Forbes - John Kotter's Change Leadership
My colleague Russell Raath has a personal interest in the success of the US Airways and American Airlines merger because of how frequently he travels. Here he points out the critical leadership issues the merger will hinge on. Let’s hope they take his advice – for the sake of all of us who fly.
After months of wrangling, union votes, shareholder meetings, and court cases, American Airlines and US Airways officially merged into the world’s largest airline yesterday. Previously, I wrote a blog about the hoopla surrounding the marketing and the announcement of this merger, and the promises that the two big airlines would form one, even bigger – and better – airline.
It was with interest that I read US Airways CEO Doug Parker describe in a recent Wall Street Journal article that the “longer term challenge is now is bridging cultural differences.” He goes on to detail the differences between the longer-tenured American Airlines employees who “haven’t worked outside” the business and who focus more on structure and process. The US Airways team does less of this, he claims. They have a “bias for action with less preparation.”
If there is one thing that will decimate the impact and effect of any merger, it is a team of employees who don’t gel that well together. In 2007, in a front-page piece about the difficulties in uniting P&G and Gillette, the Wall Street Journal wrote about just how caustic these seemingly less-important cultural issues can be.
Parker is right: Culture will be the key factor here. Regular travelers like me are wondering whether this merger will take two so-so airlines (in terms of operations, customer satisfaction, and market performance) and create one giant carrier that delivers the best traits of each. Or will this turn into a behemoth that is slowed down by its own processes, lack of passenger-orientated policies, and the complacency that can come from being the biggest in the market? Being big can be an advantage, but at the same time the business landscape remains littered with great big stars who have fallen. As Malcolm Gladwell points out in his new book, David and Goliath, it is rather the David that we should be looking out for, not so much the Goliath.
If Parker prioritizes a few key things when integrating these two companies and their people, the airlines’ combined strengths will create the 1+1=3 equation. If not, there will be in-fighting and competition, leading customers like you and I to experience the unfortunate slow behemoth situation I just described. Mr. Parker, please take note:
- Watch how you lead and communicate. When communicating with the combined workforces there is going to be a strong temptation to stick to the “official corporate line.” No doubt, right now communication strategists are feverishly preparing talking points for the various meetings. Strategy teams are partnering with OD teams and finance partners to work through the day one issues, the optimal organizational structures, and the reporting lines. But here’s the thing: Your official line as a leader will only get you so far – you need to listen to what your teams have to say, too. I’d suggest a healthy ratio of 40% conveying what you want to say (preferably without a crutch like PowerPoint) and 60% dialog, conversation, and listening.
- Invite input. Take those American Airlines employees who haven’t worked anywhere else and those US Airlines employees who have a bias for action: Ask for their input and listen to them. Has your senior team loaded bags in the rain and snow or been behind the counter or in a call center after a weather-induced, 600-flight cancellation? If not, you really ought to ask the people who have this experience how it can be done better – they’re the only ones who will know. (And remember that you’ll be infinitely more successful if you’re able to work on this integration with the support of all of your employees, instead of telling them how to do things differently in this new world.) Be careful with the tactics of bringing these two organizations together. Do it well and you’ll unleash incredible energy, good faith, and support, which will be invaluable when things don’t go well. And you’re guaranteed there will be times when they won’t.
- Create a sense of urgency. No, it isn’t about the first 100 days and the urgency created by that timeframe. It is about the passion of every single employee who understands what US Airways and American Airlines are trying to do for the shareholders, employees (some of whom are shareholders), and customers. It is about helping them to embrace your picture of what this new company can be. If you get that right, they’ll race forward to make that picture a reality – not because you told them to, but because they believe your authentic conversation with them (see point number 1 above) and your invitation to let them play a role (see number 2 above).
For our sake, I hope they get it right. I’d happily fly a carrier if I’m surrounded by a group of people who are engaged and excited, rather than an indifferent bunch of employees who feel that their world is being changed around them and that they have no influence on what is being “done to them.” It’s all in the hands of the folks at the top of the world’s largest airline.
Here’s to friendly skies.
Russell Raath is a senior engagement leader at Kotter International, a firm that helps leaders accelerate strategy implementation in their organizations. Follow Kotter International on Twitter @KotterIntl, on Facebook, on LinkedIn, or sign up for the Kotter International Newsletter.
Batkid caused a sensation, inspiring thousands of people in San Francisco to donate their time, effort, and money. Justin Wasserman points out that the dynamics that made this effort successful are the same dynamics that create successful organizational transformation.
If you’re unfamiliar with the story of Batkid (aka Miles Scott), just take a look at YouTube. A quick search yields dozens of videos showing the Make-A-Wish Foundation transforming the 5-year-old diagnosed with leukemia into Batkid for a day. Watch as he saves Gotham City (San Francisco) from the sinister likes of Penguin and the Joker. While this is a feel-good news story, it also offers a particularly salient leadership lesson.
