Leading transformational change as CEO

In today’s chaotic, fast-moving markets, change is a given. Customer wants and needs are constantly shifting. Product cycles are shorter than ever. Instant access to information and new technologies continually shrink industry barriers to entry (or remove them altogether).  Just when we think we’ve hit the sweet spot for our organizations, it moves – often faster and in a different direction than anyone could have anticipated.

Along with so many other things today’s leaders need to get really good at, planning and implementing change is one skill you must master to maintain and expand your success.

Get clear on the big picture

Planning a major change initiative starts with creating the road map for where you want to go, what you want to accomplish, and why.

• Identify the need for change.

Organizations generally change for one of two reasons. Either something is not working, or management has identified an opportunity that promises future rewards.

The “not working” category can range from “we’re not reaching our goals” to “we’re in big trouble.” It can also have many different drivers. Sales and profit margins are declining and don’t show signs of righting themselves.  Market share is slipping away. The company hasn’t kept up with changing customer needs and industry trends. Basically, anything that could put the organization at risk can drive the need to change.

On the opportunity side, taking advantage of it in a timely manner can yield enough rewards — garnering market share from competitors, entering a new market, developing a competitive advantage — that it justifies the time, cost and effort of undertaking a major change.

• Determine where the organization needs to go.

This will depend on your reason(s) for initiating the change. It will also determine to a large degree the size and scope of the change initiative. For example, does the change involve:

1. Introducing new products or services?
2. Developing new ways of working?
3. Restructuring teams and departments?
4. Refocusing on customer needs?

Launching a major change initiative is a lot like a strategic plan – decide where you want to go – define the end state with specificity to drive thinking about possibilities on how to get it done. Figure out what it will take to get there – determine who will do what, by when, with what resources.  And get everyone on board with the plan – discuss the end state with enthusiasm including why it is a great option.

• Paint a picture of what the desired end state will look like.

Outline the rewards to the organization of reaching the destination and the individual rewards for those who help implement the change. Point out the negative incentives for those who don’t. If the change involves a major change in direction, articulate clearly how the organization will still win.

For most organizations, this is the easy part. The difficulty comes in convincing employees of the need to change and getting them on board.

Helping employees work through the transition

One of the biggest challenges of major change is that no matter how well you plan, communicate and implement, people will still resist. Some more than others, but resistance to change that is not initiated by ourselves, is a basic human trait. The human brain prefers to hang on to the past. When faced with change and uncertainty, the tendency is to revert to what we already know even when there are good, logical reasons for making the change.

Believing that what worked in the past will continue to make the organization successful is a leading cause of “we’re in trouble” change. It happens when companies have a “don’t rock the boat” culture as opposed to one that purposefully looks for new opportunities. It also leads to an interesting phenomenon: people tend to be more resistant to change when things are going well.

As leaders, it’s our job to look ahead and identify the need for change before it’s too late. To employees, it may seem like the business is humming along and doing just fine. They don’t see the need to upset the applecart, and often resent it. When it’s obvious the organization is in trouble, people are generally more open to change because they can see the threat to their jobs. Even so, many will still resist the change, although usually to a lesser degree.

To help employees understand and support the change initiative:

• Explain the need for change.

As mentioned, there is “we’re in trouble” change and opportunity change. However, the need for change can also be current or anticipated, which leads to four different approaches for communicating it:

Current

1. We’re in trouble now because of new competitors, our technology is obsolete, etc. If we don’t change it could affect job security, benefits and even our survival.

2. We have a tremendous opportunity to boost market share, build our brand and grow the business, which is good for everyone. If we don’t do it now, someone else will.

Anticipated

3. We’re going to be in trouble if we don’t update our technology or work processes. Falling behind in our industry could affect market share, job security and organizational survival

4. We believe our industry is going to change significantly in the next few years. We’re positioning ourselves for future success and need to change now while things are going well rather than wait for trouble.

• Outline the change process.

After hearing the “why”, employees want to know how the change will happen and who’s in charge.  Identify:

1. Who is sponsoring/leading the change
2. Who will be affected by the change, both internally and externally
3. What will be changing
4. What will not be changing (always provide something remaining the same that employees can hold on to, something that brings a small bit of comfort)
5. The timing for the change initiative
6. How people will be kept informed throughout the process
7. The importance of maintaining a teamwork-driven environment

Most of all, let employees know what to expect during the change process. Change is a time of fear and uncertainty for most people. When they don’t know what to expect, the brain makes up information to fill the gaps. More often than not, the stuff we make up is negative. When people understand what will happen, why it will happen and the benefits of making the change, it becomes easier to let go of the old ways and embrace the new.

Support employees in making the change

During change, employees need more clarity and support than ever:

• Constantly communicate what’s at stake and why, focusing on the positive aspects of the change rather than the negative. Leading with the carrot instead of the whip will result in a higher level of employee engagement.
• Clearly define the next steps at the organizational, team and individual level. Make sure everyone knows how the change will impact their jobs and what they will now be expected to achieve.
• Describe the support (people, technology, assistance) that will be provided throughout the change. Establish change sponsors and change leaders who can answer questions and provide information. Prepare managers to meet privately with employees to discuss their fears and concerns.
• Recognize and reward the achievement of milestones. Large change initiatives can often seem overwhelming. To avoid an attitude of “we’ll never get there,” break it down into manageable steps and celebrate the small victories along the way.

Most of all, model the right attitudes and behaviors for your organization

As the leader, be a cheerleader for transformational change. Act to encourage others by discussing elements of the change with them and why you, as the leader, are supporting it. Constantly talk about how everyone will win when the change is complete.

In the movie Apollo 13, where the mission to the moon goes seriously awry, there’s a scene where the head of NASA bemoans all the horrible things that are likely to happen. The director of operations for mission control, who has full responsibility for bringing the astronauts safely back home, looks him in the eye and says, “Excuse me sir, but I believe this is going to be our finest hour!”  The information both had was the same. The mindset was dramatically different and drives us to think very different things.

Completing your next major portfolio of change initiatives could well be your company’s finest hour. What will you do to make it happen?

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• Winning through a culture of accountability
• Getting clarity of purpose for your business
• HBR: We Still Don’t Know the Difference Between Change and Transformation

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