The ability to master revolutionary change leads to success. It requires taking on the dramatic challenge of creatively destroying and remaking societies and cultures in order to improve them, and doing so repeatedly. In order for nations to win, revolution, driven by leaders with ideas and the heart and guts to bring them alive, must become a way of life.
There is no doubt that revolutionary change can be painful. But in all facets of life, including business, one must master change. Faced with increasingly difficult, large and frequent shifts in economies, societies and marketplaces, we need leaders who can redirect life's emotional energies. Leaders of any society, private or public, must be willing to repeatedly let go of old ideas and old ways of doing things and adopt new and better ones. And they must be able to help each and every member of their community to generate the high levels of positive energy needed to do the same.
No matter what their situation, leaders can improve their performance if they do a better job of generating ideas, instilling values, creating positive energy and making tough Decisions. And they can build stronger societies by teaching others to do the same. The people who succeed and maintain that success over time do so through successive periods of change; hold that thought as a backdrop in your mind as you read about winning leaders and what they do to build winning organisations.
Leaders are the people who decide what needs to be done and the ones who make things happen. It's true that one person alone can't change the world. It takes the concentrated energy, ideas and enthusiasm of many people. But without a leader, the movement doesn't get started in the first place, or it quickly dies for lack of direction or momentum. Without leaders, good results are a matter of random chance, and therefore unsustainable.
Leaders create the cultures and use the tools. Good cultures will mend themselves. But that's simply not true. Radical cultural shifts are needed at certain critical stages, and without leadership, they just don't happen.
In a broad sense, what leaders do is they stage revolutions. They are constantly challenging the status quo and looking around to see if they are doing the right things, or if those things can be done better or smarter. And, most importantly, when they do spot something that needs to be changed, they do something about it. In more concrete terms, they do two specific things:
--- See reality - size up the current situation as it really is, not as it used to be or as they would like it to be. Seeing reality requires that leaders remove the filters that screen out the things they might not want to see, acknowledge their own and their business' shortcomings and accept the need for change. When you miss a delivery, it's easy to blame a supplier for not getting the parts on time, or to blame the customer for having demanding specifications. It's a lot tougher to admit that procurement system is messed up or to accept that the failure to give the customer what he wants is organisation's failure to deliver.
Facing reality is about personally accepting the case for change. This is often referred to as "acknowledging the burning platform." Founders of new businesses often see realities that older competitors in the field miss. Federal Express was started by Freed Smith, because he saw the reality that there would be an enormous demand for rapid delivery of packages in the emerging global market-place and that this would make the economics of setting up such a service highly favourable.
Seeing reality is often more difficult in established business, because it means letting go of ingrained ways of thinking and working. Andy Grove of Intel, in his book 'Only the Paranoid Survive', describes the shakeouts in the computer industry in the 1980s as some companies - including Intel and Microsoft - adapted to new realities, while others such as IBM, DEC, Sperry, Univac and Wang failed to do so. As Grove explains it, around 1980, there were several successful computer companies that had proprietary designs for the chips and hardware in their computers, as well as proprietary designs for the operating systems and application software that ran them. These companies sold their large and expensive machines through their own sales and distribution networks, and they all made lots of money. Grove calls this the vertical period of the computer industry, because each company was a self-contained, vertically integrated player.
Once a strategy has been selected, leaders must figure out what actions have to be taken to successfully implement it, and they must take all of them. Often that means walking away from old systems and setting up entirely new ones.
Implementation of a massive organisational change is the hardest part, because it requires selling the new response - including the case for change-and weeding out the resisters and the superfluous work. Implementation of an idea requires values, emotional energy and the edge, or guts, to see it through to the end.
Implementation is where you tackle the tough day-to-day issues. It's one thing to decide to consolidate operations. It's another to tear down the corporate bureaucracy and streamline the processes. This requires that leaders change their behaviours and teach others to do the same. It his doesn't happen, any boosts in he bottom line will be short-lived.
Just as the word implies, leaders accomplish things by leading, that is, by guiding and motivating other people. Dictators issue orders, using fear and punishment to command compliance. Leaders shape people's opinion and win their enthusiasm, using every available opportunity to send out their message and win supporters. For many of the best leaders, the full-court press instinctive. Others take a more systematic approach, but whether consciously or instinctively, leaders always operate on three distinct levels - on the organisation's technical, political and cultural systems.
