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Posted on Harvard Business Review: August 10, 2010 8:30 AM
Repositioning your company can be an invigorating move—it's exciting to take a fresh approach and go after new opportunities. But change is also risky and over time, the momentum behind it can wane. When that happens, it's not uncommon for individuals, units, or entire organizations to default to the old strategy. If your team relapses, how can you get things back on track and people re-focused on the new direction?
What the Experts Say
The reality is that very few strategic changes are successful. In fact, only 5% of large-scale changes actually work, according to John P. Kotter, Chief Innovation Officer at Kotter International, a professor emeritus at Harvard Business School, and author of numerous books, including A Sense of Urgency. Therefore, the issue of regression is a common one.
The first thing you can do when your team begins to revert is understand the cause of the slippage. Both Kotter and Roger Martin, the Dean of the Rotman School of Management at the University of Toronto in Canada and author of The Design of Business: Why Design Thinking is the Next Competitive Advantage and "The Execution Trap," say that most changes fail because we are working under flawed models. These models artificially separate strategy and implementation and assume that different people are responsible for each. Taking a different approach—one that doesn't disconnect execution from strategy creation—helps prevent stalls before they happen, keeps your team focused, and could put your organization into that elite 5%.
Start out right
The best way to prevent your team from reverting is to avoid the tendency to get your most senior people in a room to dictate what the rest of the company will do. Instead, include as many people as possible in deciding on the strategy, especially those who will be affected by the change. Martin advises asking the question upfront: who will we need to behave differently? Then, make sure that those people have a say in the direction you'll pursue. "If you don't consult, widely and early, anyone in the organization that has to do something dramatically differently because of the change, you're taking a big risk," he says . Kotter has a structured eight-step approach he describes in detail in Leading Change for getting it right the first time. Unfortunately, many organizations don't take this approach, and launch the new strategy to the organization when it's a done deal. Managers in these situations are often straddled with the responsibility of keeping a team focused on and motivated to implement a strategy that they know—or care—little about. To stop your team from rejecting the new strategy in favor of the old, try the following approaches.
Build the urgency
A frequent reason that teams revert back to an old strategy is they don't feel the urgency to change. Everyone in the organization needs to see the opportunity, not be told that there is one. If your team is stalled, engage them. "Ask the employees what they would do to improve/modify/enhance the strategic direction so as to make it something in which they would have confidence—confidence enough to do something different than they have always done," says Martin. "Tradition is an unbelievably powerful force," says Kotter. They need to not only see the urgency of the need for a new strategy but also feel accountable for it. "It all starts with enough people believing that there is a new opportunity and that they have a responsibility to pursue it," says Kotter.
Make everyone a choice-maker
Under the old models where "strategy" and "implementation" are separate, organizations are divided into two categories. Martin calls them "choosers"—those that make the decisions— and "choiceless doers"—those that are left to implement. When you treat people as "doers," instead of as the actors that they are, they feel their work is devalued and aren't motivated to do anything differently. When your team members relapse to the old strategy, ask yourself whether they understand their active role in the new approach. Don't try to get buy-in—that implies you have an idea and you want them to agree. Instead, involve them in generating ideas for how to get unstuck. As much as possible, push decision-making down. Martin calls it a "cascade of choices" whereby you let your people know that the new strategy implies that everyone has decisions to make. "If you treat everyone as choice-makers who make choices under uncertainty and competition, you have a better chance of bringing about better strategy," says Martin. Remember that this is a two-way street. "If you only have arrows going down, then the people at the bottom, the people closest to your customer, will never tell anyone what's wrong," says Martin.
Create a "guiding coalition"
Kotter suggests that all change efforts include a "guiding coalition"—a diverse, cross-functional, multi-level group with different skills and strengths. He warns that this is "not some dorky task force" but people who are excited about the change and ready and able to roll up their sleeves to drive it. If your team defaults back to the old strategy, consider bringing together a group of individuals who can take responsibility for pushing the change through. Choose the people who are most enthusiastic about the new direction and give them real work to do, focused on pushing the team forward.
