Ask any leader what it takes to execute their strategy and it’s likely that they’ll mention behavioral change – or culture, for short. Mindsets, norms and practices (including their own) have to evolve, if not be reinvented, for the organisation to become more capable, resilient, adaptable and, ultimately, more successful.
They know that a top-down, directive approach to strategy doesn’t work; it becomes outdated soon after it’s developed; it’s often not connected to day-to day activities so people don’t know what they should be doing differently; and incentives don’t encourage them to change. As Rita says, strategy isn’t something they typically ‘touch’ or engage with – it’s done to them.
Instead, leaders encourage self-expression, listening, participation and experimentation, identifying and harnessing the informal influencers across the organisation to do this. To varying degrees, this process involves people re-evaluating their beliefs, learning new skills, breaking bad habits, stepping back from activities they have some emotional attachment to, getting friends, collaborating in new ways and taking risks.
Harness the energy and ideas systematically
All of this needs careful support, management, and channeling. Otherwise initial interest, engagement and buy-in can turn sour as people feel frustrated that their ideas are not being acted on. Without clarity on priorities, they feel confused, if not overworked, overwhelmed and anxious – which can also have collateral damage on their personal life (health, relationships). The initial “sprint” in the strategy process – focusing on exploring and exploiting new opportunities – can even have a negative impact on day-to-day operational performance.
So what does it take to avoid this?
Strategic change is only successful if people engagement is combined with enabling structures.
Promising ideas and initiatives have to be scaled up, organisational structures simplified to make it easier for people to contribute and collaborate, and some legacy activities stopped to create the funding and the space for innovation. Leaders have to reduce the institutional lag, as Professor Lynda Gratton puts it, in order to harness individual behavioral change. This is where a toolkit comes in – a common way of experimentation, learning and participating, at scale.
The five paradoxes of strategic leadership
Whilst this may sound intuitive, it means leaders have to play a number of paradoxical roles in the strategic process. inclusive one moment, directive another. Look to the big picture in one setting, and in the “weeds” of the business in another. Inspired by the work of Gary Pisano and Blair Sheppard, I’ve come up with five paradoxical roles strategic leaders have to play.
1. Empowering obsessive
Set the “bar” – the quality you expect from your people – and stick to it (if not surpass it). Talk about the company you want to (and may need to) create — a company that can do things it can’t do now. Don’t just talk about threats or “burning platforms.” Fear paralyses and distracts people. It creates a toxicity that can take years to remove. Immerse yourself in the opportunity or the problem, establish a process for working it out, convene the best possible people and set an expectation. And then let them get on with it, encouraging them to show their “best selves” without being suffocated by micro management.
Sir Mark Elder, the principal conductor of the Halle Orchestra, who led its creative and commercial transformation, said “Of course, I let them play, but there’s sometimes when I have to impose because the music demands or the orchestral discipline demands that I’m very clear and positive and leading here.”
2. Composed dynamo
Create more dynamism into working patterns – by organising shorter meetings, making faster decisions and giving quicker responses. Communicate what needs to change vividly, and role modelling new behaviors.
One FTSE 100 CEO told me that it was her role was to “wake up a sleeping giant”. That’s certainly the case for many traditional, incumbent organisations.
But there are often difficult issues and dynamics to grapple with. Make the time to reflect, consult and think carefully, even when there is always pressure to act.
Tim Davie, known to be a dynamic individual, told me “I think the honest truth is you just have to hose yourself down and listen. The big prize here is over 2-3 years, it is not over the next 2 months. And you just have to calm down…So if you are in a rush, you just have to work out that actually your velocity at the start could be slightly slower because you are building capability to save you time later.”
3. Grounded futurist
Set up new, short-term initiatives that help create momentum and credibility, and provide funding of other aspects of the transformation journey. Avoid too much managing the existing business means that you’re unlikely to be doing much forward thinking. And, worse, you may be focusing on a business that’s not worth saving. Similarly, avoid spending too much time on the future as this can leave you disconnected from the immediacy of what’s important today; and may lead you to divest parts of the “legacy” business that are actually worth saving.
