If your firm is in a comfort zone where doing things 5% or 10% or even 15% better next year will suffice, stop reading because I’m going to be talking about transformation. Transformations may be confused with "managing change," but I’d like to believe what we’re about to discuss goes beyond the operational or tactical to the cultural and strategic.
For those of you still with me, your firm may have been through a transformational period, may be in the midst of one, or may be contemplating one. Or maybe you’re out on the far end of the curve where you envision yourselves to be in continuous transformation (if so, email me at once—we need to get acquainted).
We can’t get into whether your firm really is or is not undergoing a "transformation," whether it’s well- or ill-advised, or whether it will likely all come to joy or to tears. But we can get into how your managing partner/firm chair/CEO can maximize the chances of success, especially if we get a little help from McKinsey.
While it’s surely the case that the chair’s role in managing change depends on their personal style, the capacities of the firm, and the urgency of the situation, some generalizations apply. Key among them are:
- Make the mission of the transformation meaningful. People—especially highly motivated, competitive, Type A people—will move mountains for causes they believe in. Make the transformation personal.
- Behave and conduct yourself as though the transformation has already occurred; model the behavior you want others to emulate. Go through your own personal transformation. Don’t think people won’t pick up on it.
- Build (recruit, if need be) and sustain a strong and committed top team. If your current team doesn’t have the motivation to finish this journey, make some tough decisions.
- "Relentlessly pursue impact." You must be hands-on, personally involved. Don’t shy from tough choices where real financial or symbolic value is on the line.
Adopt a personal approach
Make the transformation "yours;" get past the canned PowerPoints and talk about what it will mean to you (and by extension, to your audience), how we will all get there together, and why time is of the essence. Moreover, recognize that, while you may have "internalized" the change, you are by definition in the vanguard. To bring up the rear, you need to relentlessly communicate:
"Once the story is out, the CEO’s role becomes one of constant reinforcement. As P&G CEO Alan G. Lafley says, “Excruciating repetition and clarity are important—employees have so many things going on in the operation of their daily business that they don’t always take the time to stop, think, and internalize.†Paolo Scaroni, who has led three public companies through various chapters of change, likes to find three or four strategic concepts that sum up the right direction for the company and then to “repeat, repeat, and repeat them throughout the organization.â€
Begin to spotlight successes. People need to see wins, even if they’re small, to be persuaded the new model can work and that you and executive management value and will reward the behavior that produces (even small) wins.
Behavioral research shows that emphasizing the positive is far more powerful than pointing out the negative. For example, University of Wisconsin researchers studying adult learning videotaped two bowling teams and then showed the team members the edited tapes as a learning aid: But the team shown the tapes highlighting their good performances improved its subsequent scores twice as much as the team showing the bad-performance highlights.
In other words, don’t focus on issues that arouse fatigue, blame, and resistance; emphasize successes, creativity, and ardor for the pursuit.
Walk the talk
Pretend everything you say or do could be on YouTube 30 minutes from now.
OK, I made that up.
But do assume you’re in the spotlight, and that the hypocrisy-detection shields of those watching you are set to "stun." Somewhat more poetically, Mahatma Gandhi’s advice is, in this if not in all areas, worth following: "For things to change, first I must change."
One way to make this commitment visible and give it impact is to engage in a series of symbolic actions: "Symbolic" not in the devalued sense of politicians’ lackluster and tired bromides, but symbolic in the original and truer sense of the small standing in for, and representing, the large. For example?
When the Texas energy utility TXU embarked on a new business initiative, the CEO C. John Wilder spontaneously gave a large bonus to a woman who’d taken it upon herself to be a leader for the new initiative. Was this hypocritical? Not as he sees it:
"This leader’s contributions generated real economic value to the bottom line," he explains. "Of course, news of that raced through the whole organization, but it helped employees understand that rewards will be based on contributions and that ‘pay for performance’ could actually be put into practice."
Building the Top Team
This may seem obvious, but the devil is in the details. McKinsey suggests, and I endorse, the following disciplines for determining whether you have the right top team: Build a 2 x 2 matrix with "business performance" on one axis and "adopting the desired behavior" on the other. This produces four quadrants:
- high performance/desired behavior: Stars
- low performance/bad behavior: Motivate them, develop them, or lose them
- low performance/desired behavior: The problem set; probably worth retaining and trying to develop later, once the storm has passed. But lastly and most challenging and intriguing:
- high performance/bad behavior: These are your "800-lb. gorillas," and they represent your strongest possible opportunity for Sending a Message. Get rid of them and watch people take notice.
Now that you (presumably) have the right team in place, what do you do with them? First off, understand that getting highly intelligent, ambitious, and autonomous souls to head off in a new direction together takes time. The key is regular meetings, reinforcing through "80% dialogue and 20% presentation" (P&G’s Lafley), conducted in-person (no conference calls, please) and with no allowance for minutiae or distractions.
"Relentlessly Pursue Impact"
This means rolling up your sleeves and personally getting involved to promote maximum impact. Among other things, this means:
- Being open to discussion of problems; better yet, leading them
- Identify the root causes of shortfalls in the plan, and lead the charge to remedy them
- Get in the trenches when you need to, and even opportunistically when you don’t.
Finally, hold practice group leaders, office managing partners, and other senior executives accountable for performance. As they say, "if not them, who; and if not now, when?"
I reproduce McKinsey’s executive summary because I cannot improve upon it:
"For CEOs leading a transformation, no single model guarantees success. But they can improve the odds by targeting leadership functions: making the transformation meaningful, modeling the desired mind-sets and behavior, building a strong and committed team, and relentlessly pursuing impact."
Are you ready? Are you in the midst?
I take one paramount learning away from this: If you’re in it, you’re in it for keeps. Hypocrisy will be outed; half-heartedness will be outed; timidity will be outed. Famously, successful people sometimes quail from new challenges because they fear failure, whereas less accomplished folks will happily charge the new ramparts.
Don’t be a "success" statistic. Charge.
