placeholderA CEO has the power to change the way a company thinks and acts.
If a company's founder is keeping investors from achieving their deeply-desired 10x return, its board may replace the CEO with one who will eliminate those barriers to venture capital nirvana.
But that new CEO is in a very delicate position -- after all, almost everyone else in the company was hired by the former CEO -- making many of them feel more loyal to the old CEO than to the new one. And that means the newcomer must be very careful about changing the company.
This comes to mind in considering the recently appointed leader of San Francisco, Calif.-headquartered Anaplan, a cloud-based business planning service that is taking customers from IBM, Oracle, and SAP in the $20 billion market for Enterprise Performance Management.
What does Anaplan do? As Gartner explained, Anaplan offers "SaaS business modeling and planning platform for finance and other business functions. Anaplan supports financial planning and forecasting, as well as planning for sales, capital expenditure, operations, workforce, marketing and supply chain."
According to a July 7 interview with CEO (since January 2017) Frank Calderoni -- who was an executive at Cisco Systems and other big tech companies, Anaplan "helps companies to make better decisions in response to change through connective planning. For example, [our cloud-based planning service lets] Revlon connect information about customer retail purchases with its supply chain so that Revlon can stock the right product in the right place at the right time."
Anaplan -- which makes money by selling monthly subscriptions -- looks to be large enough to go public and it's still growing fast. As Calderoni pointed out, "In its fiscal year ending January 2017, Anaplan had $120 million in revenue, was growing at 75%, added 250 customers for a total of 700, employed over 700 people in 16 offices in 12 countries, had raised a total of $240 million in capital, and generates good cash flow."
It looks to me as though Calderoni was brought in as CEO to put Anaplan in a strong position to go public. In order to do that, he believes that Anaplan must change and here are his 10 truths about change management.
1placeholder. Change is about people
Most people do not like change. As Calderoni said, "Humans don't take change in a positive way. As leaders, we have to set the example of the change we want from the people around us. We work with stakeholders to set objectives and bring them along so they can see what success looks like."
2. Take the time
"Some changes are quick, but real, transformational change can--and often must--take years. At Anaplan we have a five year plan to be more customer responsive and to make sure that people are customer-first," he said.
3. Create a vision
Leaders should stake out where they want a transformation to take the company early in the change process. "We are creating a vision to help our enterprise customers using our cloud-based planning tool to connect people to make better decisions. We want to transform planning to get better results -- speeding up decisions and cutting the size of enterprise planning staffs," Calderoni explained.
4. Engage your stakeholders
In order for a company to move towards a vision, stakeholders -- such as employees, customers, partners, and investors -- must see how the vision will be beneficial to them.
5. Acknowledge tradeoffs
But a new vision can make life harder for stakeholders in some ways. "When people are asked to change, be aware of the effects," he said.
6. Work with the willing
Leaders should expect resistance. Calderoni suggested, "Not everybody in your organization is going to get on board the change train. That's natural; some people will have ways of thinking and working that are incompatible with what you need to accomplish."
Just because a leader knows something, it does not mean her followers do. To close the gap, leaders must over-communicate. As Calderoni said, "I've used every medium you can imagine to communicate about change."
More important than broadcasting is listening. "The communication I just described can't be a one-way street. You need to listen to the people who are making the change, and listen to the people affected by the change," he said.
9. Empower the silent majority to speak up
Often a leader hears more from a minority of people who disagree. "A leader must create ways to encourage those who silently agree to express their views," he noted.
10. Learn as you go
Things don't work out as planned. As Calderoni put it, "Challenges will arise as organizations change; the success or failure of your change management effort hinges on how you respond to those challenges."