Maintaining Transformational Momentum During Crisis

Organizations already faced with the challenges of Digital Darwinism are now faced with an unprecedented set of challenges posed by the pandemic and an urgent need to respond quickly. However with 60-70% of organizational transformation projects failing before Covid-19, now what?[1] How can businesses maintain their transformational momentum amid crisis and how can they use the momentum forced on them to define coherent strategies and process for ongoing transformation?

One word: leadership.

In Digital Darwinism, technology and society are evolving faster than businesses can naturally adapt[2] and that makes new demands of leadership and forces the emergence of new business models. Without the right leadership in the right places, organizations will fail to identify opportunity or develop and execute the right strategies needed to survive.

Brian Solis said it best, “Digital Darwinism possesses no prejudice. You either adapt or you don’t. Because many executives are caught in either a state of future shock and/or are so caught up with delivering shareholder or stakeholder value quarter-to-quarter, the ability to lead digital transformation or innovation is constrained as a function of everyday out-of-touchness. But that’s still not an excuse. Times, tastes and behaviors change. Ignorance plus arrogance can only equate to irrelevance.”[3]

Enabling teams, partners, and clients in meaningful ways is necessary to maintain momentum in a crisis but requires changes in how we engage with those communities. This is because successful digital transformation is not a destination; digital transformation is an internal and external process that continuously evolves to the needs of the market and organization.

So what does behavioral science and detailed analysis of leadership teach us that we can use to understand how today’s leaders can maintain transformational momentum and accelerate through crisis?

Digital Transformation Requires a New Leadership Style

Traditional models of leadership are typically concerned with the leader as an individual who exerts influence over the members of an organization in pursuit of organizational goal. These can be viewed on a continuum ranging from Transactional Leadership (where employee compliance is secured through reward structures), through Transformational Leadership (which is based on more emotional factors such as commitment to the business cause), and extending to Charismatic Leadership models (where followers attribute extraordinary qualities to the leader).[4]

In isolation, these models don’t fully reflect the needs of modern business or the people that work in them. As John Chambers, former Cisco CEO and venture capitalist, told the New York Times:

I’m a command and control person, I like being able to say turn right and we truly have 67,000 people turn right. But that’s the style of the past. Today’s world requires a different leadership style, more collaboration and teamwork.[5]

Will McInnes echoes the sentiment that something new is required in his book, Culture Shock, in which he argues passionately for a more inclusive model of leadership that prioritises employees and customers over financial stakeholders.[6]

An inclusive leadership approach has a number of advantages, namely:

  1. It enables leaders to define culture in terms of employee and customer concerns, rather than being constrained by the need to support quarterly reports to shareholders;
  2. The focus on building consensus creates powerful employee commitment to the goals of the business;
  3. The focus on high levels of transparency creates a sense of inclusivity among the workforce; and
  4. Its inherently democratic nature recognizes that input from all levels in an organisation has value.

In these times, it’s natural to be fearful for the safety and well-being of friends, family, and colleagues. Likewise, concerns about jobs, revenue, and organizational stability once the immediate risks of the virus abate may naturally loom. Moreover, there’s an understandable uncertainty about what the post Covid-19 world will be like. And yet, as leaders and individuals, we must deal with the accelerated rate of change that responding to Covid-19 is forcing.

Because leaders need to bring people on the digital transformation journey with them, the critical outcome for leadership is reassurance. That is, reassuring employees that they are valued, secure, and that there is a plan; and, meanwhile, reassuring customers that their needs will continue to be serviced.

Most notably, creating reassurance is critical to maintaining transformational momentum to:

  1.  Create a sense of inclusivity,
  2. Communicate clearly and transparently,
  3. Make necessary changes, and
  4. Enable learning and growth.

Build Inclusivity

There are two key aspects to building inclusivity: (1) leaders positioning themselves as part of the workforce, rather than separate from it; and (2) developing plans with input from a broader range of people within the company.

Leaders are the rock of the team and the face of the organization. They influence the conscious and subconscious reactions of those around them both internally and externally. Countless studies show the impact calm, relatable, and credible leaders have—especially in crisis.

