How to Transform A Sluggish Organization

sluggish organization

Leadership Skills for Breaking Inertia

One of my favorite leadership thinkers is Samuel Bacharach. Not only is he a regular columnist for Inc., an author, and a leadership speaker, but he is also the McKelvey-Grant Professor at Cornell University.

He recently released a book that I found to be an incredible addition to my leadership library. Transforming the Clunky Organization: Pragmatic Leadership Skills for Breaking Inertia is one of those books that will inspire both new and seasoned leaders with its practical advice and unique perspective.

If your organization is stuck and you need to break inertia and foster innovation, I can think of no better place to start than with this book.

 

“One of the great ironies of organizational life is that yesterday’s delivery becomes today’s inertia.” -Samuel Bacharach

 

Advance the Agenda

Why this book on leadership and why now?

In the last number of years there has been massive growth in books about leadership and trainings in leadership, but one fundamental question is not asked: What is it in an organizational context do we want leaders to accomplish?

If we are going to train and educate people in leadership, it has to be for a purpose. In an organizational context, that focus has to be on the capacity of people to come up with ideas, move ideas, implement them, create change and innovation, and get things done. In this context, what is important to me is pragmatic leadership—that is, the simple and clear tasks of execution. Not execution as global promise but as a series of skills that can be followed and achieved for results.

In The Agenda Mover: When Your Good Idea Is Not Enough, I discussed the micro-political skills that leaders at levels need to move their agenda: creating coalitions, overcoming resistance, negotiating, and establishing credibility. These often-ignored political skills were the focus of this volume.

Over the last three years I have been focusing on the question, “What do I want leaders to accomplish?” In my experience of some forty-odd years, I realize that great leaders are those who begin to have the sense of when their organization becomes stuck, sluggish, and trapped by inertia.  Great leaders break inertia. They appreciate the dangers of inertia and do something about it. They also understand that organizations may be sluggish and in the doldrums of inertia, even though they continue functioning. These leaders understand that although inertia may not necessarily lead to immediate failure, inertia may impede their organization’s capacity to reach its potential. Transforming the Clunky Organization focuses on the characteristics of organizations that get trapped by inertia and, in turn, suggests leadership skills and strategies leaders can use to overcome sluggishness and inertia.

 

“Organizations get stuck because of sluggishness and inertia. Great leaders know how to break inertia.” -Samuel Bacharach

 

Why Organizations Become Sluggish

What’s Your Digital Business Model?

Transform Your Business

Digital transformation. We read about it often. Organizational leaders struggle to determine the possible threats, the impending changes needed, the opportunities that are possible.

Peter Weill and Stephanie L. Woerner’s new book, What’s Your Digital Business Model?, provides a strategic framework for thinking about these issues. Peter is a Senior Research Scientist and Chair of the Center for Information Systems Research at the MIT Sloan School of Management. Stephanie is also Research Scientist at the same institution with a specialty focusing on how companies manage organizational change caused by digital disruption.

I had the opportunity to speak with them about their research and new book.

 

Rate Your Digital Readiness

How would you rate most organizations readiness for the era of digital disruption that we are in and are facing?

Most organizations we talk to and research know they have to change to stay relevant and have improved in some areas (perhaps they’ve worked on business process optimization or they’ve automated a lot of processes). However, as customer experience demands have increased, we find that many older, bigger companies have not made the improvements and changes needed to address those demands. Plus the leaders of the average large company (more than $7B in revenue) identified that 46% of their revenues are under threat over the next 5 years if they don’t change.

 

Fact: large companies predict 46 percent of revenues are threatened in the next 5 years absent change.

 

How was the research developed?

The book is based around six questions we think every executive and organization has to be able to answer in order to be competitive in the digital economy. We started this research by interviewing leaders from large, global companies, asking them to describe their most important digitally-enabled business transformation initiative. From there we developed a model, tested the preliminary findings in more than 50 workshops with senior executives, identified capabilities needed, conducted several surveys to test those capabilities and show links to financial performance, and interviewed many companies to help us understand what it takes to transform a business. The book resulted from five years of research which shows that the senior executives of top performing firms honestly answered the six questions. To help, each chapter concludes with a self-assessment on one of the six questions. The reader can then compare their self-assessment results to top financial performers to help leadership teams understand the gap they have to close.

