BEYOND THE BOXES: CREATING A WINNING PLAN FOR ORGANIZATIONAL CHANGE
by Michael E. Smith
In our last article,
we told the story of a CEO whose vision for the future of his company was
clear: In five years, he believed his organization could be about twice as
large and more international, have a diverse customer base and be offering two
to three additional product lines. He knew precisely where he stood in the
present and where he wanted to go in the future. The problem: He wasn’t sure
exactly how to get there.
It is a common
problem. When a company is preparing to implement a transformational change as
part of a larger revenue growth initiative, leaders know they must craft a plan
for that change. Yet all too often, we find those plans fall short in one of
two critical ways. Either they fail to consider all the details necessary to
move the organization successfully into the future and sustain the changes, or
the plan’s creation did not include all the right stakeholders, leading to
problems down the road with buy-in, execution and reinforcement of the change.
The problem stems
from CEOs tending to think too strategically when planning for the future
state. Certainly, it is imperative to have strategic goals, but executing
successful transformational change as part of a growth initiative demands a
solid operational plan – a detailed roadmap that encompasses all aspects of the
organization that will be affected by the change.
So where do you
start? With any transformative planning project, it is important that the right
people are involved from the start. The CEO is the most critical participant;
leadership of this effort cannot be delegated or outsourced to another senior
executive. While the Chief People Officer (CPO) is critical to the process
overall, the CEO must lead the team as the project only works well when he or
she is actively engaged, committed to the project and focused on keeping it on
schedule with a clear endpoint.
In considering the
rest of the team, CEOs must strike the right balance between broad
organizational involvement and speed/execution. Too many voices can slow the
process. Depending on the size of the organization, we typically recommend that
the first two levels of direct reports be involved.
Once the team is in
place, the project should start by (1) confirming the longer-term strategy and
future state of the company, and (2) defining the characteristics of the
company and operating model that will be required to successfully execute that
strategy. When this level of planning is complete, you can then lay the future
operating model beside the current one to identify your gaps.
For example, if
international sales will be a bigger part of the company three years out, what
capabilities will be needed to grow sales internationally: International
acquisitions? Stronger international sales talent? New channel partners for
international distribution? Country/ regional level management capabilities?
International marketing skills? More CEO/COO management focus on international?
In all, we recommend
companies think through five operational elements. This holistic view of the
future operating model ensures leaders consider every aspect of what the
organization needs to deliver to implement its strategy and achieve its vision.
Those elements include:
1. Culture and values
What are the cultural
values that need to be brought along as the company moves through its planned
changes? This is a broad category that includes decision-making, empowerment
and accountability.
2. Structure
This encompasses the
organizational structure of the company and is where leaders tend to be most
comfortable. While structural planning is key, it is important not to get
over-focused here.
3. People
Take a hard look at
the people filling key roles in your company and the future requirements of
each position. Do the people today have the ability to fulfill the demands of
the future job function? If not, can they be trained? If you’ll need to bring
on new talent, what is the right timing to begin the search?
4. Management
processes
These include how a
company communicates, who makes decisions, how leaders run the business, how it
reports, dashboard views and ensuring the right team is working together at the
right levels. What processes will be needed to run the company in its future
state? How are they different from what is in place today? How and when should
they be implemented?
5. Capabilities
Capabilities
encompass a company’s core competencies such as product development, low-cost
manufacturing, superior supply chain economics, marketing, ability to generate
leads for the sales team and ability to build deep, long-lasting relationships
with channel partners. Evaluate every aspect of your capabilities to determine
whether change is needed to successfully execute the new operating model.
During the process of
evaluating each of these areas to create a detailed plan for the future, it is
critical to be data-driven and analytical to minimize the sometimes emotional
aspects of evaluating different parts of the organization. The plan cannot be
created by gut feel. If the data you need does not exist, seek it.
For instance, the
company mentioned earlier surveyed all its senior managers to understand what
was working, what wasn’t working and where its gaps were relative to the
current and future operating models. In the area of “people,” part of the
analysis included a rigorous review of the senior executive team. In
particular, the CEO, COO and CPO went through a detailed exercise to evaluate
the leadership on critical dimensions.
This process included
very candid conversations about what key people could and could not do, what
essential capabilities would be required to perform as a larger, more
international and more diverse company – and whether current people had those
capabilities, could grow into them or would need to be replaced at some point.
In understanding how your team will evolve to fill the key roles of the future,
it is imperative to use a rigorous evaluation method that is practical and
actionable, not simply an interesting psychoanalysis.
This is the most
difficult step for any CEO, particularly one who has been in place for a number
of years and has successfully grown the company with the current team. Not
everyone is capable of making the next stage of the journey. The key criteria
is objectivity on whether they can be the leaders of tomorrow in a much
different, larger and more complex company.
By intensely focusing
on precisely how to get from now to the future, it makes that future state far
more real for everyone. It also results in a crisper strategy and greater focus
on the key initiatives required to implement the strategy. Importantly, this
planning process can provide the Board and the organization with a clear
understanding of how the operating model needs to change and a detailed plan
for how the changes will be implemented.
Once your detailed
plan is in place, you are ready for the next step in executing organizational
change: implementing the plan.
Fuente: CEO
Consultas al mail: msg.latam@gmail.com
Fuente: CEO
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Miguel Angel Medina Casabella, MSM, MBA, SMHS .·.
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