Catalyzing teamwork and supporting people to work towards the company’s vision is very important. Having a common belief among people inside the company is what needs to be established first. The beliefs of people refer to their values.
Values serve as the guiding principles of the organization. They need to be set not only by managements’ input but also by employees who will need to comply. IBM CEO Sam Palmisano has done this when he was leading a change from a mainframe maker to a robust provider of integrated hardware, networking, and software solutions back in 2002.
Samproposed three (3) value statements: commitment to the customer, excellence through innovation, and integrity that earns trust, which then changed as per input from the workforce and after being shared with employees to comment on. However, this is not the end of the story. Collaborative effort to set the values is one side of the coin. Believing in them and steering the company forward through these values is the second side that compliments the first side. The new agreed-upon values are dedication to every client’s success, an innovation that matters for our company and for the world, and trust and personal responsibility in all relationships (Paul Hemp and Thomas A. Stewart 2004).
Teamwork is always a key to change. Creating the right team that evolves and gets bigger along the process of change is important. Putting together the ideal team creates the needed collaboration and energy to change. It can start with a few numbers of people and eventuallygets bigger. While there are tools that can create harmony between team members, ensuring they all follow the same direction to the desired change is crucial to success.
Creating harmony among teams and team members involved in the change is important to minimize resistance. Resistors are everywhere and can be created at any time. They exist due to the fear of change, not understanding the big picture, and how they will fit in. This is where leaders of companies and leaders of change teams need to create the urgency to continue. Even if achievement was gained, it still needs to be reflected in other areas of the organization.Change needs to be absorbed by the culture to maintain and sustain its outcome.Sustainability can’t be achieved in short periods. It requires continuous efforts to build harmony among organizations on any achievement andto introduce sustainable practices gradually into the surrounding environment. (John P. Kotter 1995).
Attitude and behaviors of employees are important to keep at high levels during any change. To steer this positively, employees need to be the ones who acknowledge the small changes related to a big change in place. They need to share their perceptions of how things are being led and how this is resulting in new consequences that can relate to a big change.
Employees are the ones who are executing the change. To acknowledge this and empower it, leaders need to listen to employees and use their perceptions and insights as valuable input to make any modifications to the plan for change (Ron Carucci 2019). Getting the buy-in from employees means that they need to be part of setting the actions forward and developing the change plan. Asking “how can we do this?” and “how they can contribute to this?” or “how they can support us in this?” is crucial to bring people into one group feeling empowered, cared for, and letting employees be convinced that their leaders truly believe in them. No change can happen without such an important asset which is the employees (Harvard Management Update 2008).
Creating a common purpose for employees and driving them forward with hope is essential for value-based management. Motivating them to realize the need to change leads to more agility and the achievement of objectives (Paul Hemp and Thomas A. Stewart 2004). Motivating employees to be part of a change is not easy, especially if there were previous attempts for change that have either stopped or failed. Failed attempts at change can cause employees not to trust any new change or choose not to be part of it. Employees can even not put forward all their potential during a change if they are not motivated. Therefore, it’s important to build employees’ resilience to change and maintain it along the way. Keep them part of the developments and achievements and share successes with them (Ron Carucci 2019).
Conclusion
Change is part of any business now. Leading it efficiently and effectively is needed to sustain the business. Proper leadership enables organizations to tackle the external factors affecting business anywhere in the world while building on internal capabilities, assets, and employees. Leading change requires leaders to work hand in hand with their employees. Working as a team is a game-changer to handle the different details and aspects of the change and transformation in their businesses. This can be done by strengthening the teamwork between employees, team members of the change team, and departments to eliminate silos. Working as a team also develops a collaborative environment between everyone.
Leading change is always aligned with value creation. We always look at the value of what is being delivered to customers. We also need to understand that value goes through different stages to be created. This chain of stages needs to be supported by having a clear guiding principle shared among all employees and having leaders talk the walk and walk the talk to be the role models for their teams.
Communication is another aspect that is very important for leading change. It needs to be well managed and executed to ensure it is done properly. Effective communication in leading change gets the needed buy-in from everyone while also keeping them all in the loop of achievements, success, and progress. This will support building the needed motivation among employees who are executing the change. While employees know they will not be put aside but referred to and considered by their leaders, organizations should empower their members to share perceptions and ideas continuously to ensure the success of the change journey.
They say excellence and changes are also a journey that does not end by achieving the result of a new change. But they will require continuous efforts to embed this change in the business’ working environment and daily operations to ensure sustainability and reflection on customers and financial numbers.
To widen your knowledge about defining your organization’s strategy in times of change, establishing appropriate customer trust, and creating the right balance between team members, visit The KPI Institute’s website and sign up for Certified Strategy and Business Planning Professional Live Online Course.
