Richard Hall
At the end of this book you will understand that change means everything is up for grabs and that mastering change is essential to survival and success. In addition, you will be able to create strategies that excite and engage your stakeholders and thus create strategies that succeed.
Who needs another book telling you the same stuff? Sit back, skim through this and change your mind and your ways of strategy creation.
The aim of this book is to produce a simple, easy-to-read-guide to help you create a vision and an action plan to make things work better.
Knowing where you want to get is the big breakthrough. Following this is a recognition that you will have a battle with people if you try and change things. Because fact: we hate change. Change strategies are hard to execute, let alone create.
‘If you don’t know where you’re going it doesn’t much matter which road you take.’
Lewis Carroll’s Alice in Wonderland
Lewis Carroll should have been an entrepreneur. Nearly all of them have a clear idea where they are going. But it all goes wrong when they are successful and scaled up and the bureaucratic stuff starts and spoils everything. It is rather like a fog descending.
Think about how people think and feel. Be constantly empathetic. Unless you understand those who will apply your strategy, the chances are it will fail.
The key issue in business is people and how they feel and think. These people are consumers, customers, employees, leaders, stakeholders, suppliers and the media. A few years ago, there was a view that removing the erratic human interface in customer service would have breakthrough benefits. Replace it with voice recognition robots, they said (try talking to BT to see how this works). In our dreams, artificial intelligence may, one day, replace moody call-centre operatives, but not yet. Not for a long time yet.
People in business sometimes say they like change. But they are lying – they do not like it because human beings dislike changing the status quo. Take moving house, which, in the stress level league table, is up there with death, divorce and being fired. Why? Because it is disruptive change; it takes you out of your comfort zone and you cannot find anything.
All change is stressful, awkward and, all too often, seems a fruitless exercise in moving deckchairs.
But, once we understand that deep-rooted hatred of change, we understand why so many change strategies fail. Deep down, a lot of people want them to fail so they can (as they describe it) ‘get back to normal’.
Never underestimate how resistant people are to change. Progress may not be the great thing to them that it is to you. Factor their conservatism into your planning.
In addition to empathising with people, any change strategy needs three things:
All winning change strategies will contain these ingredients.
You do not like change? Well, look around you at the pace of change, at the broken paradigms and at the companies that have disappeared. As General Shinseki of the US Army said: ‘You may not like change, but you’ll like irrelevance even less.’
Anthony Muh, one-time head of investment at Citibank (Asia), said, ‘Uncertainty is the only thing to be sure of,’ and Tom Peters foresaw it all when he wrote Thriving on Chaos in 1987. Because, in the 21st century, normal is chaos, messy and uncertain.
The world, despite the occasional determined attempt by terrorists to prove the reverse, is becoming richer, safer and more pleasant. Advances in medicine, technology, engineering, surgery and logistics is roaring ahead, but the management of people and understanding of the human mind is lagging behind, especially in managing the human reaction to change.
Because all business nowadays is about change and people do not like change.
Explaining how change applies to everything and is ubiquitous will make it easier for you to convince people this also means us.
So, we had just better get used to it. And get used to setting out a clear route plan showing where you want to get, what you want to change and how to make that journey safely, swiftly and successfully.
The context in which we operate today is one of:
Compare your company, its products, service levels and strategy with other organisations you admire. Are you changing radically and fast enough?
In formulating a change strategy it is important to remember just how many moving parts there are in the world around us. It is impossible to create a robust strategy without factoring in some of these external change factors.
Your biggest challenges are stakeholders – what they want, feel and think. Creating a really simple, clearly expressed strategic idea with sensitivity to the speed of competitor response is a huge challenge. But your stakeholders need it, so get thinking.
Three of the biggest challenges of a rapidly changing world are:
1. Stakeholder engagement – there are so many stakeholders in all businesses nowadays that sometimes I am surprised anything happens at all, given the multiplicity of communication needs. Just produce an up-to-date stakeholder map and you will be astonished. In covering all these stakeholders, you willll be practising what one-time Tory cabinet minister R. A. Butler called ‘the art of the possible’ – the ultimate in pragmatism.
Your job is to make things happen, not to have endless debates and arguments. The art of leadership is to lead and nudge grudging stakeholders into understanding and supporting you and to avoid stand-offs, strikes and rows.
2. A real simplicity of ideas – why, what, who, when, how much? In creating the strategy, the biggest challenge of all is to boil down the key idea of the strategy to a few very simple words. This is where brands matter – brands that (when done well) stand for one simple thing. If you cannot explain what you are doing and how you want to move forward to an eight-year-old, then it is probably too complex.
