The company has a new chief, with 100 days to show the stock market some quick wins. Not the usual wins: transformation is the game. Hurry up and reinvent the whole company.
“The enterprise, that’s me!”
But where to begin? That’s easy: at the “top”. Where else when there’s such pressure. Besides, any chief who has been to a business school or reads the business press knows that it’s all about leadership: the boss who does the thinking that drives everyone else. Louis XIV said “L’état, c’est moi!” Today’s corporate CEO says “The enterprise, that’s me!”
John Kotter has written the widespread word on transformation, at the Harvard Business School, where so many of the cases are about the chief. Here is the Kotter model, in eight steps.
1. Establish a sense of urgency.
2. Form a powerful guiding coalition.
3. Create a vision.
4. Communicate the vision.
5. Empower others to act on the vision.
6. Plan for and create short-term wins.
7. Consolidate improvements and produce still more change.
8. Institutionalize new approaches.
Please read this again, asking yourself, every step of the way, who does each? The chief. Beyond an inner circle, everyone else is there to pursue the vision, obediently. Indeed, the article states that “powerful individuals who resist the change effort” must be removed. What if they have good reason to resist? Can there be no debate, no discussion? Is the contemporary corporation the court of Louis XIV?
No wonder so many big companies can’t get past me-too strategies they call “visions”
“Establish a sense of urgency”, to barrel ahead: the wolves of Wall Street are braying at the door. “A guiding coalition”—with “senior managers [always at] the core”—will “create a vision”: out of the thin air of the top? Is this any place to understand what’s happening on the ground? No wonder so many big companies can’t get past me-too strategies they call “visions”. Then “Communicate the vision” to that obedient staff on the ground—to continue with the clichés, by “empowering [them] to act on the vision”, as if people hired to do a job need permission to do it.
And keep those “short-term wins” coming with “still more change”—more and more and more change. Where is continuity in all this, given that change without continuity is anarchy? (Be careful of words like “transformation”, because change has to be about sustaining what’s good no less than changing what isn’t.) Finally, don’t forget to “institutionalize” the whole thing: after all, this is the holy writ. And whatever you do, and wherever you are, top or bottom, don’t learn, at least about the vision—that was finalized in Step 3.
Are the best strategies really formulated from on high, by looking down? Or do they form amidst the clutter of the real life of the organization?
If change is so good, how come such models of change hardly change? Kotter has been promoting essentially this one since 1995. How about a change of perspective for a change: recognizing the top as a misguided metaphor that can distort behavior. Are the best strategies really formulated from on high, by looking down? Or do they form amidst the clutter of the real-life of the organization: making products, providing services, attending to customers? Everyone deeply involved can think constructively, CEOs too, although sometimes the best thinking comes from unexpected sources, such as a worker who sews the seeds of a great new vision. Imagine that!
Actually, you don’t need to imagine that. Instead, consider this story from IKEA, about selling much of its furniture unassembled, so that customers can take it home in their cars, saving money for them and the company. This powerful guiding vision transformed the IKEA business model as well as much of the furniture business. So where did it begin? With a worker. “Exploration of flat packaging begins when one of the first IKEA co-workers removes the legs of the LÖVET table so that it will fit into a car and avoid damage during transit” (from IKEA.com).
But someone had to come up with the key insight that “If we have to take the legs off, maybe our customers have to do so as well.” That needed to be someone on-site, maybe that worker, or a foreman, perhaps even the CEO, since the best entrepreneurs spend much of their time on site. But if it was someone else, then this insight had to be conveyed to the chief so that he could sprinkle holy water on it. And this suggests an organization of open communication, throughout, not one fixated on tops and bottoms, where so many ideas like this get lost. In such an open organization, sustaining culture matters a lot more than transforming everything.
John Kotter acknowledges that major change can take years. I asked someone in IKEA how long it took to develop this new business model fully. He said 15 years! Wait a minute: according to the stock market, you’re not supposed to do that. Why couldn’t they just get it done in 100 days? Please list all the furniture companies that succeeded by doing that.
So instead of a model of top-down transformation, how about a process of grounded engagement? I call it communityship: don’t look for the word in the dictionary, let alone at the top of any organization. Here are a few basics of it—not steps, no order, non-linear, just a composite, like change itself.
