When Change Comes from the Outside
Almost any time an executive joins a new company, there is a mandate to change things. CEOs or VPs are seldom told, “Keep us on the same path we’ve been traveling.” Sometimes you hear, “We want you to be a change agent.” Other times it is specific: “We cannot continue to lose share on the most important part of our portfolio!” Sometimes, it’s just implied, like when a person with a strong sales background takes over for somebody with an operations bent.
There is an interesting rationale to hiring you to a senior position. My friend Richard Henry, President of RAH Content, refers to this as the tyranny of the unknown. Companies will assume that the person on the outside is more capable of implementing needed change than people on the inside. They have an unblemished record. Maybe nobody inside is ready for a senior role. Maybe it is thought that the way things have been done is not a recipe for future success, and that it takes people who have succeeded with another strategy to move the organization ahead. Maybe it that internal people’s growth is not recognized, and they continue to be viewed in the same light as when they were hired.
Here is the truth behind the change you are responsible for implementing… If you are hired into a company as a new executive, you don’t know how ANYTHING gets done in the organization. You don’t know processes. You don’t know culture. You may have a strategy, but in a 2013 Katzenbach Center study, it was shown that 64% of global senior executives saw culture as more critical to the success of change management than strategy or operating model. Maybe you’ll invest time to learn how things work. Maybe you'll rely on the people who do know how to get things done, as you figure out what to direct them to do.
How, then, can you possibly make change happen quickly? Let me offer five strategies:
1. Plan your work and work your 90-day plan.
Any executive taking on a new role should develop a 90-day plan. Build in your understanding of the company and environment, based on your research. Clarify your vision for success. Lay out what progress can you realistically make in that first quarter. What are the components of your action plan? What resources do you have to draw upon or acquire? What barriers are anticipated, and how can they be overcome? What quick wins can be accomplished, to demonstrate progress and to build relationships?
If you are being recruited for the position, share the plan with colleagues in your last round of interviews. It shows you have taken the job seriously, that you have projected yourself into the role that you seek and that you can show a path to accomplish things.
Why do companies focus on the first 90 days? Because, by Day 90, if there are red flags about you, many people expect they will show up. The honeymoon is over. There can be tangible evidence of your ability to deliver. You have enough exposure within the organization for a consensus about you to begin to form. The first 90 days plan is the equivalent of a coach who scripts out the first ten plays or so in a football game. It doesn’t indicate whether or not you will win, but it does establish the game plan.
A critical component of the 90-day plan is establishing relationships with the people who will help make change happen. Some might be directly involved in implementing the change. Others just have to keep out of the way!
It is unrealistic to accomplish the change you seek to make in 90 days. A company would hire a consultant to do that, not an executive. Accompanying the details of the first 90 days might be extended goals for the significant change you seek.
2. Be ready to scuttle part or all of that plan on Day 1.
You build the plan based on previous experience. But the laws of physics that worked for you in your past life might not hold in the new universe you face. Remember that your plan is a guess at what will work. When you run into the reality of your new situation, you must be quick to adapt. An environment may be more or less responsive to actions than you reckoned. Assumptions of available resources might prove inaccurate. Deadlines might have to change. Process might have to be rewired.
Expectations often change dramatically once you walk in the door. A colleague joined a hotel chain with a brief to introduce brand management throughout the organization. Once employed, he learned that authority from P&L to customer needs was wielded at the unit level. There was no easy short-term way to inject a centralized concept of branding.
3. Get key people onboard.
Medical marketers pay careful attention to key opinion leaders (KOLs), usually physicians whose written or verbal recommendations carry influence with others in their profession. You will find key opinion leaders in your company, and not necessarily where you’d expect when you look at an org chart.
Key opinion leaders often are at the confluence of several groups of interaction. They are hubs of communication. Watch what happens in an audience when a KOL reacts to a leader’s comments. Does the room react to their nods of agreement, crossed arms or rolled eyes? These people are worth cultivating.
Once they are identified, ask KOLs for their opinions. Not only do you get useful feedback, but the KOLs begin to feel invested in your course of action. They feel heard. They can become powerful ambassadors for your initiatives. And it is far more effective to use these people to influence dissenters than, as the new person, to win dissenters over yourself.
4. Tap into legacy.
If you can make a link from where the organization has been to where you are going, it is easier to bring people along. To quote Bruce Weindruch in Start with the Future and Work Back: A Heritage Management Manifesto, “Once you know where you want to go, the value of harnessing your history becomes immeasurable.“
Lots of organizations create awards that reinforce desired performance. A few wise people name these awards after legendary executives in the company’s past. In this way, employees see how somebody long-revered epitomized a particular behavior that is currently valued. People respond positively to a change that is framed as a reversion to core values held since the mythic beginning or in “glory days.”
5. Understand the value of your ignorance.
Being new allows you to ask naïve questions that can cast light on unnecessary paradigms. Why are things done the way they are? Why are these people involved in a process? Is the assessment of risk from an action accurate? Was the way you’ve succeeded in the past ever tried here? In the early days, it is easy to believe that these questions are not asked because you have an agenda, but because you really want to learn how things work.
