Mission: To strengthen and inspire leaders of the social sector and their partners in business and government.
Such bold strokes do produce fast change, but they do not necessarily build the long-term capabilities of the organization. Indeed, these leadership actions often are defensive, the result of a flawed strategy or a failure to adapt to changing market conditions. They sometimes mask the need for a deeper change in strategy, structure, or operations, and they contribute to the anxiety that accompanies sudden change.
Forces for Change
Organizational change has become a way of life as a result of three forces: globalization, information technology, and industry consolidation. In today's world, all organizations, from the Fortune 500 to the local nonprofit agency, need greater reach. They need to be in more places, to be more aware of regional and cultural differences, and to integrate into coherent strategies the work occurring in different markets and communities.
The first two forces for change -- globalization and technology -- will inevitably grow. But it's not enough for organizations to simply "go international" or "get networked." In a global, high-tech world, organizations need to be more fluid, inclusive, and responsive. They need to manage complex information flows, grasp new ideas quickly, and spread those ideas throughout the enterprise. What counts is not whether everybody uses e-mail but whether people quickly absorb the impact of information and respond to opportunity.
Industry consolidation, the business story of 1998-99, has a less certain future. But even if that trend abates, the impact of mergers, acquisitions, and strategic alliances will be felt for years. Mergers and acquisitions bring both dangers and benefits to organizations (see "Innovating in the Age of Megamergers"). Partnerships, joint ventures, and strategic alliances can be a less dramatic but more highly evolved vehicle for innovation. However, you must not starve an alliance or a partnership. You have to invest the time and resources to work out differences in culture, strategy, processes, or policies.
Keys to Mastering Change
Change is created constantly and at many levels in an organization. There is the occasional earthshaking event, often induced by outside forces; there are also the everyday actions of people engaged in their work. In change-adept organizations, people simply respond to customers and move on to the next project or opportunity. They do not necessarily change their assumptions about how the organization operates, but they continuously learn and adapt, spread knowledge, share ideas. By making change a way of life people are, in the best sense, "just doing their jobs."
Classic Skills for Leaders
The most important things a leader can bring to a changing organization are passion, conviction, and confidence in others. Too often executives announce a plan, launch a task force, and then simply hope that people find the answers -- instead of offering a dream, stretching their horizons, and encouraging people to do the same. That is why we say, "leaders go first."
However, given that passion, conviction, and confidence, leaders can use several techniques to take charge of change rather than simply react to it. In nearly 20 years working with leaders I have found the following classic skills to be equally useful to CEOs, senior executives, or middle managers who want to move an idea forward.
Look not just at how the pieces of your business model fit together but for what doesn't fit. For instance, pay special attention to customer complaints, which are often your best source of information about an operational weakness or unmet need. Also search out broader signs of change -- a competitor doing something differently or a customer using your product or service in unexpected ways.
There are lots of ways to promote kaleidoscopic thinking. Send people outside the company -- not just on field trips, but "far afield trips." Go outside your industry and return with fresh ideas. Rotate job assignments and create interdisciplinary project teams to give people fresh ideas and opportunities to test their assumptions. For instance, one innovative department of a U.S. oil company regularly invites people from many different departments to attend large brainstorming sessions. These allow interested outsiders to ask questions, make suggestions, and trigger new ideas.
In the early stages of planning change, leaders must identify key supporters and sell their dream with the same passion and deliberation as the entrepreneur. You may have to reach deep into, across, and outside the organization to find key influencers, but you first must be willing to reveal an idea or proposal before it's ready. Secrecy denies you the opportunity to get feedback, and when things are sprung on people with no warning, the easiest answer is always no. Coalition building requires an understanding of the politics of change, and in any organization those politics are formidable.
When building coalitions, however, it's a mistake to try to recruit everybody at once. Think of innovation as a venture. You want the minimum number of investors necessary to launch a new venture, and to champion it when you need help later.
