CHAPTER 2

Connecting with strategy

A strategy defines the vision or plan for an organization, designed to help it survive and prosper within a future environment. A strategy can be defined as a concept, a process and an output. In this chapter we are mainly referring to it as a concept that provides people with a reason to change. Jack Welch, ex-CEO of General Electric and business author, explains the importance of communicating a passionate vision, coupled with relentless follow-through, in order to deliver change. Notice the use of the term ‘passionate’. Going through the motions simply won’t work when leading others to change; we need to be prepared to get fully ‘on the bus’ (another Jack Welch term) and have the courage to be the passionate ‘First Follower’ if we are to convince others to join in.

So, in this chapter we start by gathering the courage to take the lead and show how connecting with the strategy helps to take others with us. We will start to see some of the thinking that has already been done to allow people to share a compelling vision and see its connection to change. We will examine how the need for change can be analyzed and then show the best way to set goals to achieve your change ambitions. Sometimes people may not want to change, but if they can see the connection between the change and an overall strategy or goal that they consider to be of value, then they are better able to buy in to the change.

The Change Equation

Linking to strategy often requires us to tell a story, which may be about exciting positives or may also be about avoiding potential negatives. Richard Beckhard and Reuben Harris wrote about a formula for change known as the Change Equation in their book Organizational Transitions: Managing Complex Change (Beckhard & Harris, 1987). This change formula is a useful model to consider here, as we can use it as a structure around which to build our story.

C = [ABD] > X

Where C = making it happen, A = level of dissatisfaction with the status quo, B = desirability of the proposed change or end state, D = practicality of the change (knowledge of the next practical step, minimal risk and disruption) and X = cost of change.

According to this formula, there are three key factors to consider during change. First, the rationale for change must be clearly laid out, linking to the strategy. This may be about explaining the current or future problems associated with the status quo, making the need to change seem inevitable. Second, the end goal or vision for the change needs to be communicated in an appealing way, focusing on the benefits of the change – both organizational and personal. Third, the initiative must appear to be well thought-through and practical, reducing fear of the unknown and providing confidence that its achievement is possible. Because the cost of change is always high in terms of uncertainty and upheaval, it is always important to accentuate the benefits of the overall goal and link it to the strategy. Looking at this as an equation, we can see that we are more likely to deliver change if the multiplying effect of A, B and D is higher than the cost of change.

A good strategy creates a vision that provides meaning for those within the organization and may trigger images and emotions that can bond people together in pursuit of a common purpose. We all like to have a sense of purpose and find greater importance in what we are doing, perhaps to feel part of something bigger than ourselves. There is a frequently recounted story about President John F. Kennedy that illustrates this concept. Apparently, while touring NASA, he stopped to speak to a janitor who was cleaning the floor. When asked about his job, rather than refer to the fact that he was mopping floors the janitor responded with pride: ‘I’m helping to put a man on the moon’. Although this story may be apocryphal, it makes the point that we all want to feel part of something bigger than ourselves; if we want to influence people to behave in a certain way, we have to give them that sense of greater meaning. We can imagine that this is particularly important with changes that people really don’t like, because providing that sense of meaning is much more powerful and sweetens the pill of having to change.

Unfortunately, during change we often focus on telling people ‘what’ to change rather than ‘why’, which often results in resistance. Metaphorically, it is like people are looking down at potential obstacles or problems without the motivation to overcome them. On the other hand, connecting with the strategy or vision encourages people to look up and to see the future first; it allows us to paint a picture of the future with or without the change. The future might be positive and exciting with the change, or it might be negative and frightening without the change. We discuss individual meta-programs in Chapter 4, which explains how some of us are motivated by positive or goal-oriented language and others are motivated away from perceived pain. Again, this concept reinforces the potential power of the Change Equation in delivering change effectively. The point is that people should feel able to understand the consequences of not changing by looking to the future.

To build and communicate these powerful links with a positive or negative association, we need to ensure that the ‘why’, ‘what’ and ‘how’ of any change are understood at all levels of the organization. There can be multiple ‘whys’, ‘whats’ and ‘hows’ to ensure relevance and meaning to different audiences.

Of course, strategies have to be based on assumptions about the future environment; therefore, the quality and credibility of the strategy will be directly related to the effectiveness of the assumptions. Tools like Porter and Tanner’s (2003) PESTLE analysis can be used to ensure that the rationale for any strategy change is well evidenced.

Political factors

This may include likely government policies or changes, including tariffs, subsidies or immigration quotas, which can create perceived urgency, e.g., many businesses relying on consultants in full-time positions moved to outsource staff when National Insurance costs went up.

Economic factors

National and global economic circumstances, whether we are in a recession or boom times and exchange rates can all influence these factors, e.g., we may choose to extend our house rather than move in order to avoid Stamp Duty.

Social factors

This is more about the trends within society, including demographic and cultural changes in expectations for products, services and working environments, e.g., we may be influenced by what others who we consider to be of a similar demographic are doing, or we may be motivated to move jobs because we have friends in a particular industry.

