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Cheat Sheet / Updated 03-27-2016

Business change comes in many varieties, yet most change types share one goal: to achieve a more productive, efficient, and adaptable organization. During changes — whether they are the result of a merger and acquisition, a technology implementation, or other large-scale change — people need visible leadership, ongoing, effective communication, and a cohesive effort toward building a sustainable structure.

Article / Updated 03-26-2016

Change is a constant in the world of business, and when faced with business change, leaders can respond in one of the following three ways: Do nothing and just hope it all works out. Manage it with a project plan from a cubicle or corner office. Lead the change with words and actions that support the future state. Successfully led changes, with visible leadership, result in shorter project timelines, widespread ownership of the change, and an organization ready to take on future challenges. What is visible leadership? Visible leadership includes three key components: setting a vision, actively discussing the change, and knowing the impact. Setting a clear vision for leadership The first job for a leader who wants to visibly and proactively drive change is to create a crystal clear vision of what the future will look like for the employees and then communicate it with passion. Leaders do this by walking employees through the status quo or “the current way things are done around here” to the desired state of where the organization wants to be once the change happens. Change leaders build a powerful case for the change, then work relentlessly to generate understanding and consensus. Actively discussing the business change Change leaders don’t just wave a magic wand and then hide out until the change is done. Visible leadership means the change leaders are out there talking about the change, adjusting their own behaviors to align with the change strategy, and actively addressing concerns voiced by employees. Knowing the impact of change in a business During change, visible leadership focuses on helping to identify negative reactions and barriers and knocking them down one by one. Common barriers to change may come from fear — fear of losing control, losing status, diminished compensation, loss of job security, or being asked to take on a bigger workload. Visible leaders help to align agendas and balance interests to reduce concerns and conflicts.

Article / Updated 03-26-2016

When a leader leads by example, maintains interest, and holds the pedal to the metal to keep intensity and commitment at their highest levels, the rest of the organization usually picks up on it, and people increase their own belief in the change. Regardless of your role, you have a great opportunity to make change happen by simply making the change happen with your own leadership style first. Whether you have a team of 100 employees or just manage your own work, think about what you can personally change to be more aligned with the vision of the future for the organization. The best leaders make change an organizational value by expressing, modeling, and reinforcing the principles in day-to-day operations. Have you ever had a manager who wouldn’t walk the talk and who gave only face time to important issues rather than really working on them? While implementing change, leaders must demonstrate integrity and act consistently with what they’re asking of the organization’s members. Following are the four key actions that a leader should take to effectively lead by example: Express the desired behavior. Model the desired behavior through decision making and day-to-day activities. Reinforce the desired behavior through forms of recognition and rewards. Endure to the end. Suppose that during a large technology change at your company, a new reporting system is implemented, but most of your team still is using spreadsheets to do work. Leading by example means you toss those formulas and worksheets and embrace and use the new tool. If you are asking someone else to do something, make sure you are willing to do it and are doing it, too. Here’s another example. Many companies are trying to change to better support a culture of work-life balance, but if you’re replying to e-mails at midnight, your own balance is pretty out of whack. You can say to employees, “Take time for yourself,” but if you’re not doing it, your employees will have a hard time doing it. Leading by example is not always as black and white as those examples, but it’s the foundation for respect from others in your organization. If you want people to show up to meetings but you’re frequently leaving the room to answer phone calls, your employees and peers will think you’re insincere. If you want to implement a new performance-measurement system that rewards results but you constantly reschedule performance-discussion meetings with your employees, the change will be seen as superficial. When leaders’ actions are inconsistent with their words, they can destroy the trust needed for an organization to effectively implement change. Even the most intricate and well-orchestrated plans will fall on deaf ears when the trust and credibility of the change leader is lost. How to do a changing-by-example audit Leading by example seems easy enough at first, but in reality it takes practice. Because leading by example is so far-reaching, take a personal audit of the example you want to set for the change. The two areas you want to address in your personal “changing by example” audit are what you physically and mentally give attention to and what new skills you’re mastering in the new environment. Attention: Where do you spend your time and energy? Are these items aligned with the goals of change? If not, what needs to change to make sure your calendar reflects the new way you want others to work? Capabilities: Have you taken the time to learn the skills you need as a change sponsor, change agent, or change advocate? If you take the time to learn how to become a better change expert, everyone around you will follow your example. Do the same for the new capabilities you’ll need in order to operate in your new business environment. What you do and how you do it is equally important when it comes to mastering the change process and the new way of doing business. Sneak in examples of the change you desire When it comes to changing by example, the rubber really hits the road when new skills are ready to be put in action. Until things are really done differently, you can say one thing but do something else. When the time for action comes, everyone can see who isn’t walking the talk. Do any of these situations sound like your organization? Skills and knowledge are assumed, not taught or developed. People learn on the job or through water-cooler conversations. Quality issues are dealt with after the fact, rather than eliminated earlier in the product development process. Employees may be rewarded for being the hero and saving the day for a customer when a product breaks rather than employees being rewarded for stopping the problem before it happens. Individuals complain about not having information, clearly defined roles, or straightforward responsibilities, but they then run as fast as they can (the other way) when asked to adhere to new standards. All of these situations can easily be turned into opportunities to lead by example. If skills and knowledge are assumed in your organization, have other employees (often your change agents and advocates) step up and teach classes. If you praise teams who get up at midnight to go fix something, start turning your attention to the teams that actually got to sleep through the night because they did things right the first time. If individuals complain about not having clarity, allow them to create the clarity for the new change. Leading by example doesn’t have to be a huge shift in the way things are done — small changes can add up to a big change in total.

