The art of change

With the credit crisis now in full swing, many brokers and lenders are having to re-examine their business models, and, in some cases, look at making significant changes to how the operate in order to survive. Leadership guru David Ulrich looks at the challenges facing leaders looking to re-position their organisations

Being able to manage change successfully is essential, but too often, leaders fall into a change diet trap, where they seek formulas and check lists that will grant their change wish. They are often accompanied with promises and testimonials of how others have adopted a clear set of actions that generated desired changes.

Unfortunately it doesn’t work that way We need to change the way we think about change.  Sustained change may begin with actions, checklists, and tools, but must evolve to adopting a fundamentally different identity. Rather than think about change tools or programs, we should be thinking about changing identities.

Changing identity

Leaders who turn organisational aspirations into sustained actions must go further than programmes or management diets and focus on identity.  Change requires letting go of an old identity. To forgo and let an old identity die requires clarity about what has to change, candor about the need for change, and courage to make the change happen. 

When employees absorb and internalise a new change, they take accountability and ownership for it.  It becomes part of who they are.  Identity shift means that one internalises both new principles and associated practices so that actions come naturally without extensive thought. A sustained change is not an event with beginnings and endings, but a pattern that shapes who we are.  A new identity means that programmatic tools are now accepted, acted on, and assimilated without formal review, and that fundamental change simply occurs.      

If an executive can not make the shift from events to patterns, from actions to identity, or from checklists to transformation, the organisation is unlikely to do so.  To understand forging a new identity, six principles should be learned and applied.  Each principle is encapsulated in a question that a person wishing to change, or motivate change in others, must ask (see table). 

Principle 1:  Focus.

Question 1:  What do I want?

Identity begins with a focus on the desired new identity. A focus sorts, prioritises, and highlights what matters most.   In change not everything worth doing is worth doing well.  Some things that are important to do may simply not be priorities.  Some things are so important to do they are worth doing poorly. When leaders start new projects, they may not do them well at first. Initial efforts at new products; at measuring productivity; at moving to new global markets, and other efforts may go poorly.  But, they are so important to do that they are worth doing poorly because they are what the leader wants.
Sometimes, companies receive great acclaim because of their change after many years of working on the change and the beginning trials and errors are easily and often forgotten.

 
As CEO of General Electric, Jack Welch received enormous praise at the end of his 18 year tenure.  In the midst of this praise, it is often overlooked or forgotten that his first few years were demanding at best.  He wanted to fundamentally change the identity of GE.  And, he began that journey with a focus.  Early in his tenure, he focused on strategic redirection with the mantra and demand on each GE business:  fix, sell, or close.  This resulted in selling and acquiring over 200 businesses.  This business realignment was coupled with a focus on productivity gains as he significantly reduced the size of the workforce even while GE was making consistently better earnings.  He then shifted focus to the GE culture with the Workout programme, the emphasis on being boundary-less, and then to six sigma.  In his annual letters to shareholders, he outlined both the evolution of his thinking and his current focus.  In his early years, he faced resistance yet he maintained his focus.

Having a focus requires that a leader may only have limited priorities that they are personally going to champion; they can sponsor others, but can really only own 1 or 2. To determine the focus or priority, the simple question “what do I want” is useful.  Knowing what is wanted requires reflection on all the things that could be done, but then getting clear about what is wanted in a specific situation.  Without focus that comes from knowing what is wanted, leaders try to be all things to all people and end up being so unfocused that what matters most happen least.  

Principle 2:  Explore.

Question 2: What are my options?

Once a leader knows what is wanted, the leader needs to figure out options to get it done.  Exploring options means looking for alternatives.  This means seeking people who have counter-intuitive ideas, especially ideas from targeted customers.  It means having forums for dialogue, innovation, and breakthrough thinking.  It means being aware of the trap of being locked into traditional ways of thinking and doing.  What has worked in the past may not work in the future.  It means exploring what others have done who both in and not in your industry.  It means experimenting with new ideas and learning from those experiments. 