Every group that exists for a purpose has a technical system that accomplishes the purpose; a political system that determines how power, influence and rewards are used to motivate people; and a cultural system consisting of norms and values that bind people together.
All of them affect how people think and behave. China, for example, is struggling with a technical (economic) system that is rapidly moving toward market-driven capitalism, while its political system is clinging to old-fashioned totalitarian communism, and its cultural system is torn between the two. In the US, on the other hand, the three systems are more aligned.
The technical system is firmly rooted in capitalism, the political system is 'democratic, and the Cultural environment values the supremacy of personal freedom, as embodied in the Bill of Rights. Sometimes, it's hard to differentiate among the systems because they are so intertwined, but all three are always at work, and the leader who wants to make a lasting difference has to work on all three.
Jeck Welch of GE tackled the technical system by designing a "GE business engine." This engine would consist of stable, highly profitable units that generate cash, and fast-growing businesses that would use the cash to produce even greater returns.
In the political arena, Welch confronted GE's massive bureaucracy. For decades, GE's "scientific management" system had been considered one of the company's greatest asset. It allowed the company to discipline and control its far-flung and diverse businesses. But by the early 1980s, the control shifted to bureaucracy, and the company was choking on its nit-picking system of formal reviews and approvals.
People were judged and paid according to how well they co-operated with the bureaucratic rules, even though the procedures delayed decisions and often thwarted common sense. Mastering the system had become a stylised art form and a requisite for advancement. As a result GE's best managers devoted far more energy to internal matters than to their customers.
As head of GE Plastics, Jack Welch knew this well because he had spent many years hassling, and being hassled by the enforcers at GE headquarters. He grew the Plastics business rapidly by doing what he thought needed to be done and apologising later if he got called down by the corporate staff. Welch made it to the CEO's job by outwitting the bureaucrats.
He understood that they liked documentation and reports, so he became a master of the game. He became famous throughout GE for his beautifully packaged multivolume presentations that were filled with charts, graphs, timelines and whatever other eye-catching gimmicks he could think of.
He replaced the bureaucracy with a new political system based on "integrated diversity." The headquarters staff was substantially reduced, and control over planning and much of the capital spending had been pushed out into the operating units.
He cleared out stifling bureaucracy, along with the strategic planning apparatus, corporate staff empires, rituals, endless studies and briefings, and all the classic machinery that makes big-company operations smooth and predictable - but often glacially slow. As the underbrush of bureaucracy was cleared away, we began to see and talk to each other more clearly and more directly... Freed from bureaucratic tentacles, and charged to act independently.
In 1994, Welch explained in a hallmark speech to several hundred GE-managers the concept of boundarylessness using a simple analogy. "In this company, if you can picture the house, the house got taller and taller and taller. As we grew in size, we got more complex, we built walls functionally. The objective of all of us in this place is to blow up the internal walls - the floors vertically and the horizontal ones. That the game we're at, that's what we are fundamentally after."
He continued, changing metaphors, to explain that the "lasers are insulators. They're like sweaters. When you go outside and you wear four sweaters, you don't know that it's cold out. You haven't faced reality. You're not getting the straight scoop on the temperature. You're all covered up. As you peel each sweater off, you learn more about the temperature. That's the same thing about layers."
To teach this message, Welch used every technique he could think of in order to help people to understand it. He preached it over and over. He provided mechanisms for people to begin to live the new way.
He once sternly told a conference of GE's several hundred managers, "People throughout this company hear us talk about boundarylessness and taking out layers, and they look at what we've done. Where we have multiple layers still left, they rightly question our integrity... The only way I am going to get at this thing is to ask you to do it, to simply, treat it as an integrity issue. We have no room for boundaryful people at GE, and we must become boundaryless if we are going to get the speed we need to survive."
Winning individuals are leaders, people with ideas with ideas and values, and the energy and edge to do what needs to be done. And organisations are winners because they have good leaders, people who understand the importance of selecting the right things to do and who are able to manage the complex forces required to get them done. Because of this, winning organisations are leader-driven.
They value leaders, they have cultures that expect and reward leadership, and everyone in the organisation actively puts time and resources into developing leaders. Remember, leaders win because of their ability to continually and consistently create more leaders at all levels of their organisations.
(The writer is an advocate and is currently working as an associate with Azim-ud-Din Law Associates)
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