One of the most damaging things a much-needed organizational transformation effort faces is complacency. Complacency is rampant in many of today's organizations mainly due to over-managed and under-led cultures. That's why it is important to note that there is a distinct difference between leadership and management, especially in the context of companies facing adaptive challenges.
A managerial culture focuses on what you might imagine - systems, process, timing, budgets, product and service quality etc. This is all well and good but where does true leadership play into this? Real leadership is focused on creating and evangelizing a compelling vision, rallying the troops behind that vision, and actively leading teams at all levels. Especially during times of change.
There are many obvious causes of complacency. And when an organization and its leadership team can identify those causes, it becomes easier to develop a plan to combat that negative inertia. Those causes include but are not limited to: the lack of any real visible crisis, the wrong performance measurement criteria, leaders drinking too much of their own Kool-Aid, too much positive communication coupled with the fear of real transparency and respectful conflict, and a culture based on self-preservation rather than taking calculated risk. The list goes on.
In a recent conversation I had with one of my clients, a major healthcare company, they expressed deep concerns about the company's lack of urgency in fixing the issues everyone knew had to be addressed. Lack of urgency and alignment in senior leaders was also infecting middle management's ability to take action. My client went on to tell me in detail about many of the challenges the company has been facing - changes in healthcare policies, increasing levels of global competition, suffering margins, departmental silos and rather low overall performance standards. Their greatest fear was the lack of innovation, knowing that a competitor would soon swoop in and grad significant market share.
When I dove deeper and asked her what she felt was needed she told me, in a nutshell, that they needed a leadership wake-up call. I asked about the inner-office dynamics. Are there visible signs that immediate action drills are happening? Have performance metrics changed to support the change goals? Does the leadership team's behavior embody the need for change and that critical sense of urgency? I of course already knew the answer.
That's why I don't really care for the term "change management" because it leaves out the most important element to successful transformation efforts. Leadership - top down and bottom up.
In the early days of my Navy SEAL training, the instructors ingrained in us the importance of moving with a sense of urgency. Everything was always stressful, fast-paced and hectic. If you couldn't keep up the Navy found another line of work for you. They taught us that what sets SEALs apart from our peers and even our enemies is speed, surprise and violence of action.
Most organizations that continue to succeed and innovate have a culture poised for positive change and taking risk. They don't wait for the ship to spring a leak. They proactively and constantly set aggressive goals. They sometimes even intentionally develop a sense of urgency.
"Yes, we exceeded our quarterly revenue and net margin goal, but overall market share is down year over year."
"Yes, we landed that huge account we have been chasing for eighteen months, but overall customer satisfaction with our existing customer base is down 4%."
They communicate the good, bad and ugly on a regular basis with brutally transparent communication.
That being said, let's not confuse the need for manufacturing a sense of urgency with creating panic. Panic is contagious and the direct result of poor leaders. Great organizations have a strong leadership and cultural foundation from which they can more easily maneuver during times of change. Then, when a sense of urgency - whether real or somewhat manufactured - is put in place, the team is ready and takes decisive action.
In one of my previous companies, we had been in business for about five years, doubling in revenue and headcount every year. We have made the Inc. 500 list two years in a row. But something started to feel off. We were clearly outgrowing our existing systems and processes, margins were thinning, customer satisfaction was waning and internal morale was suffering. The problem was that this issue, once identified, had been festering for some time.
We - the founders and senior leaders - were still blinded by our rapid growth and success. So much so that we failed to proactively look ahead to obstacles that would inevitably emerge. And when they did, and we finally saw them, we knew it was going to take considerable time and effort to make the major changes needed to sustain growth, profitability, service quality, customer satisfaction and shareholder value.
The only problem was that we had a "this is the way we do it here" culture and rather high levels of complacency. I of course must take responsibility for that and it was a valuable and costly lesson to learn. We had to quickly fix fundamental issues with the culture before we could really lay on a sense of urgency. Without trust, accountability and a clear vision communicated regularly to the team, urgency will only scare people. And in today's younger generations in the workforce, many of them are always looking for the next great opportunity to learn and grow anyway. We can't give them the extra push out the door by creating a panic state. Great leaders must communicate the vision, empower team members at all levels with a piece of the "action" and reward behaviors that align with the new initiatives.
With a strong foundation a great transformation plan can then be developed. Just like mission planning in the SEAL teams, it starts with gathering intelligence. But that data can't just come from internal employees who are drinking the same Kool-Aid and share in the existing levels of complacency. External feedback from customers, partners and shareholders can be extremely valuable. With that data, a plan for action can be formed and a strong transformation task force assigned. And complacency must be addressed in an aggressive but thoughtful manner.
What are the existing levels of complacency in your organization? And is the company poised to make significant changes when necessary?