How should a traditional company—with rigid processes and long-term employees—change in order to compete with the fast-moving global competitors popping up everywhere?
First, we’re going to make an assumption: Your company is not under siege from global competitors quite yet. You’re way too calm.
That’s O.K.—for now. But get ready. Because “war” hasn’t officially broken out yet, your job will be more difficult than it would be if your company was under siege. Organizational transformations, especially the brave-new-world kind required by global competition, almost never happen unless people really feel the fear factor in their bones. Survival is a mighty motivator.
Without an impending crisis, oh, how people love the status quo! A bureaucracy like yours, in fact, can feel like a warm bath. People never want to get out. And they certainly have no desire to jump into the icy water of global competition. And icy it will be, at least at first, because competitive organizations must be flat, fast, and transparent. Informal, candid communication is a must. So, too, is a mindset that has people constantly seeking best practices inside and outside the company.
And since people won’t jump, they need a push. Which is why you, or any leader trying to galvanize change, has to make a powerful case—and make it personal. Your people will change when, and only when, they see how new behaviors will improve the company and, more important, their own lives.
So get gritty and detailed. Use as much data as you can gather on industry dynamics, profit margins, emerging technologies, political trends—whatever will best illustrate two vivid story lines: one about what the company will become if it doesn’t change and the other about what happens if it does. Contrast plant closings with growth opportunities at home and abroad, lost jobs with more interesting work, and flat or shrinking wages with more money for everyone.
Then start campaigning. Talk and talk and talk. Not believing or absorbing a tough message the first or second time around is just human nature. You will have to repeat your case to the point of gagging, and then repeat it again.
Eventually, however, if your case is compelling enough, behaviors will change. They will change faster if you publicly praise and celebrate them whenever they occur, and faster still if you reward the people who demonstrate them.
Speaking of people, two other actions will help your transformation effort. First, make sure you start to hire and promote only true believers—those who completely accept the case for change and will proselytize for it, too. Second, make sure you start to ease out resisters who can’t let go of the good old days, no matter how much persuading they hear. Yes, some of them may do their jobs well, but they should be working someplace else. Probably at one of the few companies left out there with no global competition.
This question and answer originally appeared in Business Week magazine on August 07, 2006.
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