Change Management Wisdom From My Top 5 CEO’s!

Help Me Figure It Out!

“Whatever happened to naked fear?”  The CEO on one of my first change jobs caught me off guard with this question.  It influenced my career.  So I got thinking about the top CEO’s I’ve worked with and culled out some other mind breakers that have shaken me and formed my prejudices about organization transformation.  I chose the top 5.  Here they are – in chronological order.

1. Whatever Happened to Naked Fear?

This happened early in my career.   A lot of the executives in the 1970’s had learned about management and leadership as officers in World War II.  They understood the need for clarity of mission and discipline in execution.  Usually the mission devolved from on high and execution was within defined parameters.

I was naïve and had bought into some of the new theories about “humanity” in “personnel management.”  There was an emerging idea that people should participate in defining the mission and be empowered to execute within broad parameters.

I came up against a grizzled veteran who was struggling to see the benefit of a new way.  The old way worked.  We had won the war.

My struggle isn’t with the executive, because in many ways I’ve come to believe in his type of strong leadership – particularly in this era of record low employee engagement.

My struggle is with the incessant volumes of literature that paint participation and empowerment as new.  It isn’t.  We know more about it.  We’ve polished it more.  We aggrandize it, but it isn’t new.

Lesson #1:  Empowerment and participation aren’t the only way.

2. There’s Nothing Attached to the Strings!

I was consulting to a CEO to implement some new management techniques in the business.  I worked with him, his executive team, and project teams for several months to come up with the definitive implementation plan of: issues, goals, projects, and accountabilities.  As he signed off on the tome he sighed:

“People think all I do all day is sit up here and pull strings.  Well I do, but there is nothing attached to those strings.”

That simple comment taught me the fallacy of the CEO.  We tend to believe that with all of their positional power and personal influence that they can do miracles.  In change management the #1 reason for failure is cited as the “lack of leadership commitment.”  Don’t believe it for a minute.  Leaders are committed, but they need help tying the strings together.

Lesson #2:  Knowing the answer is only half of the solution; knowing what to do with it is the other half.

3. Don’t Believe What You Believe!

I was consulting to the CEO of a private company that had won a multi-billion dollar, long-term contract to privatize and manage an iconic government service.

We had about a dozen bi-party “tables” examining the major transition issues.  We were in heavy negotiations with government officials.  Things were not going well.

My CEO and his counterpart convened a meeting of “table leaders.”  There were about 30 people in the boardroom.  It turned into an emotional, pressure filled “knock ‘em down drag ‘em out.”  The two CEO’s were bulls at center stage.  We were scolded and told to get back to work.

That night my CEO called me and asked if I wanted to play golf the next day.  I agreed to meet him for lunch on the verandah of his club.  As I walked up to his table you know who was sitting with him – his counter-CEO.   The whole meeting had been staged.  They were both angry about the “table gridlock” and decided to blow the whole thing up and lay down the law.

As we teed off my CEO told me to “never believe what you believe.”  Since that day I’m the first to examine: orthodoxies, paradigms, myths and legends.

Lesson #3:  When you're working with CEO’s there are no rules.

4. It’s About More than the Money!

About a decade ago I was asked to lead a customer loyalty initiative for a large global manufacturing company. 

In my first meeting with the CEO I asked why customer loyalty had become a priority.  He said that he was near the end of his career; he’d made a lot of money for himself and others.  But he felt that leaving might be like taking his hand out of a bucket of water.  Before long there would be little evidence of his time at the helm. 

He was searching for something that had sustaining power.  He wanted the customer experience to differentiate the company in what had become a price-driven commodity industry.

One thing he knew was that deeply ingrained silo metrics were getting in between employees and their customers.  Sure, numbers were essential for setting goals and understanding performance; however, they got in the way of people doing the right things.

He rejected the adage: “if you can’t measure it, you can’t manage it.”  He had concluded: “if you're measuring it, you're not leading  it.”

Much of our job was to set up a tension between internal metrics and external outcomes.  Resolving the tension was usually a matter of how strongly the company believed in its stated values about employees and customers.

Lesson #4:  Beware of metrics – they work.

5. I Can Create Meaningful Work!

Recently I finished a two-year assignment in Asia.  We were asked to transform a large complex organization.  The project started in the usual way – working with the CEO and executives to describe the current and future states.  It was boring and uninspiring.  Their business sounded just like all others in their industry.

Yet, the CEO was an energizing leader.  He was far from boring and totally inspiring.  He emoted a passion that wasn’t in the written words of mission, strategy, and business plans. 

One evening the CEO invited our team to dinner.  I took this informal opportunity to dig deeper into why he took on this challenging job.  His passionate response was surprising and revealing.

He knew that his position gave him tremendous power to shape the working lives of young people in his country.  His view was that his country had gained its economic strength by doing the outsourcing work from the west.  He believed that he could influence the creation of thousands of creative-content jobs, not only in the company he led but also throughout the nation.

This was a turning point in our work.  When we better understood him, we better understood our job.