With the rate of change in the world, we’re forced more and more frequently to significantly change the way we do business in order to survive. What we know from decades of research is that most organizations don’t handle change well and they continue to make predictable mistakes. Surprisingly, the central point of failure in transforming a business is not strategy, structure, culture, or systems – instead, success hinges on changing the behavior of people.
Batkid’s wish compelled tens of thousands of strangers to transform San Francisco into Gotham City for a day. Which leads me to wonder, why can’t we harness the same enthusiasm to engage our employees to transform our own organizations? Here are five lessons from Batkid’s story that you can apply to transform your own organization:
- Use one, simple idea. You need an inspirational idea that immediately connects with your people; one that they can personally participate in. In San Francisco, volunteers showed up in droves to make Miles’ dream come true because the idea was simple and easy to understand. They flooded the streets of San Francisco because they understood how to contribute.
- Develop an idea that will engage the masses. Rather than relying solely on the “A team,” a small group of your best people that’s always tasked with leading your most critical efforts, follow the Make-A-Wish Foundation’s example. Little bits of many peoples’ time make the successful completion of a large change effort primed for much greater impact and sustainability.
- Don’t delegate, but rather compel your people to act. The San Franciscans who came out to support Miles Scott weren’t appointed to a change task force or “voluntold,” the way that most employees are asked to contribute to their strategic initiatives. This event had something in common with successful transformations. People wanted to contribute to something that was important – something that made a difference.
- For solutions, point people toward “what if”s (and away from data). Communicate that you don’t expect more data gathering, analysis, report writing, and presentations. Successful leaders engage their people by inviting them to identify creative ideas – things they never thought possible – to seize “make or break” opportunities, or surmount major challenges. It’s not that data gathering, analysis, etc., are unimportant, it’s just that these tools work best when parameters are known, assumptions are minimal, and the future isn’t fuzzy. Strong analysis rarely motivates people anyway. It changes thought, but motivation isn’t a thinking word; it’s a feeling word.
- Connect your major change effort to the HEARTS and minds of your people. Look for opportunities to engage your employees around things they are passionate about. Your people come to work every day to do more than just fulfill their side of their employment contract. There isn’t a single employee who doesn’t want to take pride in what they do. You can tap into that just by reminding them that no one knows their job better than they do, making them uniquely qualified to discover solutions and new ideas to improve business results. If you’ve given them the permission to act on those ideas, you’ll see changes start to happen in every area of your business.
Usually, leaders approach transformation with sheer force. Because moving an enterprise can be so hard, it’s logical to think that a crisis, externally forced or internally induced, is necessary. But we have yet to see a successful transformation sustained for any period of time that centers entirely on a burning platform.
Just think about the image of a burning platform – it’s something we are forced to jump away from in order to make the status quo seem more dangerous than launching into the unknown. This approach can work up to a point, but it can also create panic and anxiety that can slow or halt action. In successful, large-scale transformations, fear must be converted into positive urgency and with some speed, or it becomes a significant liability.
“Passion” and “engagement” are typically considered soft and squishy words relegated to HR. But in the seven years since Angela Ahrendts has been CEO of Burberry, the company more than tripled its market cap. When asked about her secret for success, she talks about the power of human energy and discovering the passion of her employees. Apple’s next head of retail and online stores might just know a thing or two.
So take it from Batkid, the next time your organization is faced with the opportunity or necessity to fundamentally renew itself, look for ways to create a vision — or a simple idea — that appeals to your people’s emotions as well as their logic. Your people will join you only if you can tap into their collective sense of values and purpose. We have seen it time and time again, but unfortunately this is still a rare super-power.
Justin Wasserman is an engagement leader at Kotter International, a firm that helps leaders accelerate strategy implementation in their organizations. Follow Kotter International on Twitter @KotterIntl, on Facebook, on LinkedIn, or sign up for the Kotter International Newsletter.
My colleague Ken Perlman recently spoke at a conference about helping leaders spark innovative ideas that can accelerate implementation and deliver results. Here he shares his observations, key for anyone responsible for delivering more than incremental improvements in their organization.
Earlier this week, I had the pleasure of attending and presenting at the Back End of Innovation 2013 Conference. This conference focuses entirely on execution — developing those great ideas into real products and services. This is critical as companies are getting better and better at generating new ideas (discussed at the Front End of Innovation conference). Now the processes and capabilities to turn those ideas into reality have become both a constraint and a competitive differentiator — a differentiator in a marketplace where innovation is fueling investment, growth, and valuations.
On that last point, let me point out a few data points from a really interesting article about the effect innovation can have on a company’s valuation in BusinessWeek Magazine by Larry Popelka:
- Twitter is valued at $24.9 billion. Yet Twitter has never posted a profit and boasts only $500 million in revenue.
