Neil Crofts
Co-founder
Holos Change Ltd
Last week I met with people from a very successful 70 year old company that operates in 190 countries and has 32 million customers. It is a market leader and consistently ranks as one of the best places to work. They are very good at what they do and yet the existence of the company is at risk in the next 5 years.
Like most other organisations founded more than 20 years ago they are a “conventional” organisation. As a conventional organisation their business model has remained effectively the same since they started. They prioritise reliability over adaptability and consequently, management over leadership. The summit of their ambition is to be able to do what they say they are going to do reliably.
However the “post-conventional’ storm clouds are growing around their sector. One or more of the big “post-conventional” tech companies (Apple, Google and Amazon in this case) are starting to get involved in their sector and at the same time a number of highly agile post conventional start ups are nibbling away at the high margin end of their business.
Post conventional organisations are the ones that disrupt their own business model – as well as others, they prioritise adaptability and reliability, leadership and management. The path to sustained success for conventional businesses facing this challenge is the path not taken by previous conventional market leaders – Kodak, Nokia, Blockbuster etc.
The first step on this path is for the executive team to admit that there is a risk. This can be a very challenging admission. Things still look good after all, and if senior people are five years from retirement, they may have little understanding of the risk and even less appetite for both the personal and cultural transformation that it implies. Failure to accept the risk in time will lead the organisation to irrelevance.
Once the executive team accept the risk the next step is to articulate a vision for the future that is a clear destination and is inspiring to all stakeholders – rather than one which is relative to competitors. Our client Q8 has a vision that: “every customer journey is sustainable” Everyone in the company finds this inspiring and customers and partners are increasingly getting behind it.
The transformation required to pursue the vision is very specifically a matter of leadership and culture. So the next question for the executive team is how do we need to be and how do we need to lead in order to achieve the vision. Above all, what habits do we need to change in the way we work, the way we interact, the way we communicate and so on.
In our experience it takes an executive team about 6 to 9 months, with close coaching support, to reliably adapt to a new set of habits, skills and behaviours. There is no need to announce these changes to the organisation, just for the executive team to role model them reliably. At the same time as this process is happening it is also important to bring the HR team onto the journey, both as role models for the new culture and also so that they can get to work redesigning hiring, reward and other systems and processes to support the new culture.
Once the executive team and the HR team are reliably role modelling the new culture and the new HR systems are in place it is time for the executive team to enrol the next level in the organisation in the new culture and support them in changing their habits and behaviours and developing new skills. Depending on the size of the organisation this process can be repeated over the next six months to enrol the next level in the organisation.
Close coaching support for leaders and for teams is invaluable in helping those leaders and teams develop the new skills and change the habits to enable them to live the new culture and successfully pursue the vision.
This culture change approach can enable a conventional organisation that has never had to question its business model to become a fully adaptable post conventional organisation able to reinvent itself to deliver sustained success in a disrupted environment. The change is very specifically a change of leadership style and culture, although it will also lead to changes of business model, processes and in other areas as well.
