The CEO's viewpoint on leading change

The CEO’s viewpoint on leading change

What executives think and do in order to succeed with change

As advisors in a Nordic management consulting firm, we work with a large number of business leaders every year, helping them develop and improve their organisations and businesses. The challenges and possibilities facing these leaders come in many different shapes, but we find that there is one constant – it all involves change.

The CEOs viewpoint on leading change

Inspired and intrigued by this, we asked 25 CEOs and top executives (from here on referred to simply as CEOs) in private companies and public organisations to share their point of view on the subject of change. The conversations were conducted in the spring of 2014, and we asked the CEOs to reflect on leading change.

We were curious to find out how these experienced leaders succeed with change in reality, so that we could get inspired ourselves and inspire others by sharing their experience, but we also wanted to compare their approach to change with what we believe in ourselves as advisors and consultants.

Our key findings on how the CEOs lead change included:

The CEOs viewpoint on leading change

We know that roughly two-thirds of all major change initiatives do not have the desired impact – and that the cause is often a lack of competence and/or time invested in change management. The majority of those we interviewed said that driving successful change is a significant challenge and that succeeding with change is still very much a question of having a clear sense of purpose and direction, well-developed instincts for what needs to be done (and in what sequence), integrity and courage to stand behind your ideas, even in the face of opposition, and to have the ability to engage people’s hearts and minds.

Why is change (still) difficult?

To summarise, the CEOs agreed on the following:

  • Driving change is basically what a leader does – it is the job.
  • It is seldom easy, but it can be more or less difficult, depending on how the change is perceived and the consequences of the change.
  • Very few said that they use a set framework or a theoretical model for change management. What they use is experience (what worked before), some basic principles (such as “involvement of the top-100”) and an “agile” approach, including a fair degree of trial and error.

Different choices for how to succeed with change

As indicated above, one of the key questions to the CEOs was whether they use a set method or framework to guide them when driving change. The general conclusion was that they did not – at least not in the sense of subscribing to a specific model from the academic world (for example Kotter’s 8-step model) or a model from consultants (like Prosci’s ADKAR® model). One notable exception was that 15 – 20% of the CEOs stated that they use Lean and “continuous improvement” as basic models when working with change.

The fact that so many do not use a set model obviously does not mean that they act on a totally ad hoc basis. The majority of the CEOs seemed to have an intuitive idea of how to approach and organise a change process. In fact, they use a combination of the following factors:

  • Previous experience from extensive exposure to change in different managerial/leadership positions
  • Personal values that influence how they manage the change (for instance, the view on top-down vs engagement and participation)
  • An assessment of the situation at hand and of the possibilities and limitations pertaining to that situation
  • An understanding of the impact of the organisational culture on how to succeed with change.

Based on the interviews, we identified six choices which are considered by the CEOs when deciding on how to approach a change initiative (note; the six choices are the sum of reflections from all interviews). The categories are not mutually exclusive but overlap each other in different ways.

The CEOs viewpoint on leading change overview

Change leadership

In our conversations with the CEOs, we also wanted to focus on what the leaders really do to lead change – change leadership. From the conversations, we detected six domains of change leadership that were considered critical by the CEOs:

  • Authenticity and integrity
  • Leaders who take the lead
  • Forming the right team
  • Effective stakeholder communication
  • Creating high engagement
  • The importance of culture

Authenticity and integrity

Although only a few of the CEOs used the word “authenticity” nearly all of them stressed the importance, but also the difficulty of staying true to yourself – your beliefs and values during periods of difficult changes. Most of them admitted that sometimes you need to make changes which you are not 100% convinced about yourself, but that you still need to be able to look yourself in the mirror by the end of the day.

You need to be honest. There are usually no IKEA instructions for how to handle the change.”

Leaders who take the lead

We picked up on the following wisdom from the CEOs:

  • Change requires a different type of leadership than during periods of relative status quo
  • Change requires you to make bold decisions – often without all the necessary information
  • Put your main efforts into execution and follow through/course correction, not into developing strategies

Forming the right team

A recurring theme was the importance of having the right people in the team to drive the change initiative. The top management team driving the change must be “the right people”, i.e. sharing the same view on the desired state and agree on the necessity of reaching that state (and often the first step of the change process is to gather the right group of people).

In addition to sharing the same view on the desired state, it is also important to build a team of people with different competences and experiences. If the team does not consist of the right people, it may be necessary to replace the ones who do not contribute to the success of the change initiative. If resistance to the desired change exists in the core team, success will be hard to achieve.

Sometimes, it is necessary to bring in new people from the outside in order to achieve a “critical mass” of people with the right mindsets or competences.

Effective stakeholder communication

A relevant mapping of important stakeholders and a profound understanding of their views on the desired state is another important success factor when driving change. After securing the right core team, the next step is to secure an extended team of stakeholders who actively support the change process. An important part of change planning is to identify and analyse important stakeholders (individuals and groups) and their standpoints in relation to the desired change.

The middle managers are often pointed out as being an important group of stakeholders, and several CEOs also commented that “sponsors” are important stakeholders. You need to have strong backup from your sponsors before you approach the rest of the organisation with difficult messages (key sponsors should of course include the Board/owners).

Creating high engagement

Involvement and participation – the king’s road to win the hearts and minds of people. Almost all of the CEOs stressed that implementation of change stands and falls with all the people in the organisation who are prepared to think and act in a new way. Real change only occurs when people change their behaviour.

The importance of culture

With the right culture – anything is possible. With the wrong culture – everything is impossible. All of the CEOs stressed that the culture plays a key role when it comes to succeeding with change – with the right culture in place, the chances of success are high – with the wrong culture, most change initiatives fail to deliver the expected results. Two challenges were often mentioned:

  • How to clearly define and communicate “the right” culture, and what “good” looks like in terms of attitude and behaviour in the organisation?
  • How to change a dysfunctional culture, or how to upgrade a fundamentally positive culture to make it support the new reality of the company?

Concluding reflections

We believe that the role of good leadership is probably more important than ever. The CEOs we interviewed talked about the need for strong change leadership; leaders who give direction and who incarnate the desired change with authenticity and integrity. We fully share that view. We would also add that an important part of the CEO’s responsibility is to prepare and support leaders at all levels in the organisation for their role as change leaders.