Clearly, strong leadership is the critical factor in executing a transformation, yet there are also many ways that ineffective leaders can undermine the effort. The following are among the most common that I have seen and, in fact, all of these were sighted by the 15 top CEO’s we have interviewed for our new book, Cultural Transformations (Wiley-February 2016).
- Lack of Clarity or Purpose. Individual accountabilities among the executive team are not aligned with business requirements; the team is not clear on governance bodies and roles.
- Individual Personalities. Senior executives have been promoted for individual achievement rather than team efforts; talent and leadership styles vary widely.
- Internal Competition. Multiple leaders are vying for the top job, which can erode the open and trusting climate needed for constructive group dynamics.
- Team Structure. Some structures foster a focus on personal accountability and individual business units instead of the overall organization.
A High-Performance Organization and Culture
To execute the new strategy and target operating model and sustain higher levels of performance during the transformation and beyond, a significant number of people will need to change what they do and how they behave. Improvements in customer focus, collaboration, innovation, simplicity, and productivity—typical goals of a transformation—all require changes to behavior. Behavior, in turn, is shaped by the organization context in which people work. And, behavior won’t change until mindsets (i.e., thoughts, beliefs, and values) change. To improve and align the ways in which they behave, companies will need to renew and revitalize their organizations.
High-performance organizations and cultures possess three “leading indicator” elements:
- Individuals and teams are capable (they possess the required values, skills and competencies) to drive a stronger culture and improved operating results).
- Individuals and teams are committed (they are motivated, passionate and driven to drive a stronger culture and improved operating results).
- Individuals and teams are connected (they are aligned with the values, purpose, mission, vision, and strategy of the organization).
If any of the three elements is not in place, leaders need to actively change the organization and culture—by setting the target culture and then changing the organization context to reinforce that culture. Aspects include the right leadership behaviors, organization structure, role mandates, people policies, performance metrics and management, rewards and recognition, and the physical work environment. This process is a microcosm of the overall transformation effort, and it follows the same path:
- Diagnose the current situation. How do people behave? What culture do we have, and why?
- Set the target culture. What behaviors and culture are we demanding? That’s correct. It’s only about the behaviors and culture that we must have as opposed to the behaviors and culture we want.
- Identify critical interventions. What aspects of organization context do we need to change?
- Develop a path to get there. How do we make change happen?