There are several key examples where the use of language and identity are effective means by which leaders can position themselves as one of the troops. For instance, look at the examples set by Dan Price at Gravity Payments who set a minimum salary of $70,000 for all employees while taking a 6 figure pay cut.[7] Moreover, the executives at some of the world’s largest companies pledged to take no salary, cancel any planned layoffs, and to continue paying hourly workers even though they are not working[8] in response to Covid-19. Whereas other companies have employees who have all taken pay cuts to avoid layoffs altogether.[9]

A culture of inclusivity also means seeking ideas and consensus from the members of your organization, essentially making all parties stakeholders in any plans that are created helping overcome feelings that change is something done too people, rather than done with. This also builds on the idea that leadership is not necessarily a function of position in the hierarchy and recognizes that leadership exists at all levels in an organization. Recognizing this unlocks the potential within a team, garners support and commitment to a plan of action and build momentum behind transformation plans.

Communicate Clearly and Transparently

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Effective leadership must include regular, clear, and transparent communication that reflects the experience of the people in the organization. For example, there is no point stating that business is great and sales are up if people can see that is not the case. Equally, in time of crisis there is little point in telling people it’s business as usual when everyone is suddenly working from home and unable to physically meet customers, colleagues or partners. When it comes to undermining confidence and commitment within an organization, very little is more effective than a grapevine left to thrive for lack of clear communication from leadership.

Clarity in messaging and transparency concerning the challenges and plans of the organization all help build trust and commitment from followers. Trust is an essential element in building the reassurance and commitment needed to get through the crisis. As Simon Sinek says, trust comes with a sense of value[10] and trust can’t be developed if your followers don’t believe what they are hearing.

Make Necessary Changes

The required rate of change associated with Digital Darwinism allows very limited time for leisurely consideration of the work that needs to be done, or how it can best be completed. More so now than ever, Covid-19 has accelerated the rate of change well beyond even that uncomfortable point. One of the most remarkable measures of this has been the spectacular increase in the use of video collaboration tools, by both businesses and consumers, since isolation measures have been imposed. By April 2020, Zoom were hosting over 300 million users per day, up from 10 million in December.[11] Meanwhile Cisco supported 14 billion meeting minutes in March 2020, up from 6 billion minutes in January.[12] This represents one of the most fundamental shifts in working practice in our lifetime and carries its own transformation challenges.

It’s not only working practices that have been changed either. Many organizations face the existential threat to their businesses that restricted access to customers presents to them. In this regard, digital-first businesses (such as Netflix and Amazon) have a marked advantage as their business models are defined by technology enabled access to their services. Yet for many businesses, rapid changes and the adoption of new processes become paramount as they work to maintain the viability of their operations. For instance, local stores offering new delivery services or pre-pay click and collect options built on new online ordering platforms, or schools having to adopt new remote learning technologies to maintain education services to their pupils.

The critical outcome, from a leadership perspective, is to learn from how the changes have been implemented and to create a blueprint process to managing change and innovation as an ongoing activity. While organizations are forced to make these changes, it does not detract from the effort and innovation that has been brought to bear to deliver them.

Enable Learning and Growth

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Beyond the infrastructure and operational changes adopted to address the challenges of Covid-19, leaders must give consideration to the education and enablement needs of their organizations. For instance, the shift to remote working requires not just confidence and competence with new tools such as video conferencing and remote working solutions, but also the development of new skills and behaviors.

Identifying the enablement needs and building the right learning interventions is essential to minimize the disruption caused by such seismic shifts in working practices. We know from behavioral psychology that humans learn faster and have a deeper level of mastery when they are motivated and engaged to learn. Moreover, learning is dramatically improved when people have the opportunity to build muscle memory around a skill. Behavioral psychology and learning principles show that the opportunity to transfer learning into the workplace is critical if behaviors are to change[13] and the business benefits realized.

It is essential that enablement programs are devised collaboratively if they are to drive real commitment to change and realize the desired business outcomes. The scope should include partners, customers, and suppliers, particularly where digital transformation enables new and more efficient methods for interaction. In this context, enablement becomes an engine for accelerating transformation by highlighting the benefits of change while taking risk out of the process of change.

