Platt Perspective on Business and Technology

Re-Visioning leadership 7 – finding new ways forward in addressing change management challenges 2

Posted in strategy and planning by Timothy Platt on February 6, 2013

This is my seventh posting to a series in which I discuss leadership styles, and the issues involved in meshing the right leader to the right organization, and for their style and approach and their hands-on skills and experience, and for the organization’s current and emerging needs (see Business Strategy and Operations – 2, postings 345 and scattered following for Parts 1-6.)

I began a discussion of change management leadership in Part 6 where I put change management per se in perspective and at least began a discussion as to how a need for explicitly managing it can arise. Repeating a key point of definition from that, I note that when I write of change management here I am not referring to adaptation to ongoing change as a matter of keeping a business competitively relevant and on-course. I refer explicitly and entirely to management directed towards keeping a business out of crisis, or helping it recover from that state if it is already in crisis.

When I wrote of startup managers and the skills and experience and temperament suited to building a new business, I focused on the issues of building without preexisting forms or support systems. So by contrast, managers and executives who can only comfortably, effectively work within the supporting and defining frameworks of an already established business would face real challenges breaking out of that mold to build from scratch and without that safety net. In a fundamental sense, change managers face similar challenges.

• They have to work from the context of a preexisting organizational structure and system with operational and strategic processes in place and at all levels of the table of organization. But at least significant parts of this cannot be relied upon moving forward.
• For a manufacturing business that might mean outmoded production lines with inefficient and out of date equipment that is expensive to maintain. This might mean the production staff has out of date skills and would need retraining.
• For a manufacturer or a retail or wholesaler business this might mean supply chain inefficiencies or disconnects.
• For any business in crisis this probably means operational and/or strategic gaps and this can be long-developing or a sudden consequence of adverse events.
• But either way, and in any true change management situation, there are significant parts to the overall system that do not work now and will not work tomorrow or the next day either.
• Change managers have to know how to identify the break points.
• They need the organizational and communications skills to convey this understanding convincingly to others and to work with others in assembling this understanding in detail in the first place.
• They need to know how to identify effective ways to fill in or otherwise resolve these organizational lesions and when that means filling in resource-base, operational and strategic gaps, and when that means systems reductions and cutting back to a business’ core capabilities and needs.
• They need to be able to work with all relevant stakeholders in this. And while they can never truly satisfy everyone (anyone?) in this, they do need to develop functional buy-in from those stakeholders – or how to bypass them where buy-in and active cooperative support are not going to be possible.
• And ultimately, operationally this is all a numbers game and a matter of cash flow and organizational finances and in determining what to keep and rebuild and what to cut back and resize. The goal is all about reestablishing order and balance and to reach a point where the business that can effectively compete again.

A manager who has only worked in the stable confines of established businesses and according to the rules of a larger ongoing organization can become a successful entrepreneur and business founder. They might not succeed in their first try but the skills that are needed can be learned and relevant experience gained. Similarly, a manager or executive who has always worked within the supportive framework of a stable, competitive, smooth-running business can learn too. In both cases, bringing in outside expertise that has gone through this before and who can approach this business with fresh eyes and without office politics entanglements can really help. And in a true change management crisis or crisis-averting situation this can be particularly helpful as you only get to do this once for a potentially failing business and certainly if it is to avoid failing.

Startups can bring in founding team members or board members with startup experience, or as a less-pursued option they can bring in an experienced consultant. Cash flow issues and burn rate limitations can reduce the viability of bringing in a consultant except for helping with very specific issues and on tightly time-limited schedules (see my series Understanding and Navigating Burn Rate: a Startup Primer at Startups and Early Stage Businesses, postings 67-78.) But outside help is always a possibility.

For businesses facing change management crisis, help might be brought in as consulting services and this can be particularly relevant for family owned and run businesses where bringing in a new chief executive officer, or even a new outsider member of the CEO’s executive team might not be considered a viable option. Or an interim or long-term executive hire might be made and with the company’s board of directors bringing in a change management CEO in most cases where that happens. My point is that whether the in-house executive team includes relevant stage or condition-specific management and leadership skills, or whether this is brought in from the outside, effective expertise and help can be available where and as needed.

I am going to continue this discussion in my next installment where I will explicitly delve into the issues of finding and securing the right people with the right relevant skills and experience to fill management and leadership gaps for addressing special circumstance needs. In keeping with the flow of this series I will focus on startup and change management situations. Meanwhile, you can find this and related postings at Business Strategy and Operations – 2 (and also see Business Strategy and Operations.)

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