Remove barriers and share successes
Many regressions happen because people perceive a conflict between what they've been asked to do and the best interests of the company. Take a look at the barriers that may be standing in your people's way. For significant changes, you will likely need to alter IT systems, compensation models, and performance management metrics. An ineffective team or a non-collaborative culture can often be the biggest obstacle. Ask yourself if team dynamics or even your behavior could be seen as barriers. Regularly ask employees what's stopping them from doing work in the new way and ask how they think they should be removed.
Change also stalls when people believe the new strategy is ineffective. "Even good company people don't want to do what's not working," says Kotter. It's critical to share success as it happens. Find unambiguous and visible accomplishments that serve as evidence that you're making real strides.
Stick with it
Old habits are certainly hard to break. But to be successful with a new strategy, altering your routines is critical. "Take this new way of acting, hold it in place until it becomes habit," urges Kotter. When urgent business issues come up, it is all too easy to take your eye off the prize. Teams and individuals find comfort in an old strategy when crises come up. The best way to avoid this is to commit to staying focused. "If you see the urgency beginning to slide, you need to go back and work on it relentlessly," says Kotter. Taking your attention away to tend to issues that feel more pressing can be a fatal mistake. If your new strategy can't serve you in all business situations, then it may be the wrong strategy.
Principles to Remember
Push decision-making down so that everyone in the organization is making choices about how to act differently
Ask your employees how to remove barriers to change
Share successes as evidence that the new strategy works
Think of creating and executing strategy as distinct tasks to be done by separate groups of people
Assume that current systems and processes will support the new strategy
Allow urgent business issues to distract you from your new pursuit
Case Study #1: Removing obstacles to change
Eighteen months ago, Rob Salmon, the Executive Vice President of Field Operations at NetApp, a $4 billion data storage company, performed an assessment of how his unit was doing against its big goals. The results were mixed and many in the organization were tempted to blame the economy. Rob agreed that the economic climate had put them in a tough spot but he didn't think macroeconomics was "a good excuse not to win." He brought together 600 people from his 3,000-person organization to discuss the challenge they were facing and how they could better execute their strategy. "People don't want to be told what to do, they want to be part of the solution," Rob said. Many were surprised by this inclusive move, yet excited about the opportunity to participate. This meeting set in motion a focused effort on product growth.
Six months later, a group of people in Rob's unit—primarily the chiefs of staff who were responsible for execution—were frustrated. The new strategy had created a whole set of new initiatives. When combined with what the group was already doing, it was simply too much work. They formed a group called the Strategy and Execution Team and, as their first task, did an inventory of all the projects the group was working on. The team then presented this list to Rob, who was quite surprised. "I had no idea we had that much going on," he said.
Rob worked with the team to figure out which projects they could stop or put on hold. He understood that this was critical to giving the group the bandwidth to focus on the new strategy. Removing the barriers that the Strategy and Execution Team found paid off. NetApp moved 3 positions in market share to #2 and had record earnings last quarter.
Case Study #2: Preventing setbacks before they happen
Monica Hubbard took over as the Territory GM for the Northeast region at Best Buy two years ago. The region was a solid performer and also growing. Monica felt it was important that the team have a strong sense of identity as it added more stores and brought on more people, so she hired a consulting firm to develop a team vision and focus on creating a collaborative high-performing group.
This was a wise thing to do as it prepared Monica and her team for the strategic changes that the new CEO, Brian Dunn, launched for 2010. The new framework focused on three areas: profitability, customer, and employee. Monica's territory was doing well on the first one but knew they had work to do in the other two. "When we set our team vision, we knew we really had to close the gaps within our own business units," she said. Her group developed a team vision based on the company's priorities and where they wanted to be: it included creating an ultimate customer experience and engaging employees. Monica credits the work they did as a team to become more aligned and committed with their ability to stay focused on this new strategy. "Unexpected business issues arise that are not part of your core strategy and if you're not aligned as a team, they could certainly overshadow the strategy," she said.
"Business surprises," as she called them, have inevitably come up and Monica's team has worked to stay focused on the strategy while also addressing them. She says she has learned how to respond to these situations without letting the strategy take a back seat. Monica credits her group's ability to resist distractions to the work they did to align themselves as a team. "No matter what urgent things come up, we need to stay committed to team maintenance," she said. And success has followed. Internal benchmarks used to track progress are showing momentum. In 2010, they have already improved their performance, as measured by customer and employee satisfaction metrics.
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