 

Needed: Honest Conversations about the Future

Of the six parts, is there one step that more organizations get stuck in than another?

Probably the hardest question for most organizations is having an honest conversation about whether they have leadership, at all levels, who will persevere and successfully deliver the business transformation. Along the way the culture will have to change and adapt to the new digital business model and often this means changing people at the top. But it is not just the top layer of leaders that has to change. Successful transformation requires getting the whole company to behave differently – from the board to the lowest level of employees. For example, DBS Bank in Singapore, which was one the Euromoney’s most digital banks in 2016 has managed to get 14,800 of their 22,000 people involved in a digital innovation activity every week.

 

“Successful transformation requires getting the whole company to behave differently – from the board to the lowest level of employees.”

Increase Your Resilience to Thrive in a Turbulent World

Resilience

Increase Your Resilience

Most of us are surrounded by more stress than ever before. It often starts the minute we get up as our devices feed us headlines. Our jobs require instant and continued results, and yesterday’s accomplishments seem to be remembered less and less.

Ama Marston and Stephanie Marston’s new book, Type R: Transformative Resilience for Thriving in a Turbulent World, is a thoughtful and inspirational guide to thriving during stressful times. Type R’s use challenges to innovate and grow.

I recently spoke with Ama Marston about her research into resilience. Ama is an internationally recognized leadership expert who has worked on five continents with global leaders. She is also the founder and CEO of Marston Consulting.

 

“And onward full tilt we go, pitched and wrecked and absurdly resolute, driven in spite of everything to make good on a new shore.” -Barbara Kingsolver

 

You start your new book with a gripping account of a car accident that impacted your lives. How did this awful accident impact your life’s work and result in this book?

For my mother, the process of having to recover from sever injuries and learn to walk again ultimately shaped her path to becoming a psychotherapist and stress expert. I was three at the time, but the accident also forged an even stronger lifetime bond between the two of us.

Decades later that led us to support one another while each of us separately faced the financial crisis as business owners, the ups and downs of entrepreneurship, family and health crises, etc. Through ongoing conversations we supported one another and also sought to better understand the convergence of personal, professional, and global turbulence. These challenges were something we were facing ourselves, but that we were each seeing in our respective professions. This was occurring in corporations and in the halls of the United Nations. It was on the minds of our clients and colleagues, global leaders, and our friends and family. So, while it took decades for the impacts of our car accident to come full circle, in some respect it planted a seed for a lifetime of learning about Transformative Resilience together and ultimately collaborating and writing Type R.

 

“In the middle of difficulty lies opportunity.” -Albert Einstein

 

Reframe Adversity

Your Playbook to Digital Transformation

Digital Business Transformation concept with arrow of compass (3

Reach for the Future

Nearly every business is impacted by digital transformation.

The key question for leaders is how to overcome the pull of the past to reach for the digital future. The authors of Digital@Scale: The Playbook You Need to Transform Your Company have developed a playbook based on years of McKinsey experience and research.

I recently spoke to author Anand Swaminathan, Senior Partner in McKinsey’s San Francisco office, about the book and his work in the area of digital transformation.

 

“Change is the end result of all true learning.” -Leo Buscaglia

 

3 Barriers to Change 

What do leaders need to know about identifying the barriers to change?

In our experience, executives face a fundamental conflict: Change requires a sense of urgency while highly-efficient organizations tend to have high levels of inertia. When business is going well, managers and employees generally only pay lip service to change requirements. Knowing that, there are three barriers we’ve identified:

  1. The good is the enemy of the better: Efficient, currently successful organizations often slow down the necessary change: Why cannibalize what is successful today? Why destroy efficiency gains of a ‘well-oiled machine’?
  2. Watch out for your top team: Ironically, today’s most successful managers might be the ones slowing down your transformation efforts since they have the most to lose. Transformation needs to start with the person at the top, and it’s often those who have grown accustomed to success that find it most difficult to change course.
  3. Your DNA takes time to change: Don’t underestimate the time and effort required to change deep-rooted mindsets and ways of working. Your legacy business exerts a natural gravitational pull that will stop all meaningful change unless you’re persistent and change at enough scale to break through

 

“Transformation is often more about unlearning than learning.” -Richard Rohr

 

What is the role of the CEO when it comes to digital transformation?