Often than not, several executives take strategy as a routine task or a series of frameworks instead of a mode of visualizing and solving problems. Furthermore, taking on the newest strategy trends or following a successful entrepreneur’s guidelines is not an ideal way to win. Companies need to take their strategies through a series of tests to determine their validity.
There are three tests that identify the success of strategies. These assessments help executive teams to answer some of their burning question, such as:
a) Does your company strategy respond to uncertainty and trends?
b) Does your strategy exploit legitimate sources of advantage?
c) Is your strategy aligned and cascaded throughout your organization?
Three Winning Strategy Tests
There are three types of tests companies can apply to determine whether their strategies are viable or not. The first one is the Fit Test. This type of test measures the level of fitness of a company’s strategy along with its business condition. When conducting the Fit Test, there are three fit dimensions that need to be assessed: internal fit, external fit, and dynamic fit.
Internal fit and external fitare the keys to securing a company’s survival (Tyge Payne et al., 2015). Internal fit is described as a multi-dimensional matching of strategy with structure. It is undertaken to ensure that the strategy matches the company’s resources as well as competitive capabilities. Winning strategies display an internal fit and must be compatible with the ability of a company to implement the strategy in a competent mode.
External fit refers to the congruence between an entity’s strategy and composition and its task environment. Testing external fit will exhibit how a strategy matches significantly with the external conditions, such as industry dynamics, competition, and market opportunities. Therefore, a strategy will only work well if it has an excellent external fit against the external environment.
The last type of fit test is dynamic fit. It is a fundamental measurement that assesses if strategies are changing over time. Dynamic fit is used to synchronize and align the current state of the business with market conditions.
According to Jonathan Trevor and Barry Varcoe, retaining a good strategic alignment relies on the ability of a company’s structure, procedures, and culture to evolve with strategy changes. The signs of misalignments are always evident to employees and customers who fail to receive the type of service they expect.
The second type of test is called the Competitive Advantage Test. This type of test measures the lasting competitive advantages of businesses in the market space. The Competitive Advantage Test also enlightens managers on strategies that often fail to keep up a constant competitive advantage with rivals. Failed approaches to maintain a competitive advantage over competitors usually lead to inferior performance in the long run.
As winning strategies enable competitive advantage to be durable and larger, the research of competitive advantages in the tech industry by (Huang et al., 2015) sheds light on the outcome differences between Temporary Competitive Advantage (TCA) and Sustainable Competitive Advantage (SCA).
The paper suggests that companies can achieve higher outcomes through SCA by amassing assets, resources, and capabilities. However, TCA created through strengthening market positions can assist firms with capital to accumulate resources that will develop a sustainable competitive advantage.
The Performance Test is the third form of measurement to differentiate a winning or losing strategy. A performance test is vital for organizations as companies usually mark their success based on performance. There are two types of indicators that a company looks at to understand the standard of this strategy test:
a) Competitive strength and market positioning and
b) Profitability and financial strength.
One of the performance measurements tools that businesses can use to effectively manage organizational performance is the balanced scorecard. It provides a holistic strategy implementation framework comprising five elements: desired state of evolution, strategy map, performance scorecard, performance dashboard, and portfolio of initiatives.
To sum it up, a company’s strategy needs to excel in all tests to succeed. Failing in even one of the tests could spell problems for business ventures and lead to negative performance. A company can introduce new practices only if they match or erase both internal and external conditions. On the other side, existing strategies should always be evaluated thoroughly to affirm that they are fit and contribute to good performances and competitive advantage. Incorporate fast changes to current strategies if companies fail at least one of the three tests.
Take a look at The KPI Institute’s website and find out more about the Certified Balanced Scorecard Management System Professional course. Discover new approaches on how to create a performance management system based on the balanced scorecard technique and how to implement it at all levels of the organization.
It’s a matter of differentiation. Leaders focusing on differentiation should not only link it with brands. But with the customer experience driven by salespeople who will need to add value to it; thus building the right trust with customers. This includes the customers of the customers along the value chain of the sales. So, adding value will always be important to enrich the experience of customers throughout the chain. Leaders making changes in business models are not only about aligning them with the brand and what is being delivered to customers. But aligning them with employees and what they believe in; this is what matters and what supports efficient alignment across the company. It will drive the change forward and deliver the right value to customers (Paul Hemp and Thomas A. Stewart 2004).
IBM realized that to continue to create value and manage their company in 170 countries, they have to do this through their people by empowering them to make the right decisions aligned with their direction and mission. This could be done by ensuring they identify the gaps between; what values they call for and what is being practiced on the ground. This is where leaders are continuously striving to live the values and ensure everyone does this to lead the changes forced by the external environment. Also, to meet the needs of their internal environment that are based on their human resources (Paul Hemp and Thomas A. Stewart 2004).