3. Competitive response – because the competitive context in which we operate is so complex and aggressive we need to be very aware of whether we are maximising our competitive position. Recently, Joseph Joseph – the innovative kitchenware manufacturer – said it took three years to develop a new product from scratch and it took a pirate competitor three months to knock it off. As a result of the amount of business being stolen, they have become ultra-careful about restricting knowledge of their new product development programme to a very tight circle.
And the practical issues in writing the strategy are to:
The biggest challenge of all is involving and inspiring people around you. All too often, strategies are dull, dry and rational things. They need to sizzle, too.
This section shows how to write that plan and tee it up so as to maximise the chances of success. The first question is, do you know who you are and what you stand for? Big issues are here. These include the importance of emotion in creating a strategy – no emotional engagement, no chance and a big question: do we need revolution not change? Is change radical enough in the 21st century?
Companies like Ben & Jerry’s, the ice-cream masters who sold to Unilever, clearly know what they stand for and where they are going. They showed this when, in a killing-two-birds-with-one-stone advertisement, they mocked the idiocy of management-speak mission-statement language with a strike to the jugular of their values. The ad read:
‘MISSION STATEMENT: To make nice ice cream.’
So, the first question you must answer is this one:
‘What do we do that makes us competitive?’
Constantly measure yourself against your competitors, especially those you would like to emulate. Spend time assessing if your positioning as a company is as distinctive, clear, simple and competitive as theirs.
In a world of increasing commoditisation, the brand that clearly differentiates itself wins. Look at Apple. Look at Zara.
‘If you do not know where you come from, then you don’t know where you are, and if you don’t know where you are, then you don’t know where you’re going. And if you don’t know where you’re going, you’re probably going wrong.’
Terry Pratchett, I Shall Wear Midnight
First of all, decide where you want to be. That will not be a number, top or bottom line; it will not be a story just built around money. Profit is the consequence of what you do, not an end in its own right.
It will be about why on earth you come to work every day; it will be about what turns the people on from the top to the bottom of a company; it will be about sustaining the passion that got the business going in the first place and it will be about writing a story about the exciting and impressive situation that you want your business to be in some five years from now.
You create a vision by asking yourself about the future:
If you are still wondering how to visualise, listen to John Lennon in the words of ‘Imagine’ about dreamers.
The ability to imagine is what distinguishes inspiring leaders – and you are, indeed, not alone in wanting to be one.
Create a vision by imagining what your most desired future would look and feel like. Go on, try: it is 2020, you are market leader – what did you do right to get there?
So, you have a vision – a clear and simple description of what the future could and should be. To make it happen and to allow those around you to follow the recipe for this delicious vision you have created, you need to go through the process of writing it all down.
Here is a format.
Failure to plan carefully will waste time and money and irritate people. Make sure you check off the basic who, what, how, why, when questions thoroughly.
Understand the task before anything is set down – before anyone starts building, they employ an architect, a chartered surveyor and lawyers to do searches; plans precede foundations and reconnaissance is never wasted. So decide:
Aim for simplicity and clarity, we said. An example of this comes from South West Airlines in the USA, consistently the most successful airline in the world. Herb Kelleher, who once when pressed to refine his strategy for the company, said: ‘Yeah, we have a strategy here. We make things happen.’
He was talking about his idea of an airline to a friend over dinner in 1967, not just another boring airline but one focussed on the key Texan cities, which the major airlines were under-servicing.
He drew the idea as a triangle with three points in Texas – Dallas, Houston and San Antonio.
It was that focussed. It was that simple.
Today, it has revenues of over $18.5 billion, 46,000 employees and 3,500 flights a day. It is the world’s largest low-cost airline and is thriving. Strategies that are going work need to be rooted in the real world and not just on paper and in theory.
Produce a final strategy, that (should you, sadly, be eaten by a tiger) has the stand-alone merit of being able to be picked up and implemented by someone else. It does not have to be long, but it does have to be clear and thorough. But beware taking this whole process too solemnly. Rachel Bell, founder and CEO of Shine Communications, said, ‘Paper plans are paper planes’. Plans on paper are necessary, but the heart of strategy creation is with real human beings talking together and reacting to ideas.
Your beautiful plan will be a thing of compromises and even a bit messy because the key is to get buy-in. Spend your main effort on involving as many people as you can in the strategy creation process.
It must include the following:
Making sure this change strategy is embraced, understood and championed requires a compelling series of pieces of communication.
Change strategies or blueprints for the future cannot be allowed to escape into an organisation.
They have to be proudly presented and convincingly introduced.
There are three ways of doing this:
Any change strategy is doomed to falter, unless accompanied by a powerful communications plan.
