subject: Taking The Wrong Action Can Be Costly [print this page] The evidence is overwhelming that taking the wrong action in organisations is endemic. In a study conducted by John Kotter in 1996 and more recently in research conducted by McKinsey, both show that seven out of ten change efforts FAIL. How can this be so? More importantly, how much money is mismanagement of change costing your organisation? The figure may well frighten you, but as a rough estimate, calculate the cost of everyone in your company who is working on changing behaviours, systems, processes or structures and then assume that 70 per cent of that figure is money down the drain. No organisation can afford this - it is costing you dearly.
John, a newly appointed Managing Partner of the law firm 'ALK Lawyers' (not their real names) was keen to revitalise the strategy and gain support for it right across the firm. He developed a strategy with his most senior partners in consultation with key areas of the firm. The strategy was essentially about expanding their operation in Asia, which was seen as critical to growing the firm. After a year of furious activity, very little real progress had been made. A lot of valuable resources - people, time, and money - had been wasted. The firm had been effectively spinning their wheels despite everyone being extraordinarily busy. So what went wrong?
Simply put, they focussed on the wrong things. While many leaders and teams believe they develop sound plans and strategies, few actually do, and then those that do have sound plans, usually don't execute them effectively. To effect real change, John and the team needed to identify the difference between technical and adaptive challenges in meeting the strategy. Technical challenges are those where there is a known solution - in other words the solution lies in the current repertoire of the organisation and its people. Adaptive challenges on the other hand, are those of a more systemic nature, where people must confront difficult issues requiring shifts in values, beliefs or priorities.
Most organisations 'mis-diagnose' adaptive challenges - those requiring deeper shifts throughout the organisation - and therefore apply simplistic technical solutions that rarely make a long-term difference. Examples include restructures, trotting out familiar training programs that don't challenge the status quo, defining the challenge to fit your current expertise, or simply denying the problem actually exists. John and the 'change team' also inappropriately diverted responsibility by marginalising the few individuals who could see the change efforts were in the wrong place (and in fact sacked one 'troublemaker' under the guise of a restructure), externalised the enemy by blaming market conditions for their poor execution of the plan, and delegated the adaptive work to those lower in the organisation who couldn't do anything about it.
In reality however, what John and the team failed to realise was that the culture was misaligned to deliver on the strategy. There has been a lot of cost cutting over the years and targets had become harder to achieve. Partners and Senior Associates had become very individually-focussed, with the informal and formal reward and recognition mechanisms supporting individual action over collective action. The trouble was that in order for the firm to grow in the Asian region, there needed to be a significant coming together of minds, both intellectually and in doing the work.
Alignment is such an over-used word in organisations today that John and the team thought they were doing it but were way off-tract. To create a high performance firm, there are three key pillars*: Performance Alignment; Psychological Alignment; Capacity for Learning and Change.
Performance alignment occurs when the total organisation system, including structure, systems, people and culture - fits the organisation's performance goals and strategy. Psychological alignment is the emotional attachment of people at all levels, particularly key unit leaders, to the purpose, mission and values of the firm. Finally, if the firm is to sustain performance and psychological alignment, then it also must have the capacity for learning and change. This is achieved through aadaptive leadership, real conversations taking place at all levels, and high levels of responsibility.
John and his team failed to grasp the potency of culture and its ability to serve or destroy well-intentioned plans. John also didn't exercise real leadership, and instead exercised counterfeit leadership. Counterfeit leadership is where too much emphasis is placed on getting people to 'follow the leader'; he was too preoccupied with people following the plan a small number at the top of the firm had come up with; he failed to engage various groups within the firm with competing interests; he didn't look for solutions beyond his comfort zone; and he falsely believed that those in the most senior positions had all the answers. In essence, people are working on a false set of tasks.
Getting people to face reality, as it relates to their conditions, opportunities and threats is real leadership. It is about being able to mobilise a group to do adaptive work and adjust their values, habits, practices and priorities. Real leaders, rather than waiting for other people,take responsibility for being the source of the movement.
So how do you make this happen? At the individual level, it is about creating a 'safe' environment to enable others to fulfill their potential - in effect, be their best. It's about coaching others rather than trying to control them, drawing out talents and strengths in service of team and organisational objectives. Leaders need to have high levels of self-awareness and the ability to create tension at the right time and with the right people to overcome inertia. Also, had John supported the change agenda with team and individual coaching, he would have found that people and teams would have taken responsibility for change at all levels of the organization. People would have been more accepting of new information, demonstrated higher levels of commitment to change, and then taken definitive and stepwise action towards the goal.
By courageously creating an environment where people at all levels of the firm, particularly those closest to him, were able to face and then diagnose reality, John and the team would have confronted the most toughest challenges in the firm and therefore created real momentum. People would have been focussed and energised on creating a firm which was 'fit-for-purpose' for the strategic objectives. There would have been no wasted energy on activities and tasks that kept everybody busy but didn't really achieve much. To do anything else is a costly and largely futile exercise.
What are you focussing on in your organisation?
* Adapted from the work of Michael Beer, High Commitment, High Performance - How to Build a Resilient Organisation for Sustained Advantage, 2009.
Copyright (c) 2009 Phillip Ralph
by: Phillip Ralph
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