A senior human resources executive in a large manufacturing firm recently made the following comment at a meeting of the company’s leadership team:
“Well, the easy work is done. We’ve defined the changes we have to make. We’ve figured out our market and what our customers want, got deep into the minds of our competitors, come up with a few technology efforts that will get us ahead of both those competitors and new regulations, and defined a manufacturing and sourcing strategy that will give us a solid advantage. Now we just have to implement it. That’s what’s going to be hard.”
This executive’s perspective is an honest one that we must all recognize as accurate, although her comment probably grossly understates the challenges of figuring out markets, customers, competitors, technology, regulation, manufacturing, and sourcing. There are certainly many manufacturers who wish they could say that they’ve successfully done all of that.
There can be little debate that successful manufacturers will be those that are successful at both planning change and leading change. The underlying forces are unavoidable: growth concentrated in unfamiliar markets, new competitors from emerging markets that offer an almost-as-good product at a great price point, the convergence of information technology with virtually everything else, new regulations that make your head swim and your eyes bleed, customer expectations that products be surrounded by high-value services, talent shortfalls and capacity constraints among key suppliers. The list can go on and on. Tomorrow will not be like yesterday. It promises to be even more demanding.
Most firms that have successfully managed a significant change in their business strategy and business model will agree that leading change was every bit as hard and demanding as was planning change. Many would concur with the statement once made by President Woodrow Wilson: “If you want to make enemies, try to change something.”
The critical challenge associated with leading change was a people challenge, with multiple dimensions.
Last year, I did a research project that looked at the challenges of making changes in a firm’s business model . My original focus was on the changes that were considered the most challenging. One thing that I learned from the executives that I interviewed as part of this effort was that that question, while interesting, wasn’t the most significant question. I learned that changes to business models that failed to deliver the hoped-for results were characterized by an organizational resistance to change and a failure in the implementation process. By comparison, the elements of the new strategy, the receptivity of customers, and the responses of competitors were minor obstacles in the greater scheme of things.
The critical challenge associated with leading change was a people challenge, with multiple dimensions. Three lessons can be learned.
- The change must be bought into by senior management.
This isn’t a statement of their giving approval to the plan and signing off on the new directions. Rather, it’s a statement of their willingness to take ownership of the change, to sell it over and over again, and to take on genuine accountability for the success of the initiative. Peter Drucker said “Company cultures are like country cultures. Never try to change one. Try, instead, to work with what you’ve got.” That’s good advice, but sometimes it isn’t possible to work with what you’ve got, and meaningful elements of the company culture have to change. That is hard work, and can only be done if the leadership team owns the responsibility to sell, sell, sell and is willing to take the hard steps necessary to thwart resistance to the changes that have to be made. The first, and probably the most critical, step in change management is determining if the company leadership has the commitment and the stomach for the challenge awaiting them.
- The team charged with the implementation of the plan had better be the “A Team,” not the organization’s current crop of homeless.
They have to be adequately resourced, and they have to have the flexibility to respond to the inevitable surprises that occur during every important change management process. In a review of failed change management processes, a significant majority failed with respect to this lesson. The task force leadership wasn’t up to the challenge, resources were thin to begin with (and often reduced during the process), and the timeline admitted of no detours or surprises.
- Recognize that the implications of the change will be far more extensive than you originally guessed.
Third-party organizations like suppliers will have to act differently. Some of your key systems and processes will have to be changed. Key skills will be in unexpectedly short supply. You will encounter challenges that are outside the experience set of your firm. It’s easy to anticipate such issues when the change involves something obvious like entering new markets like China. But the issues surface with every bit as much impact with changes that involve customization of products, creating a new service offering, introducing a “solutions” offer, or changing the sales model through which you reach your customers.
Figuring out the directions that will lead to success will not go away as a challenge. But the firms that will celebrate success five or ten years from now will be those that recognized planning change as only the first step in the journey, and put equal efforts into the task of leading change.
 See George F. Brown, Jr., You Know It Ain’t Easy, Business Excellence, September 2011.