Building the right value along the new change in any organization needs to be aligned with the right culture for change. It includes eliminating the blame culture and admitting mistakes by all, especially leaders. Leaders need to set the example that everyone is a human being and humans always make mistakes. But what’s more important is to admit these mistakes. Allow other people to tell you if you did something wrong and do your best to learn from it and transform it into a success afterward (Harvard Management Update 2008).
Value is always created through a journey of developments and improvements. Then, get reflected into whatever services or products are offered to customers. Managing value creation in any change or transformation requires managing efforts in a modeled way. All aspects are interrelated like a red thread and intersect in a way that they push each other forward and affect each other positively towards the result of the change needed. A model can include multiple criteria like an organizational chart which needs to be analyzed and reshaped to support the change and drive it forward. Plus, the workplace, in a way where leaders need to identify how people involved in the change can interact with each other, do their work, and add the needed inputs. This can involve physical workplaces, virtual or even hybrid where leaders embed flexibility in accordance with the organizational structure and ensure more agility are in place.
Other important criteria of the model are people skills and competencies which are considered an important asset in any organization and enablers for change. If needed skills and competencies are missing or not at the required levels, they need to be built internally or acquired from external sources.
Rewards and penalties are other criteria in a model which play a vital part. Rewards are the sparks needed along the way to celebrate successes, even small ones, to motivate employees, and to bring in a sense of recognition. On the other hand, penalties are also important, not to punish employees or to demotivate them. But they can be used as the red lines that leaders don’t need to cross. It is not because leaders want to limit creativity and innovation. However, crossing these lines has proven negatively in past experiences and based on setting expectations for the future and this takes to the fifth criterion which is tasks.
Tasks refer to the existing processes that manage work and ensure inputs, operations, outputs, and outcomes are well defined, understood by everyone, and linked properly to the objectives of the change. The alignment between change objectives, processes, and tasks is very important to support that more efficient work is being conducted with the most possible utilization of resources, thus more efficient operations driving the change.
The sixth criterion of the model is information distribution. It refers to the flow of information among the change team and inside the whole organization. When any information is shared with the receiver, the receiver becomes responsible for sharing the information.
The seventh criterion is decision allocation. It refers to the governance structure in the change team and how it is aligned with the organization’s governance structure. Decision allocation is mainly related to identifying who makes decisions, how, when, and based on what.
Measurements are one of the criteria; if you can’t measure it, you can’t improve it (Peter Drucker). Measurements are collected after setting the right key performance indicators (KPIs) that will measure the performance associated with the change from all aspects (Gregory Shea and Cassie Solomon 2013). KPIs can measure; risk, outputs, outcomes, impact, efficiency, effectiveness, quantities, quality, and other aspects depending on the change being led. Such measurements will be associated with targets to help identify where we stand compared to our planned results and what we achieve from them (The KPI Institute 2020).
Leading change in a demanding industry will always be affected with communication directed to customers from the different channels like TV, Radio, word of mouth, etc. since this will trigger the need to have more accurate and on-the-spot information about the products. But this is where trust is built between customers and salespeople. Those customers will rely more on the right and well-equipped salespeople to enrich their knowledge whenever and wherever needed (Thomas A. Stewart and David Champion 2006).
In addition, leading change wants intensive communication internally conducted among all levels and a continuous basis to ensure everyone realizes the need to change and to understand clearly where they are going, how, when, and through what means. Buy-in from everyone is important, and it’s the spark for any change. This is where leaders should play their role by embedding but not forcing the change; by convincing people with the need for change but not under-communicating the related details; by opening channels with people to express their opinions and support them to digest the need to change (John P. Kotter 1995).
Leading a change and managing communication internally with change teams and employees move hand in hand. It includes using all means of communication like emails, newsletters, executive meetings with employees, inviting experts from outside the company to explain the change, one-to-one meetings with employees, and many more; all of this requires efforts from leaders. But it is highly needed to ensure change is understood and enough buy-in is granted from people inside the organization (Harvard Management Update 2008).
Change in any organization is currently becoming the norm of their structure and tackling internal and external issues. Moving to a new market or introducing a new product or service or even a feature is considered a change, also introducing a new process or policy or guideline inside the company is also considered a change. Whether change is small or big, it needs to be managed and tackled properly, and leaders should accept that managing change should become part of the culture to continuously build on and improve instead of considering it once in a time thing that we tackle and close (Robert H. Schaffer 2017).
In managing change, considering the different parties and tools involved is a matter of importance, while it’s critical also to consider a full model to do so. This is where you can oversee what is involved and what areas need to be identified and tackled to have a sound and integrated approach towards leading a change that is led and managed completely, with flexibility and enough room for learning and improvement (EFQM 2020).