Article / Updated 03-26-2016

How do you know if you need to enact any business changes? Wouldn’t it be nice if you had a big alarm that went off to let you know you need to change? Although that may seem like wishful thinking, you probably already have that big alarm button. Unfortunately, that alarm button may be lost in a swarm of e-mails, reports, and meetings. To dig out the big alarm button, ask yourself whether your company is going through or has been through any of these big change events: Are you losing market share? Are profits suffering? If other companies are taking over your market share by offering a product or service that’s more appealing to your best customers, start thinking about changing the way your company differentiates itself in the marketplace and brings value to your customers. If someone else is luring your ideal customers (even if they aren’t yours yet), the time is right to start changing. Are your best employees leaving to work for your competitors? If competitors have a better work culture or more progressive employment practices (flextime or work-from-home options) or are growing and offer more opportunities for advancement, start thinking about how you can change to attract and keep the best and brightest brains in your company. Has new technology made your products or services obsolete? Or is your company’s image simply outdated? Things change, and they change fast. A good indicator of the need for change is having products and services that are stuck back in 1999. For example, if you’re still trying to sell dial-up Internet service, you could use a change. Sometimes the outdated feel comes from the culture of the company or a product’s marketing, not necessarily from the product. Keep in mind that some of the best products and services haven’t changed for years, perhaps even decades. For example, Coca-Cola has been around for decades and will still be here decades from now. The product remains stable and reliable, but the company’s image changes with the times. Just because a product is old doesn’t make it outdated. Has the company been sold to another one or merged with another company? If so, your company may have a perfect opportunity to implement change. When two companies come together as one, you can’t just change the logo on the business cards and expect business to continue as usual. If no one steps up to manage the merge, issues will crop up in how people communicate, how teams work together, how performance is evaluated, and in hundreds of other people and process issues. Is the company expanding — either geographically or into new product and market categories? Has globalization resulted in shifts in labor and materials costs? As your company grows, you have to identify what you need to change as well as what you should keep the same. Growth is a great thing in business, but growing without recognizing the need to change how the company operates is about as rational as trying to put a 10,000 pound elephant on a kid’s scooter: It’s not going to happen, and the scooter will probably be damaged in the attempt. Do you have a new CEO or leadership team? High-level personnel changes merit a change plan because they’re bound to cause shifts in organizational direction, business goals, and even how individual and team performance are addressed. The change plan should include a strategy to address concerns and ideas of the employees working for the new leadership team. Are you implementing a new technology platform in your company? New technology is exciting, but with new technology comes new processes for work and new ways employees will do the work — in other words, change. If you just implement a new technology without addressing the people and process side of change, you will most likely end up paying for a wonderful tool that nobody can use or plans on using. Don’t sit back and assess whether you need to change how you do business only once a year. Refer back to your business plan frequently to track growth, market direction, and accountability within the organization. A big mistake many executives make is changing too often, just because everyone else is changing. When you think about your change, make sure you really need to shake things up for long-term success.

Article / Updated 03-26-2016

You’ve heard that two is better than one; a cord of three can’t be broken; there’s no “I” in “team.” A team working together well is a beautiful thing. Here are a few of the best aspects of teamwork: Teams accomplish more than individuals. Someone reading this is rolling their eyes right now and saying, “I can do so much more when I don’t have to work with others.” But although an individual may be able to get a lot of work done, it is quite unrealistic to expect a single person to know enough and have enough time to get everything done. Teams can help get work done more quickly and meet cross-functional challenges. Some research suggests that introverts, who are able to give a lot when working individually, do not contribute as much when forced to work in team environments all the time. Make sure introverts are provided an opportunity to contribute in other ways. An organization must recognize personality differences to be successful. Teamwork helps to retain the best people. Effective teams do more than just get the work done. Think about a time in your career when you were incredibly energized to come to work in the morning and felt you were really delivering results. You were probably surrounded by some high-performing people you could rely on to help get the job done. Teams, when working well, have the ability to engage some of your brightest stars. Teams contribute to the whole organization’s success. A team can only be fully understood in terms of its relation to the other parts of the organization. The interrelatedness of teams is important because it contributes to the overall functioning of the organization. Think of the change team like a baseball team: You may have a great pitcher and catcher on the field, but if the first baseman doesn’t know what’s going on, the team will not be wining any World Series titles anytime soon. During business change, you may have a great leader in one part of the organization, but if he or she has no technical or functional support, the change may not be successful. Teamwork across teams sets up the whole organization to win. Remember that an organization is just a bigger team often made up of smaller teams. So the meaningful change can be driven from the organizational level or project, process, or department level. A team is a team, no matter how big or small.