Closing Comments

Ultimately, effective leadership today requires a more collegiate dimension than in the past. As the rate of change has been accelerated through necessity of responding to new challenges, it has never been more important to take the lessons learned and build a robust, repeatable process for handling change continuously. Leaders must create sense of reassurance by building inclusivity, communicating transparently, making necessary changes and investing in enablement; leaders who have done so, now have a golden opportunity to galvanize real and meaningful change for their employees, partners, and customers. Times remain interesting to say the least, but we are certainly at the start of something remarkable if we maintain transformational momentum!

Citations

[1] Ashkenas, R., 2020. Change Management Needs To Change. [online] Harvard Business Review. Available at: <https://hbr.org/2013/04/change-management-needs-to-cha> [Accessed 6 July 2020].

[2] SOLIS, B., 2020. Digital Darwinism: How Disruptive Technology Is Changing Business For Good. [online] WIRED. Available at: <https://www.wired.com/insights/2014/04/digital-darwinism-disruptive-technology-changing-business-good/> [Accessed 6 July 2020].

[3] SOLIS, B., 2020. Digital Darwinism: How Disruptive Technology Is Changing Business For Good. [online] WIRED. Available at: <https://www.wired.com/insights/2014/04/digital-darwinism-disruptive-technology-changing-business-good/> [Accessed 6 July 2020].

[4] Yukl, G., 1999. An evaluation of conceptual weaknesses in transformational and charismatic leadership theories. The Leadership Quarterly, 10(2), pp.285-305.

[5]Chambers, J. and Bryant, A., 2020. In A Near-Death Event, A Corporate Rite Of Passage. [online] Nytimes.com. Available at: <https://www.nytimes.com/2009/08/02/business/02corner.html> [Accessed 6 July 2020].

[6] McInnes, W., 2013. Culture Shock. Chichester, UK: Capstone Pub.

[7] Hinsliff, G., 2020. This CEO Took A Pay Cut To Give Employees $70,000 A Year. Now He’S Battling Amazon.. [online] https://www.huffingtonpost.co.uk/entry/dan-price-minimum-wage_n_5afd3d8ee4b06a3fb50dcf28?ri18n=true&guccounter=1. Available at: <https://www.huffingtonpost.co.uk/entry/dan-price-minimum-wage_n_5afd3d8ee4b06a3fb50dcf28?ri18n=true> [Accessed 6 July 2020].

[8] Kelly, J., 2020. Prominent Ceos Promise That They Will Not Layoff Workers In 2020. [online] Forbes. Available at: <https://www.forbes.com/sites/jackkelly/2020/03/27/prominent-ceos-promise-that-they-will-not-layoff-workers-in-2020/#5a0c3d619a61> [Accessed 6 July 2020].

[9] Schwartz, N., 2020. Pay Cuts Become A Tool For Some Companies To Avoid Layoffs. [online] Nytimes.com. Available at: <https://www.nytimes.com/2020/05/24/business/economy/coronavirus-pay-cuts.html> [Accessed 6 July 2020].

[10] Sinek, S., 2011. Start With Why. New York: Portfolio/Penguin.

[11] Lawler, R., 2020. Zoom Usage Peaked At 300 Million Daily Participants In April. [online] Engadget.com. Available at: <https://www.engadget.com/zoom-earnings-214253721.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAFD5O1EWS3C9DAyZYOsjHaAQSeokxGUbo0YVr5E87rqswoSbVFD0CrtilNjtw2welqeRDkatKowlr6VrGGSSZuQgiaIH-9XnakZOP90IZn7a4lFNTqheg6pe1kktnUzrCmo3UDLNlvHKe9GdhCP0fJ8C5Wm-FV7YAC-upcucPJWK> [Accessed 6 July 2020].

[12] Liu, S., 2020. Cisco Webex’s Meeting Minutes 2020 | Statista. [online] Statista. Available at: <https://www.statista.com/statistics/1106500/cisco-webest-meeting-minutes/> [Accessed 6 July 2020].

[13] En.wikipedia.org. 2020. Donald Kirkpatrick. [online] Available at: <https://en.wikipedia.org/wiki/Donald_Kirkpatrick> [Accessed 6 July 2020]. The Kirkpatrick model of training evaluation includes a focus on whether learning transfers into behavior change and operational impact.