Herman Miller originally put together a small team to discover new ways to structure and manage office space. This team was composed of people who did not have traditional office expertise and they were tasked with rethinking how to make physical space a source of competitive advantage for Herman Miller customers.  Many things were being looked at including walls, cubicles, desks, storage, lighting, ceilings, and floors.  Sound was one of the problems they were wrestling with and they formed a sub-team to figure out how to ensure privacy in an open space office.  This team focused on what they wanted (to increase privacy in open spaces) and they explored many options before creating a breakthrough product called Babble.  Babble offered a technology which masks personal conversations by recording the speaker’s voice and playing it in parallel with the speaker’s voice.  This concept allows people to have private conversations in a crowded office.  While the company had an overall focus of improving office space, they explored options and decided that a starting point was sound. 

Exploring options helps leaders know that their change effort has been thorough and comprehensive.  Exploring comes from asking “what are the options?”  Seeking and evaluating many options ensures that leaders don’t fall prey to first answers.  Options also requires that leaders find qualified experts who will give them informed counsel, not based on whims, but on theory and research.  With focus and exploration, leaders know what they want and explore alternative paths to make it happen.  Focus requires discipline and options require inquisitiveness and creativity. 

Principle 3:  Claim.

Question 3: What do I think?

Sometimes leaders get lost in the options game.  They can see so many ways to do a project that they never get around to doing it.  One executive said that he never bought his company’s latest commercial product because the future oriented project teams always told him a better one was coming.  Another executive was so creative at defining processes and ways to solve problems that he never landed on a solution that his company would follow.

There is a point at which leaders need to claim the option that will lead them to achieve their focus.  Leaders stake, claim, own, and are accountable for the choices they make.  Leaders recognise all the things that could be done, but they then claim the unique combination that works best.  Leaders take a stand and become known for something. They talk publicly and privately about both the direction they are headed and the path to get there; they put personal energy and passion into the paths they chose; they monitor progress in themselves and others; and they gain or lose personal credibility by the extent to which they accomplish their claim. With a focus, options, and ownership, leaders pass a calendar test of their time, an emotional test of their passion and energy, and a resource test of the investments required to deliver on the option.

To claim an option requires personalising the change and answering the overall question, “what do I think?”  This question internalizes an identity.  It makes the identity less an abstract thing that someone else might do and one that the leader petitions and claims as his own.  
When leaders declare their desires with a focus, explore their options with insight, and claim their path with boldness, they lead.  They set an agenda, define a path to get there, and engage others in a change journey.  They begin to forge a new personal identity for what they have to be known for that will help their organisation forge a similar identity.  

Principle 4:  Decide.

Question 4: What decisions do I need to make?

Leaders often spend a lot of time building action plans through pert charts, responsibility grids, and accountability matrices. But, in most cases, once the direction and path are decided and claimed, the leader must now make decisions to make things happen.  Clarity of decisions leads to lucent actions while decision ambiguity leads to delayed or random actions.  When approached by subordinates with questions or problems one leader would almost always respond, “what is the decision you want me to make from this conversation?”  This question shifted responsibility to the employee to be clear about what was wanted and how the leader could help.  One company began to manage change better by simply requiring that the first (or second) slide of every Powerpoint presentation elucidate the decision that would result from the forthcoming presentation.  This discipline moved meetings along and clarified expectations.

Leaders make decisions, either by themselves or through others.  Once decisions are made, actions more likely follow.  In the absence of decision clarity and rigor, actions may be delayed or misguided.  A pattern of decisions shapes an identity.  Being clear about decisions and decision protocols enables leaders to intentionally shape an identity rather than fall into one.  Decisions protocols also turn a direction and path into a set of choices.  Just as leadership is a choice, so is the identity that follows from what and how leaders make decisions.  Thoughtful leaders shape a desired identity from change through the following four questions:

1. What decision do I need to make? 
2. Who is going to make the decision? 
3. When is the decision going to be made? 
4. How will we make a good decision?