Today's organizations have come to expect bold strokes from their leaders. Sometimes these are appropriate and effective -- as when a project or product that no longer works is put to rest. But bold strokes can also disrupt and distract organizations. They often happen too quickly to facilitate real learning, and they can impede the instructive long marches that ultimately carry an organization forward. That is why imagination, professionalism, and openness are essential to leadership, not just to leading change. They give organizations the tools to absorb and apply the lessons of the moment.
Likewise, techniques that facilitate change within organizations -- creating listening posts, opening lines of communication, articulating a set of explicit, shared goals, building coalitions, acknowledging others -- are key to creating effective partnerships and sustaining high performance, not just to managing change. They build the trust and commitment necessary to succeed in good times or in bad. Even periods of relative stability (unusual for most organizations) require such skills.
Change has become a major theme of leadership literature for a good reason. Leaders set the direction, define the context, and help produce coherence for their organizations. Leaders manage the culture, or at least the vehicles through which that culture is expressed. They set the boundaries for collaboration, autonomy, and the sharing of knowledge and ideas, and give meaning to events that otherwise appear random and chaotic. And they inspire voluntary behavior -- the degree of effort, innovation, and entrepreneurship with which employees serve customers and seek opportunities.
Innovating in the Age of Megamergers
Do mergers and acquisitions impair innovation? It depends on the nature of the deal and the abilities of leaders. Some consolidations, such as the effectively managed merger of Sandoz and Ciba Gigy to form Novartis, are growth-oriented. In that case, most of the pieces that were combined, and eventually sold off, were in the chemical business. What remained was a new, strategically coherent life sciences company. It can grow by building new knowledge and collecting in one place a set of diverse products that previously had been scattered.
The key for leaders in a growth-oriented merger -- where the aim is to tackle new markets and do things together that could not be done separately -- is to foster communication, encourage involvement, and share more knowledge of overall strategy, special projects, and how the pieces of the new entity fit together.
On the other hand, many mergers are aimed primarily at reducing capacity and cutting costs. That is the case in most of the recent banking and financial services mergers, for instance.
These consolidations, and the efficiencies that result, can make good economic sense. Yet massive organizational change often drains so much time and energy that the sustainable benefits of the long march are lost, and the temptations of the bold stroke are irresistible. Often this leaves leaders with the task of putting the best face on what, for many employees, is not a promising future.
Mergers that focus on cost cutting -- often necessary to pay for the deal and to satisfy the demands of shareholders -- can threaten the funding of promising experiments and disrupt innovation. Massive mergers can also drive out the knowledge that fuels innovation. Merged organizations often lose a degree of staff professionalism because people resent losing a voice in their destiny or having to do tasks that they're not prepared for. Training budgets and opportunities for collegial exchange also tend to shrink. Most consolidations fail to create more integrated, value-adding enterprises and fall short of their promised benefits. That is what makes them such a demanding test of leadership.
Sticky Moments in the Middle of Change -- and How to Get Unstuck
Roads curve. Everyone knows that a new path is unlikely to run straight and true, but when we actually encounter those twists and turns we often panic. Especially when attempting to make changes in a system, diversions are likely, and unwelcome.
It is a mistake to simply stop in your tracks. Every change brings unanticipated consequences, and teams must be prepared to respond, to troubleshoot, to make adjustments, and to make their case. Scenario planning can help; the real message is to expect the unexpected.
Momentum slows. After the excitement and anticipation of a project launch, reality sinks in. You do not have solutions to the problems you face; the multiple demands of your job are piling up; the people you have asked for information or assistance are not returning your calls. The team is discouraged and enmeshed in conflict. It is important to revisit the team's mission, to recognize what's been accomplished and what remains, and to remember that the differences in outlook, background, and perspective that now may divide you will ultimately provide solutions.
Print citation:Kanter, Rosabeth Moss "The Enduring Skills of Change Leaders" Leader to Leader. 13 (Summer 1999): 15-22.
This article is available on the Leader to Leader Institute Web site, http://leaderbooks/L2L/summer99/kanter.html.
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