transform

Leaders don’t change, they transform

There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things – Niccolo’ Machiavelli

M

uch is written about the difference between leadership and management, and it’s the same distinction of changing versus transformation. Leadership is about bringing into being a future that otherwise wouldn’t have existed. Whereas management is about managing the day-to-day–or the default future.
 
Now, this does not mean that leadership is better than management, just that the actions and goals of leadership are different. A company that confuses the two, in the case of confusing strategy with planning believing they are transformational will encounter problems. Big problems.
 
Take the case of IBM. In the 1980s, IBM went from the dominant player in the high-tech computer space to almost broke in the early 1990s, having missed the PC revolution. What makes this story all the more extraordinary is that IBM had a team working on the PC but the establishment refused to take notice. Lou Gerstner then came on board in 1993 when the previous CEOs approach the problems was breaking up the company.
 
Although Gerstner was there to bring about a new future, he didn’t do it by articulating a vision and running road shows to gain buy-in. The classic change management approach. Instead, he focused on transforming people and culture. On becoming chief executive of IBM, Lou Gerstner stated: “the last thing IBM needs right now is a vision” and instead focused transforming the culture so they performed: improving execution, decisiveness, simplifying the organization for speed, and breaking the gridlock.
 
In other words, he transformed from the inside out by focusing on how people
interacted with each other. He then went on to transform how the company though of itself instead of selling black boxes that could easily become commoditised, he focused attention on providing services as an integrating to big business. In the time Gerstner was at the helm, IBM’s market capitalization rose from $29 billion to $168 billion in 2002 when he retired.

A sharp right turn

It is interesting to think that a leader can bring about a future that otherwise
would not have existed and then dance off into fantasy land. This is what the Benetton, the clothing manufacturer, and retailer when in 1987 hired a finance director from Citibank and announced they would be focusing on generating revenue from financial services.




Of course, this is not the type of “future that wouldn’t have existed” I’m talking about. Benetton had no skills and capabilities in financial services any more than Citibank had in apparel retailing. This business was of pure fantasy and amounted to exactly nothing.
 
It’s the same with us leaders, we are still constrained by a certain reality.
Nevertheless, within that scope, there are a variety of possible futures and if
you don’t like the way the current trajectory is looking then it’s incumbent upon
you to change it.

Changing the guard

Here are four ways to bring about a new future:

  1. Understand that the way people behave is what is bringing forward the default future. Moreover, that people act based on how and what they perceive events. The way you get people to change their behavior is for them is through language and conversation. Gerstner focused on
    removing barriers and improving collaboration so that the same business could perform again.
  2. Leadership is a contact sport. To change the way people perceive and interpret events and circumstances you’ll need to engage them in conversation, teasing out their opinions and beliefs about your organization and issues at hand. In his memoir, Gerstner described the turnaround as difficult and often wrenching for an IBM culture that had become insular and balkanized.
  3. Look at what decisions from the past are informing current behavior. Like Gerstner at IBM, he kept what was working, and dumped what wasn’t. You’ll need to do the same and deal with previous decisions head on in order to move on.
  4. Design a new future that everyone contributes to and therefore does not just have “buy-in” but rather is committed to because they helped create it. I’m sure employees at Benetton would have been at least somewhat surprised at the announcement they were about to become a financial services company. Keep it real, like Gerstner, and be ambitious.

And remember, when driving change and transformation, it is conversations that inform people’s perceptions and therefore behavior. What conversations are you engaging in, change or transformation?
 

Daniel Lock
Daniel Lock helps organizations unlock value and productivity through process improvement, project & change management. Find out more about him at daniellock.com and download a free eBook on Fundamentals of Change Management. In this ebook, you’ll learn the fundamentals of change management, why it’s critical to achieve business outcomes, as well as tools and techniques to make change work for you.

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