Article / Updated 03-26-2016

A SWOT analysis looks at an organization’s strengths, weaknesses, opportunities, and threats. If change isn’t easy, why in the world do you want to change in the first place? Pinpointing your need is the perfect way to start the change cycle. SWOT is a good tool to help leadership identify what areas need to change in order for the organization to thrive in the future and to help executives begin to frame the need for change. It can also help teams align the vision and goals with the costs and benefits of making the change happen. Here we take a look at a quick SWOT analysis for a small consulting firm looking to expand its market share. Strengths: The company’s strengths include knowledge of its offering, strong leadership, and a great product design. Weaknesses: The big weakness it needs to overcome is a small customer base and being the “best-kept secret” rather than the best-known firm. Opportunities: After considering strengths and weaknesses, leaders recognize a few opportunities: The company could partner with other firms, focus on specific niche marketing, or perhaps work to build its local market. Threats: Threats come in the form of large competing firms that may have more recognizable names. The company now needs to decide what is going to change. In this case, the change involves building the customer base. To convey to employees why things need to change, management should start by explaining that although being the best-kept secret in the industry sounds neat, not being known means not being in business. The company sees the need for change as becoming a recognized name to build a bigger business (more customers) while maintaining its expertise in the field (its strengths). Building the business case for change is one of the first steps leadership takes when undertaking an organizational change project.

Article / Updated 03-26-2016

Mergers and acquisitions take place for many strategic business reasons, but the most common reasons for any business combination are economic at their core. Following are some of the various economic reasons: Increasing capabilities: Increased capabilities may come from expanded research and development opportunities or more robust manufacturing operations (or any range of core competencies a company wants to increase). Similarly, companies may want to combine to leverage costly manufacturing operations (as was the hoped for case in the acquisition of Volvo by Ford). Capability may not just be a particular department; the capability may come from acquiring a unique technology platform rather than trying to build it. Biopharmaceutical companies are a hotbed for M&A activities due to the extreme investment necessary for successful R&D in the market. In 2011 alone, the four biggest mergers or acquisitions in the biopharmaceutical industry were valued at over US$75 billion. Gaining a competitive advantage or larger market share: Companies may decide to merge into order to gain a better distribution or marketing network. A company may want to expand into different markets where a similar company is already operating rather than start from ground zero, and so the company may just merge with the other company. This distribution or marketing network gives both companies a wider customer base practically overnight. One such acquisition was Japan-based Takeda Pharmaceutical Company’s purchase of Nycomed, a Switzerland-based pharmaceutical company, in order to speed market growth in Europe. (That deal was valued at about US$13.6 billion, if you’re counting.) Diversifying products or services: Another reason for merging companies is to complement a current product or service. Two firms may be able to combine their products or services to gain a competitive edge over others in the marketplace. For example, in 2008, HP bought EDS to strengthen the services side of their technology offerings (this deal was valued at about US$13.9 billion). Although combining products and services or distribution networks is a great way to strategically increase revenue, this type of merger or acquisition is highly scrutinized by federal regulatory agencies such as the Federal Trade Commission to make sure a monopoly is not created. A monopoly is when a company controls an overwhelming share of the supply of a service or product in any one industry. Replacing leadership: In a private company, the company may need to merge or be acquired if the current owners can’t identify someone within the company to succeed them. The owners may also wish to cash out to invest their money in something else, such as retirement! Cutting costs: When two companies have similar products or services, combining can create a large opportunity to reduce costs. When companies merge, frequently they have an opportunity to combine locations or reduce operating costs by integrating and streamlining support functions. This economic strategy has to do with economies of scale: When the total cost of production of services or products is lowered as the volume increases, the company therefore maximizes total profits. Surviving: It’s never easy for a company to willingly give up its identity to another company, but sometimes it is the only option in order for the company to survive. A number of companies used mergers and acquisitions to grow and survive during the global financial crisis from 2008 to 2012. During the financial crisis, many banks merged in order to deleverage failing balance sheets that otherwise may have put them out of business. Mergers and acquisitions occur for other reasons, too, but these are some of the most common. Frequently, companies have multiple reasons for combining. Even though management and financial stakeholders view mergers and acquisitions as a primarily financial endeavor, employees may see things a little differently (they’re thinking WIIFM, or what’s in it for me?). Combining companies has some potential downsides for employees, who have to deal with immediate fears about employment or business lines, but more positive sides of merging may include more opportunities for advancement, or having access to more resources to do one’s job.