- Only 50,000 Tesla Motors vehicles have been sold, yet the company is valued at $17 billion. In contrast, juggernaut General Motors is valued at roughly $52 billion.
- Apple jumped from a $2 billion company in 1997 to more than $600 billion company in 2012, largely due to the iPod, iPhone, and iPad.
- Though revenue is up, investors are doubtful Apple can keep up their swift innovation – and the company’s lost about $2 billion in value.
Just to clarify, we’re talking about groundbreaking innovations here — things that cannibalize existing markets, things that disrupt the old models, and services that challenge the embedded ways of thinking and working. (Think Uber, Tesla, iPad.) We’re not talking about an incrementally better version or a brand extension or a new fruit flavor. Those incremental improvements and extensions are expected; they are built into the slow, organic growth line projections.
With groundbreaking innovation driving company valuation, there is a bigger set of questions and implications. Perhaps the biggest question is this: If we see that correlation to be true, what can we do to increase an organization’s ability to deliver big innovations? (Now you know why we attended and presented at the Back End of Innovation Conference.)
Among all the great presentations and panels, there were a number of powerful lessons. The good news is we are seeing a convergence and a sophistication of thoughts, approaches, and practices that help front-end innovations successfully make it through to the back-end — to implementation. The daunting news is that the challenges and barriers that still stand in the way are equally sophisticated, but long-standing issues. What makes them so difficult to overcome is that they are the human issues.
Here are some examples:
Existing hierarchical organizations are rarely nimble enough to innovate at speed and are rarely able to both deliver against the demands of today AND think about the opportunities of tomorrow.
- Innovation is enabled by and depends upon the connection of strategy, process, structure, and capability.
- Execution is the multiplier of innovation — meaning that an organization that can execute well on a few good innovations is more powerful than one that has lots of great ideas with no way to execute.
- Growing complexity, accelerating pace, and increasing demands are creating a capacity issue for our existing resources — and these resources are the best sources of great ideas.
- Employees want to work on “stuff that matters.” If you give people some freedom to contribute and think outside their box, they will amaze you.
- Recognition of wins and communicating progress is critically important.
- A critical enabler or significant barrier to an organization’s ability to innovate remains its culture.
How do you get a large organization with silos, divisions, project teams, brands, and existing products and revenue streams to not only think outside their box, but know what to do with the great/threatening/groundbreaking idea that is staring them in the face?
The amazing part of the conference came when solutions were discussed. Sure there were the “Aha!” moments in the presentations and the panel discussions … hopefully including mine. What was really interesting, were the spectacular insights that occurred when people went off-script, when they were talking at the networking lunches and open times. Some of the greatest observations were:
- Connections: Give people (existing employees, not consultants) dedicated time, forums, and physical space to make connections with people from across the organization.
- Ownership: Establish processes and feedback loops that encourage people to contribute ideas and have the opportunity to work on them throughout the process.
- Confidence: People throughout the organization will dedicate their time, energy, sweat, and creativity if they believe in what they are doing and believe their ideas will come to fruition.
- Flexibility: Passion > policy. This is evident in the turnover seen in organizations with cultures that stress the opposite.
- Management Examples: Cultures get stronger the lower in the hierarchy you go. Truly innovative cultures will start at the top and get dramatically accelerated and amplified by middle management. This is also true of risk-adverse and punitive cultures.
- Risk Tolerance: Learn, learn, learn. Even if something fails at first learn, adjust, and adapt. If that doesn’t work, abandon. Failure is to be expected and at times rewarded.
- Action, Now: Fail fast, prototype early, and share the concept with customers. Ugly, now, shared, and prototype is better than pretty, held in isolation, demo model, and useless later.
For me, the best part (slightly ahead of having someone in the audience live tweet all my best lines from my presentation) is that if you asked any of our clients they would have told you much the same things. Whether an organization is innovative or not is ultimately a decision — specifically a series of decisions — made at all levels. Do we ask that critical question? Do we punish the person who tried and failed? Do we promote the schmoozer or the producer? Do we give our people the time and space to contribute?
The pressure to innovate is greater than ever. The pressure to make numbers is greater than ever. The opportunities to create are greater than ever — either inside large organizations or starting something small.
The rewards are clearly there, and so are the risks. The real question to leaders is: What are you doing to enable innovation and create the capacity to act on it? If the answer to that question has not changed dramatically in the last five years you may want to re-evaluate your strategy — before someone else smaller, faster, more nimble, more risk embracing, and maybe even better funded steals your most valuable customers, recruits your most critical talent, and turns your offering into a commodity play — in essence, eats your lunch.
Ken Perlman is an engagement leader at Kotter International, a firm that helps leaders accelerate strategy implementation in their organizations. Follow Kotter International on Twitter @KotterIntl, on Facebook, or on LinkedIn. Sign up for the Kotter International Newsletter.