Article

Leading in Turbulent Times

Recognising that the world is constantly changing is a first key step, but insight doesn’t create change. To lead through change requires leaders to actively engage, think, explore, learn and ultimately adapt how they do things to ensure their organisations make the changes required to survive and thrive.

Authors: John Brodie – Consulting Director & Fortune Gamanya – Associate Director

Business leaders find themselves in a highly disrupted environment, where many of the rules of doing business, expectations of their stakeholders and ways of work are being fundamentally re-shaped. The challenge for leaders is that they need to move from having the change happen to them, to beginning to shape the change in a way that will enable sustainable and potentially exponentially successful organisations of the future.

Don’t waste a good crisis

Crises can be incredibly transformative because they directly threaten our survival or the status quo and “force” people to make changes to survive. The cause of the crises is not what drives the disruption to businesses, societies, economies…, but rather how people responded and changed the way they see the world and adapted by doing things differently. It is in these changes of perceptions and behaviour that the opportunity lies.  

If we think of two recent crises in world history, the Global Financial Crisis (GFC) and the Covid-19 pandemic. The GFC shifted perceptions of financial institutions by breaking trust in these organisations and launched an exponential growth in the “risk” management and continues to shape how these institutions do business as one example of the impact. The pandemic restricted access to the workplace and forced many people into remote work. It has begun to change perception of where work gets done and how many organisations do business with their customers. The disruption has seen the adoption of new technology and digital platforms in the workplace at an unprecedented speed, as well as the acceleration of e-tailing and platform-based businesses.

The challenge for leaders is that the threat a crisis creates often compromises our ability to think and engage our creativity to develop new and innovative solutions. To lead, one needs to choose. That is explore options and make decisions, which requires leaders to take time to think. In times of crises the ability to access our pre-frontal cortex (the part of the brain that holds our executive functioning i.e. ability to think about future consequences, connect the dots, explore options etc…) is compromised. In times of crises the more primitive areas of our brain take over as we kick into survival mode. The amygdala takes over and pushes us into learnt responses and habits, because based on our evolution in times of crises the danger was imminent and we needed to act immediately “flee or fight”, there was no time to think. Paradoxically for business leaders when they are faced with significant disruption that is up-ending key fundamentals of how business is done, they find themselves reacting, rather than thinking and acting strategically. 

What are the fundamental shifts we need to make?

Many leaders demonstrated their ability to react appropriately to the recent pandemic-led crisis and have managed the crisis effectively through the implementation of their business continuity plans and managing to operate in a shifted reality. The critical question is how effective have they been in creating a platform to thrive, by beginning to make fundamental changes to their business’s strategies, operating models, real estate, technology, organisational structures, people skills and cultures as we move into recovery?  A recovery that
needs to recognise that some fundamental shifts linked to the 4th industrial revolution that were in their infancy have been significantly accelerated, and that we are no longer at the beginning but moving toward the middle of this significant economic shift.

The most fundamental shift that needs to be recognised is that to the nature of work. What was spoken of until recently as the Future of Work is now been shifted significantly to the recognition that the world of work has now changed and will continue to significantly evolve over the next few years. As with every industrial revolution this has been the key disruption for humanity as work evolves to align with the new economic drivers, so does the need for humans to develop new skills and evolve their social and organisational structures. In this
revolution humans are needing to strengthen their uniquely human qualities such as empathy and creativity to leverage the insights that significant amounts of data enable. Learning to collaborate in a digital economy where we move from functional specialisation to the ability to collaborate in non-hierarchical team structures and can effectively leverage the capabilities in our broader eco-system to innovate and scale at speed.

The above changes are shifting the capabilities we require, how we design our organisations, structure and access skills. Leaders need to base their organisational shifts on how they are evolving work (what and how we do it) to create the next level of value. Why is this the fundamental task of leaders? As with the disruption it is ultimately the shift in human perceptions and behaviour that is driving the shift in the economy, similarly until we shift the perceptions and behaviour of our people in our organisations we will not be able to respond effectively and deliver the next level of value. The technology is the enabler, that is shaping change, however, it is what we do with it and how we use it that creates value.

