Adaptability is a core part of the leadership toolkit, as Jordi Ferrer, VP of Enterprise for Cisco Systems, explains: “We like to have a vision of where we are going, but the landscape changes constantly and you must adapt – the way we do that is to continuously listen to our customers.”
The Cisco story is one rapid of growth, driven by nearly 200 acquisitions. It has achieved huge success, with a market cap of around $170 billion, but its leaders realise that strategic change is required. “Success can make you complacent. It’s difficult when you’re profitable and doing well to really change your market model,” Jordi explains.
From the senior leadership team’s perspective, the rationale for making changes is irrefutable. “We enter a market to be ‘Number one’ or ‘Number two’, but competitors do not stand still; you have to continually respond. There is technology disruption, so when a new entrant comes in with a different way of doing things and an extremely low cost base, you have to adapt,” he explains.
In a poll of executives conducted by Criticaleye, 95 per cent said their business model was being disrupted in some way. However, only 12 per cent felt they had the right executive team in place to adequately respond to that disruption. As Director of Programme Management at Criticaleye, Tom Beedham has worked closely with companies that need to reassess their commercial model and traditional routes to market.
He says: “To successfully deliver organisational change, the senior leadership team must be able to find a way to manage business as usual while implementing medium to long-term plans. When executives are too focused on short-term KPIs they often lose sight of the strategic imperative for transformation.
“This is reflected in our research, in which 86 per cent said their leadership team was too inward-looking and fixated on the day-to-day.”
The art of storytelling
Once the leadership team sees it is necessary to implement change, the next step is to relay this message in a simple, compelling way, to a range of stakeholders with different views.
John Goddard, Partner and Member of the Global Leadership Team at L.E.K. Consulting, comments: “Many programmes end up generating an awful lot of initiatives, which tend to overwhelm the organisation. Breaking those down into component projects and being clear where the ownership lies can help.”
From John’s perspective, “generating that commitment to change, and engaging the decision-makers and future leaders, so as to foster ownership of the new strategy, is probably one of the toughest things to do”.
There must be a narrative for transformation that people understand, both intellectually and emotionally. “It’s as much about hearts and minds as it is about putting in new processes. Sustained delivery happens when plans are jointly created by all relevant stakeholders at multiple levels in the organisation, rather than just handed down and pushed through from above,” adds John.
At Cisco, Jordi explains there is a fortnightly meeting with the CEO and executive team, during which every employee can participate and listen. “We do the same thing at a local level; we’ve a team of around 5,000 in the UK. In my area, I also have open sessions where people pop in every two weeks. It makes an enormous difference to clarify challenges and correct your course. There are no pedestals – the company is very flat.”
Two-way communication needs to be ongoing. Jordi adds: “The question is how to get everyone else to understand the broader picture. To do that, you must explain to people why their current job might need to change. This requires patience. You should show them what is going to happen and how you are going to help.
“There is usually a very small number of people who create obstacles. The vast majority want to co-operate.”
Anita Maclean, COO for the Corporate Banking division at Santander, which has 1,000 employees across 50 locations in the UK, has a lot of experience in leading large-scale transformation. She agrees “it’s vitally important that during periods of transition you take everybody on the journey with you; that people fully understand the rationale and the key to achieve objectives”.
Like Jordi, she believes it’s important to keep the channels of communication with employees open, while reiterating broader strategic goals. “You also need to look at the performance against those objectives. Get direct feedback from staff so that the management team can understand the challenges, take away actions and develop targeted plans to address them,” she says.
Effective planning is evidently a fundamental aspect of business transformation, but that needs to go hand in hand with careful communication. Jordi says: “It’s about engaging the overall population to make sure they all understand why we are making changes, because unless they buy into it, they are not going to do it.”
Everyone in the business needs to feel ownership and understand the strategic turns being made, so they can join you on the journey.
These thoughts were shared during Criticaleye's recent Conference Call, Leading Through Change – Balancing a Long-Term Plan with Business as Usual.
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