The world is continuously changing, and now it’s faster than ever, with the fourth industrial revolution, new and more technologies and digital disruption being presented and offered around the world. These affect almost all organizations regardless of the sector and region they work in (Ravin Jesuthasan and Marie S. Holmstrom 2016).
While these effects can be considered as opportunities or threats or both, leaders still need to align them with internal strengths and areas for improvement to fulfill strategies and identify a complete strategic direction to act upon the external environment using capabilities now and in the future. All of this means that we are in a storm of changes, and those who succeed and sustain are the ones who can lead these changes efficiently and effectively. Leaders need to be ready, not only by using their past experiences but also by absorbing the changes around them. This also means developing their skills, competencies, and ways of doing work to manage the current era’s workforce, embed innovation in how things are done, and tweak challenges for change to succeed (The KPI Institute 2019).
Leading Change Is a Journey
Most CEOs focused on leading change in costcutting, like Nissan’s CEO Carlos Ghosn and JP Morgan CEO Jamie Dimon. However, Fred Hassan, the CEO of Schering-Plough who undertook multiple acquisitions, focused on leading change in sales performance improvement because he believed it would positively affect other business areas and support the long-term initiatives. As a CEO and top leader, he believed that being the one who unites the business behind the right purpose and direction, cares about people, and provides needed support is the important aspect that supports the growth of the business and the harmony between people. Differences in culture among people shouldn’t be regarded as a disadvantage in terms of managing salespeople or a reason to change strategies in managing sales as they are usually extroverted and understand what needs to be done. They even care more about their linkages with the company and how they are being rewarded and cared for (Thomas A. Stewart and David Champion 2006).
It all starts by identifying the need for change and creating the importance of such a change that is bought equally by all people inside the organization. Such attention to change is shared as high enough. No less than 75% of company management believe that change is needed and that the current business can longer sustain itself. The change any organization wants to undertake needs to be aligned with a sound and clear vision that is integrated into the change they want to happen. However, achieving a vision can take time, and during the journey, people need to realize they are doing well and that they are achieving a part of this vision and getting rewarded for such positive progress. Accordingly, setting clear milestones along the way, with clear results to be achieved and shared with everyone, is needed among change teams. This will boost motivation, collaboration, productivity, and satisfaction for teams and team members involved (John P. Kotter 1995).
Defects are easy to be created during change; thus control gates need to be identified and constraints need to be eliminated. This includes acting upon any of such constraints in a timely manner and making sure that decisions are taken in alignment with the change with no fear of such decisions as everyone agrees that they are needed to move forward efficiently (The KPI Institute 2021).
Leading change also affects leaders by expecting them to lead change and be ready for such a change. Leaders may act slowly trying to absorb change and reflect on their management style. This involves an evaluation of how to manage work during or after change. Meanwhile, a failure in reacting efficiently to the change may cause damages in the relationship between leaders in the organization and will put pressure on all efforts made to succeed in any transformation or change, as they may not be ready to deal with it or don’t realize what is needed to be done. So, it’s not only the organization that requires transformation and change to meet new needs or changes in the external environment. Another layer in this change is the company leaders who need to work in parallel and identify what is needed from them to change or to create to be the right ambassadors for the needed change and also be able to manage it (Cassandra Frangos 2018).
Leaders need to acknowledge the past to build on the future and drive the new change forward. This includes learning from past experiences, whether they are driving a change in their current company or even joining a new company and starting a new change. It doesn’t mean that previous challenges and failures done by other leaders don’t relate to current leaders trying to drive a new change. However, all leaders need to acknowledge the past, the disappointments of employees, and their lack of trust in new initiatives. Learning from the past includes conducting a baseline assessment of the current situation in the organization and understanding the internal factors that negatively affected the past changes and how these factors can affect the new change. Such assessment needs to be shared with change teams and employees to explain what was going on and what we have now in hand to use for the new change (Ron Carucci 2019).
We consider leading change as part of leadership style and one of the ways of doing work. We propose that leading change consists of some aspects that need to be considered as a whole, not separately, to drive change towards success. Because change is currently a norm in any organization, sector, or region, it’s important to tackle it as a journey that creates internal and external value while catalyzing teamwork, morality, motivation, and employee empowerment to develop the needed assets and tools for change.
We found that leading change is an art that requires modeling efforts and directions to create a sound and integrated direction for everyone involved while ensuring that past patterns need to be considered as inputs into this model, resulting in efficient and effective change leadership towards the desired results. Furthermore, we show that uniting behind a purpose and progressing towards a clear vision are important to align the change teams and thus align the change among the different areas of the organization while ensuring continuous communication among all levels of the organization to explain the needed change, share successes, and exchange ideas and perceptions among employees and leaders.
Below is a series of articles I wrote about leading change, published in three installments:
