Change Your Approach To Change

A new year is a natural time to talk about change.  And directing and enabling change is one of the most important responsibilities of a leader.  In today’s world of global connectedness and always-available and constantly-updated information, it seems like more than ever organizations must be willing and able to adjust to a dynamic environment.  So what must leaders know and do to effectively guide their organizations through change?

An article in the November/December 2017 Harvard Business Review, What Everyone Gets Wrong About Change Management, explains the shortcomings of traditional approaches to change and suggests ways to improve the odds of success. The authors state that the focus of change is often the implementation aspect; so experts and organizations strive to improve the execution of change initiatives. However, their analysis suggests that execution is only part of the issue and that leaders often fail to identify what to change.

They state that, based on their own research and analysis, the common thread of any organizational change is achieving greater value. This in turn is a combination of improving efficiency while reinvesting in growth. However, many change efforts are not successful because they focus on one or the other, instead of a balance between the two.  So the first part of determining a desired end state is to ensure that it entails both savings gains, such as cutting costs, and forward movement.

The second question is, what path do you take to the end state?  The authors determined that change efforts typically increase the organization’s abilities in one of (or combinations of) these areas, which they refer to as “quests”:  global presence, customer focus, nimbleness, innovation, and sustainability. The authors also found three common issues in choosing a quest: (1) overlooking the need to choose a quest, (2) selecting the “wrong” quest, for example, one that might be the focus of your competition but is not the right direction for the goals of your organization, and (3) being too muddled and not focused enough in choosing a quest.

The first step in determining your end state and the path forward is to do an honest survey of where your organization is today.  A good starting point is evaluating how skilled or strong your organization is in the five quest areas of global presence, customer focus, nimbleness, innovation, and sustainability.  The areas where your organization is weakest will help you identify the most urgent needs for change.  This process requires a willingness to expose what may be organizational blind spots, and this may be uncomfortable. But it also opens up necessary dialogue about what the challenges may be and how best to address them.

The diagnostic stage often reveals several challenges, and this means having a subsequent conversation about setting priorities.  Which are the most important issues to address? What is the effort versus the impact of addressing each challenge?  Are there interdependencies, or limitations due to staffing or other resources?  Such discussions are necessary to get convergence around and agreement on organization-wide priorities.

Change efforts often focus on successful execution. To improve the success of your change efforts in the new year, make sure you also have a clear idea of where your organization needs to go and what will get you there.

Your questions and comments are welcomed – please leave them below, or email me.  To learn about new blog posts, follow me on Twitter or look for them on the Neo-Strategic website.

Successful Strategic Planning

In my last blog post, I wrote about how to improve your strategic thinking skills. While this is a necessary leadership capability, as a leader you are also likely going to engage others to determine the future direction of your department or organization, because:

• Giving others a voice in the process helps get buy-in and engagement with the final strategic plan
• To assess the strengths and weaknesses of your department or organization, you must get the perspectives others, of different functions and at different organizational levels
• Other viewpoints can help you determine the highest priorities of your department or organization

One of the biggest responsibilities you will have is to ensure that your group is actually engaging in strategic planning and not other sorts of planning. The difference is that the end result of strategic planning is setting a new direction. Strategic planning is proactive not reactive. It involves inductive thinking – extrapolating beyond the facts in front of you – not deductive thinking, or responding with step-by-step reasoning to the facts given to you.

To better illustrate this, two activities frequently confused with strategic planning are contingency planning and budgeting. Both activities start with a known entity – for example, half our department will be retiring in two years, or we have $50M for our operations in 2016. Planning then involves responding to the known entity – how to fill the empty positions, or how to allocate the annual budget within the department. While this planning ends up defining new activities to respond to the known entity, the planning has not taken the department in a new direction, beyond what was already known. Therefore, it is not strategic planning. When planning is complex or looks ahead several years, it is even more likely to be confused for strategic planning.

So if that’s what strategic planning isn’t, here is a process to follow that does support strategic planning:

• Conduct an internal evaluation of your department or organization, both what is working well and what can be improved. Sometimes the bounds of “internal” are fuzzy, especially if you are only doing strategic planning for your department – so consider “internal” to be anything that is within your control, that you can influence. Think broadly to include things like resources (both human and other), processes, and capabilities.
• Identify and evaluate the impact of external patterns, trends, and developments, today and in the future. Consider not just your immediate industry and competitors but also legal, economic, technology, and cultural changes, for example, fluctuating oil prices, an increasing Latino population in the United States, and transactions of all types that are conducted more and more via mobile devices and the internet.
• Look for themes and issues from your analysis and distill them down into a SWOT analysis – Strengths, Weaknesses, Opportunities, and Threats. Strengths and Weakness are internal, Opportunities and Threats are external. Discussion within your team can help determine which are the most important points to include in these categories. Some good examples of these for major companies can be found here.
• Leverage your SWOT analysis to come up with key priorities for your department or organization – Key Issues and Critical Success Factors that must be addressed to ensure success.

