human resource

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JWI 556 (1196) Page 1 of 9

JWI 556 Leading Change by Putting People First

Week Three Lecture Notes

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SETTING THE STAGE FOR CHANGE What It Means Proper planning is critical in leading change initiatives, especially large-scale ones. No matter how tempting it may be to just get on with it, you have to prepare both the plan and the people who will be change agents along with you in order to succeed. Without a solid foundation in place, your enthusiasm for the initiative will not be enough to get the change done. Why It Matters

• Successful change begins with urgency. You have to get people excited or frightened enough to break them out of their complacency and comfort zones. Without this, you just won’t have the rocket fuel to get off the ground.

• Change is not a solo activity. You need a group of engaged teammates whom others respect and look to for leadership. This is your guiding coalition, your inner circle, your frontline army in the battle against the status quo. These people will be both a support network and a means to spread the change message beyond what you can do alone.

• You must create a vision of the Promised Land. Without this clear and compelling picture of the future state, people won’t really understand why the change will be good for them, and with the first signs of resistance, they will give up.

“Good leaders create a vision and relentlessly drive it to completion.”

Jack Welch

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THE ROLE OF LEADERSHIP IN CREATING A SENSE OF URGENCY AND COMBATING COMPLACENCY

“To get ahead of the competition, a change leader must create urgency and a need that isn’t obvious to the general population.”

Jack Welch

Kotter argues that complacency arises from a fundamental disconnect between what is happening outside an organization and what people are seeing, feeling, and believing inside it.

“Much of the problem here is related to historical victories – for the firm as a whole, for departments, and for individuals. Past success provides too many resources, reduces our sense of urgency, and encourages us to turn inward. For individuals, it creates an ego problem; for firms, a cultural problem.”

Leading Change, p. 44

The starting point for building a case for change is the systematic collection of data to illuminate risks and opportunities. Building a business case can be a shared or a distributed activity. Deliberately increasing people’s contact with external constituencies – such as through customer meetings, conferences, consultants, or participation in external projects – and making sure that new questions or insights are identified and shared can help build urgency. Business case development is frequently a top-down activity. But it is important to remember that people on the “frontlines” of an organization often have the best insights into what is happening on the outside. This includes sales people and customer service reps. It can also include people who are new to the organization, especially those who come from a competitor, supplier, or customer. Of course, the business case will be different in each situation, but here are some signs you should pay attention to that can form the cornerstone of a case for change:

• A crisis of any kind • Negative trends in key performance indicators (e.g., sales, profits, membership, market share,

new customers) • Emergence of a new competitor or game-changing technology in your industry • Emergence of a new competitor or game-changing technology in an adjacent industry (think

about the impact the iPod had on the music industry) • Restructuring or consolidation in your industry or among your customers or suppliers • Big social or demographic shifts • Changes in popular culture or values • Emerging needs, markets, or skills in other countries • Trends toward significant shortages or availability of key inputs or outputs

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If you see any of these happening, major changes are probably coming. Build a case around these trends, and then communicate the way forward with everything you’ve got.

“Establishing a sense of urgency is crucial to gaining needed cooperation. With complacency high, transformations usually go nowhere because few people are even interested in working on the change problem. With urgency low, it’s difficult to put together a group with enough power and credibility to guide the effort or to convince key individuals to spend the time necessary to create and communicate a change vision.”

Leading Change, pp. 37-38

What is it about crises that releases hidden potential and allows change to happen so quickly?

• Everyone involved sees the clear consequences of failure and the unambiguous measures of success; waiting to act is not an option – results must be achieved quickly

• People jump in to do whatever they can, regardless of formal position or job title • There’s lots of experimentation and a willingness to take good ideas from anyone on the team • Participants feel a great sense of teamwork; competing agendas and priorities are suspended in

service to a clear, common goal Kotter posits that “creating a strong sense of urgency usually demands bold or even risky actions that we normally associate with good leadership.” He suggests nine ways to raise the urgency level:

