A senior H.R. executive for a large manufacturer recently made this 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 is an honest perspective, one that we must 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 is little doubt that successful manufacturers will be those that succeed 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, 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. Woodrow Wilson said, and many will agree: "If you want to make enemies, try to change something."
Last year, I researched the challenges of making changes in a firm's business model. My original focus was on changes that were considered the most challenging. One thing that I learned from executives that I interviewed was that this question, while interesting, wasn't the most significant one. 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 involves people, and it has several dimensions. Three lessons can be learned.
First, the senior managers must "buy into" the change. This doesn't imply them giving approval to the plan and signing off on the new directions. Rather, it refers to 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 wrote: "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 company's leaders "own" the responsibility to sell, sell, sell and are willing to take the steps necessary to thwart resistance to the changes. The first, and probably the most critical, step in change management is determining if the company leaders have the commitment and the stamina for the challenge awaiting them.
Second, the team charged with implementing the plan must be the most talented, the company's "A Team," not the current list of underperformers. They have to be adequately resourced, and they must have the flexibility to respond to the inevitable surprises that occur. In a review of failed change-management processes, a significant majority were found to have failed with 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.
Finally, 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. Critical skills will be in unexpectedly short supply. You will encounter challenges outside the experience of your firm. It's easy to anticipate such issues when the change involves something obvious like entering new markets, but the issues surface with just as much impact when changes 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 remain as a challenge. But, organizations that will celebrate success five or ten years from now will be those that recognized planning change as only the first step in the process, and put equal effort into the task of leading change.
George F. Brown, Jr. is the CEO and cofounder of Blue Canyon Partners Inc., a consulting firm that works with businesses to develop growth strategies. Follow him @GeorgeFBrownJr on Twitter. He is the co-author with Atlee Valentine Pope of CoDestiny: Overcome Your Growth Challenges by Helping Your Customers Overcome Theirs, Greenleaf Book Group Press, © 2010. See www.CoDestinyBook.com