As this decision protocol is followed, leaders pass the decisiveness and decision test.  They not only know what they want, what the options are for getting there, which option works best, but they also have specified the key decisions that will only move the change along, but shape a new pattern or identity that emerges from the change. 

Principle 5:  Act.

Question 5: What actions do I need to take?

Ultimately, a new identity requires new actions.  We often judge ourselves by our intent, but others judge our identity by our actions.  There are many lessons learned to making actions a part of the new identity. Start small.  Leaders often look for a magic pill that will solve all problems, but such elixirs seldom exist.  Instead of seeking for dramatic change, successful change leaders seek for small, first steps.  For example, they look for lead customers who might engage in a new project.  They look for low hanging fruit as a way to change bureaucracy or save costs.   They look for early adopters of a new idea and then seek to learn from their experience and share it with others.  They seek a lot of people making small changes rather than a few people making major changes.  A new identity begins with simple changes that others see and reinforce.

Let go.  Any new identity requires letting go of old actions.  It is hard to dispose of old shoes that were worn and fit well to wear new shoes that have not been broken in.  But, any change to a new identity requires letting go of actions consistent with an old identity. Letting go implies recognition of actions that must be stopped, regret and remorse for having done those actions by realising their negative consequences, resolve to not do them again, and resilience in learning how to overcome mistakes.  Letting go means putting aside the old for the new.  It takes time to remove legacy identities, but as old actions are replaced by new ones, others begin to not only support but expect the new identity and its actions. 

Involve others.  Change requires a social support network. It may require spending time with people who reinforce the change (e.g., a leader wanting innovation will spend more time with the creative folks doing the innovative work).  It may also require spending time with those who are not supportive of the change effort.

Sustained change takes time.  But actions that sustain change may be done in predictable ways.  Leaders may follow a four 3-s methodology to help move people from desiring a change to actually doing it. 

• 3 hours:  What can I do in the next three hours to make progress on this initiative? 
• 3 days:  What can I do in the next three days to make progress on this initiative? 
• 3 weeks:  What can I do in the next three weeks to sustain progress on this initiative? 
• 3 months:  What can I do in the next three months to demonstrate progress on this initiative? 

The four 3s allow leaders to make sure that the change starts now, but continues.  It allows leaders to have a dialogue with those in change to see if the change is actually occurring in short, specific ways that lead to longer term success. 

As leaders start small, let go, involve others, and practice the four 3s, they pass the action test.  They are able to observe and recognise the patterns and events that need to change, to let go of old behaviors, to enlist the help of significant others to bolster the change, and to start now and continue forward with change. 

Principle 6: Learn

Question 6: How will I know and grow?

Sustained change requires follow up which comes from monitoring and learning.  Without indicators to track progress, learning can not occur.   In change, leaders should look for early signs of success by identifying lead indicators of what is or is not working.  But measurement without learning fails to sustain change.  Learning occurs when the tracking indicators lead to insight that then lead to continual improvements and upgrades.  It takes leadership confidence to monitor progress and improve.  One organisation did an employee survey and the results were so negative the leader sponsoring the survey refused to share the data with other senior managers.  In successful organisations, monitoring and learning continually occur in both good and bad times.

Leaders committed to monitoring continually do after action reviews to gather information about what worked and what did not, track both quantitative and qualitative data, and identify trends and themes from the data.  They measure what is right not just what is easy by tracking both behaviours (what we did) as lead indicators and outcomes (what we accomplished) as lag results. Seeing cause and effect helps change leaders monitor the right things.  Leaders not only collect data for themselves, but they allow those affected by the change to monitor their own progress. Self monitoring has much more impact than reports being generated and shared.

This article first appeared in Human Resource Magazine (HRM)