The successful digital transformations we see out there have one common denominator: the CEO spearheading and promoting the digital transformation. They are making it front and center of their personal agenda. Only if change is demonstrated and exemplified by the top management will the necessary changes to structures, processes, management instruments, as well as the establishment of new skills and new IT systems, be successful. That can mean using new technologies, challenging existing ways of doing business, and making the bold decisions necessary to change the trajectory of the business.

 

Assess Your Readiness

How can management assess the current strategy of the company and its readiness for digital transformation?Digital@Scale book cover

That’s two questions. The first is understanding your strategy, and that requires looking at sources of value – where they’re created in your business and in your sector. Most important, you need to look at where sources of value are being created outside of your sector – that’s where some of the biggest changes (and challenges) might be happening.

Then you need to look at where you are today and what needs to change. There are lots of assessments and diagnostics out there, but you need to take a cold-eyed view of where you are as a digital business and what needs to be in place to drive value at scale. As an example, we have developed a comprehensive benchmark to derive a company’s Digital Quotient (DQTM), road-tested with several hundred organizations across the globe. It helps leadership to take stock compared to best practices across sectors and within its own industry.

In addition to the benchmark, some questions that management should start with to determine the urgency and their organization’s readiness for change include:

  • Are we assessing whether we can use our strengths to penetrate completely new industries within the current rules?
  • Are we actively creating an ecosystem of partners, customers and suppliers that will last into the digital world?
  • Have we defined a feasible timescale and meaningful KPIs to reliably measure success or failure?

 

“Transformation literally means going beyond your form.” -Wayne Dyer

 

Break the Silos

A Leader’s Role in Achieving Excellence in Execution

Leadership execution
This is a guest post by Robin Speculand, author of Excellence in Execution: How to Implement Your Strategy. Robin is the founder and CEO of Bridges Business Consultancy and creator of the Implementation Hub.

Don’t Lead by Example

To guide an organization through the execution of its strategy, leaders… don’t lead by example.

In strategy execution, leaders are responsible for driving the strategy forward and championing the direction the organization is heading. This involves, for example, reviewing progress, coaching people, resolving issues, and ensuring the right outcomes are being achieved. Leaders don’t lead by example as they don’t implement strategy; their employees do.

Before you even start your strategy execution, the odds are stacked against you as more fail than succeed. I have seen from my seventeen years consulting in this field that leaders are guilty of delegating the execution and not paying adequate attention to it. When leaders do this, their people also stop paying attention to it. McKinsey & Company stated that, “Half of all efforts to transform organization performance fail either because leaders don’t act as role models for change or because people in the organization defend the status quo.”

 

Show Confidence in the Strategy

If leaders perceive execution as an interruption to the business, they will not drive and champion it.

Anything short of embracing a new strategy and its execution by leaders can be seen by employees as a lack of confidence in the strategy itself. That feeling will spread throughout the organization.

  • If you only apply lip service to the execution without championing it, employees will sense the lack of commitment and not step up; the execution will fail.
  • If you don’t create the time to oversee the implementation journey, change the agenda and explain why the organization needs to transform, then employees will sense the lack of commitment and not step up; the execution will fail.
  • If you don’t set the strategy and create the budget to allocate required funding, employees will sense the lack of commitment and not step up; the execution will fail.

 

Booz and Co. Survey: 53% don’t believe their company’s strategy will lead to success.

 

A key question to consider is:What are you willing to do to execute your organization’s strategy?”

In contrast, strategy execution progresses when leaders support their comments with time and actions. Because only so much can go on a leader’s radar, he or she has to carefully select which actions will best drive the execution forward and where to invest their time.

Booz & Company surveyed executives from around the world on the results of their organizations’ strategic initiatives. Given more than 2,350 responses, the findings suggest a high degree of disillusionment, including:

  • Two-thirds (67%) say their company’s capabilities do not fully support the company’s own strategy and the way it creates value in the market.
  • Only one in five executives (21%) thinks the company has a “right to win” in all the markets it competes in.
  • Most of the respondents (53%) don’t believe their company’s strategy would lead to success.

If leaders don’t believe in the strategy, they will never be authentic and sincere in executing it.

 

PWC Survey: 55% of CEO’s state lack of trust is a major threat to growth.

 

Demonstrate Increased Commitment