Effective organizations are communities of engaged human beings, not collections of passive human resources. (I have used this sentence many times before and will keep using it until it is taken seriously.) These organizations have no tops or bottoms, no “leader” who has to think for everyone else. Everyone is engaged; communityship is fundamentally indigenous.
Anyone can come up with a great idea for change. Have you ever told a joke? Good, because you can change the world. Most jokes, and creative ideas, are just little switches. (See my blog on “The Extraordinary Power of Ordinary Creativity.”). Here’s an example: “I want to die like my grandfather died, quietly, in his sleep. Not like those other people in the car who died yelling and screaming.” The little switch: grandpa was not in bed after all. At IKEA, the little switch, the critical insight, was: “If we have to take the legs off…” Such little switches are no big deal, even if they can launch very big deals. I’ll bet that people who take that top seriously tell fewer jokes, or worse ones, than people whose feet are firmly planted on the ground.
Communication is open, so that ideas get shared easily. With no top and bottom in communityship, people just connect, for the sake of progress. A fixed hierarchy gives way to flexible networks. That insight at IKEA must have made its way to a management that was listening all around, not looking down.
Strategies, whether as overall visions or market positions, emerge gradually from grounded learning; they are not immaculately conceived. Many of the greatest strategies really do form, rather than being formulated, in a process nurtured by an engaged management group that cares, not a heroic leadership that cures. And this process is not primarily about doing competitive analyses, although these can sometimes help. It is about committed people prepared to learn their collective way to unexpected strategies, one switch at a time. (In the last paragraph of his article, Kotter notes that “In reality, even successful change efforts are messy and full of surprises.” This sentence belonged in the first paragraph, where it could have changed many of the other paragraphs.) Of course, there is the need to pull diverse insights together, which is usually overseen by a management that’s on top of what’s going on, not on top of a hierarchy.
One final point: Often companies turn to the fix of transformation after a spell of disconnection. Those companies that stay connected, through communityship, don’t need step-by-step fixes. So please, all you serious managers, professors, and pundits, come down to earth, symbolically and literally. Get a bit playful with your strategies and your jokes: you just might find that effective change balanced with continuity follows, naturally: No need for transformation!
¹Cases at the Harvard Business School “exaggerate the role of individual leaders. 62 percent of cases feature heroic managers acting alone”, according to an internal HBS study. (Andrew Hill in his column in the Financial Times, “Harvard and its business school acolytes are due for a rethink”, 7 May 2017.)
²Leading Change: Why Transformation Efforts Fail” Harvard Business Review (March-April 1995; reprinted January 2007; table below and quote following from the later version.
Dave Ulrich with colleagues, while involved with the GE WorkOut program around 1990, developed a similar model in steps, called the Change Acceleration Process (date reported to me in personal correspondence). In fact, the similarities are striking: Ulrich et al. listed “Seven Universal Principles for making change happen:1. Ensure leadership commitment, 2. Create a shared need, 3. Articulate a desired direction or vision, 4. Mobilize commitment, 5. Turn the long-term change into short-term decisions, 6. Institutionalize change. 7. Monitor progress and learn along the way.” (See Dave Ulrich, Mary Ann Von Glinow, Todd Jick, Arthur Yeung, and Steve Nason. 1993. Learning Organization, Culture Change, and Competitiveness: How Managers Can Build Learning Capability. Monograph prepared for the International Consortium of Executive Development and Research. For the latest rendition: Dave Ulrich and Norm Smallwood. 2013. Leadership Sustainability: Seven disciplines to achieve the changes great leaders know they must make. New York: McGraw Hill.)
³Some words have changed, but not the steps or the tone. For example, Kotter International now writes of “Building” rather than “Forming a guiding coalition”. #5 has become “Remove obstacles”, albeit still to empower people to execute the vision, and #8 says “Anchor the changes in corporate culture”
⁴I first used the term in a Financial Times article titled “Community-ship is the answer” (23 October 2006).
Thank you, Professor Henry Mintzberg, for another great article, that was originally published at your TWOG (blog) in September 2017.