What’s missing from Strategy Execution? (Strategy Execution Methodologies series, Post 5)

 

It’s a seductive reality: strategic change may be the most exciting endeavour of an executive’s career.It compares with climbing Mount Everest?not everybody makes it on the first attempt, some don’t survive, but those who succeed are considered heroes.

The difference is that for most organizations committed to a strategic change, it is a business imperative. There is no backing down - re-tries have additional risks.   

We are not talking here about linear, progressive change, but rather 90- degree turns or even 180s?we are talking about the kinds of strategy that makes or breaks the organization’s future. This is the kind of change that is rocket fuel to start-ups like Facebook and LinkedIn; the elusive Fountain of Youth for dinosaurs like Kodak, Nokia, Canadian Pacific and JC Penney; and Buckley's Cough Syrup for every organization in between.  

Because strategic change is so complex and dynamic it takes years to develop successful, comprehensive approaches. Early attempts, such as Project Management, were linear. Change Management added another dimension. Anecdotal information suggests that these have improved effectiveness and yet still there are gaps.

The legendary “70% failure rate” and the real rate

Since 1993, when Hammer and Champy famously quoted the following 70% failure rate, it has been burned into our collective conscious: “Sadly, we must report that despite the success stories described in previous chapters, many companies that begin reengineering don’t succeed at it…Our unscientific estimate is that as many as 50 percent to 70 percent of the organizations that undertake a reengineering effort do not achieve the dramatic results they intended.” [1] 

This has been reiterated in subsequent studies (for example “Success Rates for Different Types of Organizational Change” [2] and repeated ad nauseum by every consultant selling a solution (a challenge from our chairman here http://connerpartners.com/how-challenging-is-the-change/the-dirty-little-secret-behind-the-70-failure-rate-of-change-projects).

Notwithstanding all the sales pressure, it has resonated with leaders and managers alike precisely because it reflects our common frustrations. 

The real rate is unknown. However, the only real rate that matters is the organization’s rate of success/failure. This can be examined and improved.

Breaking it down—and building it back up

As with most complex problems, it has taken time to break down change management into discrete and treatable elements. Project Management has been elevated to address delivering on-time, on-budget and on-scope at the Program and Portfolio levels as well. Change Management emerged to increase commitment and adoption. 

Yet, even after closing these gaps, there were still shortfalls. Even in projects where strong project management and change management are effective there are still places where teams have to “muscle through”. 

End-to-end, top-to-bottom

“We moved past change management 10 years ago,” our chairman, Daryl Conner, said. We were talking about Strategy Execution with a client and there was an obvious moment of reflection in the group. “Yeah,” I thought. 

Conner Partners (formerly ODR) is most well-known for advancing theory and practice of change management. And yes, while our methodology includes change management, this is only one part of our Strategy Execution approach. 

Daryl went on to explain, “As we studied the patterns of winners and losers in transformational change, it became clear that there were gaps beyond change management. Our current approach addresses these.”  

Differentiating between symptoms and root causes is not easy. 

An example:It is widely accepted that the most significant critical success factor in executing change is the performance of leadership, specifically the sponsors’. Even after breaking down more specific role definitions and competencies and getting leaders to fully lean into these important activities we still found gaps – between sponsors. 

It became clear that we had assumed full commitment from all sponsors and that they would cooperate together. However, systemically, organizations are not set up this way. Most hierarchical organization charts require tasks to be parsed apart and delegated discretely. Getting tight alignment at the leadership level for cross-functional, transformational change requires specific activities and explicit contracting. Building a successful consulting offer to tackle this obstreperous challenge has not happened overnight—we do this today through a comprehensive offer we call “Managing Intent”.

The fact is that on the market today, there is no public end-to-end, top-to-bottom approach. Some come close, but ultimately those organizations (or even teams) who are determined to compete will develop their own.

What else?

What are the frontiers of strategy execution and change management?

• Formal integration of Project Management and Change Management: Rumour has it that The Project Management Institute (PMI) is releasing the next (fifth) edition of the Project Management Body of Knowledge (PMBOK) and will introduce a new practice area. Word is that it will be change management. This is likely to be a very tactical approach addressing low-level communications and training requirements. Users will have to be vigilant to ensure that they include adequate treatment for the nature of change.
• Change Management and Change Leadership: The debate as to whether these are the same or different, separate or connected continues—mostly fueled by those with self-interest in the answer they are promoting.
• Comprehensive: Imagine if the organization had a repeatable and reliable process to take strategy from cradle to rising star. Today, in most organizations, this process is patchy and clumsy, and, at times, dysfunctional and counterproductive.
• Project Change Management and manager/leader competencies: I don’t hear many conversations about this and yet I see opportunity here. “Change Management” shows up as a competency on most position descriptions today, but ask an HR manager to tell you more about what that looks like and the well runs dry quickly. They would benefit from integration.
• Organizational agility (the nimble organization): Now here is a competitive advantage. This is the richest opportunity for organizations in a position (or a corner) to invest in expediting results.

In 2010 I wrote the first version of a white paper to try to create a framework to describe the various interconnected elements as applied to innovation capability, “Call to Action: Power innovation bandwidth with the 9 pistons of the Change Management engine” (http://www.symphini.com/doc/Call%20to%20Action%20to%20Power%20Innovation%20with%20the%209%20pistons%20of%20CM%20engine%20v10.pdf). This was an unconventional and fledgling approach (business, not organizational design perspective) and it still needs work.  

However, the underlying business challenge remains unsolved (i.e., how to think efficiently about and comprehensively improve an organization’s needs for change capability).

References

[1] “Reengineering the corporation: a manifesto for business revolution”, Michael Hammer and James A Champy, Harpercollins, 1993.

[2] “Success Rates for Different Types of Organizational Change”, Martin E. Smith, PhD, Performance Improvement, Volume 41, Number 1, January 2002.