Ensure you spend enough time on the style, clarity and content of your communication. Skimp here and a great change strategy falls at the first fence.
At every stage of the strategy development, these questions need to be asked:
Sam Goldwyn, the great film man, ironically noted that it was very hard to predict – especially when it came to the future.
I regard the future as a place where fiction writers excel and analysts and futurologists rub shoulders, looking a bit puzzled. Flesh out your own vision by using your imagination and your appetite for storytelling. Because the future is a story until it happens.
Within this work of predictive fiction, you must outline the threats and opportunities beyond our control.
Draw up a very clear, simple step-by-step plan showing how the strategy will be implemented:
Mike Tyson, the ex-heavyweight boxing champion (not generally rated for his intellect, but what a surprise he often is when you read what he says), said something particularly brilliant:
‘Everyone has a plan until they get punched in the face.’
All recent work by psychologists shows the importance of emotion that is so often discounted by MBA-educated analytical brains: ‘Me, emotional? Forget it. I’m a strong-willed decisive rationalist.’
The best book on the subject is by Daniel Kahneman, Thinking, Fast and Slow, in which the power of the intuitions and emotions over rational thought is shown brilliantly. Whilst Donald Calne, the Canadian neuroscientist, said this:
‘Reason leads to conclusions; emotion leads to action!’
Introducing emotion into a strategy means seeing things from the user’s or consumer’s viewpoint and getting into their shoes. Tears, laughter and excitement all play a part in strategy creation (as they do in our everyday lives.)
The Fortune Knowledge Group, with the global advertising agency Gyro, launched a report that endorses all this work, ‘Only Human: The Emotional Logic of Business Decisions’, which surveyed 720 senior business executives, revealing the undervalued role of emotion in business decisions. It starts as follows:
‘In the age of Big Data, it is often assumed that the rational and analytical are the primary drivers of business decision making. However, a new study… has found it is just the opposite – while a majority of senior business executives believe that data is an important tool when making business decisions, it is subjective factors such as company culture, values and reputation that truly play the pivotal role.’
The key findings about the role of emotions in decision making are:
It is useful to know how your team score in terms of emotional quotient – how do they feel about gut feelings, human insights and the importance of soft factors?
Cognosis, the UK management consultancy, concluded something similar rather earlier and, in a rather larger sample, conducted a piece of research they called ‘Edge’. Cofounder of the business, Richard Brown, said:
‘Quite simply, strategy creation should be exciting and strategies should inspire.’
But it was the conclusions within their research that were most helpful. They showed that most strategies that failed did so because people within the organisation were not sufficiently emotionally engaged in the strategy. Buy-in happens at a rational and an emotional level but emotional buy-in is the key and, without it, no sale is made, however plausible the reasons to buy might be. So, strategies created and admired by boards wilt through lack of enthusiasm lower down the organisation, where people have been neither involved nor engaged.
Brown’s conclusion was that, despite the research demonstrating so palpably that organisations needed to reach into the way people felt rather than try and manage the way that they thought, it did not work like that in practice. Senior managers’ self-perception is of their being icy cold, emotionless decision makers. ‘Follow me’ is to them an order not an inspiring suggestion.
The biggest competitive edge you can give your change strategy is to give it a more emotionally charged content and style.
The great brands have always blended rational and emotional appeal but, if we were, as some think, wholly rational beings buying for function and on price, Heinz Baked Beans would have been obliterated in the baked-bean price war of the 1990s when a rash of products were sold at around a third of their original price. Even when blind tests showed these parvenu entrants tasted as good as Heinz, the Heinz loyalists stood firm.
Given their historic quality problems, who would have ever bought a Jaguar? But, in the 1970s, owners would stand misty eyed beside their car patting the broken-down machine and saying, ‘Never mind, old girl, the AA will be here soon to make you better.’
Brands like Coca-Cola, Harley-Davidson and Innocent do what Heineken used to claim its beers did, ‘Refresh the parts other brands don’t reach.’
Emotion drove the positioning and appeal of the German sweet Werther’s Original (like Müller yoghurt before it, marketers in the UK were sceptical that the Brits would buy something so Teutonic-sounding). The reasoning was in a world where 40 per cent of marriages fail and the bonding role of grandparents was essential, the Werther’s advertising created a grandparent-endorsed brand and spanned – at the same time – three generations. Advertisers loathed the emotionalism but they were wrong.
Experience shows emotion beats smart-arse humour for most people any day of the week. That is why films like Frozen do so astonishingly well.
It was Andy Gove of Intel who said:
‘High tech runs three times faster than normal businesses. And the government runs three times slower than normal businesses. So we have a nine-times gap.’
The need to be nimble, to U-turn when necessary and to overtake competition – global competition no longer being just the guy down the road – has taken a few lumbering businesses by surprise: Kodak; Tesco flatfooted by two German chains Aldi and Lidl, which they had not taken seriously; virtually all the banks; BHS, a floundering retail giant, and so on, and so on.
Resolve to move faster. Practise giving off ‘Let’s get it done now!’ signals. Decide to complete the tasks you have to do more quickly and get that to-do list done faster.
Speed creates a series of things – internal energy, intimidation to external competitors and a reputation for being up to date. Quite simply, slow is old-fashioned. Incidentally, as good as speed is, do not rush crucial decisions and make them faster than they need to be taken. Speed is great, but random guessing is just amateur.
The pace of change in today’s world is such that in our change strategies we need to avoid just tinkering around the evolutionary edges and consider more revolutionary thinking. Gary Hamel (London Business School and the Californian Management Lab) in his fascinating book What Matters Now explained why there are big changes in thinking. He calls his book ‘a blueprint for creating organisations fit for the future and fit for human beings’.
He gets very excited by the phenomenon so many of us seem to wish would go away:
‘Business models aren’t eternal and in recent years their mortality rate has been rising. In industry after industry we’ve witnessed profound paradigm shifts… what matters now more than ever, is that you question your assumptions, surrender your conceits, rethink your principles and raise your sights… the only question is who’s going to lead and who’s going to follow.’
Look around and work out how imminently mortal you and your competitors really are. Do you question your assumptions, surrender your conceits, rethink your principles and raise your sights constantly?
If, after reading Gary Hamel’s thoughts, you do not feel inspired to lead, I would be surprised.
How will you know your strategy is a good or bad one until it is too late, until it has succeeded or it has failed? This book is about understanding the end-to-end process of the creation of a change strategy and beyond that. But the real test of success will be the way people engage with and talk about the strategy. If they were thoroughly involved in its creation, chances are they will be more supportive.
But the acid test of the strategy creation lies, ultimately, in the answers to the following questions:
To help you, here are the key headlines that you need to keep in mind:
Strategy = a plan for success that says where you want to go.
Change strategy = a new strategy that involves disruption.
Strategic plan = a route map with milestones so you not only say where you are going but also how you are going to get there.
Vision = a dream of your future.
Any strategy that does not have a powerful emotional content will not work. All the evidence from psychological research shows that the intuitive and emotional side of our brains holds sway. Reason leads to conclusions; emotion leads to action.
People are not robots – they need to be inspired and to be engaged. Strategy cannot be created in isolation to the people who will have to make it happen. Increasingly, how we manage and work with each other is the key to success. People are complex… figuring out how to persuade and motivate them will take most of your time.
A blindingly obvious point? Sure – but the quality of the way we talk, hold meetings, write or present to each other needs to be smarter, more dramatic and exciting. Great communication works. Bad communication can kill a great idea.
A vision is not a mission statement (I hate that arid expression). It is a vivid dream of what your future might look, feel and be like. It is a technicolour, 3D story with detail and drama. It is not full of numbers. A spreadsheet does not belong in a vision.
We live in a complex world with complex people but, more than that, as technological advances accelerate, everything is engulfing us in a fog of complexity. Make things simple. If a child of eight cannot understand what you are saying, it is too complex. Simplification may lead to the greatest competitive edge you can find. Follow the Apple mantra. Reduce. Less is more.
Back to communication. But this is a specific point. We try to please everyone but, in so doing, communicate in a fuzzy and unclear way. Use short sentences. Use simple words. Make people repeat what you have said. Be clear that they are clear.
The speed of change is intense. Arguably, all strategies need to be change strategies now. Embrace change; do not fight it. Nostalgia is not a strategy.
The challenge is to ensure your change strategy is radical enough. Chances are you will be too timid. Chances are you will need to imagine revolution not just change. Ask yourself just how different the world you live in might be in five years’ time. Ask if you feel the strategy that you are creating will give you enough of a competitive edge.
Speed for its own sake will not get you far. But we live in a fast world and the exhilarating impact that a dynamic leader and his or her team can have on those around them is amazing. Be thoughtful, be circumspect and weigh the odds carefully, but create a go-go atmosphere. Strategy should be exciting, not just right.
You need to be able to measure the impact of your strategy, not just numerically, but in the round. You need to able to learn from what you do – both successes and things that did not quite work out as you had imagined. Set up a longitudinal study (that is a piece of research repeated every six months) so you can check out what happens, how people feel about what happens and how embedded the change strategy is.
Do you feel more confident about creating a vivid strategy supported by a thrilling vision of the future?
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