An Interesting Perspective On The Development of Strategy

For many years, I have asked participants in the From Vision to Action Leadership Training to read the book, Leading Change by John Kotter, the Konosuke Matsushita Professor of Leadership, Emeritus at the Harvard Business School and the cofounder of Kotter International. Given Kotter’s eight step model for organizational transformation, first presented back in the mid-nineties, is the national and international gold standard for successful organizational change, it is always important to keep up with his current thinking. Recently, he wrote the lead article for the November 2012 issue of the Harvard Business Review on it’s 90th anniversary called “Accelerate!: How the most innovative companies capitalize on today’s rapid-fire strategic challenges - and still make their numbers. Here is the link: http://hbr.org/2012/11/accelerate/ar/1

The article begins with the following premise: “Although traditional hierarchies and processes - which together form a company’s “operating system” - are optimized for day-to-day business, they can’t handle the challenges of mounting complexity and rapid change.” Therefore, Kotter suggests the development of “a second operating system, devoted to the design and implementation of strategy, that uses an agile networklike structure and a very different set of processes. The new operating system continually assesses the business, the industry, and the organization, and reacts with greater agility, speed, and creativity than the existing one. It complements rather than overburdens the hierarchy, thus freeing the later to do what it’s optimized to do. It actually makes enterprises easier to run and accelerates strategic change.”

According to Kotter in this article, there are three main differences between his original eight-step method for successful large-scale change and the eight “accelerators” for the development of strategy. The first difference is that the eight step method for organizational transformation is sequential while the eight accelerators for the development of strategy are “concurrent and always at work.” The second difference is that the former is “usually driven by a small, powerful core group, whereas the accelerators pull in as many people as possible from throughout the organization to form a volunteer army.”  The third difference is that the former is “designed to function within a traditional hierarchy, whereas the accelerators require the flexibility and agility of a network.” 

The eight accelerators that create this high degree of strategic fitness are similar in many ways to the eight step model, e.g. “create a sense of urgency around a single big opportunity,” “build and maintain a guiding coalition,” etc. However, this complementary system for strategic development, according to Kotter, is based on the following five key principles, namely “many change agents, not just the usual few appointees”, “a want-to and a get-to not just a have-to-mind-set”, “head and heart, not just head”, “much more leadership, not just more management”, and “two systems, one organization.”

First, while I like the idea of dual operating systems as a way to explain how strategy is developed and communicated, I am not entirely sure that Kotter’s new model is all that new. I have seen numerous organizations over the last 20+ years create this dual operating system model without out calling it something new and different. While Kotter’s new model is very specific in how the strategic development operating system should be created, I think many large and small companies can embrace the idea and then modify it in simple ways to meet their needs. 

Second, I do not know if they need to create an entire networklike structure that runs parallel to their traditional hierarchy to formulate and implement strategy. The best companies that I have seen each have a unique system for the on-going development of strategy. However, from my perspective, the critical part to their successful implementation of strategy revolves around the generation of a deep level of clarity, ownership, and understanding of strategy within the entire organization. It is the clarity that makes the strategy effective not simply having an entirely separate structure for the development of strategy.

Third, I also want to note that in the later half of this article Kotter explains that he has only utilized this new method in eight companies, and that it is critical for the strategic development guiding coalition to be in close communication with the more traditional executive management team. Furthermore, according to Kotter, if a company is based on a control-oriented hierarchy, this new model is quite helpful. But, having taught leadership since the eighties and been involved with countless strategic development projects, I find very few companies with control based hierarchies to be successful and strategically agile. Control based methods of working and leading people are typically the main problem for why the company is struggling strategically. From my perspective, if one changes this form of leadership, then many of the problems will fade away related to strategic development and implementation. 

Still, I do encourage everyone to read this article as over the years Kotter’s perspectives always generate considerable discussion and introspection throughout the world of business. And who knows, maybe in twenty years it will become the new gold standard for strategic development. Until then, keep reading and learning!

Geery Howe, M.A. Consultant, Executive Coach, Trainer in Leadership, Strategic Planning and Organizational Change Morning Star Associates 319 - 643 - 2257

The Power of Short-Term Wins

“My team is not working very well together. What should I do?”, asked the young team leader.

“Did you clarify whether or not you are building a team or a single leader work group?”, I responded.

“Yes, a team.”

“Did you choose the right people for the team?”

“Yes. I carefully choose each one and made sure we had SMART goals to work with.”

“Wonderful; I am impressed. Now, did you set them up for some short-term wins as they worked on their SMART goals?”

“Opps. I forgot about the short-term wins. I need to go back and look at our timelines and action plans. I think I have us working too hard and too fast without any noticeable progress until way out in the future.”

“Don’t worry,” I remarked. “It happens to the best of us.”

Many young leaders forget that short-term wins create forward momentum, build confidence and undermine cynics and resistors. First coined by John Kotter in an article called “Leading Change: Why Transformation Efforts Fail” in the March-April 1995 issue of the Harvard Business Review, short-term wins require careful planning and thoughtful execution. Many young leaders get so focused on doing something and getting it done that they forget the importance of short term wins.

For those of you who want to read more about short-term wins or coach someone about this subject, I encourage you to read the following short piece on John Kotter’s web site <http://www.kotterinternational.com/kotterprinciples/changesteps/step6>, or check out the aforementioned article <http://hbr.org/2007/01/leading-change-why-transformation-efforts-fail/ar/1>. Either way, helping young leaders improve their short-term wins will make a major difference when working with struggling teams, departments or the whole company.

