Setting a High Bar for Transformation
The conversation in the chairman’s office was serious. Sitting in high-backed leather seats around a highly polished table, we talked about the readiness or not of the business to change. The chairman was concerned, and indeed a little worried.
Rather colorfully, he set the scene. “We’ve had the best mousetrap in the business for 57 years and achieved growth and outstanding levels of profitability. The landscape has changed, and we’ve been too slow to respond. As a result, I’m not sure I’ve got the right people to make the journey.”
This was a global business where long tenure was the norm—where leaders had masses of technical expertise and where the people knew the products really well. They were proud of what they created and achieved over time. There was a “family feel” to the culture with the inevitable “pros and cons” implications.
While the facts here relate to a specific client, this speaks to any organization where growth and scale are high on the agenda. This provides a potent reminder of the steps required to shift an ingrained operating culture and embrace change.
Businesses that have enjoyed “the best mousetrap” always risk getting blindsided. In this case, it would be fair to say the senior leaders running the business wore their cultural clothes with pride. And, with the vast majority having been promoted from within, they were less externally focused, less strategically alert, and less agile. Most had never had the experience of leading a truly transformational change. This was a big problem given the challenges ahead.
Operating culture runs deep
Deeper down in any business there are always established ways of working; these are no longer challenged but accepted as the way things are done. An often commented-on dynamic in global businesses is the tension between discipline and empowerment. This was symbolic in our case in a few ways. The old leadership regime, quite paternalistic, had tight control of how work got done. Our data showed that the greater the distance from the center, the more people found work arounds—justifying what they were doing as necessary in their local markets. In this context, our task was to identify those leaders who could successfully work with the enterprise and at the same time be accountable for their own results and deliver. We needed to find leaders who were able to understand and role model to the business a new way of working with the center.
Crossing the streams
Connecting the various workstreams in transformation increases value. However, it can be tempting to sequence the talent workstream once the business agenda is complete. Acting concurrently has benefits both for the business in terms of making timely decisions and also helps shape the specific leadership investigation.
What became clear in this case was that the wide business remit (including “routes to market,” “operational footprint review,” and “new business models”) meant the transformational journey was long term. The result was a state where the business would need to be “always on” for transformation and change. Understanding this informed our approach to assessing “change readiness” and the leadership skills required to be successful. We had to identify those who had the ability to both intellectually and emotionally handle ambiguity and change at speed; not only for themselves, but also to bring people with them as they navigated unchartered waters.
Finding the next generation of talent
It was critical here to find the good talent further down in the business—those who were not on the radar but who could play a role in the emerging growth strategy. This activity can be costly and take time, two likely reasons not to do it. Therefore, using a time and cost-efficient process is essential. Indeed, our process was not looking simply at potential, our enquiry had to be broader and more business specific. We were looking for talent that showed a readiness in their leadership to scale and take on roles with greater complexity and size. We were looking not only for leaders with ambition, but high levels of resilience to stay the course.
In three months, we had aggregate data to share with the client. This was an important moment in addressing whether they had the leadership horsepower to achieve this transformation or not. The data revealed changes were needed on the top team and the overall leadership profile was not strong. True, the bar had been set high, but in order to take a robust look at all aspects of leadership, it needed to be challenging. And a lower bar is only superseded some time later when the transformation (as always) encounters the inevitable bumps in the road and leadership gets harder.
It is fair to say that the chairman was not completely surprised. However, the results sharpened the focus on what needed to happen next. And, as always, we were also able to surface some unknown talent, in particular a swathe of ready-now leaders who could be utilized straight away in new roles to drive the business forward.
When faced with the mousetrap dilemma:
- Act on the talent agenda concurrent to the strategy and operational review.
- Set a high bar for your leaders; don’t pull punches when it comes to the leaders you are looking for in the future (make it aspirational and future focused).
- Make sure that you have leaders who can not only lead the business (e.g., make the right calls and balance long term with the short term), but also inspire their people and create the right focus. Above all, in transformation, find leaders who are resilient and can thrive under pressure.
- Focus on leaders’ readiness to scale, not just their potential.
Readiness for Scale℠ is a service offered through Executive Bench®. To find out how RHR International’s Executive Bench® services can help your organization plan for critical leadership transitions, please contact Jessica Foster.