficiency. While our bodies have some kind of innate ability to regulate the whole, in organizations this requires difficult conversations between heads of departments. The ability for everyone to look at the whole system and not at isolated parts does not seem to come naturally to us. At some point, there may be conflicting objectives between different departments and these will only get worse if holistic incentive structures are not aligned.
As an example, think of the following situation: a company is facing financial difficulties and needs cash desperately to cover future obligations. The CFO’s incentive is clearly aligned with those cash needs. On the other hand, a director for the most relevant operating business unit is rewarded based on profitability and not cash. She is about to close a very important deal with a vendor for a multiyear contract and has the possibility of getting a better price if the company can pay in 10 days rather than the normal 90 days. Her incentive structure will have her choose the option of a better price and immediate payment, but this option is clearly going against the most urgent need of the company and the CFO’s bonus. If the decision were in the hands of the CFO, the CFO would have chosen the deferred payment option, hurting the overall profitability of the operating unit and therefore the bonus of the head of that unit.
Conflicting interests abound in the automotive industry, for example, when dealing with the tension between the safety department, whose incentive is based on fewer serious injuries in car accidents, and the recently created “energy efficient” or “green” department, whose objective is based on lower fuel consumption for the car. When building a new design, the amount of steel or protection built into the car will directly benefit the safety department but create excess weight in the final vehicle that will increase fuel consumption and go against the objective of the “green” department.
The only way to navigate the situations described above and many more like them is to force a deep conversation at the board level to choose the right criteria and make sure these align with the best interests of the organization as a whole, not to mention those of the end user or customer.
Incentive structures at the senior level need to be revisited to make sure that every senior leader has his or her own personal objectives in line with the overall objectives that have been selected for the business.
When organizations start growing, it is easiest to split responsibilities into different divisions or functional areas, following the military model that first guided the production needs that arose from the industrial revolution. These areas grow and develop their particular expertise, creating natural barriers between departments. This is a good motivation for moving people across different functional areas in order for them to gain a better understanding of the challenges that other areas may be facing. In many cases, we may find that functional experts have been in a single function for many years and do not have a good general idea of the challenges in other divisions or silos.
Senior teams are usually made up of leaders. That is one of the reasons they actually made it onto the executive committee. Each of these leaders often has a strong personality and knows very well how to get alignment in his or her own team around the vision and objectives they have set. This is all excellent! Nevertheless, the big challenge for whoever is leading that senior team of leaders is to make sure that those visions and objectives are in alignment with the overall vision and objectives that need to be achieved for the organization as a whole. If you allow conflicting visions to exist, there will not be alignment in the team and this will cascade downwards.
What should you do when someone is in the way and is not letting you move ahead with the plan and your transformation program?
Figure 3.4 Ever felt someone is in the way?
Have you ever felt as if, while you are trying to row in one direction to get to a safe harbor, someone else has actually drilled a hole in the boat?
I have observed in senior leadership teams that often the overall behavior of the group and its dynamics are strongly influenced by the most extreme behavior. Often in a group there are one or two characters who have a stronger presence and influence over the general behavior of the group. This is fine when these behaviors are the ones we are actually looking for, but what if these dominant behaviors are not the ones we need at the moment?
I have seen team dynamics in which everyone was so concerned about one particular member’s reaction to anything that was being presented or proposed, that no one else in the team was taken seriously. Suddenly, the whole team dynamic was about trying to please one of its members in an exaggerated way.
How can this happen? How can we reach a point where the behavior of one single person can so strongly influence the whole team? Probably no one was willing to stand up and confront the dominant character, and help them understand that their behavior was hurting the team and its ability to make progress. If we look at society in general, we can see this phenomenon replicated in other ways: in every community, only a very small proportion of people will actually go out and steal from someone else’s home. For the sake of this illustration let’s assume it is 1 per cent of the population. Everyone else in town, in this example 99 per cent, has to adapt their own lifestyle to the particular behavior of the 1 per cent. That’s why we all end up going out and buying locks, keys, security cameras and anything else that can prevent the 1 per cent from disturbing our way of life. In fact, there is a whole industry, the security or safety industry, that has emerged and developed around the fact that only 1 per cent of the population may cause inconvenience to the other 99 per cent. If we recognize this social behavior and its implications we should also be aware that in smaller groups we may run into situations where extreme behaviors from only one individual can influence the ability of the whole group to perform.
