MANAGING COMPLEX CHANGE
Without hesitation, many in business and industry would say we have experienced more disruption and change in the past five years than ever before: a pandemic, successive interest rate hikes, domestic political turmoil, and significant international conflict with advanced economies. This kind of disruption is out of the control of day-to-day business leaders.
However, we learned if we do not swiftly address disruption and change taking place in the market with our teams, the challenges worsen. Team confidence was at an all-time low during the pandemic; teams were seeking more reassurance and clarity of direction than many business leaders were prepared to provide. An unprecedented 47 million Americans quit their jobs in 2021. As business leaders, we cannot afford this to continue and have the responsibility to influence future outcomes.
Goethe wrote, “Things which matter most must never be at the mercy of the things which matter least”. In today’s fast-paced and ever-changing business environment, leaders must ensure that important matters are not overshadowed by less significant tasks. To address the challenges of navigating disruption and managing complex change, we offer two critical actions leaders can take: Align on Priorities and Establish Team Autonomy.
Align on Priorities: Ample data illustrates that focus and clarity increase team performance during non-disruptive times. Sixty-five percent of teams with clearly defined goals and organizational expectations are more engaged. As we move further into this post-pandemic era, we are learning that even in disruptive times, leaders that can re-prioritize quickly experience increased team productivity, morale, and retention. An essential duty of leaders is to regularly iterate on their priorities and ensure that they align with the broader organizational goals. As a result, leaders can guide teams to action by giving direction even amidst uncertainty.
We learned during the pandemic that leaders who fail to assess and adjust their priorities are more likely to encounter challenges and increase the risk of failure. Disruptions often reshape the business landscape, altering customer preferences, market dynamics, and competitive forces. Leaders who do not respond to these shifts may find themselves stuck with outdated strategies that miss capitalizing on emerging opportunities. However, when leaders adjust their goals and provide novel solutions to new problems, they enable their companies to thrive through profound changes.
TOV, a furniture designer and manufacturer, demonstrated how reviewing business goals can result in exponential growth despite uncertainty as outlined by Forbes. Before the pandemic, TOV primarily sold furniture business-to-business through e-commerce. Following a worldwide shutdown that resulted in remote work becoming the new norm, the company leadership recognized the opportunity to start selling direct-to-consumers and saw a 200% spike in year-over-year sales. Because their leadership updated their priorities, TOV effectively navigated a new economic marketplace.
Leadership can utilize prioritization to flourish during times of disruption by providing clarity on the purpose and process of their organization. Simon Sinek outlines this approach through his Golden Circle concept: “For great leaders, the Golden Circle is in balance. They are in pursuit of WHY, they hold themselves accountable to HOW they do it, and WHAT they do serves as the tangible proof of what they believe.”
Every leader can design and refine their strategic direction during complex change by doing the following:
- Establish purpose and outcomes. Leaders should articulate their mission by creating their North Star, Objectives, and Key Results (OKRs). A North Star is a narrative that defines the focus of the company and provides insight into the organization’s aspirational, long-term vision (the ‘Why’). A well-written North Star provides a transparent framework to ensure all effort is directly tied to business priorities. OKRs identify what the organization wants to achieve to meet the desired outcomes. These establish short-term goals and measures of success (the ‘How’). Socializing the North Star and OKRs visibly cascades priorities across the organization, inspiring teams to deliver the business results (the ‘What’).
- Continuously align. Most companies conduct annual planning to set their strategic direction for the upcoming year. However, there is often a gap between connecting those long-term goals to short-term delivery plans. Additionally, external and internal changes can cause those initial yearly goals to become effectively obsolete. By implementing a shorter business review cycle, leaders can drive performance and ensure relevance for their purpose and outcomes. Creating a consistent flow of planning and review provides continuous alignment, prioritization, and feedback. During the review cycle, leaders should steward activities to facilitate impactful discussions and generate shared understanding across the organization. Align work to business value to provide teams with the knowledge of how they advance organizational outcomes. Act as a challenger by pressure-testing recommendations and rationale to ensure quality decision-making. In a rapidly changing environment, leaders must celebrate wins and share successes across the organization to build confidence and inspire additional achievement. Bring outside perspectives by facilitating stakeholder and sponsor engagement to reinforce executive support and commitment. Leaders that reframe crisis into a learning opportunity to continuously improve their goals set the stage for the organization to harness the benefits of change.
In a recent interview with ADAPTOVATE, Rodney Satterwhite, SVP of Bank Performance for Liberty Bank & Trust, detailed how he collaborates with leaders to conduct quarterly organizational reviews of the Bank’s vision, strategic objective progress, and key performance results to ensure clarity and garner insights and feedback from teams across the organization.
After the President provides the quarterly all-hands updates, managers are provided talking points to discuss successes and opportunities with their teams. As a result, team ideas for improvement are prioritized with leadership for input and testing. With a continued focus on Liberty’s vision and collaboration with teams, the company has experienced a significant uptick in teams providing quality suggestions on improving both the customer and employee experience. This is the first of several initiatives to foster continuous alignment at all levels within the organization and increase team participation.