A key concern with the current industrial revolution is that machines will take over the work of humans. The above applies particularly to repetitive tasks where automation, machine learning and ultimately AI (Artificial Intelligence) can processes things faster, more accurately and efficiently at enormous scale. The businesses that are beginning to thrive and grow are those that are leveraging these shifts and using them to fundamentally shift their business models and more importantly the work that their people do and how they organise themselves. We all are aware of Google, Amazon, Uber, Netflix…. The shifts, however, are now accelerating in traditional industries. Many banks are now evolving into platform businesses, Telco’s are becoming digital operators, retailers are moving to e-tailing, mining is seeing operations become increasingly automated and leveraging data an AI to operate more efficiently and safely, automotive companies are building business models around a world where people don’t drive, or own cars…

If leaders are going to lead their organisations to take advantage of the changes that are happening and enable the shifts, it needs a fundamental shift in thinking around the work we do. Every business model has at its centre work: what we do and the unique or optimum way that the way we do things to deliver value. If what and how we do things do not deliver the right level of value, we will initially perform poorly and then ultimately go out of business. Recognising that at the core of the disruption is the shift in work and how we think about creating value requires a fundamental shift in thinking and perhaps more importantly how we do things as leaders. A core function of leadership is to translate the strategy into how we do things differently to deliver on the strategy. Plans don’t execute, people do, and if we are facing a key disruption the key requirement is to understand how what we do needs to change, and how we need to do things differently to achieve the results we want.

Figure 1: Designing with work at the centre

The change needs to start with leaders doing things differently

Leaders can have an immediate and real impact on their organisations thinking and ways of doing things, by beginning to shift some key behaviours and ways of doing things (habits) across their leadership group. A key first task of leaders as they begin to shape the shift in their organisations is to break some of the learnt habits of their leaders that would perpetuate traditional thinking and ways of reacting to situations within their business. Remembering that we want to enable our leaders to engage their pre-frontal cortex, and not slip back into learnt habits and ways of doing things. Shifting habits i.e. making meaningful change in the way you do things as an organisation requires consistent and deliberate effort, because you are rewiring the brain.

The way we interpret information and therefore react to situations is wired into our neurophysiology in the way that our neurons are linked through the different synaptic connections. As we learn and experience new things, we create new synaptic connections. The more we repeat something the stronger and more entrenched these connections become, and ultimately these shape our habits. Electricity follows the path of least resistance, so when we are learning a new way of doing things, the challenge is that without persistence in grooving a new neural pathway we will quickly revert to our old way of doing things. It literally requires less effort, because we don’t have to think. Recognising that ultimately the key task of leaders is to drive change, thinking about new things requires more energy, and changing the way we do things requires lots of persistence. It is a different way of thinking about why real leadership is hard, because the leaders have to do the hard thinking work, and then persist in shaping the way things are done differently in their teams and
organisations, when you have a whole lot of people doing things in the older “easier” way.

It is therefore key that leaders are extremely deliberate, clear and simple in the behaviours (habits) they want to change in their organisations. Success is based on making some key changes to key habits, however, as the above illustrates trying to change to many will most likely result in limited long-term change, as there is not enough energy to change so many habits at once.

The below are 3 key habits that should be considered:

Align for continuous change and integration (Slow down to speed up)

Planning needs to consider two fundamentals shifts in ways of working: Firstly, change is continuous, and therefore planning needs to be a continuous process. Secondly next level value requires the ability to leverage your eco-system, not break things into their functional siloes. Strategic planning traditionally is an annual event, which starts at the top and is then cascaded down into functional areas or disciplines. If there is a large transformational programme, we may have a temporary Programme Office to integrate, co-ordinate and drive continuous engagement. However now we need to recognise that changes are constant, and there is an increasing requirement to integrate and manage multiple changes that are happening in our organisation.

Leaders need to begin to create consistent space in their monthly agendas to review, align and integrate their strategic initiatives, rather than delegating these to leaders that are not positioned to integrate or make decisions. This is a shift away from a management mindset into a leadership mindset that recognises the need to balance strategic and operational work, by continuously working on, and not only in the business. Creating a fixed set of slots 1 or 2 in the monthly calendar where the time is spent understanding the key initiatives, looking at key integration requirements and aligning this with other leaders i.e. what decision is needed from Leader X to enable leaders in Function Y to proceed is fundamental to speedy and successful execution.