Society in general — and therefore every town, in our example — encounters great difficulty in identifying the people who make up that 1 per cent, which makes removing them from the system difficult and costly in terms of time and resources. The good news is that in a team, where the negative behaviors are explicit and known, we can easily remove whoever is causing them. The challenge is probably on the cultural side again. How easily can we face these difficult situations and take action before the damage is too big?
After you have tried to get alignment and it just does not work for everyone, don’t hesitate to get rid of the blockers. We have to do it! The rest of the team will appreciate and celebrate it. Having spoken to many senior leaders after taking these tough decisions, their comments have always been in the same vein: “I should have made that change sooner!”
Removing detrimental people from the team will always be an opportunity to bring new ideas and fresh thinking into the team.
Three Steps to Building a Better Top Team
Michiel Kruyt, Judy Malan and Rachel Tuffield — McKinsey Quarterly — February 2011)
1. Get the right people on the team… and the wrong ones off
2. Make sure the top team just does the work only it can do
3. Address team dynamics and processes
By this point we have developed the Story behind the need to change, we are sure that the leader is ready, willing and able, and his or her direct team is behind the effort required and the direction in which the organization is going.
It is now time to go out and engage the rest of the company — and even beyond — and make change happen. Reaching 100 per cent of the employees working for a company may already seem an impossible task, but even this is not enough. The message needs to be spread not only to every single employee across the company, but also to external parties close to the company. If we expect our strategic partners, vendors, suppliers and related third parties to be part of our transformation, they must also be involved and hear the whole story behind our need to do things in a different way. Without their wholehearted engagement early on in the process, it will be much harder for them to make the changes they need to make and adapt to our new reality. If, on the contrary, we do not involve them in our communication process, we should not expect them to be conscious of our situation or do anything differently to what they have been doing in the past. Very direct communication to these third parties will catalyze “moments of truth” in which we will be able to identify whether we have had the right partners all along.
The movement towards sustainable relationships and stakeholder management encourages all businesses to consider the world beyond their direct workforce. Many companies today have outsourced significant parts of their business processes to third parties. In some industries, many of the “customer-facing activities” have been outsourced to third parties as a general trend to focus internally on core processes and also achieve significant scale benefits through the outsourcing of transactional activities.
At the same time, contracting specialists for certain activities in developed countries is becoming common practice and these specialists are not required to be members of the stable workforce of an organization.
Both trends described above make it even more paramount to go beyond the formal employees of a company when communicating the story behind a transformation effort.
If the transformation process could affect them in any way, I would also recommend addressing the key customers. This is particularly relevant in the B2B environment, where we should be working very closely with our customers as their strategic partners or advisors. If our imminent changes are going to affect the way we do business, we should anticipate these changes for our customers to avoid surprise or dismay.
But what exactly is the story that we share? What version, what spin, what angle? Ideally, when we start evangelizing with our story, the message needs to be the full length, unabridged and meaty story, including the urgent need to move out of the current situation that is cancerous and getting worse. The sense of urgency and the vision of a better future, if we embark successfully on this transformation agenda, must be made crystal clear. As mentioned earlier, we need to talk about both elements of the Story: talking only about the sense of urgency may create panic and general paralysis, but if we only share the vision of a brighter future, many people will still consider that they are better off remaining where they are today and not taking the risk of an unknown future situation. Sharing our reality and vulnerability will bring people closer, get them involved and prepare the ground for change.
The challenge of facing real and tough conversations grows exponentially now that we are communicating to everyone in the organization. Many leaders and managers will only pick out the positive news around the better future and will resist sharing the bad news. There are two big downsides to this: the first, as mentioned before, is that many people will prefer to stay where they are if the danger is not made explicit; the second is that people will be subliminally aware of possible doom and the fact that we do not openly talk about it hurts our credibility as leaders.
My experience in combining the bad news about the current situation with the good news about the future has always been very positive. At the end of the day, people appreciate being treated like adults and want to know what is really happening. How do you feel when there is critical information that you should know that is not being shared with you? Why wouldn’t we treat our people like adults and tell them what is really going on? Is it the fear that people will panic? In many countries, if we were fighting a war, people above 18 years of age would be in the front lines of battle. Assuming that everyone working in our organizations is over 18 years old, must we really hesitate to share real information? My answer is emphatically no. Do share the information that shows what the real situation is if you want to get people moving. There is no need to be dramatic but you should not hide the facts.
