Tuesday, January 29, 2008

How do the best organizations actually change?

“John P. Kotter, on change processes and the key challenges in order to create an ongoing successful change culture.”

Which are skills and talents used by an effective Change-Leader?
The one thing that we need to understand the best, is the fundamental process by which significant change can happen effectively with a minimum of pain and expense. In the process there are all kind of different types of skills that people can, at one point or another, usefully apply, and what you find increasingly, is the significant number of people that get involved in this efforts. Very often it works because they know the roadmap.

One person helps because he is particularly good at one thing, at one particular part of the process, another person helps most because he is particularly good at another thing, at another part of the process. So it is not one person with one sort of skills that makes it happen. It’s more that sufficient people, who understand how this can work, who all contribute various skills, are set at the right time, in the right way, to make the change happen effectively.

That means the change leader is in a role of a conductor?

In a lot of cases, it increasingly is. Additionally, as the world moves faster and faster, the size of the orchestra, that he or she is dealing with, is growing: When we were at a string quartet 15 or 20 years ago - we are now up to a full orchestra, which means, that the complexity is growing.

Where do you see the differences between a Manager and a Leader – and is there a chance for a manager to become a great Leader?

What good managers do, is that they take something that exists and make it work well. They do it through the kind of processes that are taught in MBA programs: budgeting, structuring activities, people staffing, control systems, etc. All of that done well, can take even very large organisations and help all the activities happen in a way that it produces the outcome that was desired. So that the products come out of the factory on time and on budget. The thing works.

What leaders tend to do is, they either create the organisation of those systems that managers manage or they take them and help change them in a significant way, to take advantage of new opportunities or to avoid induct new hesits that are coming from the outside. They do it in totally different sorts of processes: the first of that is working with people in order to create this new vision of ‘where we want to go’ and ‘how to get from here to there’. The second important point is about communicating the information to as many relevant people as possible, in a way that they get them not only to understand, but to become convinced, that it is the right way to change into the direction toward that vision. The third is to create conditions that really motivate people, inspire people to want to put in the action that will make implement the strategy and make the vision reality, even when they run into obstacles.Those things: the vision, the strategy, the communication, the inspiration and the motivation is the leadership side of the change. While the Manager is in a more hierarchical structure and looks that the things are done in the right way, the Leader is less hierarchy based but more vision focused.

Why do firms/companies often fail in change-processes?

The first and main reason is, that it is difficult! The second reason is, that companies don’t understand the dynamics of a significant change. They don’t know the secrets of dealing with difficulties and actually making things happen without provoking a lot of frustration and pain. The reason they don’t know this is, because they didn’t grow up in an increasingly fast moving world. They saw lots of examples from companies getting hit with new technologies, companies getting hit with new competitors because of globalisation, that needed to make significant changes, and did it well. So it is not in their experience that it is so difficult. When you put it all together, it is not surprising that most of the times they don’t do a great job with a perspective significant change.

If a change process is fundamental, e.g. by a new vision or a new positioning, but not realised in the organisation as urgent, how can a Leader create an urgency for change in his organisation?

What we found is a kind of formula that get used by firms that are most successful. It all starts with step one, which is creating some sense of urgency: killing off the complacency that so easily grows in bureaucracies and also getting pass other things like fear or anger that people want to hide. Urgency is the state where I feel that ‘I’ve got to do something’ but ‘can’t do it on my own’. We’ve got to figure out new and better ways to grab up opportunities and avoid hesits. If you look how people create their urgency, and when you look at enough companies, it’s almost an endless list of creative things that people come up with, they all tend to be attention grabbing. The leaders tend to be not just to work on the rational side but also the emotional side of the brain. They grab people not only in the logic but in the stomach. No matter the form, it is all the same logic: it’s trying to take a complacent group and get them to suddenly sit up and say: maybe we need to do something! Once they get the concept, the place to start on all of this has to be, to get some minor, minimum amount of urgency going. People can be very creative at looking at their specific situation, at specific details on what is going on in a company like that, and come up with very creative ways to start making things happen.

In a change-process, how do you deal successfully with the matter of resistance and fear?

The answer to that is, the more the process is done well, the more fear goes down and resistance goes down. When people feel a sense of urgency they resist less. If they feel that the people who are pushing the most are credible, seem like a logical group to help out, seem to have skills, then, fear and resistance go down. So it does, if the vision makes sense to them, if they can understand it. But if they are trying to do something but find that they are bumping into roadblocks and barriers all the time, frustration grows and at a certain point, even if you understand ‘we got to move over there’ they get frustrated, they stop and become part of the resistance. Only if people see someone move into the right direction, they calm down, they resist less. So trust, credibility and transparence are important parts of the process.

Which key-points are important by putting together an effective change-team?

Two things:

1. The people on it has to feel some sense of urgency themselves. If they don’t, they don’t put in enough time and energy.

2. Companies have to bring together a set of complementary skills that you must obtain in order to drive a change: somebody that knows the territory, someone specialized in technology, somebody that is good at leadership, etc. At least you need to have some people who are highly trusted in the organization and have a great reputation. Some which are a little more analytical, some that are little more emotional and then, the critical thing is to get them all together to work as a team.

What are the most challenging points in order to creating an ongoing change-culture?

The most important thing by far is, that the organization achieves multiple changes successfully. When that happens the actions and attitudes that help facilitate an ongoing change-culture, will start to be part of the culture. So culture is something, that is less a cost than an effect. You can’t go at it directly: holding a meeting and explaining, what the culture has got to be, doesn’t work. The aim is to get a culture that facilitates change and not saying we need to have one. Changing will simply be successful when the experience shows that it works. Then attitude and behavior will just automatically be adopted and will create that culture, the right norms and the right values associated with it.

Regarding the structures of a winning organisation in the 21th century, what are the key-challenges for the leaders?

The challenge is to give more and more help for more and more people. In the former industrial model, a very limited number of smart people at the top of a hierarchy, were developing the strategy, and then there was a bunch of people with implements below them. If you look at some of the most successful companies on earth, which have been able to sustain their success over more than only 3 to 5 years, people are really into the game and are not just doing some limited job for contributing more understanding. In great organisations you can go five levels down the hierarchy and find people to have an intelligent discussion about corporate strategy, while in the old model, you’d have trouble going down one level. I think the challenge of making that happen, of going from a more limited, exclusive, to a more inclusive group of people, who do understand things and who contribute brains, is a tough transition from an industrial model. The people are the brain of the company not only 5 or 6 people at the top. A company in the 21th century is increasingly a knowledge driven organisation and not a machine. So it’s a big challenge, but it’s increasingly critical to making companies succeed in a rapidly changing world.

Source: Our Iceberg Is Melting: "Changing and Succeeding Under Any Conditions" John P. Kotter

No comments: