You’ve Survived, Now What? (Part 1)

The economic turbulence of the second half of 2008 and all of 2009 has challenged the leadership capacity of many organizations like never before. Many organizations, both for profit and not-for-profit, saw revenues shrink dramatically, many in the range of 25-40%, or greater. In this environment many leaders and managers resorted to the primordial, survival mode. The immediate, knee-jerk reaction was to cut production, programs, and people. In this environment, the strategic horizon was instantly abbreviated to the next payroll period for many organizations. As a result of this economic upheaval, firms face a new reality, one of chaos, complexity and continuous change. To lead organizations through this new economic landscape it will be imperative for strategic leaders to think beyond the challenges of the next payroll period, month, quarter, year or even their traditional strategic planning horizon. It will be imperative that they think strategically. Chaos, Complexity and Change

Not many leaders will argue that the past two to three years have not been chaotic, complex and characterized by rapid change. At the turn of the millennium the terms sub-prime mortgage and credit default swaps were known by only a select handful of financial specialists. By September 2008, the impact of these two financial instruments threatened the financial stability of the world’s economy. The result was U.S. government bailouts to the tune of hundreds of billions of dollars. The term “billion dollar bailouts” was unknown to virtually everyone, yet the vast majority of individuals, organizations and their leaders have been affected.

What’s next? In his compelling book, The Extreme Future, futurist James Canton believes that there is plenty of chaos, complexity and “extreme change” on the horizon that will rock our world over the next ten to twenty years. Imagine a world in which 80% of all entertainment is downloaded from the Internet; 90% of consumers want tests to detect their genetic destiny; the ratio of women to men in the workforce is 2:1, and 60% of the individuals in the workforce are robots; 80% of consumers buy cars that only used renewable energy; 75% of Americans use performance enhancing drugs; 25% of Americans live past 100 years, and 80% of those are women. These are just a few of the possibilities that Canton forecasts for the not-too-distant future. How many of these or other seemingly radical forecasts are given any consideration in your strategic thought process?

Is Strategic Analysis Strategic Thinking?

Many of today’s leaders and managers have been educated to view strategic thinking as a process of comprehensive, sophisticated analysis of the internal and external environments in which their organizations must prosper. Most are familiar with and use a variety of strategic analysis tools developed over the last three decades. Porter’s Five Forces, Value Chain analysis, and BCG’s portfolio matrix are common tools that form the foundation of the contemporary strategic thought process. These tools are often augmented, if not supercharged, by multi-layered spreadsheets, Monte Carlo simulation and the application of Real Options Theory. While these tools and frameworks bring structure to the strategic thought process, it may also be the case that they limit leadership thought to very linear and limited conclusions. Mitzburg, Ahlstrand, and Lampel believe that strategic plans, evolving from this type of analyses, by their very nature promote inflexibility and place limits on the scope of insightful strategic alternatives. They further claim that while these plans are developed to establish clear direction, responsibility and stability, it is this same established direction and stability that inhibits strategic action in the face of chaos, complexity and change.

The foundation of most current thought processes is analysis of current and historic environmental data, e.g., sales data, cost data, demographic data, etc. Although these analyses can be thorough and comprehensive, providing insight into the circumstances and trends of today, they often say very little about tomorrow. The typical output of these analyses is an extrapolation of current trends into the future. Spiro Makridakis and Nicholas Taleb, experts in the field of statistical forecasting, pointedly claim that accurate forecasting is nearly impossible. They also provide us with a new, poignant Yogi Berra-ism: “the future is not what it used to be.” In this new environment, leaders run a very high risk when they assume that tomorrow will resemble today.

1. Irene Sanders agrees with Makridakis and Taleb in her book entitled, Strategic Thinking and the New Science, that leaders wrongly rely on quantitative data and analysis of today to provide information about a constantly changing environment of tomorrow. She further believes that leaders fail to see potentially disruptive events because they don’t know how to visualize the multiple complexities of the environment. Complexities like relationships, connections, patterns of interaction and subtle changes create the dynamics of the real world in which leaders make decisions. Sanders further believes that this failure can be avoided through the application of strategic thinking.

So, What Is Strategic Thinking?

If strategic analysis is not strategic thinking then what is? Sanders provides us with a very simple, yet powerful definition. To Sanders the two key components of strategic thinking are: 1) insight about the present, and 2) foresight about the future. Further, the key to both is understanding the dynamics of the “big picture” in which leaders make decisions that impact the future of their organizations. The development of strategic thinking necessitates a broader, more whole-systems-view, than currently applied strategic analysis can provide.

Developing insight of the present and foresight into the future takes more than analysis of specific data. Quantitative analysis is predominantly a left brain exercise. Sanders argues that insight and foresight require a comprehensive, whole-brain perspective, and are experienced through the more creative qualities of right-hemisphere thinking. For a visual thinker, as opposed to an analytical thinker, the ability to see and interact with a problem, issue or opportunity is the key to developing valuable insight and foresight.