On the contrary, people will be more likely to panic when we do not share the right information. They will end up finding out themselves, talking around the coffee machine, making up their own conclusions and making decisions without any clear guidance. After many direct conversations with people from many parts of the business, I have had employees walk up to me after the session and thank me for the openness of the conversation and for sharing the reality behind everything. No one had addressed them in such an open way before. It was great feedback to receive and raised the level of energy I personally needed to continue sharing what was really going on.
Every group of people within the company needs to receive the real, unabridged edition of the Story if we want to move in a certain direction. Be careful if the sense of urgency is only shared amongst a few at the top level. It has to be spread across the company at all levels and the best way to do this is by communicating it and generating conversations about it.
I have found that once I have opened the heavy, creaky door to the vault that holds the plain truth and let a team venture in, poke around and look at the scary skeletons, they have captured the history and the mood of urgency. Decisions then follow quickly and easily.
For example, I had been sharing the overall financial situation of the company with my team on a monthly basis and everyone was very much aware of what was going on and of the need to adjust all of our expenses and revisit all projects to make sure that we were only focusing on those initiatives that would have the highest impact on the business. We were reaching the end of the year and we needed to start preparing the budget for the following year. I was prepared to have all sorts of difficult conversations, needing to push back on requests for additional staff, more expenses and new projects. In fact, I was very positively surprised that everyone was so conscious of the context that there was no need to push back on anything. The team was getting it right from the beginning because they knew the context and shared the common purpose of defying doom.
Other colleagues had been telling me about the pain they were going through when their direct teams were asking for increases in staff and expenses for the following year’s budgets, when we all knew that it was impossible to increase expense budgets. I learned later on that these leaders had not spent enough time making their teams aware of the context. I learned that, despite my trepidation, it does pay to be frank, open and realistic in our messages to our teams. This changes behaviors in our teams and makes our lives easier. The energy saved can be placed somewhere more productive.
I find it useful to engage people and have them contribute to the analysis as part of the communication process. Depending on the amount of time you have set aside for the team to learn and understand the facts, you can decide to just place all of the information on the table or you can give them the bigger picture and allow the team to work on the next level of information that actually builds back into the same diagnosis. This can be very useful in large companies where a lot of the information about what is really going on with customers, products and services resides deeply in the ranks. I like to ask them: what else are you seeing that is contributing to this challenging context that we are looking at? I have always been positively surprised at how new issues come up to the surface and build a more compelling story. The additional and very positive impact is that people are discovering and contributing to the Story. It is (and should be) their story.
The next step is to engage people in the definition of potential solutions. This is a powerful way to bring people from the assessment or diagnosis stage, away from the complaint zone, to start thinking about solutions and what they can do to get us to a safe harbor. A clear call to action promotes ownership of the situation and its solutions. Additionally, of course, the best suggestions about how to solve problems come directly from the people involved in those activities. The complex organisms of our companies today don’t allow for all-knowing top-down management where a few at the top have all of the solutions to all of the problems. We live in a time of shared knowledge and broad bases of consciousness and responsibility. It would be simplistic to think that all solutions could come from the top.
If you are the leader, don’t expect your team to start having these difficult conversations if you are not doing the same. Remember everyone is looking at what you are doing, not just what you are saying. So you must articulate your action plan to start personally delivering the messages and listening to the teams for complementary analysis and solutions. Don’t do it just once; you will have to stick to these open behaviors and repeat them consistently over several months, quarters and even years if you expect things to start changing.
Reaching out to everyone is about communication. And all existing and potential channels should be used in a very coordinated and consistent way to get the message out to everyone. The style and tone of our communications should break with what we have used in the past, to make sure that they herald a new context.
There is a delicate balance between creating panic by showing only the difficulties we are facing and accurately conveying that we are in a crisis situation. We do not want to be talking to our people about irrelevant or superficial issues when everyone is aware of hard times. If we do not adapt the style and tone of our communications — for every channel — we run the risk of losing all credibility and damaging the value of our communication channels for good. This applies to all channels, including the face-to-face meetings in which you are the one delivering the messages. When meeting with a group of employees, don’t expect to get off easy and with no collateral damage if you do not tackle the difficult issues straight on.
There is a risk in communicating processes of transformation that lies in assuming that by telling the Story a few times and in a few different contexts everyone will get it and start acting differently. It is when you start feeling weary of telling the same story over and over again that people out there are just starting to get the message. We cannot afford to lose the passion and the energy behind the delivery of the message, no matter how grueling the repetition feels. People will sense it and act according to how they feel and not according to what you say. Listening to yourself deliver the same message may become boring, but that is exactly your role. Share the message with everyone as if it is the first time you are delivering it. Be patient, recharge your energy and convince yourself that you are probably just in the warm-up phase of a long marathon.
