Firms grow with systems, vision and inspiration

Some years ago I wrote enthusiastically about John Kotter’s “eight steps to change” that many, including here in Kenya, have followed as a guide to transforming their organisations.

Kotter laid these out in his 1996 book, Leading Change, and then 10 years later, together with Holger Rathberger, he published Our Iceberg Is Melting, that brought the eight steps together as a fable in the style of Who Moved My Cheese?

The iceberg that Harvard guru Kotter wrote about was in Antarctica, home for many years to a colony of penguins. Then one day, a curious bird discovered a worrying crack under the ice.

But at first no one seemed interested. Gradually though, he persuaded penguins of greater emotional intelligence and influence to help the colony overcome its resistance to change — following Kotter’s eight steps.

So its leaders were eventually persuaded that the iceberg was under such threat that if they were to survive they would have to migrate to another location.

I have recommended the book to many people and now, a decade after their penguin fable, I was delighted to see that Kotter has again collaborated with Rathbeger to produce another one, about a large meerkat clan in the Kalahari Desert.

Following years of easy growth, managed through well-defined command-and-control hierarchies and strict job descriptions, with supporting systems and rules, the meerkats were threatened first by a drought and then by deadly vulture attacks.

As things got worse the clan’s harmony disintegrated and the blame game erupted.

The “Alpha” executive team quarreled about possible solutions, and doubted whether they even needed to change their rigid systems.

Suggestions from front-line workers were met with the classic change-averse response: “That’s not how we do it here!” Hence the title of the book.

Nadia, a bright and adventurous meerkat who had been identified as an emerging leader, was so fed up that she left the clan and went in search of new ideas to help her troubled folk.

She discovered a much smaller group that operated with wonderfully participative teamwork and agility.

The meerkats here had developed innovative ways of finding food and evading the vultures, as a result of which their numbers started growing rapidly.

But the more new meerkats arrived to join them the more difficult it became to sustain the informal approach that had worked so well when they were fewer.

While the leadership style remained great, they lacked the robust management systems needed to deal with issues in a disciplined way, and so coordination became impossible and morale and motivation levels collapsed. Things fell apart.

Nadia began thinking about how to combine the best of both worlds: the benefits of the systems that handled the large, disciplined, well-managed clan, along with those of the agile, creative leadership that drove the smaller, informal one.

She returned to her original clan, where she set out to convince its traditional leaders to adopt more of the agility and innovativeness of where she had just come from.

And despite initial resistance, with the expected reasons-why-not mindset, eventually complacency and conservatism declined among enough of them, the organisational pyramid flattened, and with new energy and confidence they succeed in growing and flourishing again despite the ongoing challenges.

The moral of the story is straightforward: as organisations face uncertainty and the increasing complexity that comes with scale, both the disciplined systems of management (without the commonplace stultifying bureaucracy) and the vision and inspiration of leadership are essential.

It need not and should not be either/or: as I have always believed, any good manager must be a good leader and vice versa.

This book, this fable, has spelt it out more clearly and vividly than I have ever seen it attempted before. It concludes with a chapter suggesting how to approach having the cake and eating it, in which we are advised to follow Kotter’s original eight steps to change: create a sense of urgency; build a guiding coalition; form a strategic vision; enlist a volunteer army; remove barriers; generate quick wins; sustain acceleration; and institutionalise the change.

All this must take place without killing off the founding fast, entrepreneurial culture that needs to remain egalitarian, fluid and innovative.

Involve staff in layoff plan to ease feelings

In the last few months I have come across numerous examples of employees who, as a result of a planned restructuring of the organisation in which they work, feel they will be losing out.

They expect to suffer from woes such as diminished seniority, influence, control and prestige — even redundancy, while more practically also worrying about reduced earnings and cramped career prospects.

Why does restructuring occur? It can be because of new market circumstances or technology requirements, and so the need for different skills and attitudes; it can flow from mergers and acquisitions, or just from new leaders with different preferences (hopefully not simply wanting to make their presence felt or to fill key positions with loyalists).

These upheavals can result in a wider or narrower geographical presence, increased or reduced staff numbers, and many other consequences too, all tumbling around together. Then, the larger an organisation becomes the greater the need for multiple reporting relationships within intricate matrix structures; and also for temporary work groups that can respond with agility to new opportunities and challenges.

Inevitably, salary structures and incentive schemes must be revised to align with these changes.

So much volatility, uncertainty, complexity and ambiguity: the VUCA thing! No wonder it leaves many perplexed and frustrated. While the fear of impending loss may be misplaced, either way how the people feel is real, and for some the loss may indeed be significant. So like with the loss of loved ones, they will journey through the well-defined stages of grieving: from denial to acceptance to mourning… and hopefully to eventual healing.

People react differently when dealing with loss. Demoralised and demotivated, some may withdraw, perhaps sulk, but not always obviously. The angry and aggressive will resist the new situation, fight back, protest, perhaps sabotage it and disrupt those around them, suppliers and others. Others will rise to the occasion, go with the flow and become reluctant heroes to their bosses and others.

So how can one overcome people’s feelings of loss? How can they be helped to come to terms with it, sacrificing their immediate wellbeing? And how can their bosses and colleagues work with them to mitigate the consequences of these losses? Do they show sympathy? Offer support?

The first requirement from their superiors is to recognise that in any reshuffle there are likely to be losers. Identify who they are, and accept the reality of how they feel. Then find ways of comforting and compensating them.

One company with which I am familiar is planning a restructuring thanks to the ongoing growth of its branch network, and is doing so in a highly participative way. As part of a strategy review meeting of the board and top management, those leading the teams whose jobs will be affected were tasked with proposing how the new structure may look. Brainstorming followed at the meeting, in which the pros and cons of the alternatives were assessed and consensus built around one.

In another organisation I have also been impressed by the leaders, who inspired many of their people to make short-term sacrifices in order to strengthen their personal longer-term prospects while building a more robust future for the whole entity.

The “losers” who perform most nobly today will be duly rewarded in the rosier times ahead, while graceless grumblers will either drop out or be asked to leave.

Much of the stress that accompanies restructuring is caused by a transfer of sales prospects from one part of a company to another. For example, larger projects may be moved to specialised head-office functions, with those in branch offices losing out. So can the branch people still play a role, benefiting from at least a share of such revenues and of the accompanying bonuses?

So my plea is simple. Not because a leader should be “nice”, but in order to keep the workforce together as a cohesive and motivated team, do consider ways of reaching an adequacy of win-win – particularly for those who would otherwise become unhappy and thus less productive losers.

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