Studies consistently report that about three-quarters of change effort fail. They either fail to deliver the expected benefits, or they are abandoned entirely. In a highly matrixed, complex organization, these transformations are challenging. Execution is critical, but it’s more than that. It’s often about which changes to pursue—specifically, taking the time to properly identify the changes that will help the company remain competitive. Especially in complex and fast-moving environments.
In a recent Harvard Business Review article, What Everyone Gets Wrong About Change Management, the researchers investigated 62 corporate transformations over the course of four years. The main finding? Leadership teams need to fully understand and align three factors:
- The catalyst for transformation (why you’re in pain)
- The organization’s underlying quest (what will help in the long run)
- The leadership capabilities needed to see it through (execution)
Let’s explore all three of these factors so you can avoid common mistakes in executing change in your organization—especially in a complex matrix organization.
Catalyst for Transformation
The implicit or loudly stated cry “Why change?” is one I hear from so many stakeholders in large-scale changes. John Kotter introduced us to the idea of the burning platform: there’s no reason to jump off an oil rig into the ocean unless that oil rig happens to be on fire. Companies are usually trying to create value—whether from improving efficiency through cost-cutting, streamlining or downsizing or from investing in growth in new products, services or geographies. Balancing these two sides of the efficiency/growth coin can be tricky. The most successful companies clearly tie the change to both.
I work with a US-based music company with projects around the globe. They are always trying to improve their processes, while providing high-touch customer service. Employees sometimes see standardized processes as “we need to treat everyone the same,” which creates tension with the deep cultural belief that every customer is special. As they’ve grown, navigating this disconnect has been a struggle. How do you provide high-touch customer service in Korea when no one in the company speaks Korean? Hence, their initiative for global growth was born.
The company did a great job of communicating to employees that, for the company to serve the new markets, some changes needed to occur, including streamlining a few departments so others could grow. HR expanded to hire new talent with in-country experience (and language skills). IT expanded to set up project management systems that improved efficiency for a 24/7 global operation. Customer service in the US shrank since the growth was outside the US. Great answers to the “Why Change?” question.
Next, the organization needs to define what they are trying to achieve. As Lewis Carroll famously wrote, “If you don’t know where you’re going, any road will get you there.” Organizations need to clearly set out their objectives for employees to be able to assist in achieving them.
Most organizational change efforts can be classified as one (or a combination) of the five prototypical quests:
- Global presence. Extending market reach and becoming more international in terms of leadership, innovation, talent flows, capabilities and best practices
- Customer focus. Understanding your customers’ needs and providing enhanced insights, experiences or outcomes (integrated solutions) rather than just products or services
- Nimbleness. Accelerating processes or simplifying how work gets done to become more strategically, operationally and culturally agile
- Innovation. Incorporating ideas and approaches from fresh sources, both internal and external, to expand the organization’s options for exploiting new opportunities
- Sustainability. Becoming greener and more socially responsible in positioning and execution
The growing music company has chosen to pursue customer focus and nimbleness. They use matrix management to achieve its goals. They focus on accountability to avoid the blame game and work across functional silos. Employees can no longer throw their hands up in the air and say, “Not my department.”
Lastly, if you’re looking to change the way things are done in your organizations, your first step is to look in the mirror. How are you leading? What are you doing to reinforce the change? Are you doing anything to inadvertently reinforce the old ways of doing things? Strategic leadership is a skill.
I work with a CEO who wants his team to be more strategic but continually focuses on the numbers for the current month. They’re so busy scrambling to meet short-term targets that it’s difficult to think about the longer term. In the weekly meeting, the CEO spends 90% of the time focused on short-term results.
If you want things to change, you need to model the new way of doing things. It’s important that, once leaders are committed to the change effort, they lead by example, to model the change that they wish to see from their employees. If they don’t live the change, why should employees? If this CEO doesn’t demonstrate strategic leadership and provide a role model for how to deliver a great experience, his organization won’t change.
Change management doesn’t just happen. As a leader, you have an opportunity and a responsibility to change the conversation to help your teams become strategic leaders:
- Profile a new project/idea being implemented within the business.
- Count the number of questions asked—and make sure there are an equal number of strategic and short-term ones.
- Start each weekly meeting by discussing a future trend and its implications for the business.
- Ask each team member to dedicate 15 minutes of their weekly staff meetings to strategic conversation.
“Opportunity is missed by most people because it is dressed in overalls and looks like work.”
If you want to be part of the 25% of changes that are successful, you’ll have to spend some time in planning the change, not just hoping for the change. The following steps will help you get started:
- Face reality. First, you’ll need to look at the facts. If you want to excel at customer service, for instance, review the related metrics. What are your customer service scores? What are your lead times? What are the most common customer complaints? What are the blind spots, sacred beliefs, and uncomfortable truths that you’ll need to face? For example, some companies talk about raising their talent bar, but are loath to let anyone go—even poor performers.
- Debate priorities. You’ll have a plethora of opportunities—probably too many—once you face reality. Now comes the interesting task of sifting through those opportunities. Spend time talking through the pressures and challenges of each one to decide which to pursue. Plan to include plenty of time for disagreement amongst team members. Each person sees through his or her own lens, and now is the time to consider all options in identifying those that best serve the organization. Healthy debate also builds a sense of involvement and commitment to the chosen opportunity.
- Communicate. When leading people into an uncertain future, create some space for people to talk about the drivers and restrainers of the change. If you want to become more customer-focused, employees might identify their own sense of ownership as a driver, but the current processes or lack of accountability as a restrainer. Taking the time to talk through the plans to leverage drivers and address restrainers will help build commitment.
Change is never easy, especially in a modern matrix organization. By understanding the underlying catalyst and desired outcome and by aligning the leadership strategy to these critical factors, you can dramatically increase your chances of success.