Why do some companies consistently outperform their peers? When comparing companies facing the same circumstances, one variable stands out among the winners: the quality of leadership. The best leaders can effectively influence three determinants of organizational performance: adaptation, efficiency, and human resources.
Adaptation involves changes made to cope with external threats and take advantage of the opportunities created by new technology, changing markets, and changing customer needs and expectations. Adaptability becomes even more important when the external environment is turbulent and uncertain, but it is often more difficult the larger the size of an organization.
Here are seven things leaders can do to better manage change and ensure their companies can adapt amidst uncertainty.
Start with a culture that rewards change
The many challenges involved in fostering adaptation in large organizations make it essential to have a culture with deeply held values and beliefs that support innovation and change. Relevant values include flexibility, continuous improvement, initiative and the pursuit of excellence.
Rather than viewing adaptation as an infrequent reaction to dramatic and one-time events, it is best viewed as an ongoing process that involves a combination of many frequent incremental improvements and occasional major changes. In organizations with this type of culture, new ideas are nurtured and promoted, information is shared widely and freely, and people and systems are flexible and ready to respond to changes when they occur.
Monitor the environment
Monitoring the environment involves collecting and analyzing information about opportunities and threats in the external environment and identifying trends and opportunities to improve business performance.
It is often assumed that external monitoring is the responsibility of senior leaders, but it is the people in direct contact with customers, such as sales and service representatives, who often first learn of changes in customer needs or the actions of the competition. Therefore, environmental analysis and interpretation of events should not be left entirely to the CEO and other senior executives.
External monitoring in organizations is more effective when people are involved at all levels and relevant information is recognized and used to improve strategic decisions.
Use strategic planning
Strategic planning is the process of determining where you are, where you want to be in the future, and how you will get from here to there. The process includes setting strategic objectives, identifying tactics and actions to achieve them, and determining the resources and actions necessary to implement the strategies.
Although top management has ultimate responsibility for strategic decisions, the most successful leaders find ways to involve people from across the organization in the strategic planning process.
Help employees imagine the change
Painting a vivid and engaging picture of what your organization wants to achieve or become helps communicate the desired results of a change initiative in an understandable, meaningful, and inspiring way. Visualizing change is about putting opportunities and threats in context and clarifying how the organization should respond. A variety of elements can be included in the vision, such as strategic objectives, key values for the company, general approaches to achieving the vision, slogans and symbols, and a description of what the vision will mean to people when it is achieved. .
Develop support for change
Although most people would agree that change is essential for an organization to adapt, grow, and remain competitive, change often produces anxiety and resistance. For people to support change, they must see it as necessary and feasible. Leaders can build that support by explaining the urgent need for change, building a broad coalition of supporters, identifying potential opponents and the reasons for their resistance, and taking steps to deal with resistance.
They must also be prepared to answer five critical questions employees must ask: Why is this change necessary? How will we manage the transition? Where are we in the process? What am I expected to do? I will be able to do it?
Implement the change
It is impossible to anticipate all the potential problems created by a major change or to prepare detailed plans to carry out all aspects of the change. A change program is less likely to be successful if a senior leader tries to dictate in detail how it will be implemented in each part of the organization. The authority to make decisions and deal with problems should be delegated to the leaders who are responsible for implementing the change in their subunits.
Facilitate collective learning
It is important for leaders to create an appreciation for flexibility and learning among people at all levels of the organization. Major changes will be more acceptable and less disruptive once people develop pride and confidence in their ability to adapt and learn. To foster an appreciation for learning, all practices should be considered temporary and periodically reviewed to see if they can be improved or eliminated.
Leaders must also encourage the active exchange of ideas and new knowledge in the organization. Secrecy is the enemy of learning. Leaders should encourage employees facing difficult problems to reach out to others in the organization to find out how they might have handled similar challenges in the past.
When innovations are developed in one part of the organization, leaders can facilitate the dissemination of this knowledge to other parts of the organization in a number of ways. When it is not possible for people to attend formal training, a team of experts can be dispatched to different sites to demonstrate how to use the new procedures. Webinars and self-guided e-learning can also be used to promote a broad exchange of ideas in a cost-effective and time-efficient way.
Putting it all together
The most effective leaders recognize when major change is needed and know how to develop the support of the people who can make it happen.
Because many innovations in large organizations are the result of a bottom-up process, effective leaders understand how important it is to inspire and empower all members of the organization to learn from experience, develop creative ideas, and share new knowledge across the board. across the boundaries of the subunits.
They understand that implementing major change is a slow and difficult process that requires their constant attention to be successful. And they use programs, systems and structural arrangements that are designed to encourage and facilitate innovation and collective learning.
