Mastering the Challenges of Leading Change. James Dallas H.

cascades from the top down, so changing priorities usually starts at the leadership level.

      Over the years, I have seen three typical cultures of dysfunction again and again when companies or teams within them are in trouble. Figure out which you're dealing with, and tailor action accordingly.

      The PowerPoint Mafia

      In a PowerPoint mafia, executives and managers focus their time and attention on studies and assessments rather than concrete action. They aren't interested in changing because they think they're already the best. These folks love to hold meetings and prepare detailed slide presentations that lead nowhere. Indeed, their presentations are the best looking and best delivered you will ever see – in fact, that's often how they measure success. The top priorities here are short-term profitability and margins, even at the expense of growth. They are largely ignorant of (or closing their eyes to) changing market dynamics and customer needs.

      The reason why I call them a mafia is that they are very skilled at taking anyone out who dares to question their way of life. Indeed, many a change leader has gone the way of Jimmy Hoffa, never to be seen again, because he suggested changing priorities and doing things differently. Even worse, sometimes these organizations see their customers as the enemy. Executives at one company I observed suggested they should stop doing business with their biggest customer, an account worth nearly a billion dollars, because the customer was demanding (and honestly deserved) better value.

      PowerPoint mafias tend to be large, previously successful organizations that are now stagnating or adrift. They are riding the wave of a previous innovation that has given the organization a dominant market position; however, growth has started to slow. When you survey people within the organization, you're likely to hear about how they are the industry leader, how profitable they are, and how good their products are. They are oblivious to or dismissive of their competition. They may have things to complain about internally, but when it comes to how to fix those things, they don't have much to say. They're also good at telling you why any given solution you might offer is bound to fail.

      Customers of a PowerPoint mafia say things like, “hard to do business with,” “slow to respond,” or “provides solutions without understanding our problems.” They're likely to be searching for alternatives, which can actually be a blessing because it can provide a needed wake-up call. This is true whether you're talking about a company or a specific service group within a company. For example, working with one corporate IT department, we thought we had standardized the company on a leading customer relationship management (CRM) package. In interviewing the internal clients, we found that we had over 30 instances of people “going rogue” and using another CRM program. Who could blame them? They told us they could install it more quickly and run it cheaper than we could at corporate. Overall, it was a better solution, and the CRM company was much more responsive to their needs than we were. That wake-up call was better than any speech I could make to convince people that we had work to do.

      When dealing with this kind of culture, change agents need an external fire to light an internal one. Move too early and you'll find yourself in a bag in the river. Wait for those fires – loss of market share to competitors, clients jumping ship – and use them to shift the attitude of leadership. Only at that point will you have their full support and protection in changing priorities and processes.

      This culture is in contrast to the next one, in which it takes a big internal fire to change the priorities.

      The Firehouse

      Within this culture, employees know things are broken and that they are in trouble; however, everyone thinks it's someone else's fault. The top guys aren't leaders, they're firefighters. They don't even want to take the time to meet with you to answer the three questions. They're too busy firefighting – as they see it, heroically saving the organization again and again from the failures of others. You normally find this culture in mature industries or in departments that aren't high on the executive team's list of strategic priorities.

      The top priority within this culture is – no surprise – putting out fires. They will recall with fondness the fires they have put out and how hard they worked to do so. They are proud that they are always ready to answer the call. Leaders in this culture can tell you things that need fixing, but the fixes are all tactical and generally related to the latest fire. Unlike the PowerPoint Mafia, they won't have any presentations or other analyses to show you because they don't have time to do studies. They don't want you to do studies, either – they want you to either put on your firefighter hat or cheer them on.

      Customers usually have good things to say about a firefighter company because its leaders are very good at stopping flames before they reach customers. Actually, this culture is customer-focused to a fault. They have so customized their approach that they have fragmented, one-off processes, systems, and people (hence the fires).

      The main problem with this culture is that growth stops because the underlying infrastructure, processes, and systems can't scale. Leaders resist “wasting” time on strategic planning and organizational alignment. Meanwhile, the front-line and middle management are desperately supporting broken systems and are on the defensive. They blame leadership and external factors and are worried that any change to the legacy system and processes will threaten their jobs and, more importantly, their hero status within the culture. They are firefighters, too.

      Scratch the surface and what you often find is that strategic planning hasn't been a priority because leadership is lacking the skill set. Your first task is to join in the firefighting while you're figuring out who has the ability to help develop strategy and who doesn't. Your opportunity to shift priorities will come when a fire occurs that the team can't put out before it affects customers. At that point, the leadership will support you. Bring together the potential strategists you've already identified to develop a plan for change.

      The saving grace of both the firehouse and the PowerPoint mafia is that leaders will respond to wake-up calls. Unfortunately, with the third and last culture, they just keep hitting the snooze button.

      The Thumb-Suckers

      This is the worst-case organization for any agent of change. The thumb-suckers are disengaged and complacent. Problems exist and everyone knows it, but no one is looking to troubleshoot or improve things, though they'll tell you they're “working on it.” If there's change, it's incremental and rarely focused where it's most needed. Business units in such an organization are typically siloed, failing to collaborate, and therefore oblivious to opportunities to improve and innovate. Their top priority is to stay under the radar screen of executive leadership. They resist direction and reject assistance. The front-line and middle management have given up because they feel their leadership has failed them and that they're powerless.

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      Simon Blackburn, Sarah Ryerson, Leigh Weiss, Sarah Wilson, and Carter Wood “How Do I Implement Complex Change at Scale?,” McKinsey & Company, May 2011. www.mckinsey.com.