Continued here: You've Survived, Now What? (Part 2)

Michael Petty is the managing partner of North Star Partners. North Star Partners assists companies in the areas of leadership development, strategic thought and application, and financial stewardship. He is also a doctoral candidate in the Strategic Leadership Program at Regent University, in Virginia Beach, VA, USA. Mike can be contacted at: mike.petty@north-star-partners.com

FACILITATING CHANGE – WELL (and it is long term!)

How often have you seen- or been a part of – a senior leadership team effort to design change? And seen it not happen at all! So often what happens is that the senior leadership team spends lots of time (days, weeks, even months) deciding on some new vision for which CHANGE must now take place. And then they announce it, . . . . . and the change does not happen. They tend to blame everyone/anyone – except themselves. They usually skip asking why it took them weeks and then they expected people to engage with the change with one short announcement! A useful tool for me in facilitating change was given to me by a mentor of mine, Carl Harshman: let me share the essence of it with you. You will note that it focuses on the reasons CHANGE fails: pay heed, it is powerful.

Leading Change: Why Transformation Efforts Fail

In the March-April 1995 issue of Harvard Business Review, John P. Kotter, a professor of leadership in the Harvard Business School and a national expert on Change, wrote of eight primary reasons that organizations are unsuccessful when implementing efforts to change.

First a beginning summary:

The most general lesson to be learned from the more successful cases is that the change process goes through a series of phases that, in total, usually require a considerable length of time. Skipping steps creates only the illusion of speed and never produces a satisfying result. A second very general lesson is that critical mistakes in any of the phases can have a devastating impact, slowing momentum and negating hard-won gains. Perhaps because we have relatively little experience in renewing organizations, even very capable people often make at least one big error.

Next, a summary of the eight most common reasons transformational change is not as successful as envisioned:

Error #1: Not Establishing a Great Enough Sense of Urgency

When does an organization reflect a sufficient amount of urgency? Kotter says:

From what I have seen, the answer is when about 75% of a company's management is honestly convinced that business-as-usual is totally unacceptable. Anything less can produce very serious problems later on in the process.

Error #2: Not Creating a Powerful Enough Guiding Coalition

Kotter's experience is straightforward: “Efforts that don't have a powerful enough guiding coalition can make apparent progress for a while. But, sooner or later, the opposition gathers itself together and stops the change.” In order to counteract this error, the membership, role, and development of the steering committee structure require major attention as part of the effort.

Error #3: Lacking a Vision

Kotter's bottom line:

In every successful transformation effort that I have seen, the guiding coalition develops a picture of the future that is relatively easy to communicate and appeals to customers, stockholders, and employees.

Without a clear vision, the effort often degenerates into a series of projects that are unrelated and either go nowhere in the long run or mislead the organization in terms of where it really needs to go.

 His recommendation in terms of a vision?:

. . .if you can't communicate the vision to someone in five minutes or less and get a reaction that signifies both understanding and interest, you are not yet done with this phase of the transformation process.

Error #4: Undercommunicating the Vision by a Factor of Ten

According to Kotter, communication is the key to getting people to make the sacrifices that are necessary to achieve the vision. If the communication is done poorly or if the top leadership undermines it with their actions, everything is wasted. His recommendation? Use every possible channel, especially those that are being wasted on information that really doesn't matter.

Error #5: Not Removing Obstacles to the New Vision

Kotter's perspective on this error is to be assertive:

In the first half of a transformation, no organization has the momentum, power, or time to get rid of all obstacles. But the big ones must be confronted and removed. If the blocker is a person, it is important that he or she be treated fairly and in a way that is consistent with the new vision. But action is essential, both to empower others and to maintain the credibility of the change effort as a whole.

Error #6: Not Systematically Planning for and Creating Short-Term Wins

Change is a long-term investment. We risk losing the early momentum of an effort if there are not short-term goals to meet and celebrate. According to Kotter, creating short-term wins is different than hoping for short-term wins. Managers have to identify opportunities, set goals, develop strategies, and recognize people when the goals are met.

Kotter says that once people realize that the larger transformation effort will take a long time, leadership must create opportunities to produce short-term wins as a way to keep the momentum high.

Error #7: Declaring Victory Too Soon

Of all the problems that can hinder an effort (not enough urgency, an ineffective guiding coalition, a vision that does not get communicated), Kotter says the premature victory celebration kills the momentum and allows the forces of tradition to take over.

The successful strategy, according to Kotter, involves the following:

Instead of declaring victory, leaders of successful efforts use the credibility afforded by short-term wins to tackle even bigger problems. They go after systems and structures that are not consistent with the transformation vision and have not been confronted before. They pay real attention to who is promoted, who is hired, and how people are developed.

Error #8: Not Anchoring Changes in the Corporation's Culture

Kotter opens this section thus:

In the final analysis, change sticks when it becomes "the way we do things around here," when it seeps into the bloodstream of the corporate body. Until new behaviors are rooted in social norms and shared values, they are subject to degradation as soon as the pressure for change is removed.