When going through your communication plan, make sure that you include all possible communication channels, including — and this is not an exhaustive list — all of the following:
- All staff meetings and meetings among peers
Figure 3.5 All staff meetings
Make sure communications are two-way if you expect people to be engaged. It’s not just a matter of talking but also listening and receiving feedback! There may be great suggestions, comments and pieces of information that could help you deliver a better message next time. Although only a few people may speak up to ask questions, the same questions are likely on the minds of many more people. Plan your session allowing enough time to receive many questions, and allow people to express their doubts, concerns, fears and suggestions.
Figure 3.6 Two-way communication needed for feedback
Only through their direct participation will you increase the level of engagement of all employees. Don’t expect to have all of the answers right there on the spot. On many occasions I have received very specific questions for which I had no immediate answer. In some cases, by opening the floor and allowing someone else to answer, I have witnessed a rich debate around a particular topic and got to the answer through someone else in the room. In other cases, I wrote down the question and made sure that next time I had the answer. Generally, people will not expect you to have all of the answers.
- Internal Newsletters — if you still have them
Even though these days we see new media formats replacing traditional newsletters, if you are still printing and distributing any sort of weekly, monthly or quarterly newsletter, make sure that the Story around the transformation is explicitly included. If this type of media is still out there, people probably still recognize it as a serious and relevant source of information. Be sure that a large part of the content refers to your transformation challenge and to the specific focus areas where the whole company should be placing all of its energy. Tell the great stories of good progress around those key initiatives that are pulling in the right direction and use them as a mechanism to praise and recognize people or teams who are contributing the most to the transformation.
Figure 3.7 Internal newsletters
- Intranet, email and social media tools
In recent years, the intranet has become the place where employees go to find relevant information about the company. In many companies, the intranet is the homepage on the browser of all corporate computers. The intranet becomes the first page all employees see. Make sure your intranet contains all relevant information about the need to transform and the main blocks in the transformation program and its progress.
I strongly suggest you combine the intranet where people go to look for information, or “pull channels”, with other “push channels”, where information is proactively sent out to everyone in the organization. Do not expect to use only the push tool or pull tool because people have different habits for obtaining information. Just think of the large media groups and how they complement the information they hold on their official websites with email, twitter and/or other messaging services for alerts and breaking news. The combination of both channels significantly increases the impact of any communication plan.
Figure 3.8 Intranet and email
Be creative in using new ways to reach out to everyone. New ways of communicating will model a message of change and everyone will appreciate the effort of a leader who goes beyond his or her comfort zone in communicating the Story.
Use social networking tools to break hierarchies, geographical boundaries and divisional boundaries, and reach out to everyone to share the vision and to get feedback. Many large companies are still very reluctant to use social media tools to reach out to everyone. But we have to consider that many of the people within our community are more comfortable using these new types of media than the traditional channels. We need to adapt our traditional channels to reach out to everyone. Social tools allow you to receive instant feedback and analysis regarding any proposal you share, tapping into the collective intelligence in an easy and economical way. None of us is smarter than all of us!
Figure 3.9 Adopt social media tools
The rate of adoption of new channels of communication depends on a series of factors, such as the openness of the IT platforms within the company to allow people to use new tools, the existing security policies within the company and, most importantly, the existing cultural barriers from within the company that may determine whether people embrace or resist the adoption of these new channels. In most cases I have seen, it is usually a combination of all of the above factors.
Again, the role of the leader is very important to set the right trend. If the leaders within a company start using these new ways of communication, people will immediately copy this behavior and start using social media tools openly. All employees already use some new formats to communicate with friends and family such as Facebook or Twitter. If they haven’t yet started to use them within the organization, it is surely not because of a lack of knowledge about how to use them but because they find it difficult or culturally uncomfortable to use them in a work context.
At the same time I believe that, as of today, we are just seeing the initial phases of the adoption of these new channels and no one knows how this phenomenon will evolve in the coming years. What is certain is that we need to adapt our internal communication channels to new ways of getting out there to reach everybody.
