In practice, of course, the challenge is in the details of leading the organizational change. We can summarize these as follows:
Establishing a sense of urgency:
Most CEOs start by creating a sense of urgency. This often takes creativity. For example, the CEO might present executives with an analyst’s report describing the firm’s lack of competitiveness.
Mobilize commitment through joint diagnosis of problems. Having established a sense of urgency, the leader may then create one or more task forces to diagnose the problems facing the company. Such teams can produce a shared understanding of what they can and must improve mobilize commitment.
Create a guiding coalition. No one can really implement changes alone. Most CEOs create a guiding coalition of influential people. They work together as a team to act as missionaries and implementers.
Develop and communicate a shared vision: Organizational renewal requires a new leadership vision, a general statement of the organization’s intended direction that evokes emotion in organization members. For example, when Barry Gibbons became CEO of Spec’s Music some years ago, his vision of a leaner Spec’s offering a diversified blend of concerts and retail music helped provide this direction. The key elements in communicating his vision are:
Keep it simple: Eliminate all jargon and wasted words. For example, we are going to become faster than anyone else in our industry at satisfying customer needs.
Use multiple forums: Try to use every channel possible – big meetings and small, memos and newspapers, formal and informal interaction to spread the word.
Use repetition: Ideas sink in deeply only after employees have heard them many times.
Lead by example: Walk your talk — make sure your behaviors and decisions are consistent with the vision you espouse.
Help employees make the change. Perhaps a lack of skills stands in the way; or policies, procedures and the organization chart make it difficult to act; or some intransigent managers actually discourage employees from acting. When he was CEO at the former allied Signal, Lawrence Bossidy put every one of his 80,000 people through quality improvement training.
Consolidate gains and produce more change. Aim for attainable short term accomplishments, and use the credibility from these to change al the systems structures, and policies that don’t fit well with the company’s new vision. Leaders continue to produce more change by hiring and promoting new people; by identifying elected employees to champion the continuing change; and by providing additional opportunities for short term wins by employees.
Reinforce the new ways of doing things with changes to the company’s systems and procedures. Use new appraisal systems and incentives to reinforce the desired behaviors. Change the culture by ensuring that the firm’s managers take steps to role model and communicate the company’s new values.
Finally, the leader must monitor and assess progress. In brief this involves comparing where the company is today with where it should be, based on measurable milestones. At Avon, for instance how many new products has the company introduced? How many new door to door sales reps has the firm added?
Using Organizational Development:
Organizational development: A special approach to organizational change in which employees themselves formulate and implement the change that is required.
There are many ways to find out what organizational changes the firm requires, and to implement the change itself. One popular method is organizational development (OD). OD is an approach to organizational change in which the employees themselves formulate the change that’s required and implement it, often with the assistance of a trained consultant. Particularly in large companies, the OD process (including hiring of facilitators) is almost always handled through HR.