Technological factors

Clearly, this is a rapidly changing and potentially disruptive force that can create competitive advantage in terms of goods, services and access to both customers and workforce, e.g., we may need to change processes to make goods available online or develop an online app for customer feedback.

Legal factors

New legislation can provide compelling reasons to change in relation to governance, e.g., the General Data Protection Regulation (GDPR), or legislation that provides new market opportunities for products or solutions.

Environmental factors

This relates to what is happening around us, including changing attitudes on environmental practices. This can be bolstered by government legislation (legal) or incentives, e.g., tax relief on green company cars (economic), which may make change more attractive.

Strategies may also be influenced by the level of competition in a specific marketplace; this could be about new products, companies driving prices down or the increasing bargaining power of buyers or suppliers. These potential opportunities or threats tend to bring additional urgency to any strategy, helping it to become more compelling and potentially easier for people to identify with.

As we have established, the purpose of a strategy is to enable organizations or businesses to survive and prosper, usually by meeting customer needs profitably or sustainably. If the ability to achieve this purpose is threatened, then it creates the need to change. This creates urgency and helps people to realize that things can’t stay as they are. Consider the example of a company restructure that is going to involve redundancies or job losses. Very often this is a painful and unpopular form of change. However, if people understand the consequences of no job cuts – perhaps the business will be so unprofitable that it will no longer be viable and therefore will close – then they will understand that the change is necessary and will buy in to the rationale. They can then focus on how the change is delivered to ensure the best outcomes for those affected. The restructure doesn’t have to be a negative vision; it could also offer a positive vision of a reskilled workforce that is able to beat the competition due to its enhanced skills and productivity.

This is all about how we re-frame or re-position a message before we communicate it. So, connecting with strategy is also about inspiring people to look to the future, helping them to consider the vision of change and to understand why in terms that are relevant to them. We have probably heard the term ‘golden thread’ being referred to when setting objectives. Essentially, if we understand the ‘golden thread’ – the link between our goals or objectives and the overall business strategy – then we understand why we are doing what we are doing, or, in this case, why the change is necessary. This is beneficial in several ways, first, it gives purpose and meaning, as outlined earlier, particularly if we can understand the direct link between our own activities or interests and the vision for change. Second, it empowers us to make our own decisions about how best to deliver the change. This is incredibly helpful when it comes to delivering large-scale change, which requires groups of people to take forward a future vision. Clarity about the overall purpose or strategy that we are trying to deliver acts like a compass, stabilizing us and ensuring that we stay on track.

Consider an example of a new company process that requires all contractors to complete detailed timesheets with a breakdown of how much time was spent with which customer. This will be time-consuming and therefore costly, either to the contractor or to the company. So, what is the purpose or strategy behind this new process? When we follow the golden thread through the organization, we find that the actual purpose is to better allocate training costs to clients, to ensure that all training is billed accurately. A blanket cascade of the new process without understanding would result in wasted time or money for half of contractors, many of whom work on pre-defined projects or temporarily fulfil internal roles. The golden thread also emphasizes that the most important piece of information to be captured by the contractors involved in customer training is which customers they are spending the most time on; it is not about micro-accounting for time.

All often, a blanket approach is taken when cascading new processes whereby people don’t understand the overall strategy or purpose of the change. This can lead to two problems: an inappropriate and possibly damaging new process is implemented more widely than required, or people see that the process is inappropriate and don’t follow through, which means the desired changes are not made. Understanding the overall ‘why’ as well as the ‘what’ or ‘how’ makes a huge difference when change is cascaded down an organization. Change Agents should have the courage to go back up the chain to question the purpose of a cascaded change, ensuring that it hasn’t been lost during the roll-out.

Of course, strategies and visions tend to be long-term, so however inspiring they are to begin with, they still require high levels of determination and resilience to see them through to fruition. It is no wonder so many change efforts fail to reap all of the benefits that were originally envisioned. It is challenging to keep focused and to stay on track over the long term, which is why we should also set key sub-goals or milestones along the way. This allows us to focus ourselves and others on more manageable, short-term deliverables in the confidence that they are taking us in the right direction over the longer term. This golden thread of alignment supported by short-term goals helps people to choose the best activities or behaviours when faced with uncertainty, which is so often the case in times of change. In the absence of leadership or immediate direction, by understanding and following the golden thread we are better able to decide on the best course of action ourselves in order to deliver the goal or strategy in question.

As Change Agents, we and others need to be able to clearly articulate answers to the following questions.

• Where are we now?

• Where do we need to go?

• Why do we need to go there?

• How will we get there (specifically)?

Most people are familiar with the concept of SMART goals – specific and stretching, measurable, achievable and agreed, relevant and time-bound. However, SMART really is far more than an acronym; it is well backed by behavioural science. Research shows that goals that people consider to be stretching yet achievable are actually more motivational than extremely easy goals. One of the most effective ways of encouraging high performance is by agreeing clear goals and providing feedback against them (Locke & Latham, 1994). I use the term ‘agreed’ intentionally because it is the involvement of the individual in setting the goal that increases buy-in and presumably motivation. Involvement is key to buy-in when setting goals and delivering change.