Being new allows you to break norms. Maybe experiments can be tried that might not be approved otherwise. Maybe shortcuts in process can be explored. Apologies might be required when the rule-breaking becomes apparent. But as former Rear Admiral Grace Hopper said, “It is easier to beg forgiveness than to ask permission.”
Being new allows you to seek opinions of employees and to aggregate them into arguments for a course of action. In this way, you do not provide your opinion of a direction to be taken, but instead you offer your summation of the experiences and opinions of the organization at large.
Employees will cut you some slack on your ignorance of process, if you can compensate by demonstrating your competence in other areas that matter to them. Use your functional expertise to coach others. Use your management skills to achieve goals through other people.
All well and good so far. But before you climb on board a steamroller and flatten everything in your path, let’s consider four things that can go wrong along the way.
Leadership determined that your outside experience and competencies are better suited to affect change than the people inside the organization. How does this make those people inside the organization, those whom you will call on to execute your plan, feel? Mainly, that their talents, process, experience or judgment are seen as inferior to your own. That the company doesn’t value how they have been doing something as much as it values the potential of doing things differently.
When you proclaim your change agenda, you are reinforcing these negative feelings from the people on whom you must rely. Diplomacy is critical. Build up their esteem by giving credit to their strengths. Highlight the team’s successes to date and suggest how to invest in their continuation. Underline their critical role going forward. Figure out what’s in it for them, as it relates to the change ahead.
People don’t need to see their input put into action. They just need to feel part of the process. They want to know that theyhave not been ignored. Asking opinions, listening and playing back the feedback you receive can help avoid alienation. Even explaining why somebody’s point of view was not taken forward makes them feel like they are a contributor.
2. Lack of alignment
A former Wells Fargo executive with a strong sales background replaced an Operations person as CEO of a small Upper Midwest bank system. The organization was operationally sound; it needed a stimulus in growing its business.
The CEO commuted from one state to another for the job, raising concerns whether he would ever become part of the corporate community. He announced dozens of changes in his first two years – closing kiosks in grocery stores, launching apps, experimenting with video banking, etc. But he observed that the organization, led by long tenured employees, picked and chose which initiative to get behind. They believed they could outlast him. This was infuriating to him. He told a consultant, “I just want to fire all the SOBs!”
The consultant suggested that his company saw so many changes that employees believed he would forget about this month’s program as he initiated next month’s. What was missing was an overarching CHANGE, something that would link all the small changes together. Tell your employees that you are redefining banking convenience and show the link between this and all the steps you take. Or show that you can match the big guys in tech-driven service. If people understand the CHANGE, there is a better chance they’ll sign up for the changes. And if they don’t buy into the CHANGE, they shouldn’t stay with the company.
Alignment can come from clearly articulating a vision, the CHANGE, rather than focusing on the individual changes. Alignment can also be helped through the demonstration of success in the form of quick wins. Celebrate these accomplishments. They may not be strategic, but they build rapport and momentum.
3. Not delivering to expectations
You take on a position with assumptions of what will work. Early days on the job will pressure-test those assumptions. You build a plan preparing for the situation you will face. Plans can change. Even financial goals can be adjusted once you have a chance to understand the dynamics of the business.
Every leader gets a pass to adjust their thinking about objectives in the early learning phase. There are two actions that are not so easily forgiven. The first is failing to deliver against a set objective that has not been adjusted. If you cannot accomplish something, let people know. Don’t let a due date go unaddressed, if it cannot be met.
The second is making incremental adjustments to a target over time, rather than "ripping the bandage off." Delivering bad news once lets people adjust their thinking. Continually pushing back deadlines or reducing goals smells like incompetence or lack of courage. I’ve seen share prices take precipitous drops as investors lost faith in CEOs who continually made small downward adjustments to guidance.
4. Unforeseen consequences
Hit the target completion dates? Check! Accomplish goals on budget? Check! And yet, while accomplishing this task of great importance, while executing requested change, customer satisfaction suffers, employee turnover increases or your plant operates at full capacity, forcing a lucrative opportunity to go unaddressed. In our zeal to bring about change, it is easy to lose perspective, and it’s hard to ask important questions: Are we doing the right thing? Are there alternative actions that would yield even better results? Are there trade-outs to be recognized that will result from the changes we enact? Or how will this impact people the organization counts on every day?
In summary, a new leader coming from outside the organization is bound to be a source of change, if for no other reason than being ignorant of how things have been done. But usually, the reason you are hired is because of the change you can impact. Care must be taken to get alignment with the people who will help you deliver change, to provide the big picture in your direction and to be flexible enough to communicate the course corrections you have to make. Remember that the urgency of an immediate task needs to be balanced with the longer-term goals that will determine your ultimate success.
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Executive Springboard President Steve Moss shares learning from years as an executive and a mentor.