Geery Howe, M.A.Consultant, Executive Coach, Trainer inLeadership, Strategic Planning and Organizational ChangeMorning Star Associates319 - 643 - 2257

Work Your Plan: Implementation vs. Entropy, Order and Complacency - Part # 2

THEME: Fall 2010 From Vision to Action Executive Roundtable Report

Monday morning: October 18, 2010

Dear friends,

Some days we get so busy that we forget there is a difference between management and leadership. John Kotter notes that management makes systems, people and technology work well day after day, week after week, and year after year. This includes planning, budgeting, organizing, staffing, and problem solving, plus taking complex systems of people and technology and making sure they run efficiently and effectively.

Leadership, on the other hand, notes Kotter, creates the systems that managers manage and changes them in fundamental ways to take advantage of opportunities and to avoid hazards. This includes creating vision and strategy, communicating and setting direction, motivating action, aligning people, plus creating systems that managers can manage and transforming them when needed to allow for growth, evolution, opportunities and hazard avoidance.

When I reflect on what John Kotter wrote, it is clear that mangers maintain systems that work well on a day to day basis. They are trained in order and execution. Yet, we must remember that systems that are working well over time tend toward entropy or the lack of forward momentum plus complacency or the lack of urgency. Therefore, we have to accept the fact that managers are trained to maintain something that will ultimately not work well over time. Furthermore, they are not trained, encouraged or rewarded in any way to constantly improve or change things. Thus, many times we are setting managers up to fail and be frustrated on a regular basis due to the natural tendency of systems to move toward entropy and complacency.

So, what happens when organizations have different amounts of management and leadership? When organizations have high competencies in management and leadership, they’re able to meet challenges today as well as tomorrow. However, most organizations are usually lacking in one or the other. When management exists without leadership, the company is often unable to change. And when leadership exists without management, the company is only as strong as its charismatic leader. Most of the time, organizations are overstaffed with managers, but lack enough leadership to help them deal with constant change. It reminds me of some farm wisdom that I learned many years ago when I first came to Iowa: if you keep doing what you are currently doing, you keep getting what you currently got. To avoid constantly ending up at the place of entropy and complacency, we as leaders and managers need to do some things differently.

First, when building a new system, define the results you are seeking and define the outcomes you will measure that show whether or not you are achieving the desired results. Sounds simple but 9 times out of 10, people do not do take this action. Still, in the process of doing this, watch out for the tyranny of measurement. The standard perspective is that what gets measured, gets done. However, the measurements in some companies are now becoming more important than the results.

Second, it is common for organizational goals and systems to be in conflict. Therefore, it is important to better define your goals and make sure your systems are in alignment with those goals. Be careful along the way and watch out for the tyranny of goals. In this place, having goals is more important than completely them in a thorough manner.

Next, routinely do a system analysis as part of your strategic reviews. Often during this process, we discover that there is no one who is clearly in charge of managing a system. If this is the case, then define who you will hold accountable to meeting expectations related to this system, e.g. quality assurance, but also clarify how he or she can or can not improve the system if entropy and complacency sets in.

This week, recognize that poor leadership or management can cause major problems when dealing with the challenges of entropy and complacency.

Have a fantastic week,

Geery

P.S. Routinely, we, as executives and leaders, have to stand up in front of large and small groups to present new ideas. Some days it is a new vision for the future and other days it is a new strategic plan. Whatever the case, the goal is to develop clarity and ultimately ownership and buy-in across the organization.

However, when leaders present, they also encounter confusing questions, off the wall comments and at times verbal bullets or attacks from people who do not want to change. John P. Kotter and Lorne A. Whitehead in their new book, Buy-In: Saving Your Good Idea From Getting Shot Down, Harvard Business Review Press, 2010, notes that these attack strategies by naysayers, nitpickers, and handwringers fall into four categories:

- death by delay: endlessly putting off or diverting discussion of an idea until all momentum is lost.

- confusion: presenting so much distracting information that confidence in a proposal dies.

- fear mongering: stirring up irrational anxieties about an idea.

- character assassination: undermining the reputation and credibility of the presenter.

In their new book which opens with a short fictional story, very much like the work of Ken Blanchard and the current, more popular form of Patrick Lencioni, Kotter and Whitehead outline how to respectfully engage with adversaries and how to stand your ground with simple, convincing responses to common questions. Their method outlined in the second half of the book focuses on how to save a new idea and how to rebut twenty-four common attacks.

Overall, this is a good resource for leaders and managers to read and then review before any major presentation. I thoroughly enjoyed the section in the appendix called “how the method helps large-scale change” which is a quick and delightful summary of the Kotter 8 step organizational change model. For those of you who are familiar with the model, this book is critical to step four, communicating for buy-in. Recognizing that “the single biggest mistake that people make when trying to communicate a new vision of change, and strategies for achieving that vision is under-communicating by a great deal,” this book outlines how to avoid that problem and deal with those who want to shut down change at the point of presentation.

If your time is limited and reading a 190 page book is not possible, then I suggest you read an interview of John Kotter by Jeff Kehoe called “How to Save Good Ideas”in the October 2010 Harvard Business Review. It will not give you the depth of the book, but you will get a nice high level overview of some of the key material about why well intentioned and talented people with good ideas often fail when presenting them to large and small groups. Personally, I enjoyed reading the book and the article because I could really get a more complete sense of what Kotter was trying to do in the book and a better understanding of the key points. I particularly enjoyed some of his thoughts in the later part of the article about writing books, story telling and what motivates him to keep studying leadership and change. In short, the book, Buy-in, will be a good addition to your leadership library.

Geery Howe, M.A.Consultant, Executive Coach, Trainer inLeadership, Strategic Planning and Organizational ChangeMorning Star Associates319 - 643 - 2257