‘Relevant’ means relevant to the business strategy, so it is all about the golden thread, as discussed earlier. It means ensuring the individual understands the relevance of the goal in relation to the strategy and potentially in relation to their own role or their own interests. The more relevant to us we consider a goal to be, the greater our buy-in and motivation to pursue it.

Finally, any goal needs to be time-bound, to allow us to choose when to review it. This is particularly important in large-scale change that can go on for months or even years. There should be an overall target date or timescale to aim for and if this is months or years out then it is advisable to define a series of milestones with timelines. This helps to provide a sense of progress, keeping people focused and on track. Without milestones, it is easy for people to lose focus and for any progress to stop or even be reversed. As Change Agents, we need to help people to connect with the vision or strategy and to agree and define project plans with milestones that will take us from where we are now to where we want to be.

When we set strategies and goals it is easy for us to focus purely on hard, tangible metrics, yet we know that failure to address cultural or people issues is often at the root of many change failures. Nohria and Beer (2000) describe two basic theories of change that should be balanced in order to deliver sustainable change. The first, Theory E change, emphasizes hard economic value such as shareholder return, in effect being about cost savings or increased profitability through redundancies or the sale of a business. The second, Theory O change, is about developing corporate culture and human capability, effectively building intrinsic value into a company that will be realized later, through the skills, knowledge and motivation of the staff. In reality, most companies attempt to balance both theories during change. However, this approach needs to be carefully managed to prevent leadership from looking erratic by erring between savage cost-cutting and cultural development. As always, connecting with strategy is relevant here as there may be a harder, financial goal supported by a softer, cultural vision. Usually, the cultural vision is more motivational for people to buy in to but more challenging to be specific about when setting goals. It is worth persisting here and sometimes identifying success indicators can be helpful if the goal feels a little intangible. For example, we may want to increase our share price through increased sales and customer retention as our Theory E measure. In order to increase the sales and retain customers we may need to increase our customer satisfaction by developing the skills and behaviours of our workforce, which is a measure more associated with Theory O. Success measures may be levels of customer retention, net promoter scores and salesperson knowledge levels across our product range. Both are tangible and they align and support the overall strategy.

Of course, we can communicate a vision and strategy and set SMART goals, but there will still be obstacles and resistance to overcome. Chan Kim and Mauborgne’s (2003) Harvard Business Review article ‘Tipping Point Leadership’ can be useful when bringing strategy to life. Their four-step approach can be used to overcome some of the many hurdles.

Break through the cognitive hurdle.

Consider how you can help your audience to experience the problem rather than consider it as abstract. Storytelling is a helpful technique to use here; gather real examples of the problems or customer needs that are creating the need to change. Maybe the audience would benefit from hearing directly from customers (if not in person, via salespeople or video) how your business or product is perceived? Consider how you can bring the problem to life.

Sidestep the resource hurdle.

Another way of explaining this might be with the term ‘choose your battles’. This is about focusing resources on the areas of change that will make the biggest difference first. Don’t try to achieve everything at once; identify some quick wins and deliver them. If we are setting goals and milestones, as suggested, then make the earliest milestones the ones that will make the biggest difference and don’t try to achieve too many things at once.

Jump the motivational hurdle.

Rather than trying to change the organization en-masse, identify key influencers within the business who can do this for you. Consider the ripple effect if you drop a stone into a pool of water. By identifying the right influencers and getting them on board, potentially as fellow Change Agents, we can leverage their networks to deliver change rapidly.

Knock over the political hurdle.

Even when change is about to take place and the tipping point is reached there will still be resistors and possibly even saboteurs who want to cling onto the old way. Remember the story from Chapter 1 about the cynical operations director who had the potential to undermine the whole change initiative? Identify these people up front, particularly if they are senior, and have the courage to involve them and get them on board. If they feel like the change is their idea, we are far more likely to succeed.

Connecting with strategy is about creating the ‘why’ for change; it creates people with the vision and motivation to want to change. It also sets key milestones and goals that keep the change on track. The Change Superpowers that are most helpful are a diverse mix of painting visual pictures, storytelling, goal-setting and even project management.

Quick recap on connecting with strategy • Connecting with strategy is about providing people with a vision and reason to change. • The vision for change should provide purpose and be meaningful at all levels of the organization. • Communicate the ‘why’, ‘what’ and ‘how’ of change up and down the organization. • Use stories and emotions to create urgency and help people understand the consequences of not changing. • The future strategy should be broken into smaller SMART milestones to keep on track.

Online toolkit The following free change resources can be downloaded via: www.changesuperhero.com • The ‘Five Superpowers of a Change Superhero’ quiz • The ‘Five Superpowers of a Change Superhero’ infographic