This combination sounds intuitive, but is hard to practice. In terms of neuroscience, the “transactional” part of the brain – the “low-road” – focuses on immediate decisions, changes to structures. The “strategic part” – the “high-road” – focuses on why people think in a certain way, and what might happen in the future (this is called ‘mentalising’).
Jeremy Darroch, the CEO of Sky, well-known for continual reinvention said that “you need to have your eyes to the horizon and your feet on the floor. At all times. And it’s quite a discipline to do that”.
It requires reinventing the existing core business, and inventing the new core business – at the same time, connecting the two carefully through a coherent set of capabilities. Xavier Rolet did this at the London Stock Exchange, increasing its market cap from £800m to £14bn in eight years – restructuring the existing business, creating new assets, and integrating a series of acquisitions.
4. Caring entrepreneur
Craft a clear, coherent and differentiated strategic identity for the organisation – as you see in the likes of Apple, Honda, IKEA, Lego, Starbucks. Make an absolute commitment to a single overarching way of doing business. This shows how the organisation will act responsibly, purposely and profitably, delivering substantial value to shareholders and society.
This should come with a deep-rooted appreciation of, and care, for the people involved. Call out the trade-offs you face, and the difficult choices you have to make. Name the opportunities you’re not going to pursue, and explain why. Be transparent, be real. And make it safe for people to disclose how they feel, and what they think – to encourage participation, and emotional regulation at what can be a traumatic time. Give them the support to upskill, and to craft their own roles and progress. This helps to sustain the initial momentum and build a culture of continual renewal.
James Timpson, CEO of the Timpson Group, is known for being generous to his staff (who run shoe repair and key cutting shops). They can take a day off for their birthday, get a loan if they’re facing short-term financial difficulties or use one of the company holiday homes for free. It comes from a belief that looking after his staff is the right thing to do and it pays off in their performance; it also comes with an expectation of very high standards in the shops.
5. Curious architect
Apply your curiosity systematically and energetically. Leaders of transformation should have a high Curiosity Quotient (CQ), a hungry mind that generates lots of ideas, seeks out ideas from others, goes back to first principles and is comfortable with ambiguity. I remember a new chairman of a TV organisation asking two simple questions at the beginning of his tenure: “why do we sell advertising in this way? And what new approaches could we try” No-one else had thought to ask it, focusing instead on day-to-day improvements.
Reach out to the voices that are not often heard, give a platform for the original thinkers and the “rebels”. After all, people are more likely to adopt what they help to create.’
Craft experiments to test which ideas bear the most fruit – whether new products or services, entries into new markets, operational improvements, new ways of tracking results, explorations of new business models, or new ways of working that emulate (or improve on) those of upstart technology companies.
Master the ‘pivot’ from exploration to exploitation. Be decisive about which ones to select and then syndicate those that prove themselves, implementing them at full scale across the organisation. You will probably have a small, authoritative senior group set up to pick which ideas get scaled — not all at once, but when each is ready. Then they have to land on the designs or formats to scale. The senior group may assign new team leaders at that point; the characteristics of experimenters and implementers are very different. Provide enough guidance for teams around the world to implement each new approach wholeheartedly
A personal endeavor
Leading strategic change in an organisation can be an incredibly hard, long drawn-out, personal endeavor. It’s full of trade-offs and tensions. All five paradoxical roles are required at different points along the journey, and even in a working week! It would be hard, if not impossible, for a single leader to be able to excel at all of them. That’s another reason why it’s important to create a diverse, capable leadership team.
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David Lancefield helps leaders unlock value by transforming themselves and their organisations.
He serves as a catalyst, strategist and coach. He has advised more than 35 CEOs, structured 15 digital ventures and has 14 years’ experience as a strategy partner in PwC.
He is a Board Advisor to LeaderEQ, a contributing editor of strategy+business, a contributor to Harvard Business Review and the director of a forthcoming Digital ecosystems programme at London Business School.