Lesson #5:  CEO’s have a passion that drives them.  You’ve just got to find it.

Our leaders influence our lives.  These CEO’s deeply shaped the way I do my work.

"Twelve O''clock High": The Change Management Paradox

The Non-Participator

“Cut out this guidance stuff and just tell me what to do!”  That’s a quote from my son when he was nearing the end of his university education.  Like most young people he was unclear and anxious about his future.  As a good parent I was guiding him.  It wasn’t working; he wanted an answer.  That’s the paradox of parenting – it’s not your life, but you still have a responsibility.  Leading organizational change has a similar paradox.

Participation, involvement, engagement, buy-in, equality; these are all words that underlie organization transformation as we know it in the west.  These words are orthodoxy.  We believe in a democratized change management process.  We make daily decisions and take actions without questioning this belief.

I too am a believer.  I believe that participation increases the chances of success.  Maybe?

Maybe there’s a sequence here, and maybe the sequence goes back to the tireless discussion between management vs. leadership.  Maybe the foundation of transformation is hierarchical control, not egalitarian empowerment?

Let me explain.

Check out your NetFlix or i-Tunes and find the 1949 film Twelve O’clock High starring Gregory Peck.  It's a story about Peck taking over a B-17 squadron during the daytime bombing of Germany in WWII.  Peck is confronted with an undisciplined squadron with a low hit rate and high death rate.  He tries to lead the group but can’t.  He decides to enforce discipline to the extent that the men hate him so much that they all request transfers. 

Of course all turns out well.  The men get the message and Peck relinquishes leadership to the group – and it “saves the day.”  Hollywood drama?  Sure, but it makes a great point.  It reveals the transformation paradox: 

“you can’t lead if you're not in control!”

I relearned this lesson when I recently spent more than two years working in Korea.  The CEO of a $20 billion public company asked our team to build an Innovation capability within the organization to transform it from a market follower to a market leader.  A major issue holding the company back was the Korean culture of deference to hierarchy.  Everyone looked to the boss for ideas.  The deeper you got into the organization the deeper was the belief that “ideas are not my job.”

All of the innovation processes and tools used by our consulting team are based in the principle of participation.  You know the drill: everyone is equal; there are no bad ideas.  

The first six months of the project went well.  There was a lot of knowledge transfer.  Koreans love to learn.  Their Confucius based education system instills a belief in finite knowledge that can be learned and passed along.

Progress stalled as we got into the second six months.  This is where we brought teams together to use their newly acquired innovation skills.  This is where we developed insights from research; crashed insights to find ideas that had never been seen before; and assembled ideas into business opportunities.

Our teams fumbled.  We hit all of the walls: hierarchy within the teams slowed genuine idea generation; the reliance on rote learning inhibited pattern recognition; and even when we got good ideas the dynamic of deference slowed the exploration and synthesis of the ideas. 

Once the teams had reasonable change initiatives we coached them to develop plans to request funding for experiments to de-risk the ideas.  The plans were  to be based in vision, creativity, and energy.  We wanted the teams to sell ideas to their executives, not incremental business improvements.  They found this difficult.  The executive presentations were usually glorified spreadsheets – comfort zones for presenters and receivers of the information.

As we moved past the first year of work we realized that we had to change our approach.  Our biggest shift was to drop the principle of egalitarianism and take up the mantle of authority.  The Korean culture forced the paradox of transformation.

Now that I’ve left Korea I’ve discussed my experience with westerners who have practiced in other cultures like Russia, Saudi Arabia, China, and other countries in the east.  The message is consistent.  Our participative approach to change isn’t an immediate fit in countries with strong traditions of hierarchy and authority.  Empowerment has to be disciplined.  This sounds counter-intuitive, but that’s why it’s a paradox.

Is the west free of the transformation paradox?  I’m not convinced.  According to a recent survey reported in the Economist only 3% of organizations are “self-managed” through a set of core values.  In the remaining 97% there is a predominance of top-down, command and control management that stifles innovation, engagement, and performance.

Are we in the west living a delusion?  Is the principle of participation limiting transformation rather than driving it?  Is the transformation paradox one of the reasons that 70% of change initiatives fail?

These questions are worthy of debate if we are to get better at transforming organizations.  Maybe we’ll find answers to make adjustments, such as:

1.  Using Authority:  People have been trained to look upward.  This is a powerful lever to start the process.  Employees need to have permission to participate.
2. Codifying Creativity:  We can’t simply sit around and “ideate” changes.  We need to be specific on: how to generate ideas, recognize patterns, and synthesize information.
3. Limiting Participation:  Can we really expect to kick start the process by getting “participation from everyone, everywhere?”  In the beginning only involve people who have the talent and passion to participate.
4. Being Out Front:  The transformation leader has to lead from in front, not behind.  Don’t delegate in the beginning.  Be on stage.  Be visible.  Make the decisions.  Knowledge will transfer in due time.

It’s Twelve O'Clock High in the transformation business.