strategy+business is published by PwC Strategy& Inc.
 
or, sign in with:
strategy and business
Published: May 28, 2013
 / Summer 2013 / Issue 71

 
 

Captains in Disruption

To pilot the new approach, Borne and the Amedisys top team created a “pirate ship”—an organizational unit kept separate from the mother ship, set up to prototype and offer a broader range of care for its clients. With any such skunkworks efforts, it is important to think through the separation in advance; how soon, and how thoroughly, can the insights and operations of the pirate ship be brought back to the main vessel?

Ultimately, the kind of organizational change typically needed to respond to disruption must be an ongoing effort. Says Barclays’ Jenkins, “It is about being continually dissatisfied with what you are doing. What is the next thing to drive for? There will always be a next phase. It is about constantly challenging and creating an organization that is never satisfied.”

Culture change. As difficult as organizational redesign may be, truly changing a large company’s culture in response to a disruption can be even tougher. But it is no less important. In the case of one large car company facing declining sales and a weak cash position, top executives had devised both a new strategy and a new operating model, but didn’t know what to do about their culture. They knew it had to be changed: It was slow and bureaucratic. The CEO set up a team of several of his best executives, who started defining the company’s cultural priorities: speed, willingness to take risks, and greater accountability.

The CEO understood that the only real way to change a company’s culture is by changing behavior. He began by asking his top team to make decisions in days and weeks, not months or years. They didn’t announce the change; rather, they just practiced the new behavior themselves, and it spread. Because the top 50 or so senior executives had become very isolated—the company had as many as 15 layers in its hierarchy—they began interacting informally with people lower down in the structure who actually knew what worked and what didn’t. The result was a much clearer picture of how the company operated, with the added benefit that the people involved became zealots about the need for change. The company made sure to act quickly on the best ideas generated through the process.

At Barclays, Antony Jenkins faced a tough task when he became CEO: to restore the bank’s public reputation and renew its internal culture. Though he had spent time at Citibank between 1989 and 2006, he began his career at Barclays in the early 1980s. Despite his time away, he considers himself an insider, which he feels has been a singular advantage since becoming CEO. In his view, it would have been incredibly difficult to come in from the outside and try to change Barclays. As an insider, he was already familiar with the strategic and cultural challenges facing the organization, and having the opportunity to “road-test” different approaches in individual business units was a significant benefit in taking on the CEO role.

“I was able to prototype what I believed in, first at Barclaycard and then at retail and business banking,” he says. “This became the foundation for my thinking about how to change the larger organization.”

Using his earlier experience, Jenkins developed a vision of a “go-to bank,” and turned it into action in the TRANSFORM program. The program was then approved by the board of directors, and presented publicly in February 2013. Now the challenge will be to sustain momentum and to run the bank to serve the interests of all its stakeholders.

Promoting cultural change, in Jenkins’s view, is feasible. “Leadership drives culture, and culture drives organizational performance,” he says. “Organizations look at how you behave, not what you say, and you can’t do it if you are not authentic and relentless. Do what you believe is right and do not get distracted by all the voices outside commenting on your plan.”

 
 
 
Follow Us 
Facebook Twitter LinkedIn Google Plus YouTube RSS strategy+business Digital and Mobile products App Store

 

Resources

  1. Amy Bernstein, “Yossi Sheffi: The Thought Leader Interview,” s+b, Spring 2006: MIT’s leading supply chain expert says business leaders have to figure out how to bounce back from the unthinkable.
  2. Christopher Dann, Matthew Le Merle, and Christopher Pencavel, “The Lesson of Lost Value,” s+b, Winter 2012: A study of companies with shrinking shareholder returns shows that strategic risk—self-induced disruption—is the number one cause.
  3. Ken Favaro, Per-Ola Karlsson, and Gary L. Neilson, “CEO Succession 2011: The New CEO’s First Year,” s+b, Summer 2012: Last year’s study focused on guidance for the incoming captain of the company.
  4. Art Kleiner, “The Discipline of Managing Disruption,” s+b [online only], Mar. 11, 2013: The interview with Clayton M. Christensen where the quotes in this article first appeared.
  5. Gary Neilson and Julie M. Wulf, “How Many Direct Reports?Harvard Business Review, Apr. 1, 2012: During the past 20 years, the CEO’s average span of control has doubled, giving fresh relevance to the question, How much should the chief executive take on?
  6. For more thought leadership on this topic, see the s+b website at: strategy-business.com/strategy_and_leadership.