Top-Shelf Tip No. 139:

"It is not the strongest or the most intelligent who will survive but those who can best manage change."

Charles Darwin

Four Ways To Lead Change

My company is on the verge of a large-scale transformation. It's no secret, and they've already prepped industry analysts that change is coming. What leads to a large transformation? In the case of my company, industry consolidation, regulatory pressures and market shifts are all leading to a change in the way we do business.

In his recent article in Harvard Business Review, Douglas Ready, senior lecturer at MIT's Sloan School of Management, stated that two-thirds of large-scale transformation efforts fail. Ready, who has worked with companies around the world, says that for large-scale change to be successful, there are four key elements that change leaders need to have. We'll reveal them in this issue of Promotional Consultant Today.

1. Recognize embedded tensions and paradoxes. Ready says that successful change leaders are those who recognize the tensions and paradoxes in organizations that either spring up or become more apparent during a transformation. He describes some of the most common scenarios:

  • Revitalization vs. Normalization. At the core of every change initiative is the desire to breathe new life into the organization―to revitalize ways of thinking, behaving and working. But one change initiative often morphs into many, and before long employees become "change weary." Thus, we find ourselves in the conflicted situation of needing revitalization but desiring normalization.
  • Innovation vs. Regulation. Many organizations, especially in industries like financial services and health care, want to innovate, but they must continue to manage increasing scrutiny and regulation, so it causes a struggle between the desire to innovate and the need to operate under these controls.
  • Optimization vs. Rationalization. Organizations are struggling to provide solutions that are better, faster, cheaper and increasingly customized, yet this costs money to develop. Leaders are caught between optimizing benefits to customers while rationalizing their costs of doing business.
  • Digitization vs. Humanization. Leaders are struggling with how to reconcile the increasing need for the digitization of their business models while trying to create organizational climates that create a sense of purpose for the employees.

    2. Hold everyone accountable. The change leader must signal that enterprise-wide transformation will be an organization-wide effort, not just for the top managers with accountability. And they need to show action that proves this. Ready gives the example of CEO John Hess who challenged his team to come up with solutions that would make the company more agile, cost conscious and faster at decision making, and created a champions team responsible for coordinating the variety of efforts underway.

    3. Invest in new organizational capabilities. Change leaders must go beyond storytelling, motivation, and mobilization efforts―they need to provide resources so that the organization has what it needs to win in the new environment. This might include capital improvements, process improvements and building new talent capabilities.

    4. Emphasize continuous learning. Finally, transformation requires continuous learning. Ready gives the example of Alan Mulally who was brought in to turn around Ford Motor Company. At every meeting, he asked managers to share what they learned by airing concerns, making course corrections and, especially, fixing problems together. By combining his relentless focus on implementation and making tough calls with an equally important focus on continuous learning, Mulally transformed Ford into one of the most successful automobile companies in the world.

    While these tenets are based on large-scale transformation, these steps can also be applied to small and medium-sized businesses as well. Looking to make change? Focus on these four traits.

    Source: Douglas A. Ready is a senior lecturer at MIT's Sloan School of Management and the founder and president of ICEDR.

    Compiled by Cassandra Johnson

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