Large-scale change is destined to fail when executives allow it to become an end in itself and forget what’s most important for the business. “You have to be very aware of customers during the transformation process; you must not let them down,” comments Paul Lester, Chairman of Essentra and former CEO of VT Group.
There are myriad examples of executives becoming so fixated on synergies and dramatic cost savings that it requires a second large-scale transformation for a business to regain its strategic focus. “I’ve seen it happen where the customer suffers because of an integration or an acquisition,” adds Paul.
It’s of paramount importance that the overall objective is clearly understood. Phillippa Crookes, Senior Relationship Manager at Criticaleye, who supports executives in their efforts to execute transformation, says: “For complex change programmes to succeed, there must be real energy, enthusiasm and clarity across the senior leadership team. They need to recognise and celebrate when milestones have been reached, while also being mature enough to hold frank and candid conversations during the more challenging times.
"All too often, change fails due to a lack of trust and alignment in the top team, which filters down through the rest of the organisation.”
Criticaleye spoke to a mix of directors to discover their 5 best tips on how to lead change successfully. This is what they had to say:
Repetition is never a bad thing when explaining the reasons for change and the steps that must be taken. Tim Doubleday, Group CFO of Burger King, believes that periodically bringing the chief executive into steering group meetings can help reinforce the change message and keep everyone on track.
“When it comes to transformation, everything comes back to strong communication. If you have a chief executive who is a strong communicator, then you are much more likely to carry off a project successfully,” says Tim.
David Parry-Jones, Vice President and General Manager for Northern Europe, VMware, comments: “You’ve got to over-communicate if you want to get traction… It takes a long time to land a message consistently as often people are cynical, based on prior experience… You’ve got to incorporate it into their day-to-day lives and make it pertinent to them.”
The effect of uncertainty on people can also be a barrier to getting a clear message across. Martin Grieve, SVP for Corporate Business Planning at Reckitt Benckiser Group, notes: “Communication is really important to any transformation process. However, until you are through the stage of announcing where everyone is going to sit within an organisation after a transformation, this will remain people’s principle concern no matter what the communication strategy.”
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Many executives dream of having a set of metrics that show how much change an organisation is capable of absorbing at any one point in time. In reality, it remains a case of using a combination of performance data and good, old-fashioned gut-feel.
Paul says: “I sometimes get frustrated that change isn’t moving quickly enough. It’s natural to want to get it over and done with and through to the other side. Whether you are the chairman, CEO, or the CFO, you have to keep people on track to achieve the goal.
“But at the same time, you have to go at a pace where you don’t screw things up. It’s a delicate balance to strike.”
There’s no doubt that consultants are an invaluable resource during large-scale change, provided they are used correctly.
Paul comments: “We have used a small number of consultants to check and challenge our thinking. People are often resistant to change, so it is helpful to hear from others who have been through the process. Consultants are able to keep your feet on the ground.”
Problems can occur when lines of responsibility start to blur. Martin explains: “The use of consultants in a transformation process is important, but you have to be aware of giving them too much authority. The pendulum can swing too far in the consultant’s direction and then you lose accountability.
“Involve your own people and don’t outsource too much of the decision-making process.”
In short, if transformation is to be sustainable, it needs to be owned by the senior leadership team.
Leading transformation within the division of a global corporate is notoriously difficult as the opportunity for misalignment is almost infinite.
David says: “The biggest challenge as a divisional leader is: how do you build a culture in your unit that's aligned to the corporate one and, at the same time, gives your piece of the business something that people can align themselves to, driving purpose and progression? That can be difficult if you're part of a multinational."
When leading change, it’s essential to work at forging a consensus. "You need to involve your leadership team in building that strategy. And I mean your extended leadership team,” he notes. “For those of us in matrix organisations, where you've got people in your management team who don't report directly to you, you must include them.
“If they're involved in creating the strategy, they are much more likely to believe in it and deliver it to their teams."
The board has to know when to bring things to a close. “Knowing when to call a halt to the transformation process is very important; you have to be able to recognise when you have reached your destination,” says Martin.
If it goes on and on, then change fatigue will set in. Paul cautions: “Transformation builds momentum when you are getting it right, and that can be very exciting, but don’t keep going for ever. Know when to stop, otherwise people will start to get fed up."
This article was first published in Criticaleye's Community Update, and many of these comments were made at Criticaleye's recent CFO Retreat.
BIE is proud to be an advisory partner to the Criticaleye community and were also sponsors of Criticaleye’s CFO Retreat in November 2017.