1. Create a crisis by allowing a financial loss or even allowing errors to go unchecked

2. Eliminate obvious examples of excess

3. Set performance targets so high that they can’t be reached without change

4. Establish broader performance metrics that hold everyone accountable

5. Send out more data on substandard performance relative to the competition

6. Make people talk to unsatisfied customers

7. Bring in consultants to force discussion of unfavorable data

8. Stop the “happy talk” from senior management and focus on the problems

9. Bombard people with information about opportunities for a better future

Leading Change, p. 46

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THE IMPORTANCE OF AN EFFECTIVE COALITION, AND HOW TO BUILD ONE

“Pick your change partners wisely…Don’t make the mistake of thinking you can,

or even have to convince every last person to support change, and don’t let the negative polluters poison the well.”

Jack Welch In a world as complex and fast-moving as the one we live in today, no leader can drive change alone. Regardless of intelligence, power, or charisma, one person cannot foresee the thousands of changes that need to be made to transform an organization or affect all the people who are part of it. The success of a major change initiative hinges on leaders who can mobilize the necessary commitment from key people throughout the organization – a guiding coalition.

“No one individual, even a monarch-like CEO, is ever able to develop the right vision, communicate it to large numbers of people, eliminate all the key obstacles, generate short-term wins, lead and manage dozens of change projects, and anchor new approaches deep in the organization’s culture.”

Leading Change, p. 53

Beyond the guiding coalition, you can think more broadly about who else’s commitment you need to mobilize in order to win hearts and minds and spread the word about the change initiative. You want to think about key functions or locations that are so central to the organization’s identity or competitive advantage that they have their own center of gravity. If people in these areas do not get with the change program, they will hold others back. Conversely, if they do get with it, their momentum pulls others forward. Consider including respected thought leaders in the organization as well. They may be experienced people with unique and valued functional expertise, or rising stars who have captured attention for their competence or brilliance. They may be behind-the-scenes types who have quietly built the organization’s intellectual capital. Kotter advises that a guiding coalition needs to have four key characteristics:

1. Position Power: Are enough key players on board, especially the main line managers, so that those left out cannot easily block progress?

2. Expertise: Are the various points of view – in terms of discipline, work experience, nationality, etc. – relevant to the task at hand adequately represented so that informed, intelligent decisions will be made?

3. Credibility: Does the group have enough people with good reputations in the firm so that its pronouncements will be taken seriously by other employees?

4. Leadership: Does the group include enough proven leaders to be able to drive the change process?

Leading Change, p. 59

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Who should we avoid bringing into our guiding coalitions? Kotter and Jack both caution us to avoid egos and snakes. The former will grab all the attention for themselves and leave no room for anyone else. The latter may support the effort, but their real love in life is sowing the seeds of doubt and spreading gossip. They also advise us to avoid reluctant participants who will join because they feel they have to, but who either: (a) really don’t want to lead the change, even if they agree with it, or (b) are just too busy to contribute what you need them to do. There is one additional piece of advice from Kotter that draws us back to the “leader-versus-manager” distinction presented in Week 1:

“A guiding coalition with good managers but poor leaders will not succeed. A managerial mindset will develop plans, not vision; it will vastly undercommunicate the need for and direction of change; and it will control rather than empower people…A guiding coalition made up of only managers – even superb managers who are wonderful people – will cause major change efforts to fail.”

Leading Change, p. 61

Given everything we have learned about the importance of guiding coalitions, we might ask why all change initiatives don’t begin with them. Kotter suggests the following:

“Most senior-level executives were raised managerially in an era when teamwork was not essential. They may have talked ‘team’ and used sports metaphors, but the reality was hierarchical – typically, a boss and his eight direct reports. Having seen many examples of poorly functioning committees, where everything moves slower instead of faster, they are often much more comfortable in sticking with the old format, even if it is working less and less well over time. The net result: In a lot of reengineering and restrategizing efforts, people simply skip this step or give it minimum attention. They then race ahead to try to create the vision, or downsize the organization, or whatever. But sooner or later, the lack of a strong team to guide the effort proves fatal.”

Leading Change, pp. 58-59

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CREATING AND SHARING THE VISION FOR A CHANGE

“Good leaders create a vision, articulate the vision, passionately own the vision,

and relentlessly drive it to completion.”

