Leaders have become accustomed to the concept of steady change to stay in business. But the sheer scale and pace of change, complexity involved, together with its highly unpredictable direction, has created a entirely new challenge: That’s leading into a future that is widely unknown. Successful leaders install clear strategic direction and build the capabilities and capacity of employees. They install a challenger mindset that fuels creativity and agility. They prioritize, simplify and align information. They balance near term with longer-term results. They inspire their business.
Change is a constant in business. In his 1995 bestseller “Leading Change”, John Kotter introduced the “8 step change-model”. From “creating urgency”, thru “creating a vision”, “removing obstacles” and “short-term wins”, all the way to “anchoring changes in corporate culture”. A proven process to drive and land any change and as such still valid today. What is changing in transformational times tough, is the fact, that the mastery of managing change is not a capability of few specialized people anymore, but is starting to be a defining element of corporate culture.
Change projects start to be around almost everywhere in companies – they are numerous and less timebound. Companies started to react by embracing agile models, creating autonomous teams or experiment with new self managed organizational models like “holocrazy”. Time will tell what worked well for whom, but all do have in common, that a lot more has to happen in the change category than in the past, with multiple parallel efforts and in a much shorter time. Attempts to control those change efforts with classical models, processes and manage them centrally are bound to failure, since either they will control them to creativity-death or die due to complexity.
Hit Refresh at Microsoft – installing growth mindset in your corporate DNA
It seems, that one of the most important elements Satya Nadella describes in his book “Hit Refresh” about how he reshaped Microsoft culture was the installment of “growth mindset” and new communication style that is anchored in “empathy” – in contrast to the existing managerial culture, that led the troops of smart people in Microsoft build their silos and saw the tech giant risking to miss more and more trends. The culture change Satya infused was undoubtedly one of the main reasons for Microsoft’s turn around to be a nimble and fast company again – transforming from the inside by installing change as part of the DNA how people act and opening up to the waste ecosystem that surrounds the company with a different communication style that is building bridges rather than confrontation. (https://news.microsoft.com/hitrefresh)
A new leadership paradigm for managing change for a uncertain future
The Microsoft example does also suggest, coping with internal change is not going to make the job alone: Corporate executives need to move beyond only managing their own companies and become active influencers within broader systems. Business leaders need a new mental model to better understand the complex interplay between companies, economies, and societies. To do so, they must shift their focus to the broader business and social ecosystems in which their companies are bedded. Acknowledging the unpredictability, nonlinearity, and circularity of cause and effect relationships within these systems is a notable departure from the simpler, linear models that underpin traditional mechanistic management thinking. (“The Five Steps All Leaders Must Take in the Age of Uncertainty“, MIT Sloan / 2017)
In a digital transformation setup, communication matters most
Combining the intra-company requirements to land constant change with the extra-company broader ecosystem dealing with a uncertain future leads to the mandate for corporate executives to succeed with their companies in those times: they need to instill DNA of successful constant change in the corporate culture and they need to become masters of communication. Strongest leaders tend to be strong communicators and visionaries in the future, but not visionary in the sense of the product or innovation – visionary in terms of defining a common purpose and strategic direction.
Not surprisingly, a recent McKinsey online study reviewing digital transformation change efforts unveiled, that change leaders named “clear communication of desired outcomes” as the most important differentiator of successfull transformation projects, followed by “prioritization” and “expertise”. (“How the implementation of organizational change is evolving“, McKinsey and company 2018).
Transformational leaders inspire, challenge and create a culture of open mindset that embraces change.
More than ever corporate success is bound to inspiring leadership and visionary direction, that challenges and prioritizes for outcomes. Employees must be encouraged but also enabled, tooled and trained to drive change where they see the requirement. Only if all layers of an organization work seemslessly together towards a clear direction, shared purpose and goals and have a common binding culture that has “change” at its core, companies start to act as agile organisms. As Darwin pointed out: “It is not the strongest of the species that survives but the most adaptable!”