Leaders must change or face the danger of being changed

Change management under normal circumstances is a challenge. The ‘overnight’ changes demanded by COVID-19 is a case in point. Organisations, and individuals, had to act fast with little or no planning and without a phase of transition. New ways of working, transacting, and communicating emerged. A careful review of the effectiveness of the various change programs adopted by organisations in response to the pandemic reveals that the degree of success, and, indeed, the sustainability of success, was positively correlated to the clarity, honesty, and transparency of the communications 

The reluctance of leaders both in Sri Lanka, and outside, to change even when the need for change stares in their face, is an occurrence which is sad but true. Although these same leaders publicly preach about the necessity to change, they rarely walk the talk and/or practice what they preach. Even where there is some action, the efforts are, often, very half-hearted and the outcomes are inevitably suboptimal. 

This reticence to change is elegantly articulated by Niccolò Machiavelli, Italian philosopher, writer, and diplomat, when he stated, “It should be borne in mind that there is nothing more difficult to arrange, more doubtful of success, and more dangerous to carry through than initiating changes. The innovator makes enemies of all those who prospered under the old order, and only lukewarm support is forthcoming from those who would prosper under the new. Their support is lukewarm, partly, because men are generally incredulous, never really trusting new things unless they have tested them by experience.”

Logical as Machiavelli may be, the disinclination to change is dangerous behaviour in a world abounding with potential disruptors ranging from digital transformation, pricing algorithms, new business platforms, out of the box organisational design and differentiated customer service forced by COVID 19 to artificial intelligence driven processes, blockchain technology, internet of things (IoT), cheaper testing and simulation facilities and cloud computing/storage, just to name a selected few. 

The hesitancy of many leaders to timeously respond to change may also spring from their inability to recognise a need for change and/or a lack of confidence in their ability to lead the change. Change leadership is, amongst others, a critical competency of an effective leader and pundits observe that it is the degree of such ability which distinguishes a great leader from a good leader. It is what separates the men from the mice.

Ready-aim-fire

The wheel, the printing press, the internal combustion engine, the telephone, the light bulb, penicillin, the assembly line technique of mass production, the Apple iMac, the internet, and Amazon are just a few of the many instances where leaders sniffed a need to change and then led the change execution from the front. There was little procrastination. 

The dynamism of today’s complex environment demands quick decision making. Often, “gutty” leaders act even without having the usually desired level of definitive information. They recognise that speed to market is the essence in creating a competitive advantage. Using a Peters/Waterman metaphor from their best-selling book, ‘In Search of Excellence,’ the great exponents of change have a leaning towards a ‘ready-aim-fire’ approach as opposed to suffering from a “ready-aim-aim-aim” syndrome. Many are the instances where leaders afflicted by analysis paralysis have lost the first mover advantage and failed to make hay while the sun shone. 

Although much can be learnt from the many political, and national, leaders, both men and women, who have positively shaped the world and/or their nations, and society, with their ability to recognise the need for change and their skills in leading change by innovating, empowering, and influencing their constituents and followers, the examples in this article are, in the main, from the corporate world. The principles, however, are applicable in all contexts. 

Good leadership

Studies reveal that leaders, who are good in recognising the need for change, nurture, and enhance, their individual and organisations’ capabilities in this art by;

• Inspiring a shared vision through platforms and vehicles which facilitate continuous ideas and insights from all employees irrespective of their rank,
• Communicating, clearly and in simple terms, the role of every single employee in the organisation’s journey towards achieving the visions and strategic goals and in fulfilling its mission. Continuous efforts in inculcating this sense of belonging are second nature to such leaders,
• Creating an atmosphere of open, candid, and robust conversations which enable all employees to freely express their thoughts,
• Encouraging an “outside-in” approach in satisfying stakeholder needs as opposed to a, purely, “inside-out” approach. In “inside-out” thinking, the focus is on processes, systems, tools, and products designed and implemented based on internal thinking and intuition. The customer’s needs and wants do not play a major part in this type of thinking. The business decides for the customer. On the contrary, “outside-in thinking” has the customer as the starting point. Interestingly, gurus question whether Henry Ford was an “inside-out” in giving the customer just a black car or was he an “outside-in” in developing a production system which made available an affordable product which satisfied, at that time, the market needs, 
• Seeing the bigger picture. Marketing Myopia a term popularised by Theodore Levitt in an article he published in the Harvard Business Review in the 1960s, refers to the many leaders who have narrowed their horizons by failing to ask the questions which lead to the bigger picture. Typically, “Are we in the fast-food business or in the business of providing convenience?”, “Are we in the railroad business or in the transportation business?”, “Are we publishing or in entertainment/ information dissemination?”,- and
• Establishing a performance culture which rewards those who regularly convert ideas into actions. 

Seeing the invisible

Shiv Khera, Indian author, activists, and motivational speaker, who, we Sri Lankans were fortunate to hear when he spoke at the National Conference hosted by the Chartered Institute of Management Accountants, Sri Lanka in 2006, said: “If you want to achieve the impossible – you must have the ability to see the invisible.” 

Leaders who are great at leading change revel in being able to see the invisible. It was Jonathan Swift, the Anglo-Irish satirist, essayist, poet, and Anglican cleric who said, “Leadership vision is the art of seeing the invisible.”

Ray Croc, the founder of McDonalds imaginatively pictured his philosophy of operating excellence and providing convenience long before it existed. Mark Zuckerberg’s Facebook and Satoshi Nakamoto’s (possibly a pseudonym) blockchain technology are of a similar genre. Needless to state, there are many more such examples.

