Capitalizing on Change – Principles of Successful Transformation

Abstract

Change must occur, but those prepared through knowledge and adherence to key principles will find opportunity where others fail. These principles include creating a pattern for change, candid assessment, strong leadership, a focused vision with a compelling purpose, and building a superior team. This paper discusses the realities and types of change faced by people and institutions with descriptions of the five principles mentioned above.

Emotion of Change

Few things cause as much emotion as change. A minority of people experience an excitement that propels them forward—sometimes without proper preparation. For the majority it creates a sense of unease, even fear, and a desire to hide or even fight against it—even though they know change is inevitable. Change is such a constant part of life that many may even fail to recognize it as it occurs.

Yes, it is human nature to seek stability, but is also part of our DNA that we adapt. Additionally, stability is saturated with false indicators. The highest mountain has a quiet, unseen erosion that brings about eventual change. Thus the desperate grasping for normalcy can, in fact, bring about change for which we are ill prepared.

Of course there are risks in change—such as the belief that change equals success (or can cure systemic failures)—creating a serial transformation that is unguided and has weak or even no measurement methodologies associated with each iteration.

Helping people to see the changes they embrace regularly is often a good first step in removing the fear of change. There are five additional steps that can be used to successfully transform any company into producing continuous business improvement goals and culture.

Pattern for Change

Enduring change requires creating a pattern for change as opposed to change around an event. A pattern suggests the creation and preservation of a new culture. Dave Ulrich once said “In almost every organization there are unspeakable viruses that limit successful change. These viruses are customs and norms that—without being talked about—shape how employees behave. In many cases, they hinder an organization’s ability to successfully change.”

Lasting patterns are woven with the opposing threads of creativity and discipline. For example, the startup entrepreneurial organization usually bursts with creativity—often accented by chaos. In order to bring order out of the chaos, bureaucracy is introduced—slowly choking the creativity and leading to a creative death spiral where discipline trumps creativity. The key is to allow both to flourish.

According to Jim Collins, author of Good to Great, “this is done by following three simple principles. 1) Build a culture around the idea of freedom and responsibility, within a framework. 2) Fill that culture with self-disciplined people who are willing to go to extreme length to fulfill their responsibilities. 3) Don’t confuse a culture of discipline with a tyrannical disciplinarian.

Candid Assessment

Change can be either a prohibitive or rewarding experience. Some changes we can control, others we can only manage, but we must be actively working to do both.

Changes we can manage, but not control, include new tax policies, new employment, or other surprises or instances where we are not the person making the decision. Managing these changes effectively requires adherence to the same principles that apply to controlled change.

While discussing key components of an assessment is a whole article in itself, they include:

• Assessing core competencies – what differentiates you and does it match where you focus resources?
• Assessing business efficiencies – both strengths and weaknesses. Can the company respond rapidly to opportunities based on a clearly defined strategy?
• Assessing your workforce – do you have the right people? Are you investing in your people ? What are their feelings about working for the company?
• Properly defining your target market – the description must both be broad and focused and you should aggressively draw on existing data. Which specific customers will benefit from your products and/or services? What problems do you solve for existing and potential customers? What are your primary value propositions?
• Conducting a competitor analysis – based on target market and products. Who are your competitors? What services and products do they offer? How are their services and products priced? What are the profile and numbers of their customers compared to yours?  What are their competitive advantages and disadvantages as compared to yours?
• Conducting a customer and market analysis – includes changes in your market (new and  emerging services), changes in your customers’ needs, and external factors such as the   economy, new technology, and changes in competitive activity.
• Reviewing your financial position – what is your efficiency ratio compared to competitors? How many departments are setting and meeting budgets? What are your capital ratios—can you weather negative market changes?

As difficult as this can be, this task must be done with unflinching resolve. Without clearly identifying where you are and what challenges you face, you risk either mistakenly deciding there is no need for change or you focus on the wrong priorities.

Strong Leadership

A candid assessment is one of the hardest yet most crucial responsibilities of leadership. Too often leaders confuse the need to “inspire” their followers with the belief that motivation can only come with focusing on the positive. In sports this is known as cheerleading, and the difference between coaching and the cheerleading are as clear as the differences between true leadership and motivational speakers.

The successful leader combines two paradoxical traits—an unrelenting resolve to succeed coupled with a personal humility. As Jim Collins points out, these leaders “channel their ego needs away from themselves and into the larger goal of building a great company. It’s not that [they] have no ego or self-interest. Indeed, they are incredibly ambitious—but their ambition is first and foremost for the institution, not themselves.”

Focused Vision

With this, leaders are able to deliver a focused vision for the company, which brings both a driving force for the organization and an accurate criterion whereby all decisions are made.

Focused vision creates what authors George Land and Beth Jarman call, “Future Pull.” Future Pull is the phenomenon “in which a blueprint of the future serves as the propelling force of creative change…which endow the organization with direction to be pulled to the future.”

Building a Superior Team

In the end, it is always people before process. The best processes in history will produce nothing without the best people following and implementing them (and engaging the best people will also produce better processes).

Nucor Corporation, a manufacturer of steel products, amended the old adage that people are your most important asset by adding the word “right” before people.  The right people will share the commitment and vision with each other propelling the collective organization forward with a greater synergy than can be accomplished through the inspiration of a brilliant leader.

As mentioned in the assessment portion of this article, successful leaders invest in the right people. Investing is more than training and education, it also incudes promoting and providing opportunities for growth. One of today’s buzzwords for employees is “adaptability.” Human Resource professionals and writers are banging the drum on employees demonstrating the “soft skill” of adapting to changing environments.

While this is true, leaders show adaptability by extending trust to the right people by giving them new opportunities and challenges. If leaders fail to embrace this responsibility (and risk) then they will ultimately fail to create a culture where their people feel safe in engaging in transformation initiatives.

Conclusion

“It is said that creativity is allowing yourself to make mistakes. Art is knowing which ones to keep.” The art of successful change can be learned and is available for those with the discipline to follow proven principles and the courage, and/or humility, to actively engage their employees in producing a corporate masterpiece.