Leaders must face every change with discipline, transparency and creativity.
Jim Collins, who runs a management lab in Boulder, Colorado, and has written three books on business-related topics, is bent on removing the guesswork from his life.
According to a 2009 New York Times profile, he aims to devote 53% of each working day to creative pursuits, 28% to teaching and 19% to other tasks. He even uses a stopwatch to monitor the time he spends on each of those endeavors, finding that the ever-shrinking and ever-visible numbers leave less room for one task to run over into the next.
An avid mountain climber, he also made it his goal years ago to scale El Capitan, a treacherous peak in Yosemite National Park – and he wanted to do it in 24 hours, a highly accelerated rate. According to the Times, he prepared by training with a younger, stronger man and researched the mountain's weather patterns from the previous century. The effort took more time, dedication and determination than many might be willing to give, but he succeeded in his ascent.
Collins, who applied a similarly methodical approach to helping his wife, Joanne Ernst, win the 1985 Ironman Triathlon, is keenly aware of the randomness of life in general and business in particular. As the Harvard Business Review once put it, we all live in a VUCA World – one marked by volatility, uncertainty, complexity and ambiguity. Change is inevitable, and not always welcome. In fact, Collins outlined the stages of a business's decline in his 2009 book, How the Mighty Fall. The book had grown, in part, out of a conversation he had following a presentation five years earlier at West Point with 12 U.S. Army generals, 12 CEOs and 12 social-sector leaders.
The conversation itself featured a spirited debate about where the U.S. stood in its history – whether the nation was at that point slipping from great to good – and afterward, the CEO of a major company pulled Collins aside and asked him how, exactly, a company might identify the tipping point: that crucial moment when a business's future was about to go south. Intrigued at the question, Collins went to work.
Ultimately, he found that change can be the result of internal or external forces. It can be developmental (involving procedures like billing, payroll or marketing), transitional (involving mergers and acquisitions, new products, et al.) or transformational (changes to strategy, culture and operations). But it's going to come, and a leader must be agile enough to deal with it when it inevitably arrives. Basically, it's going to require three things: discipline, transparency and creativity.
Not everyone can take this mindset to the degree Collins does – in fact, it seems like few can maintain his level of single-minded determination for extended periods of time – but he makes clear in his book that determination is an absolute must for a CEO when dealing with change. Collins' first stage of corporate decline is, after all, Hubris Born of Success. In other words, trouble is sure to follow when a leader forms too high an opinion of his own abilities and/or doesn't understand how much of a role good fortune can play in a company's success. Either lapse can leave him unprepared when issues arise.
Stage Two (Undisciplined Pursuit of More) involves over-reach on the part of a company, while Stage Three (Denial of Risk and Peril) is not being able to see the forest for the trees – i.e., not being fully aware of how serious your problems might be. It is still possible in Stage Four (Grasping for Salvation) for a CEO to save his company, but it again requires cool-headed deliberation, rather than a desperate slew of Hail Marys.
Stage Five is self-explanatory: Capitulation.
It is true that Facebook founder Mark Zuckerberg once extolled the virtues of risk-taking, saying that playing it safe is all but a guarantee of failure. However, being bold and open to out-of-the-box solutions is not the same as being reckless. Embracing a risk-taking mindset does not mean you flail about wildly; it means you have a plan and follow it, and that any risks you take are calculated ones.
Transparency, too, is critical. As Patti Sanchez, chief strategy officer for the communication consultancy Duarte, wrote in a 2018 post for the Harvard Business Review, relatively few businesses go to the trouble of gathering feedback from their employee base before undergoing significant change. One survey conducted by Duarte found that of 200 business leaders, 69% were contemplating change – but only half had bothered to solicit input from their teams before the fact.
Not taking employees' voices into account, she wrote, is a recipe for disaster. Nothing kills morale and engagement quite like uncertainty – especially when it comes to wide-scale changes. While it is not possible to keep everybody in the loop about everything, they need to know what's coming. One example that she offered was of an employee voicing concerns over turnover in the wake of change, and the added burden it would place on holdovers. The solution was a meeting in which the employee (and everyone else) was assured that low performers would be weeded out, and hiring would be ramped up.
The point is that transparency leads to awareness and inclusion. One idea for CEOs is to present the company's story, and make one and all aware of how the latest chapter fits into the larger narrative. That leads to trust and healthier relationships moving forward.
Effective change implementation can take a variety of forms. There is, of course, the single-leader model, where a CEO becomes the driving force behind and, in some ways, symbolic of the change movement as a whole.
As an example, when Shell Oil Company made some necessary changes to its internal processes in the face of an oil reserve crisis and leadership change in 2004, there was some initial pushback on the part of some countries where Shell was based, as those nations stood to lose market share. But Shell oil group chairman Jeroen van der Veer manned the point of the transition team and managed to make clear that the changes would prove beneficial in the long run. The lesson is a good one – that while it is often necessary (and beneficial) to delegate certain tasks, there are clearly other times where it is essential for the CEO to take the reins.
At the other extreme is the EMS unit in Tulsa, Oklahoma, which sought to improve its processes collaboratively after a survey of every EMT, paramedic and firefighter concluded that the various organizations worked well together … until management got involved. Measures were instituted to improve communication between leaders, as well as between leaders and the various crews, and it led in time to a far more efficient operation – the point being that there is no one-size-fits-all approach to dealing with change. There must be some adaptability, some understanding of the unique factors that a given company faces during change-heavy transitions.
The only certainty, really, is that organizations will need to evolve in the face of changing industry landscapes. When the need comes to bear, leaders must prepare themselves to face every eventuality with discipline, transparency and creativity.