To Lead Change, Explain the Context

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Ron Ashkenas' blog post on Harvard Business Review November 24, 2015

To Lead Change, Explain the Context Imagine that your boss asks you to run as fast as possible in one direction, and then after a few minutes, blows the whistle and asks you to run the opposite way. Imagine that this happens over and over again. After a while, you’d not only get tired, you would be frustrated by the meaningless instructions and the lack of progress. And you’d be less willing to run again next week since you would no longer trust that your boss had a real plan. This sense of being pushed and pulled every which way – without having any broader context or a sense that you’re getting somewhere – is something I see all too often in organizations, as executives try to keep up with new competitors or business trends. For example, one CEO of a large technology firm oscillated between major expansions (e.g. pursuing adjacent markets, making acquisitions) and significant contractions (e.g. downsizing, divestitures, program cancellations) several times over the course of just a few years. Each strategic shift, of course, was carefully explained and justified by changing market conditions or opportunities; but the net result within the company was a performance-sapping sense of cynicism. Middle managers had to go back and forth between firing people and finding new ones with different skills, and few people believed that the yearly planning and budgeting cycle was anything more than a painful exercise, since it was always changing midway through. This case isn’t the exception. Many companies are inconsistent in their strategic direction, often because leaders want to find the next shiny new idea that will transform (or save) the company. For example, one large retail company has been starting and stopping a number of new initiatives as it searches for the magic solution to counteract more and more consumers shopping online. They’ve tried launching a large-scale program to monetize the company’s real estate, introducing a new marketing campaign, creating a new information system and “big data” approach, consolidating their buying categories, downsizing functions, testing new store concepts…the list goes on. Each of these might make sense individually, but because they haven’t been positioned as an integrated way of coping with a changing environment, employees have become skeptical about senior management’s ability to secure the future. Leaders have to place strategic changes, initiatives, and goals into a broader organizational context, or they risk losing good talent, burning out managers, and


wasting money on programs that don’t pay off. People have to see why what they’re doing has to change, why they should suddenly be moving in a new direction. This is even more important when a new executive or team leader takes over. Often, they hope to create a legacy by abandoning old strategies and pursuing new ones. This is all right as long as they explain the rationale behind their actions. For instance, think of all the zigzags in strategic direction the old Hewlett Packard took as it went through four CEOs in a decade: first, the focus was on technology innovation, then it was on growth through acquisitions, and then on efficiency. These constant changes made it difficult for employees to stay excited about a company that had previously been an industry bellwether. Leaders should also be aware of the many change initiatives and management trends championed by consultants, professors, and fellow executives. We’re all familiar with the various fads that roll across the corporate landscape, but many don’t appreciate the impact that these have on employees who are continually being asked to implement one program after another – often without seeing benefits from the last one. In one large consumer products firm, for example, hundreds of managers went through programs on “change leadership,” “lean six sigma,” “prioritization and alignment,” and so on over several years. While each program had its own merit, the frequent starts and stops, shifts in terminology, and lack of consistency eventually made employees resistant to almost anything new. The business environment changes too fast for any strategy to be perfect at the start. Strategic plans will always need adjustment, learning, and iteration, and there will always be new opportunities and approaches cropping up. However, to keep people energized and willing to adjust, help them understand how the current focus connects with or builds upon the last set of strategic directions and imperatives. For many years, GE has done this by carefully positioning each new change initiative as something that builds upon previous foundations – even as these initiatives spanned from the Welch to the Immelt eras. For example, businesses at GE still strive to be first or second in their markets, which was an early Welch initiative, and they do this through approaches that were started both in the Welch years (such as simplification and Work-Out) and through more recent ways of working (such as ecoimagination, lean innovation, and the “internet of things”). Most importantly, many of them build on the same common principles (focus on customer needs, engagement of employees, speed), and therefore are not seen as cancelling each other out. Creating this kind of context over time is a critical part of the manager’s job. People need to know how to connect the dots, not because they don’t want to follow the next new program, but because they want to make sure that their energy expenditure will be worthwhile and that it will lead somewhere productive. Otherwise the rational


thing to do is to stand still (as in our running example) and wait for the different initiatives to roll past, like civil servants waiting for the next election and the next administration. So if you’re managing people, think about how you can help them connect the dots between the work they’re doing and what it’s meant to achieve. What are the threads that tie together past initiatives and strategic directions with current ones? What are the lessons learned that you can apply to the next project? How have past efforts helped you build capability over time, and how can that help you win as a team and as a company? Unless you take the time to help your people understand the answers to these questions, they may experience change as a series of random and arbitrary directives with no rhyme or reason. On the other hand, by putting change into a longer-term context, whatever you are trying to accomplish may have a better chance of success.

Ron Ashkenas' blog post on Harvard Business Review https://hbr.org/2015/11/to-lead-change-explain-the-context