Conclusion

"In reality, even successful change efforts are messy and full of surprises. . .[and] fewer errors can spell the difference between success and failure." An organization has at least two opportunities to reduce their errors in design and implementation of a successful transformation process. One is at the point of design, the other at the point the error begins to occur. Failing at both points is what Kotter is trying to help organizations avoid.

The Three P’s of Satisfaction

Any time you need to guide a major change or help others resolve a conflict, you have the potential to make one or more people very unhappy. This is true whether you’re negotiating a business contract, selecting a new department manager, cutting your operating budget, or resolving differences within your executive team. In each of these situations, one person or group may end up praising you while another is grumbling behind your back … if not to your face.

Having mediated hundreds of legal, business, and organizational disputes, I’ve found that I am far more likely to end up with satisfied people on all sides if I make a concerted effort to provide everyone with the “Three P’s of Satisfaction.”

• Process satisfaction requires a fair, orderly, and even-handed process where everyone feels that they’ve had a reasonable opportunity to present their side of the matter (1 Cor. 14:40). This requires that everyone is given all the time they need to prepare and present their thoughts. When you ask, “Is there anything else anyone would like to say,” you want everyone to respond, “No, I’ve shared everything I see as being relevant; thank you for hearing me out.”

• Personal satisfaction requires treating everyone with respect, courtesy, and equality, just as you would want to be treated yourself (Matt. 7:12, James 2:1-4). This kind of treatment involves careful listening, genuine empathy, and gracious communication (Prov. 22:11).

• Product satisfaction requires a final agreement or decision that is as reasonable, just and equitable as is humanly possible (Micah 6:8; Prov. 28:5).

Here’s the key to this process: although most people involved in a decision-making (or conflict-resolving) process will focus most of their energy on achieving a particular outcome (product satisfaction), in the long run they will also place a great deal of value on how they were treated during the process.

This means that even if a final decision is not entirely to their liking, they will often accept the result with equanimity if the decision-makers provided them with a high level of both process and personal satisfaction.

I cannot emphasize this point too much: Give people process satisfaction (the opportunity to fully and candidly share their views) as well as personal satisfaction (treating them with sincere courtesy and respect), and you’ll be surprised how content they’ll be even if they disagree with your substantive decision.

And if you succeed in giving people all three types of satisfaction, you’ll find that they will trust and respect you more, and genuinely support the decisions you make.

By the way … the Three P’s of Satisfaction are fully transferable: they work just as well at home and in church as they do at the office.

So whether you’re dealing with a corporate issue, a marriage conflict, a debate with your teenager, or differing positions at an elders’ meeting, you’ll be far more likely to preserve respect, unity, and relationships if you make every reasonable effort to provide everyone involved with process, personal, and product satisfaction.

Ken Sande is the founder of Peacemaker Ministries and Relational Wisdom 360 and the author of numerous books on biblical conflict resolution, including The Peacemaker: A Biblical Guide to Resolving Personal Conflict.

The Convene points of difference: A conversation among Convene chairs

Convene Chairs eat their own cooking. They get together and work challenges and opportunities just like the CEO teams they gather. In a recent conversation we talked about how we have come to understand and respond to the question that often comes:  "What are the points of difference between Convene and other peer-based advising groups for CEOs and business owners?"

Our answer? We have:

* An Essence Process (that distills the team's best thinking)

* The Holy Spirit Co-Creating Wise Counsel (with like-minded peers)

* A Safe Peer Environment Committed to the Ongoing Transformation of the Leader (producing trust, vulnerability and speed of decision-making)

These elements, when combined, lead to greater clarity sooner.

 This in turn, empowers our members to make more confident decisions, grounded in deeper understanding for greater (Kingdom, business and family) impact.

Three great temptations wage war against a CEO:  fear, pride and confusion. When a CEO does not have clarity on the issue at hand, on God's will for them and their stewardship of the company, or on a particular opportunity, it is nearly impossible to act dutifully. Fear, pride and confusion block right and timely action.

The alternatives are twofold:

1) To not act, delay the decision, gather more facts, avoid, put off, minimize, rationalize or spiritualize.

2) To act with compromised effect based on un-clarity of purpose, opportunity, etc.

By engaging a Convene Team with a tough issue, a CEO is:

1)   Humbling themselves by submitting their pride to the counsel of the team, thereby counteracting the enemy's tool of pride;

2)   Gaining truth, wisdom, insight and clarity, thereby counteracting the enemy's tool of confusion;

3)   Gaining depth as a leader, borrowed experience and encouragement from others thereby counteracting the enemy's tool of fear.

"For God is not a God of confusion, but of peace." (1 Cor 14:33 - ESV)

It is interesting that Paul, who wrote those words, creates a dichotomy between confusion and peace.

And so, we answer the question about the Convene distinctive as more confident decisions, grounded in deeper understanding for greater (Kingdom, business and family) impact... and personal peace.

Convene Chairs

-Harris Wheeler

-Marcus Bigelow

-Mark Vincent

-Michael Powers

-Mike Petty

-Ron Hoover

-Todd Kemp

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