KIs & CSFs should:

• Be consistent with your organizational mission and values. If your organization does not have a mission statement and values, then developing these should be the first step in the strategic planning process.
• Leverage Strengths and Opportunities and minimize Weaknesses and Threats.
• State “what” as well as “how.” For example, a major soft drinks company might “Diversify product portfolio (what) by developing a bottled water line (how).” (Assume that this reflects the company SWOT analysis).
• Not be so generic that anyone in any industry could say it, e.g., “Increase profits within three years.”
• Be no more than five items. If your list is longer than this, your group did not focus enough on identifying bigger themes or priorities.

Give your organization the best chance of success in a dynamic environment by anticipating change, not just reacting to it. Many leaders misunderstand or misapply strategic planning; make sure you are not one of them.

Your questions and comments are welcomed – please leave them below, or email me. To be notified of new blog posts, subscribe to Favorite Reads This Week or follow me on Twitter. Or look for them on the Neo-Strategic website.

Developing Strategic Thinking

I’m working with a client who wants to increase his capacity for strategic thinking. As a first step, I provided some clarity around the term so that he could understand how and what he needed to develop in order to improve his strategic thinking abilities.

“Strategic thinking” cannot be neatly summed up in one or two lines because it entails a set of capabilities to meet a specific goal. And the goal of strategic thinking is to determine the direction for your line-of-business or organization. Strategic thinking can be described by these activities:

• Considering external trends and developments, those of today and what might be in the future
• Seeing patterns and connections among ideas and actions, both within and outside of your department or organization
• Evaluating the implications a dynamic environment has for your department or organization
• Making decisions to support the success of your department or organization amidst change, even when faced with ambiguity or uncertainty

This is in sharp contrast to the activities we are usually responsible for when we first start our professional careers and that we are rewarded for, such as completing tasks, fixing problems, and reacting to crises. As we move into leadership positions, we must shift from operations-driven, tactical responsibilities to a larger view. We must change our perspective to look beyond what is on our desks to the big picture, and from what needs to be done today to the future – frequently several years ahead.

A post in the Harvard Business Review blog tells us, “In study after study, strategic thinkers are found to be among the most highly effective leaders…a true strategic leader thinks and acts strategically every day.” And the results of a survey conducted by James Kouzes and Barry Posner, authors of The Leadership Challenge, showed that 72% of respondents thought that a leader needed to be “forward-looking.” And, “among respondents holding more-senior roles in organizations, the percentage was even greater, at 88%.” Unfortunately, however, leaders don’t necessarily prioritize strategic thinking. Kouzes and Posner also report that, “researchers who study executives’ work activities estimate that only 3% of the typical business leader’s time is spent envisioning.”

If you are a leader who wants or needs to bring more strategic thinking to your position, here are some things you can do today:

• Set aside time for strategic thinking. This can seem impossible when faced with urgent and endless day-to-day matters, but it is up to you to control how your time is spent. Evaluate what tasks you can delegate to others; block off time on your calendar to devote to strategic matters.
• Increase the information available to you. Read or listen to the news every day or at least read a good weekly news periodical. Develop broader and more diverse networks, and connect with them regularly to get their perspectives and ask them what trends and shifts they are seeing.
• Reflect thinking outside of your domain and into the future. When you are writing a memo or email or presenting to others, check in with yourself to see if your language is solely in the here and now of your world, or if you are looking bigger picture.
• Strategic thinking is curious, ambiguous, and imaginative; so develop comfort with that space. Explore big, broad questions about the future, beyond just your organization. What will happen as our lives become more internet- and electronic-gadget-based? As the world’s middle-class population grows?

While it is important for you as a leader to develop the ability to think and act strategically, setting a future direction and priorities often involves the participation of others. In my next blog post, I will discuss the strategic planning process, and how to ensure your group is engaged in developing strategy, not just planning.

Your questions and comments are welcomed – please leave them below, or email me. To be notified of new blog posts, subscribe to Favorite Reads This Week or follow me on Twitter. Or look for them on the Neo-Strategic website.