The formation of these strategic “governance” alignment forums and ensure they work effectively requires some deliberate effort and persistence. It is about breaking the habits of avoiding conflict or focusing on specialisation for efficiency and delegating to a functional silo rather than developing a cross functional leveraged solution. If the forums operate optimally, they reduce hierarchy and encourage consensus, which by default creates conflict. Learning to effectively manage conflict and align on priorities has a significant impact on the speed at which change can be implemented within the organisation. The default habit is to move to action, before the right level of alignment work is done. The conflict and often misalignment manifests in the next level of leaders, and often derails any real ability to implement change, especially not at speed. Alignment across a historically functional divided value chain takes time and effort but is a key shift that is required to move towards faster and more leveraged problem solving. Borrowing from “agile” principles we need to “slow down to speed up”.

Communicate for purpose

As we move to a world where we need to make consistent changes that require higher levels of integration across our organisation, a core role of leaders is the ability to consistently mobilise and align teams across a complex eco-system. An old habit was to reference a 5-plus year vision. Now leaders must articulate shared purpose statements that will focus teams on solving problems, that ultimately will enable business success.

An example is if you are a business that is moving increasingly onto a digital platform for your transactions. The vision probably reads something like “Be the No.1 choice for customers in our market…”. The multi-skilled, cross-functional and supplier team solving and delivering on the customer experience needs a purpose that focuses them on a simple definition of how value is created, and success is defined i.e. Why are we doing what we are doing e.g. the purpose for the team could be: “Make it easy to pay.” Purpose statements articulate the problem to be solved, and definition of success that is not an end state, but rather requires continuous iteration to enhance and evolve the experience. We have made it easier to pay, however, the market is continuously moving so how are we continuously making it easier to pay if this is a key market differentiator.

The shift from vision to communicating with purpose recognises some fundamental shifts in the world of business and work. Firstly, you must keep improving and changing to stay in the game, purpose statements focus on how we create value together and aren’t defined by an end state or goal. Secondly, we need to mobilise and align multi-skilled and networked teams to solve increasingly complex problems. Purpose statements need to appeal and make sense to a broader group of individuals than those I have direct control over or manage in my function or organisation. Finally, people are more motivated to solve problems than achieve visions i.e. people are more likely to change behaviour because they are avoiding something, than if they see the potential for future success. Purpose statements direct our thinking to the “problems” we need to solve to achieve our mission with a clear definition of how success is measured. 

Resource for the future

If you are a hammer, everything is a nail. One of the fastest potential accelerators for change is to bring in fresh thinking and skills, that can change the perspective and provide completely new and alternate solutions. In a crisis as discussed earlier our tolerance for new thinking is compromised, and often the habitual response is to pull one’s trusted colleagues to develop solutions. Trusted colleagues, however, are that often because they share our beliefs and experiences. The key question we should ask ourselves when looking to create shifts and changes is “do we have the right team?”.

The question unlocks thinking on two levels. Firstly “what is the right team?” i.e. what capabilities, experience and attitude do we need to succeed based on how things have changed. Secondly “where do these people sit inside or outside our organisation. Very often it opens the door for others in the organisation to participate in solutioning, which helps to unblock or unlock value that already exists in our organisations. It can accelerate change by pushing the team to bring in new skills and capabilities, that perhaps would not have been considered previously. A key shift by introducing new people is that they often introduce new habits “ways of working.” This shift in how we do things is most often the key to unlocking the next level of value.

Making these shifts in personnel is not easy, and it initially creates greater uncertainty by introducing new ways of working and thinking. One must balance how much a team can tolerate, not only because it disrupts the team, but also it often activates organisational anti-bodies that resist the change in people and thinking. Leadership is tested on how the team engages and deals with the changes, and therefore it needs to align with the previous two habits. Make sure leaders are aligned on “why” we are bringing in the new people, and they understand the purpose of what these individuals are supporting the business to solve. 

Concluding

Leaders need to be very deliberate in making time to think and engage their executive functioning to ensure that they can tap into their creativity and develop new solutions and ways of working. It can be practically done by focusing on 3 key habit shifts: 1. Slowing down to speed up and ensuring the right level of alignment before solutioning and executing. 2. Communicating for purpose, by defining what problems need solving and how success will be defined and 3. Resourcing for the future, by bringing in new skills, thinking and ways of working. 

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