A simple approach to leading change

Business leadership in its essence is about understanding people, understanding business, and applying that knowledge to deliver positive results.

The difference between a good leader and a great one primarily boils down to three traits - their ability to (i) build a compelling vision, (ii) inspire others to align to their vision and (iii) optimally apply resources and relationships to transform from current reality to the ideal state. Let us explore the third trait here - effectively leading transformation and change.

Having contributed to a wide range of transformation programs over the past two decades, I would like to recommend a simple 3x3 model for effectively leading business transformation.

The three steps are - to analyze the current state, to solve the gap to the ideal state and to effectively implement the solutions identified.

In simpler words, it is about

• taking time deeply to understand the current reality and the people involved,
• smart partnering to define the ideal state and to innovate the solutions to get there,
• making it real by effectively implementing the solutions and continuously improving.

Let’s look at each of these closely and go one step deeper for more complex changes. I am approaching the model as sequential steps, however, each subcategory is highly interrelated with others, hence quite important to consider this model as a whole at every stage; thinking ahead and looping back as apt.

While the below is written expansively for corporate transformations, by removing the corporate lingo, the same can be trimmed to suit the realities of a small business, as well as leading change in a personal and social context.

Step 1 - Analyze - at a broad level to get a comprehensive understanding of the current reality and thereby estimating the gap to the ideal state.

This phase should focus on (i) understanding the holistic big picture, (ii) deep-diving into key variables that impact the current and future state, and (iii) establishing the interdependencies of different variables.

The results here should indicate the aspects to preserve, areas to modify/stop and learnings from past initiatives, thereby clearly defining the gap between the current state and ideal state.

Process - Understand the processes being followed currently in a holistic manner covering its maturity, the market benchmarks, standards/exceptions, systems used, reports, targets, documentation, expertise available, failure impact, roles and responsibilities. It is also important to deep dive into how the process is currently operationalized by understanding the current state of resourcing, load balancing, bottlenecks, knowledge repository, governance, service levels, efficiency, stability, business continuity, metrics, and exception handling.

Team - Here the focus is on the teams involved and the individuals behind the roles. One should cover role definitions, skills(hard/soft) inventory, range of expertise, goal alignment, approach towards change, engagement levels, resilience, culture, and team atmosphere. Special focus should be given to evaluate the team leadership covering maturity, practices, relationship management, balancing priorities/scorecard, change championing, business acumen and overall fit.

Relationship with stakeholders - Here primarily map out the various stakeholders such as suppliers, partners, data providers, leadership, internal stakeholders and most importantly customers. Then understand the quality of the current relationship and mutual impact by deep diving into the engagement model, service levels, satisfaction, transparency, special handling agreements, escalations, sensitivity, priority alignment, feedback loop, in-flight projects/roadmap, and innovation partnering.

Step 2 - Solve - by converting the findings from the analyze phase into well understood practical solutions that will close the gap to the ideal state.

Here the process should expand on (i) ‘Why’ to change, with two-way communication among the broader stakeholder audience, (ii) ‘What’ value should be targeted and prioritized across different phases and (iii) ‘How’ to change by innovating the right solution with key success criteria, impact assessment, implementation plan, and milestones defined.

The success of this phase significantly depends on the findings from the analyze stage and in engaging the right experts including external consultants/ thought leaders.

Communicate – by refining and aligning on the ‘Why’ with active two-way communication through the change journey. The steps involved are: (i) validate findings from the Analyze phase and seek inputs from key stakeholders and teams involved, (ii) build a high-level business case; seek resourcing and buy-in from key decision makers, stakeholders, authorities and leadership , (iii) regularly engage different layers of impacted stakeholders to partner and prepare for the change journey.

Value* - to align on the deliverables by clearly articulating and prioritizing ideal state value in terms of (i) Utility- where the focus is to build trust by consistently delivering to the most basic stakeholder expectations such as basic features, quality, cost, cycle time(availability), compliance, efficiency, etc. (ii) Ease of business/comfort - where the focus is to expand stakeholders’ engagement by exceptional service levels, comfort features, predictability, impactful insights, highly streamlined and effective process, (iii) Wow factor - going above and beyond to positively surprise the stakeholders with intuitive self-service, best in class automation, cognitive analytics, premium add-ons, digital solutions, and other pioneering technologies. Caution - while many change leaders like to concentrate their focus on the Wow factor, failing to deliver on Utility can quickly alienate customers /stakeholders.

Innovate - to identify the best solutions to close the gap and to deliver the targeted value. Build an empowering framework for innovative solutions by (i) bringing the right team (expertise, passion, attitude, influence) together, (ii) enabling the team with tools, budget, methodology, data, other resources and (iii) sponsoring the team with active stage setting, decision making and removing obstacles. The solutions must be developed with a detailed roadmap with milestones, system dependencies, success criteria, assumptions, stakeholder signoff’s and upstream/ downstream impact clearly documented.

Step 3 - Implement - the solutions identified with active monitoring, robust governance, and an iteratively optimizing model to reach beyond the ideal state.

Here the process involves (i) validating the different facets of the solution through progressive go-lives, (ii) actively monitoring the stakeholder impact while revisiting the initial assumptions and (iii) iteratively optimizing and releasing improvements to the initial solution based on internal/external feedback.

The primary success factors here are a robust governance model and ability of the operations to continually iterate the solution to higher levels of value (wow factor) beyond the initially targeted ideal state.

Operationalize - going live with the solutions in a phased manner to ensure that the higher value product/service is delivered to the customers with minimal disruption to the stakeholder ecosystem. The different phases involved here as (i) user training and comprehensive testing covering upstream/downstream dependencies, (ii) pilot go-live with active governance and assumptions validation, and (iii) full go-live incorporating learnings from pilot and active sign off from key stakeholders.

Governance - to ensure that the right stakeholders are closely monitoring the results of the live solution and optimally prioritizing action. The three phases of governance are (i) critical care during the period immediately before the go-live, during the go-live and for a reasonable period after the go-live, (ii) active monitoring during stabilisation phase to ensure there are no unforeseen upstream/downstream impact and to revise initial assumptions, (iii) improve mode extending into the Optimize stage with ongoing engagement of the key stakeholders.

Optimize - to ensure ongoing improvements by continuously monitoring stakeholder feedback, technology changes and observing pioneering market trends. Depending on the scale of the changes, the Optimize mandate can be either baked into the current team structure or managed by a standalone role/team. New opportunities are reviewed through a light ‘Analyze - Solve - Implement’ model, to ensure proper rigor in validating the fit and prioritizing. A regular leadership report out should be factored here to seek strategic guidance, revalidating the vision and to secure ongoing sponsorship for the Optimize charter.

My attempt here is to broaden the thinking of those approaching a transformation to better prepare for the journey and to avoid being overwhelmed by inflight surprises. Feel free to add more perspectives and helpful resources in the comments section.

* in case you are interested in reading more about Designing for Value, check out this post.