Successfully restructuring an executive leadership team a case study in change management


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A full 65 percent of respondents to the Katzenbach Center survey reported this as a problem.

The change initiatives they suffered through may have been poorly thought through, rolled out too fast, or put in place without sufficient preparation. Change initiatives also flounder, according to 48 percent of the respondents, because companies lack the skills to ensure that change can be sustained over time. Leaders might set out eagerly to raise product quality, but when production schedules slow and the pipeline starts looking sparse, they lose heart. Lacking an effective way to deal with production line problems, they decide their targets were unrealistic, they blame the production technology, or they accuse their frontline people of not being up to the task.

The third major obstacle is that transformation efforts are typically decided upon, planned, and implemented in the C-suite, with little input from those at lower levels. This filters out information that could be helpful in designing the initiative while also limiting opportunities to get frontline ownership of the change. The following list of 10 guiding principles for change can help executives navigate the treacherous shoals of transformation in a systematic way.

Lead with the culture. Yet change leaders often fail to address culture—in terms of either overcoming cultural resistance or making the most of cultural support. Among respondents whose companies were unable to sustain change over time, a startling 76 percent reported that executives failed to take account of the existing culture when designing the transformation effort. Or they get so focused on structural details—reporting lines, decision rights, and formal processes—that they forget that human beings with strong emotional connections to the culture will be enacting these changes.

Instead of trying to change the culture itself, they draw emotional energy from it. They tap into the way people already think, behave, work, and feel to provide a boost to the change initiative. To use this emotional energy, leaders must look for the elements of the culture that are aligned to the change, bring them to the foreground, and attract the attention of the people who will be affected by the change. In two healthcare companies undergoing a merger, culture led the post-deal integration.

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It quickly became clear that where one company had a culture attuned to bottom-line results, the other tended to focus on process. Optimally, the new company would need to skillfully use processes to deliver clear results. Start at the top. Rather, work must be done in advance to ensure that everyone agrees about the case for the change and the particulars for implementing it.

A clinical research firm was committed to tripling its size over the next decade to achieve a more competitive position. Because the company was still pretty much operating as a startup after 25 years, this required a far-reaching organizational redesign. Before starting the design phase, finance leaders gathered at an off-site meeting to begin a rigorous exercise in alignment.

Why We Need To Rethink Organizational Change Management

Instead, they mostly operated as lone rangers, in characteristic startup style. Each of the executives in the group made a thoughtful individual presentation about the case for change. Most of them agreed on the general direction the company needed to take to achieve rapid growth. But their descriptions of how to move in that direction—for example, what the first concrete steps should be—were all over the map. They were then tasked to work together to develop a case for change that every one of them could support.

To hammer out these agreements, these top executives had to listen closely to their colleagues and weigh conflicting points of view. The exercise was demanding, but they began to coalesce around a coherent vision for what the company should look like in 10 years. Most importantly, the experience of working together so intensely led the executives, for once, to act as a collaborative and committed team.

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By the end of the off-site meeting, they found that they were all using the same language to describe what the company needed to do. As one participant noted, the experience had transformed him , which in turn gave him confidence that together they could cascade the plan to other groups at other levels of the hierarchy. Involve every layer. Strategic planners often fail to take into account the extent to which midlevel and frontline people can make or break a change initiative. The path of rolling out change is immeasurably smoother if these people are tapped early for input on issues that will affect their jobs.

Frontline people tend to be rich repositories of knowledge about where potential glitches may occur, what technical and logistical issues need to be addressed, and how customers may react to changes.

The 7 Principles For A Successful Restructure - Bevington Group

In addition, their full-hearted engagement can smooth the way for complex change initiatives, whereas their resistance will make implementation an ongoing challenge. Planners who resist early engagement at multiple levels of the hierarchy often do so because they believe that the process will be more efficient if fewer people are involved in planning. But although it may take longer in the beginning, ensuring broad involvement saves untold headaches later on.

IBM recognized the need for such an approach in , when rolling out a new initiative on culture. The leadership team had met intensively to develop clear definitions of the cultural traits the organization would require going forward. Make the rational and emotional case together. Hewlett-Packard CEO Meg Whitman and her senior executive team appear to be following this principle in their transformation efforts. In any organization facing a challenging environment, the emotional connection fostered by moves like these is likely to make a major difference.

Act your way into new thinking. Many change initiatives seem to assume that people will begin to shift their behaviors once formal elements like directives and incentives have been put in place. People who work together on cross-functional teams will start collaborating because the lines on the chart show they are supposed to do so. Managers will become clear communicators because they have a mandate to deliver a message about the new strategy. Yet lines on a chart and bold statements of intent have only so much impact.

Start by defining a critical few behaviors that will be essential to the success of the initiative. Then conduct everyday business with those behaviors front and center.

Senior leaders must visibly model these new behaviors themselves, right from the start, because employees will believe real change is occurring only when they see it happening at the top of the company. Leaders of a major global manufacturer seeking to escape bankruptcy believed the company had lost touch with customers because of entrenched problems in its culture.

Managers operated in an overly layered system without much accountability. They were ponderous, risk averse, insular, and prone to spending time on approvals and office politics.


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Instead of implementing a dramatic, full-scale turnaround, the change team demanded that leaders adopt three specific behaviors:. Because these behavioral shifts were both limited and clearly spelled out, they were implemented quickly. Engage, engage, engage. Leaders often make the mistake of imagining that if they convey a strong message of change at the start of an initiative, people will understand what to do.

Nothing could be further from the truth. Powerful and sustained change requires constant communication, not only throughout the rollout but after the major elements of the plan are in place. A global publisher undertook a major initiative to become more digital, putting in place far-reaching structural changes.

Leading organizational transformations

The top leaders decided to engage people throughout the company at a variety of levels. First, they convened a series of town halls where large groups were given the news and invited to ask how the company-wide shift would affect them. Executives followed this with function-wide meetings where people could learn, for example, about the prospective impact on finance or human resources.

Finally, an internal trade fair was planned to showcase what various teams were doing to make the company more digital. This multifaceted and ongoing communications effort kept the message alive, giving every employee an understanding of the change and a stake in the outcome. Lead outside the lines. Change has the best chance of cascading through an organization when everyone with authority and influence is involved. Companies that succeed at implementing major change identify these people early and find ways to involve them as participants and guides.

There are three distinct kinds of informal leaders:. Panorama Consulting needs the contact information you provide to us to contact you about our products and services.


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