In this note I would like to share with you my experiences in Organization Transformation. There could be a question, why is this topic relevant? Is it not the job of CEOs? I think it is important for all business professional to think about this topic because there is massive change happening in the business world and all will likely get impacted in some way. There are exciting growth opportunities that we could have never visualized earlier. At the same time, the global economy is facing severe challenges that are causing lot of uncertainty. There will be much churning. Organizations who step up and capture the opportunities can become world beaters. Equally, those who fail to adapt can see surprising decline. Therefore, it is important for business professionals to understand the forces of change and how they can make a positive leadership contribution to help their organizations adapt to the impending change.
First, let us understand the big forces of change in the global business environment. There are four that are particularly noteworthy:
- Global economic crisis. Eurozone crisis and massive level of debt across markets are two grave problems to which there are no easy answers. Eurozone seems to be in an unsustainable position. Long-term scenarios are extreme – either moving to tighter fiscal and political union or perhaps just breaking it up. Either of these scenarios will cause massive costs and disruption. Similarly, reducing the level of debt requires a painful deleveraging process that will take years. With increasing globalization, no market is now insulated from the impact of these events
- Hyper-competition. There is increased competition and over-supply across most product markets. This is creating continuing downward pressures on pricing and changing the market economics significantly. Moreover, the business cycles are getting crunched. New product markets are getting created and then getting saturated at much faster pace than before
- Shift of wealth from West to East. Purchasing power in developing countries like China, India, Brazil and many others is continuing to grow. This is creating great opportunities for growth. Equally, growth in the traditional developed markets is becoming more challenging especially as their population pyramid continues to age
- Technology megatrends. Technology is continuing to evolve at a dazzling pace and changing the world around us significantly. There are four technology driven megatrends that are especially noteworthy – Big Data, Cloud, Social Networks and Mobile Devices. More than 4 billion people now use cell phones. If Facebook users constituted a country, it would be the world’s third largest, behind China and India. Data is now measured in Peta Bytes not Tera Bytes. Clearly, these are very significant changes that will revolutionize both consumer behaviour and business models. (See blog post, “Technology Megatrends – Is the Indian IT/BPO industry headed for a disruption?“ for more insights on this topic).
These global forces are not just about doom & gloom but offer many new opportunities as well. However, it is clear that the velocity of change we are seeing is unparalleled and will not leave any industry or business untouched. In such times of flux and discontinuity, there is need for organizations to lift their game. Organizations need to challenge existing business strategies, operating models and mindsets & behaviours that might have worked well for decades. As mentioned earlier, organizations that are able to adapt and reinvent will win while many marquee names might bite the dust.
Change needs to happen across multiple levels in an organization. This is the time for professionals at all levels to be counted. Often managers at senior levels feel threatened by changes and try to maintain status quo. This presents opportunities for professionals who might be at a more junior level but who have the vision and courage to rise and shine. You can make a difference at any level in the organization. If you aspire to develop as a leader, then be proactive and take ownership of the change opportunities around you. Don’t let the size of the challenge weigh you down. Just be positive and focus on your karma. You will be surprised how much power your individual actions can have. As you take action, your zone of influence and the leader within you grows. Slowly, the change you start with your actions can come to a tipping point when the organization also starts changing.
So, how do you drive change in an organization? I would like to share with you six best practices that have worked for me over the years both as a manager and consultant:
- First understand and build trust. Often new managers rush to declare all that was done before them as rubbish and to change everything. This is a recipe for failure. It is not easy to pick up the nuances of any situation. If you rush, it is likely you will get it wrong. Moreover, your colleagues will see you as disrespectful and it will alienate them. You have to spend time to fully understand the situation especially the history and culture, and build trust with people. Only once you have done that should you start developing your manifesto for change.
- Simple and open messaging. You need to articulate the need for change, your vision, and benefits of the change for organization and individuals in a simple manner. Employees at all levels should be able to understand the messages and what it means for them. Often the messages remain limited to the top levels and do not reach down the line; and, if they do, they are articulated in ways that are not relevant for majority of the staff. Moreover, you need to communicate often and be transparent and consistent in your messages. When you are going through change, people feel insecure and have a high need to know. You need to treat them like mature adults, and be open and honest with them. That works much better than trying to hide or soft pedal any difficult messages.
- Identify change agents. It is very difficult to drive significant change on your own. You need to have force multipliers who will not only embrace the change themselves but evangelize it across the organization. There are certain type of individuals who are more open to change – those who have high levels of personal confidence and broader outlook. These are analogous to the “early adopters” in marketing!! In my experience, I have often found more change agents in the second line of management than the first line of management. The latter are often too vested in the status quo while former could see opportunities in the change.
- Focus on some early wins. Driving change is not just about strategy but also about tactics. You need to ensure some early wins. This will build credibility for your change agenda and move it from being conceptual to tangible. It is not easy to move people out of status quo and for them to agree with the need for change. Moreover, people have an inherent distrust of words and respond much better to actions or outcomes that are concrete and visible. Early wins will provide a compelling reference case and help you gather momentum. It will help build understanding of what you are trying to accomplish and encourage people to embrace the change.
- Go slow to go far. While I have talked about early wins, it is important to recognize that organizations have a lot of inertia, and change especially of mindsets & behaviours takes time. You have to be patient and persistent. The “Hare and Tortoise” story is very relevant in change management. You need to take not a 1-2 years view but a 3-5 years view for achieving substantial outcomes. I have experienced that progress at the 2 year mark can be underwhelming, but if you are persistent results in the 3-5 period can be outstanding. Therefore, you need to pace yourself and set realistic expectations. Do not lose heart. It is OK to lose or not fight a few battles. If you are persistent, results will come.
- Build stakeholder coalition. You need to understand the organization politics and power centres, and how you work them to achieve your change objectives. One of the key aspects of my corporate education has been recognising the reality of organization politics. Self-interest is an inherent aspect of human nature, so politics exists in all organizations and you have to be prepared for it. Moreover, organization politics is not always bad; you can also use it for good. Any organization will have power centres and people are very sensitive to cues from them. You can give your change program a big boost if you can understand motivations of key stakeholders and find alignment and visible support from them. Equally, if you don’t, your change program can get derailed very quickly.
In addition to the above six best practices, a key determinant of success of any change program is the ability of the leader to inspire those around him. To drive change and achieve outstanding results in an increasingly complex world, you need to go beyond just managing efficiently. You need to touch people at a deep level where they get inspired from within. Inspiration is the elixir that helps individuals go beyond ordinary limits and achieve great results (see blogpost, How Great Leaders Inspire Others – The “5 Cs” Formula!!).
I hope the above best practices help you play a positive leadership role in transforming your organization. It is a difficult journey but if you navigate it well the rewards are significant, both for your organization and for you. Your organization could emerge a winner while you could grow as a leader. All the best for the exciting times ahead!!
