No Going Back
Published in British Industry Magazine: Leadership & Strategy
Change is a way of life in today's fast moving business world. So, asks Sarah Bower, why is it still such a minefield for many managers?
Attitudes to change are many and various. Most of us love a change of image - new clothes, a different car. We embrace the change of scene offered by a holiday, yet moving house is classed as one of life's most stressful experiences, up there with divorce and bereavement. Perhaps it would be true to say that we respond well to change provided the door does not close behind us. We crave the reassurance of an exit strategy. The challenge for managers is to be able to manage change successfully in their organisations when there is no going back.
What key skills do senior managers need to meet this challenge? "One of the first things is to be open minded, to be in a place which is more accepting of what might have to be done in terms of flexibility," says Adrian Moorhouse of Lane4, whose approach to management development is inspired by his personal experience as an Olympic swimmer. Mark Reynolds, whose consultancy, Catalyst, also utilises sporting analogies, identifies five components that are "omnipresent in people who are successful at leading change and particularly major change." Firstly, they must be principle-based decision makers, who do not waver under pressure. Awareness of one's own strengths and weaknesses is just as important as being able to accurately assess those of other team members.
Thirdly, Reynolds stresses coaching style. "The successful coach has an ability to get an exceptional level of performance out of a group of highly paid artisans," he says, and it is the same for business leaders. They need to have the ability to be always moving things forward and to resist "the raking of ashes", even over positive experiences. This is closely related to a visioning ability, "a desire to take people to a better place and an ability to describe that better place and bring it to life in the eyes of others." What all this amounts to is a balance of IQ and EQ (emotional intelligence). "How many times," asks Reynolds, "have we seen IQ win over EQ - a great idea, a really insightful analysis of a particular situation, phenomenally badly or insensitively communicated?"
This goes to the heart of change management. Corporate restructuring - mergers, de-mergers, re-financing operations - tends to be led by managers with a financial or technical background. They can make the figures add up, ensure assets complement one another, integrate IT systems, but there is a danger they may overlook the needs of people. Yet people are the greatest assets of any organisation. Employees, not state-of-the-art SAPs or lean manufacturing techniques, generate the wealth of a company. Even institutional shareholders are governed by boards made up of people. No senior manager without an understanding of the different ways in which people respond to change can hope to manage it successfully. Communications skills, says Mandy Haeburn-Little of MHL Corporate, are "paramount". Managers must understand "the human issues involved in significant change. People will react in many different ways, for very personal reasons."
Laura Kelly of Thomson NETg, sees an internal role for heads of HR in this process. As the trend is increasingly towards the outsourcing of tactical, functional roles such as payroll, HR leaders are freed up to take a strategic role in preparing staff for change.
Bringing in consultants should be treated with caution. According to Joe España of Performance Equations, "it can feel to the receiving organisation that this is something that is being 'done to them' rather than engaging people fully in participation and commitment to the change." For Adrian Moorhouse it is a matter of finding the right balance. While bringing in experienced consultants reduces the need for managers to "go through the pain and learn the hard way," companies should avoid becoming over dependant on their outside advisers.
Recalling his swimming days, he says, "my coach coached me and my psychologist and nutritionist gave me all their stuff, but then I swam the race on my own. There's no way you should be seen as the people to lean on all the time." For Mandy Haeburn-Little, consultants or interims should be "SWAT teams", coming in strictly when needed. Companies should be "actively looking to get rid of their consultants as soon as possible," says Alan Mitchell of TSO Consulting. "Management consultancy should be about making the client self-sustainable."
Self-sustainable change cannot be achieved without the commitment of people at every level of an organisation, but the process has to begin at the top. "If the top aren't engaged it can get very expensive later on," Alan Mitchell puts it bluntly. Laura Kelly explains this by pointing out that agreement on the fundamental strategic goals to be attained has to be a precursor of implementing any change required to achieve them. Clearly this is the role of senior management.
