Notes from the Field: Leadership Matters in Transformation

Over the past few months, I’ve been writing about my engagement with a global organization and its journey of transformation into a more agile organization, driving business enablement. One thing has remained missing: real leadership. This large corporation has thousands upon thousands of people, and many of them are in “leadership” roles. The problem here is that no one is ready to understand the underlying lessons at play or is able to apply those lessons to their own or their organization’s benefit.

I consider myself a student of leadership. Like most, I have adapted many types and styles to form my own leadership style. As a student, I spend a lot of time observing, making notes, running scenarios through my models, and coming up with reasons why certain leaders struggle and others excel. I’d like to share with you some of the lessons I’ve learned during my engagement with this customer. I hope that it sparks thought and reflection on today’s IT and business leadership.

Lesson 1: Any strength used to excess becomes a weakness in transformation. Many leadership teams I’ve worked with are made up of individuals who are very strong and capable in one or more aspects of leadership. This probably comes as no surprise. After all, how would these leaders have gotten to where they are without some significant stock in trade? But this is just my point. Whatever propelled a leader to a leadership position may now be a liability to transformation if those strengths limit or eliminate the opportunity for the leader and the organization to succeed in the future. One team I worked with serves as a good example. This team was composed of people who shared similar styles and preferences. These preferences led to a relentless focus on results in their thinking, their decision making, and their navigation of the business. Such a focus isn’t necessarily wrong, but there are three other aspects to consider when transformation occurs. One area of concentration should be the creation of a compelling vision for the future of the company. This team spent very little time and effort in this area. Second, there is a need to create intrinsic motivation through a connection to a deeply held purpose. The team also spent very little time on this. Third is the need to cultivate relationships within the organization. This is probably where the company was weakest. The net result was an inability to engage in transformation on any reasonably effective level. Without the ability to articulate compelling vision of a changed organization, to engage the organization through intrinsic motivation, or to create the relationships necessary to build teams of people to make transformation happen, the team and the organization made no progress.

Lesson 2: What you don’t know about what you don’t know can be toxic. Leaders are expected to know everything at all times. This is clearly an impossible standard, but it is still difficult for many executives to consider their own blind spots. Atop the pedestal we place them on, leaders are treated as though they have almost limitless knowledge and wisdom. They know they possess no such properties, yet admitting this would be a blow to their ego and sense of power. In transforming organizations, the number of unknown and unintended consequences can be daunting. If given too much thought, transformation efforts might become paralyzed. Further, leaders are reluctant to expose what they don’t know. More importantly, contemplation of what they don’t know about what they don’t know is even less likely. This customer identified a gap in its knowledge around talent retention. What it did not know about what it did not know was the unintended consequences of using monetary incentives to retain key talent instead of providing real and meaningful positions for the people in question. At the beginning of this ITO engagement, the leaders assumed people would remain loyal if they were adequately compensated, but the leaders were wrong. This blind spot cost them, triggering a severe talent loss and continuing to hurt them as they misdiagnosed the reason for the loss, blaming the exit of talent on the weaknesses of the people who left. The remaining people in the organization recognized management’s blind spot, and the continued ignorance of the leadership team resulted in the loss of its members’ credibility and effectiveness. In this case, not knowing what they did not know was toxic to the organizational talent.

Lesson 3: Transformation means building specific leadership abilities, not just new IT infrastructure. Leaders may know a great deal about how to orchestrate performance based on an existing set of key performance indicators (KPIs), but they can be less skilled at figuring out what the new service or product value chain needs to look like in the transformed enterprise. The ability to convert today’s KPIs into tomorrow’s is a discrete skill necessary for transformation. Also a part of the required skill set is the ability to redesign the organization from the outside in, on the basis of customer and market outcomes. Another necessary skill is the ability to align the organization from the inside out, starting with the core aspects of the company. Creating strategy from the outside in while driving alignment from the inside out is critical for leadership teams.

Transformation is messy and sometimes frustrating. Patience and persistence are critical. Decisiveness is even more critical. Leaders shouldn’t let their need for assurance become an excuse for inaction. Changing direction when in motion is much easier than when the organization is at a full stop. When it comes to making critical decisions in transformation, some leaders are prone to adopting a wait-and-see attitude. However, there is no practical way to get every last detail figured out when making organizational changes. Competency and the ability to deal with ambiguity while constantly focusing on purpose and direction are critical in leadership. The more ambivalent and indecisive a leader is, the greater the risk of creating an organization stuck mid-transformation with no forward momentum.

Leaders must therefore increase their tolerance for being unsure. I’ve said this before: In the realm of innovation, a leader who is preoccupied by the notion of requiring absolute proof is not likely to lead anything significant. By the time there is proof, the opportunity to create something disruptive and differentiated is lost. This doesn’t mean that leaders should completely throw caution to the wind and operate on the basis of gut feeling and creative guessing. I have always advocated the use of evidence but discouraged the demand for proof before action. Using evidence is about finding the indicators within data that are associated with trends and opportunities. Proof is a guarantee that any given course of action will absolutely work. To charge ahead without evidence is an accident waiting to happen. To stall while insisting on proof is looking for an opportunity that will not appear until it is too late.

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