Jack Welch Kotter argues that an effective, well-communicated vision for change accomplishes three tasks:

I. “[A] good vision can help clear the decks of expensive and time-consuming clutter. With clarity of direction, inappropriate projects can be identified and terminated, even if they have political support. The resources thus freed can be put toward the transformation process.”

II. “A good vision helps to overcome…natural reluctance to do what is (often painfully) necessary by being hopeful and therefore motivating. A good vision acknowledges that sacrifices will be necessary but makes clear that these sacrifices will yield particular benefits and personal satisfactions that are far superior to those available today – or tomorrow – without attempting to change.”

III. “[V]ision helps align individuals, thus coordinating the actions of motivated people in a remarkably efficient way.”

Leading Change, pp. 71-72

Since the term “vision” can come with a lot of different interpretations or baggage, let’s remind ourselves that Kotter defines vision as “a picture of the future with some implicit or explicit commentary on why people should strive to create that future.” He lays out six characteristics of an effective vision.

1. Imaginable: Conveys a picture of what the future will look like

2. Desirable: Appeals to the long-term interests of employees, customers, stockholders, and others who have a stake in the enterprise

3. Feasible: Comprises realistic, attainable goals

4. Focused: Is clear enough to provide guidance in decision making

5. Flexible: Is general enough to allow individual initiative and alternative responses in light of changing conditions

6. Communicable: Is easy to communicate; can be successfully explained within five minutes

Leading Change, p. 74

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JWI 556 (1196) Page 8 of 9

Although it is the leader’s job to make sure a compelling vision is created and communicated, vision- setting needs to be a group effort. The final simplicity of good visions can be deceptive. In fact, they are the result of long and hard discussions among the leadership team. They are hard because they must work through the implications of what stays and what goes, where trade-offs will be made, where resources will be focused and where they will be withdrawn, and which projects are consistent with the vision and which are not. The leadership team needs to be able to predict the implications of the vision for a range of future contingencies, most of them unknown. Ideally, the essence of a vision can be captured in a compelling couple of sentences. But this statement cannot stand alone. People need to translate it into what we specifically need to do and what success will look like. Taking the time to work through these elements helps ensure that the pieces fit together.

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JWI 556 (1196) Page 9 of 9

GETTING THE MOST OUT OF THIS WEEK’S CLASS As you read the materials and participate in class activities, stay focused on the key learning outcomes for the week:

• Explore the role of leadership in creating a sense of urgency and combating complacency Thinking about a specific change initiative you are passionate about, what sense of urgency exists among your colleagues that this change is critical to the success of the organization and should be pursued sooner rather than later? What sources can you leverage to combat complacency? What are your customers saying about the current state? What are competitors doing in this space to change the game? What is the likely outcome if the change is not made? What, if anything, has already been done to address the issue, and what was the outcome? Conduct a focus group with a small number of colleagues who will be impacted by this change. Identify three positive results that would come from the change and three negatives if the change is not made.

• Understand the importance of an effective guiding coalition, and how to build one As Jack says, “pick your change partners wisely.” Ask around. How can you assess the people who might be the ones you want to partner with? Choose carefully, because a bad decision here could spell the end of the change before it gets off the ground. What roles will you want to have represented? You will need people with the right technical skills, influence, and energy to drive the change forward. Talk to recruits for your guiding coalition to feel them out. Start to build a list of potential change agents you can leverage.

• Leverage strategies to create and share the vision for a change Refine your change vision. What should definitely be in scope and out of scope of the initiative? Craft a vison of the change that can be shared with others. Your vision should be a bit like an “elevator pitch” with:

o A clear and succinct presentation of the problem to be addressed (ideally with data to validate the statement)

o An action statement of what the team proposes to do, including clear parameters of the scope of the project

o An outcome statement of what will be accomplished through the change that clearly articulates what success will look like

Ask others to validate the vision. Do they get excited? Does it make sense? Can they see it actually happening? Have your change leadership group present it back to you, and continue to refine and tighten it until it is precise, easily understood, and compelling.