Leaders who clarify their organization’s purpose and regularly review priorities are better equipped to navigate marketplace disruption and manage complex change successfully. They can adapt to changing market conditions, identify new opportunities, and maintain a competitive edge to keep their organizations thriving even in turbulent times, thereby increasing their chances of long-term success.
Establish Team Autonomy: Leaders that empower teams throughout the organization foster a culture of open communication that drives improved performance. According to a study done by Harvard Business Review, teams that feel their voices are heard by their leaders are 4.6 times more likely to feel empowered to perform their best work. Research at the University of Nottingham shows that leaders who encourage team involvement and autonomy in decision-making are more likely to foster innovation. Teams that are afforded responsibility feel inspired to contribute their ideas and suggestions, leading to increased organizational creativity.
There are a couple of approaches leaders can take to create an environment that improves team empowerment:
- Guide ways of working: When leaders create autonomous working environments for their teams to deliver on the North Star and OKRs in times of change, it fosters trust and ownership that increases performance. Steve Jobs highlighted the importance of autonomy, stating: “It doesn’t make sense to hire smart people and tell them what do; we hire smart people so they can tell us what to do”. By guiding teams to co-create ways of working, leaders empower them to design how to deliver results best. Ask them to identify their team norms to establish how they will interact. Build accountability for these commitments by celebrating those who practice them and privately addressing those who might have returned to old reflexes. Even in uncertain times, uphold team norms to demonstrate commitment to supporting team decisions. Whether teams work in a remote, office, or hybrid environment, establishing agreed-upon work practices facilitates a collaborative atmosphere for members to develop agency and improve productivity.
- Create transparency: Leaders that provide a dedicated platform to collate relevant work information enable teams to identify what’s essential and make fast, data-driven decisions in times of crisis. By providing access to a shared space, teams can easily visualize, track, and action work, including risks, issues, and dependencies across teams. Great leaders leverage this organized knowledge to clarify the connection between organizational objectives and work completed by teams, glean insights about what is and isn’t working well, and clear roadblocks and impediments. This requires active listening to identify achievements and obstacles and how leaders can help. Forbes detailed how Kelly Knight, President and Integrator at EOS Worldwide demonstrated the importance of this transparency in changing times. She utilized a tool to provide teams with a clear outline of the organization’s vision and roadmap that enabled the business to pivot quickly during the pandemic. This transparency and focus allowed EOS to navigate disruption for themselves and their clients. Empowering teams with the right tools to proactively address business matters is an essential step for leaders who want to be prosperous in times of transformation.
By enacting these empowerment and transparency strategies leaders promote accountability, creativity, and innovation that leads to elevated levels of success.
Client Case Study
Situation: At a global energy company, creating a profitable product portfolio posed several organizational and market challenges. These included a lack of strategic direction and prioritization due to a complex matrix of stakeholders, unclear and inconsistent performance metrics, and difficulty engaging teams across regions with unique regulations and needs.
Complication: There was a clear need for portfolio optimization. Without a comprehensive strategy, leadership could not effectively make decisions on portfolio improvements. Lacking clear criteria to make data-driven decisions resulted in a surplus of products and an inability to determine their value. The teams needed help to collaborate globally while navigating regional and regulatory differences.
Actions: We worked with the client to focus on high-impact initiatives to ultimately drive greater profitability. The decision was made to identify a strategic purpose for all products, create a living product lifecycle to regularly assess and optimize the portfolio, and maximize value across regions while incorporating global views.
The action steps included:
- Aligning on North Star and Objectives and Key Results (OKRs) for the portfolio. OKRs and prioritization made it clear when to start, stop, or pause project work.
- Implementing a Quarterly Delivery Cycle (QDC) to improve decision-making and iteratively optimize the portfolio in shorter cycles.
- Building a revised governance model by engaging internal members and leadership across regions to understand areas of ambiguity and pain points.
Results: Within 6 months, leadership established a continuous improvement culture that supported a competitive strategy to accelerate profitable growth. The efforts produced the following achievements:
- Creating a clear strategy enabled the global teams to prioritize and deliver high-value solutions that led to a more lucrative and aligned product portfolio. Within the first 4 months, $70 million in cost-saving opportunities were identified and 172 products were approved for removal.
- Implementing quarterly review cycles provided a framework to iteratively improve the portfolio. Teams developed a platform to prepare product lifecycle performance metrics and trends. Additionally, ad-hoc approaches were created to identify and evaluate future optimization opportunities.
- Establishing four cross-functional delivery workstreams empowered teams with decision rights to improve work criteria, processes, and tools to fit geographical needs. This allowed the teams to define and discuss plans for asynchronous work.
Overall, this client case study showcases the importance of leadership empowering teams with clear purpose and implementing approaches that establish team autonomy when managing complex change. By doing so, leaders and their teams can identify cost-saving opportunities, avoid setbacks, and allocate resources to the most impactful projects. The result is improved organizational performance and significantly more likely to sustain during and past marketplace disruptions.
Summary
Intentional leadership is an absolute necessity when it comes to managing change successfully. Whether navigating industry shifts or adjusting to global disruptions, it is crucial that leaders clearly define organizational purpose and priorities and provide teams with the autonomy needed to execute those outcomes successfully.
If you want to learn more about your ability to influence and successfully implement change and enhance your organization’s leadership abilities, contact ADAPTOVATE.
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