Leading fearlessly

As stated before, leaders who are adept at leading change, do not allow themselves to be put off by the unknown. They:

• Foster innovation and experimentation by lowering the fear of failure. They do not say one thing in public and do something contradictory in private. Many are the occasions when leaders are heard saying, publicly, “Our organisation promotes innovation” and yet, when they are out of the public eye, exhibiting a low tolerance of failure. Innovation cannot thrive in an atmosphere which is intolerant of failure, particularly failure suffered in pursuing the interests of the company.
• Are quick to act. Within the first 20% of the available time, they figure out the 80% of the key issues and then, using effective methods of risk management, embark on the journey translating changes, both current and emerging, into plans of action.
• Do not find excuses to delay a change initiative. Have you not said, or heard, the usual excuse lines such as “Why fix it if it ain’t broke?”, “Things are fine; why do we have to change?”, “We have to maintain tradition,” et cetera. These thoughts may not be bereft of logic. But when used as an easy excuse in talking against the need to change without even closely examining the merits and demerits of the proposed initiatives, they sound so hollow, particularly in the ears of the enlightened.
• Align the change plans to the overall vision and mission of the organisation. 
• Leverage the existing core competencies in venturing into new business areas and in developing new techniques. However, when the situation demands, they act quickly in developing new competencies through imaginative hiring, learning/development, and talent management policies.
• Keep open minds and maintain their ability to quickly respond to emerging situations. 
• Employ a leadership style of “drive” mixed, astutely, with inspiration, empowerment, and motivation. Most “big change” initiatives are successful if there is a right balance between push and pull. “Pushing” behaviours emit a feeling of deadlines and commands. Although, in the first instance, it smacks of autocracy and imposition, when combined with “pull”, where pull is loaded with participation, teamwork and belonging, the synergised outcome is significantly more positive, and
• Communicate clearly. 

John Keells Holdings

The effectiveness of the “push” and “pull” is well evidenced by the change initiatives which took place in John Keells Holdings (JKH) in the period 2004 to 2017. It was a period when, paradoxically, change was a constant. A period when the operating model, human resources strategy, performance management, enterprise resource planning, recognition and reward policies, director vs president roles, portfolio management, risk management and succession planning et cetera, were subjected to comprehensive transformation. Change was ubiquitous. 

The operating culture of the Group underwent a paradigm shift. The core values of Ethics, Integrity and Transparency were entrenched as an uncompromisable in every action. A stakeholder model of governance, as opposed to the Friedman supported shareholder model, took deeper roots and the importance of sustainable development became top of mind. 

The women and men of JKH, invigorated by clear leadership, rose to the call, willingly, and passionately, oblivious to the stress and strain of “change fatigue”. So much so, was their intense experience of coping with change that ‘change’ became a part of the JKH DNA.

Unsurprisingly, it was a period where the Profit Before Tax increased from Rs. 937 million in the year ended 31 March 2003 to a Profit Before Tax of Rs. 27,637 million in the year ended 31 March 2018. While the ability of JKH’s Board, Group Executive Committee (GEC), the senior managers and employees in recognising, and believing in, the need for change was key, one must also recognise the ability of the JKH Chairman/CEO Susantha Ratnayake, who led the change initiatives with a “push” and “pull” approach which was a hallmark of his leadership style in a golden era of JKH achievements. Current indications are that JKH, under the new leadership, continues to respond to change with the same belief, vigour, and enthusiasm.

Change management

Change management under normal circumstances is a challenge. The “overnight” changes demanded by COVID-19 is a case in point. Organisations, and individuals, had to act fast with little or no planning and without a phase of transition. New ways of working, transacting, and communicating emerged. A careful review of the effectiveness of the various change programs adopted by organisations in response to the pandemic reveals that the degree of success, and, indeed, the sustainability of success, was positively correlated to the clarity, honesty, and transparency of the communications.

It is no secret that more than 75% of “big change” initiatives fail because leaders forget that change is all about people. Most leaders presume that logic alone will be enough to convince people to join them on the change journey. The fear of change is evolutionary in human beings. We like routine. We like to be in control. Given these inbred triggers, feelings and emotions easily overwhelm logic when it comes to change. 

Psychologists state that the human beings do not care, too much, about facts. However, they do care, deeply, about safety and belonging. When employees perceive change as a threat, and such fear is not adequately addressed, there emerges a self-accelerating cycle of fear and resistance. 

Resistance to change is very normal. It emanates for reasons ranging from neuronal to psychological and sociological needs arising from the fears of the negative effects the proposed change may bring to the subject person. Leaders must use their emotional intelligence in addressing these with compassion and honesty. Securing the buy-in of the subject persons is an absolute essential if the proposed change is to result in the anticipated beneficial outcomes, not just in the immediate but also over the medium and long term. Interestingly, two Harvard Business Review studies have found that organisational change efforts were, even, more successful when leadership emphasised not only the vision of change but also a vision of what would continue as current.

Unrelenting change is the norm

In closing, leaders must accept that unrelenting change is the norm and will be the norm, always. Employee pressure in the forms of a search for more meaning in their work through a deliberate, and structured, work-life balance, more involvement in decision making and a fairer share of company profits, external factors such as political ideology, social concerns, economic trends and increasing globalisation and shareholder pressure for better returns on the capital employed within an ethical framework are just a few examples of what a modern leader must contend with. 

Leaders will do well in heeding the advice of Nelson Mandela, the South African Anti-apartheid Revolutionary, President and Philanthropist, who said: “We don’t have to accept the world as it is. We could do our part to seek the world as it should be.”

It is increasingly clear that leaders have a Hobson’s choice when it comes to adopting socially demanded change. They must adapt and help others to adapt too. If they do not change, they will find, soon enough, that they will be changed.

(The writer is currently a leadership coach, mentor and consultant and boasts five decades of experience in very senior positions in the corporate world – local and overseas.)