As a business change agent, I have frequently experienced a business during serious change and restructuring. What have I learned from these often chaotic situations?
There are many reasons the change is initiated:
- Market disruption renders the business model obsolete
- Ownership change, rapidly changing business focus/style
- Planned or forced leadership change
- Economic disruption drives needed capital off the market
- Being acquired or being an acquirer – always a business stressor
Clearly the diversity of possible driving forces makes a simple change template or model less than useful.
- Here are three vastly different businesses currently in transition: A change of bank president sees 80 % of the senior managers leave in the first 24 months of the new president’s tenure. He’s following a long time and very successful leader whose style matched the market conditions of his time. But, markets in banking have changed hugely and the new president started an unwelcome change process.
- A technology giant has had three CEO’s in three years. Publically traded, the market has little patience for fine strategic sentiments and the glories of the past. The new CEO has a major job to sell employees on her vision of the bright future that lies ahead.
- A very successful leader for 22 years moves on and his business enters a new era. What does he believe the business now needs? Where does the new leader start?
People are, invariably, the key area of initial focus in a business change process. Without the right peopleno elegant strategy can be executed.
In fact, in the case of the bank above, or a business I have been involved with, when a business has, and is currently enjoying, financial success, it is often the senior leaders who are most resistant to change, who want to enjoy the status quo and who deny the need for change despite signals of impending business difficulty.
In businesses with troubled operations or financial difficulties, the weak and entrenched senior leadership may be holding back more progressive and competent employees whose sense of the need for a change becomes a source of frustration and causes them to either leave or “switch off” and simply go through the motions of working. So conditions for a business disaster are further elevated.
Any business transition, regardless of the driving force behind the need to change, starts with a review of who in the key leadership team has the competence to carry the process through. One has to be brutally rigorous in that review. Every skill and character attribute needs to be assessed against forward goals and structural revision. Who will master the new vision quickly and indeed add to the strategic elements?
The bank president had to answer the question- “Who poses the greater risk of failing to carry out the transformation despite being technically competent in the now tasks?”.
The leader with 22 years’ experience knows the new leader has to see beyond his horizon and imagine a more agile business with better focus.
The third CEO now has to convince the troops she is for real and uses the repetition of her message to ensure the confusion of the past three years is left behind. She believes it is the unbelieving right brain she has to reach, not the overwrought left brain.
In the business I referenced, complacency caused by occasional (but not sustained) strong performance had left the business with few who could create urgency and renewed marketing drive. Five of seven senior managers were replaced and updated business practices were implemented to instill new vigour for reaching global markets.
One doesn’t start then with the “culture”. Culture is an outcome derived from the results of the change.
Clearly investing in enough change of leadership to gain new momentum is necessary despite being disruptive and costly in the short term. How you go about it, the pace at which you proceed and the improvement in team leadership that is clear to everyone, are parts of the art form a good change agent brings to transition success. As with any art form, successful change management is mostly derived from the experience of doing, not watching from afar.