There is an increasing awareness of the direct link between good leadership and business performance. A recent US study found that 82 per cent of companies with above average growth had a leadership development programme in place. "You absolutely must get executive buy-in," Kelly concludes. If top management has too great a vested interest in maintaining the status quo, organisational change is doomed to failure.
Once the change process is underway, however, according to Adrian Moorhouse, "you need a pincer movement". Every change plan should include a strand requiring senior management to continually assess the impact of the plan on people throughout the organisation, including themselves. Everyone at every level is human. Senior management may believe themselves to be immune from the negative effects of change, but they are not, and "if they're not prepared for it or geared up for it then they'll have a massive modelling effect on the people that work for them."
When Ford entered into a joint venture with GETRAG Transmissions to run its Halewood transmissions plant, Catalyst was called in to help with the transition, recognising immediately that sustaining change was the main challenge - finding the motivation within the workforce to make change work and make it stick. Leadership potential had to be identified and developed at all levels, not only in the boardroom. Union representatives were key players. According to plant convenor, Joe Cunningham, "by involving people in the development and subsequent implementation of the project, we will deliver to our customers a quality, world beating product." Laura Kelly identifies learning at all levels as a means of motivating employees through change and discouraging negativity. By learning "to understand the change curve and to understand what's normal and what's to be expected," people are better able to manage themselves through change.
In a rapidly developing society like ours, in which technologies are out of date almost before they go on the market, we tend to assume that change is always a good thing, even though our instincts may tell us otherwise. There are times, however, believes Alan Mitchell, when caution needs to be exercised. "People who are so keen on change they never actually finish anything," can be as much of a danger to an organisation as those who are "not confident about operating in what they see as a scary new environment." He goes on, "people who resist change can be very powerful tools. Sometimes they resist it for very sensible reasons." A good team has a balanced mix of both approaches together with the skills to negotiate a mutually acceptable position. "From the change point of view it's all about getting people thinking and concentrating and focusing on the end purpose." To refer back to Kelly's point, first identify the strategic goals for the organisation and only then determine what - if anything - needs to change to achieve them.
Can the soft skills, communications skills, team-working ability etc, needed for the successful management of organisational change, be taught? By placing the emphasis on emotional intelligence and intuitive abilities, are we in danger of discouraging business leaders from believing themselves capable of motivating their people to rise to the challenge? Mark Reynolds believes that "people with leadership potential are born," but "it can be taught, it can be absorbed [even if] it doesn't always come naturally - you can take people to a higher level."
Leaders need honesty and integrity; they must be prepared to openly acknowledge the difficulties confronting them before they can take their team with them. While Alan Mitchell acknowledges that experience can be the fastest way of learning, Joe España cautions, "there is an old saying that you can have either 10 years of experience or one year of experience repeated 10 times."
As organisational change becomes almost institutionalised itself, fewer and fewer people are achieving top management positions without the experience of change, both as individuals and team leaders. Ten or 15 years ago, says Alan Mitchell, change management was a new concept but now "it has become something that managers on projects just do. People talk about change. I try to avoid the term because actually it's management. Change is part of the normal management process, it's not something you pick up and put down."
But there is no room for complacency. As Adrian Moorhouse explains, "my first responsibility as the leader of a business is to know how it affects me, what the impact might be on my people and therefore, how I can support them in the best way. If I'm not thinking about my own development then I'm missing a trick." Senior managers are still conditioned to perceive their personal goals in terms of achieving power and influence rather than a position of nurturing.
It has recently been estimated that 75 per cent of a company's value resides in its human capital. As Jack Welch, chairman and CEO of General Electric for 20 years, put it; "Our core competency today is not manufacturing or services but the global recruiting and nurturing of the world's best people." Social trends are helping - the generation now rising to leadership positions has grown up caring for the environment and valuing the individual - but if business organisations are to be able to change positively their leaders must constantly keep in mind that organisations are made and maintained by people, not computers or balance sheets.