You may be concerned that the teams will be suffering from an overload of information. Again, when you are getting weary of listening to yourself deliver the same messages through all communication channels, people out there in your organization are just starting to get it. At the same time, each person responds to different channels of information and probably is only paying strong attention to some of them, which is why we need to cover all possible fronts and channels to get the message out.
Get people talking
If you want to get the word out there to everyone, you want people to be talking about the transformation Story around the coffee machine. Informal conversations may have a stronger impact than anything else. People need to have small, private conversations with colleagues and other team members to fully understand and acknowledge the situation and the options moving forward. As Belenky et al. point out in their seminal work about relationships and different ways of knowing the world, the act of “gossip” or small-talk “proceeds from trust and builds trust”. Patricia Spacks insightfully remarks that, “gossip, like poetry and fiction, penetrates through to the truth of things. ” And so generating gossip around a transformation effort contributes to people internalizing and understanding the Story as well as creating a different sort of buzz.
Figure 3.10 What are people talking about at the coffee machine?
When involving everyone else in the organization, it is useful to engage teams in identifying the next levels of diagnosis or next levels of projects and activities. Engage people! Where do the influencers in the organization lie? Identify the key change agents and let them play a key role. For example, let them run the diagnosis again and suggest what to do.
Once you have been able to identify the next set of leaders within the organization who will help produce the change, give them lots of visibility. Be careful if their direct boss is not aligned, since they will face difficult times and may become frustrated in the process.
Don’t expect everyone to stand up at the first opportunity and jump forward to join the process. As change theory shows, there will always be a set (a third) of people who act as ambassadors or champions of the movement. There will be another third of people who will oppose the idea and will resist, and there will be the final third of people with no particular strong opinion who will wait and see where the transformation program is really going. I recommend focusing all of your energy on those who are willing to drive the change and on those who may be undecided. Don’t spend too much time convincing the small percentage of employees who do not want to change. It will require an enormous amount of effort and energy from your side and it may go nowhere. On the other hand, by focusing on those who want to make the change happen, you will quickly get a lot of support to help you drive the transformation. Because they are predisposed to get on board, the amount of energy and effort needed from you is much smaller and won’t drain you unnecessarily.
On a personal level, don’t expect everyone to like you if you are trying to make changes that may affect people’s lives. If it helps, even Jesus Christ had enemies and was crucified by them (regardless of any religious belief, he was a leader).
When I first started to share unpleasant information about what was going on in my organization, I came across more people than just my mother who would explicitly tell me that it was wrong to be telling and sharing this harsh news. I know that I would have made a few people happy by shutting my mouth and putting a stop to the storytelling.
Unions are of course important players, and special attention must be given to engaging with them and sharing the real issues the company is facing in order to involve them in positive solutions.
Back in 1979, Lee Iacocca was brought in as CEO of Chrysler to fight and save the company from bankruptcy. He had been fired as CEO from Ford the year before and was absolutely committed to turning around his new company’s situation. During 1979, Chrysler posted its largest loss ever totaling US$1.2 billion. If the company went bankrupt, 400,000 workers would lose their jobs. Iacocca got lots of support from unions and engaged them in convincing the US government to pass a bill providing US$1.5 billion in loan guarantees. Additionally, the company secured an extra US$1.4 billion in private financing and reduced labor costs through salary reductions from unionized employees worth US$462 million and an additional US$125 million from salaried workers. Iacocca took a key decision that helped him align with union workers: he brought the head of the labor union to the Board of Directors to make sure that he had direct information regarding the real situation the company was up against.
Once again, every very important group of stakeholders needs to be involved in the process, if they are left in the wings they will not understand many of the decision that are taken and their level of resistance will be that much higher.
Once you have made sure that all communication channels are aligned behind the same Story, once the symphony is written and being rehearsed, make sure that you go back and tune your own instrument. What is it exactly that you, as the leader, are doing in the process? What is your voice? Just as the role of leader cannot be delegated, the role of main messenger of the Story cannot be delegated either. People will be looking up to you to see exactly how you tune your instrument and make it sing. So once again, are you out there spending time with employees and customers, sharing the same symphony around the transformation at hand?
If the leader behind the transformation has only 30 minutes available on any given day to do anything at all, that time should be invested in sharing the Story with as many people as possible, instead of solving a problem that someone else could take care of. If the leader can actually change the behavior of a few people, the overall impact will be much greater.
By now we have established a clear and demonstrated need for change and crafted the story or vision of our future success. We have written our symphony, we have our musicians and you have tuned your own instrument. Now we just need to invite everyone to play.