By Stuart Crainer and Des Dearlove
‘Leadership produces change. That is its primary function,’ observes Harvard Business School’s John Kotter. Former CEO, Larry Bossidy puts it like this:
‘The leader’s job is to help everyone see that the platform is burning, whether the flames are apparent or not. The process of change begins when people decide to take the flames seriously and manage by fact, and that means a brutal understanding of reality. You need to find out what the reality is so that you know what needs changing.’
Leaders are rarely recruited to maintain the status quo. When they are it is often a recipe for disaster. Probably the best example of this is the recruitment of David Moyes to follow the hugely successful tenure of Sir Alex Ferguson as manager of the soccer club Manchester United. Moyes was the continuity candidate, someone in the same image as Ferguson – dour, Scottish, fiercely committed and intense. From the moment he took the job, Moyes was caught in a no man’s land of trying to put his own stamp on the club while maintaining things as they had been. The past won.
While change is integral to the job description of any leader, it is fraught with difficulty. We have worked closely with CEOs who have failed to last the course. All were bright, ambitious, hard working and obvious people to take up senior leadership jobs.
The first became CEO of a major professional organization. He wanted to drag it into the twenty-first century and developed a smart strategy to do so. Every time we visited his office, he went through his presentation of the strategy. It was highly convincing. But that was in Powerpoint. In reality, he had completely underestimated the reluctance of people to willingly embrace change. However brilliant the strategy, the people in the organization needed time to learn to trust the new CEO and to understand the strategy as an opportunity rather than a threat. The CEO carried on regardless, irritating people, attempting to shake things up and then being left shaking his head as nothing happened. He lasted six months.
At another firm we worked with a CEO who was hugely impressive. He knew the organization inside out, had worked throughout the world for it and appeared a thoroughly likeable person. So far, so good.
He then hatched a similarly ambitious strategy and set about implementing it. He also wrote a book about being a CEO. We imagine that didn’t endear him to people. Again, to mix metaphors, feathers were ruffled and he bit the corporate dust.
Change is never easy. Never. Research repeatedly bemoans the high failure rate of change initiatives. And there is no sign that the failure rate is declining. But, the truth is that change is what leaders do. Indeed, leadership could be pithily defined as being the catalyst for change. Leadership enables change and changing things is core to any understanding of leadership. While management is concerned with maximizing the efficiency of what exists, leadership is concerned with bringing about quantum leaps in performance by changing how things are thought about and done.
The Harvard professor Rosabeth Moss Kanter has looked at the leaders who excel at dealing with change – what she labels the ‘change masters’ – and has also researched turnaround leadership in detail. Kanter says that ‘the most important things a leader can bring to a changing organization are passion, conviction, and confidence in others’.
Based on studies of several turnarounds, she suggests that information and relationships are crucial elements. A turnaround leader must facilitate a psychological change of attitudes and behavior before organizational recovery can take place. She identifies four essential components of the turnaround process: promoting dialogue, engendering respect, sparking collaboration and inspiring initiative.
Kanter also notes that a great change leader remembers to reward, recognize and celebrate the accomplishments of the people involved in the change process. Make everyone a hero, she says. Because, as she points out, ‘There is no limit to how much recognition you can provide, and it is often free. Recognition brings the change cycle to its logical conclusion, but it also motivates people to attempt change again.’
Recognition can be as big or small an issue as you make it. The executive coach Marshall Goldsmith makes the point that simply saying thank you is probably the most efficient form of recognition. It is remarkable how low expectations are in this regard. (Witness the Hawthorne research in the 1930s where production went up simply because employees thought that supervisors were paying attention to their needs.)
Recognition is an entry point. As Rosabeth Moss Kanter suggests, leading change can never be a simple matter of forcibly corralling people in a particular direction. People have to want to head in that direction; they have to want to change. This is what Michael Jarrett, a professor at INSEAD, calls ‘readiness for change’. ‘Readiness for change applies at the philosophical level – being open to and prepared to embrace change; but it also applies at the practical level,’ he says:
Readiness applies to those organizations that have developed a set of core dynamic and internal capabilities that allow them to adapt when faced by external demands. It is the precursor to those organizations that gain strategic agility. Basically, successful change is a function of how well an organization’s internal capabilities – its management capacity, culture, processes, resources and people – match the requirements of its external environment, the marketplace.
Change is a match-making process. The leader has to have an appetite for change. The organization needs to be ready for change – and, if not, the leader has to nurture its readiness for change. And the organization has to change in the right way to meet the needs of its time, its marketplace, its reality. Are you ready?
Rosabeth Moss Kanter’s best known book is The Change Masters (Simon & Schuster, 1983). Also recommended is Confidence (Three Rivers Press, 2006).
Michael Jarrett’s ideas are captured in Changeability (Prentice Hall, 2009).