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 / Autumn 2007 / Issue 48(originally published by Booz & Company)


Exercising Common Sense

3. Senior management is firmly aligned. The CEO of a transforming organization is responsible for bringing the top levels of management on board in strong support of both the targets articulated and the reasoning behind them. Every individual on the leadership team needs to have a stake in the transformation effort as a whole, rather than focusing only on the piece re­lated to his or her business or function. As one CEO said, “Everyone has to own the problem, even if they don’t like doing so. They’ve got to understand it, believe it, suck it up, and move ahead.”

This particular leader brought his senior team together on a retreat, laid out the case for change, and then asked each one of them to put into words exactly why he or she was personally committed to the transformation. By requiring them all to thoughtfully articulate ownership, and to publicly claim the case, he was able to create genuine alignment in a difficult situation.

Senior team alignment often requires moving people out of traditional silos, at least temporarily, so they can get away from their focus on day-to-day execution. Incentives must also be put in place that give team leaders a clear stake in the change effort’s collective success. Financial incentives are necessary, but they are not enough. One client we worked with put the executive who was most skeptical about shared services in charge of the initiative, visibly identifying her with it and so forcing her to wear the company hat instead of the mantle of her division.

Such highly public efforts serve the purpose well, but the CEO must also deal privately with senior executives who are reluctant to embrace the effort. As one leader noted, “You never get everyone on board right away, but you’ve got to make some calls and get things sorted out.” Don’t hang skeptics publicly; bring them in for a one-on-one fireside chat to let them know that the transformation is not going away. It’s important to remember that squeaky wheels or complainers tend to be people who care deeply about the organization. Securing their alignment for the collective journey is worth the effort because, when they see the light, they often become the most effective and passionate advocates for change.

Recognizing Relevance
We sometimes observe senior leaders making the mistake of presenting transformation as a corporate project, without explicitly laying out why it is integral to the success of individual business units, geographies, and functions. Hearing this, midlevel team members remain focused on meeting their quarterly or annual goals and running their businesses. This focus undermines the transformation effort. If people in the decentralized parts of the organization are expected to look beyond their daily concerns and focus on the future of the organ­ization as a whole, they need to recognize the relevance of the new initiative to them personally.

4. An integrated enterprise-wide program for change is put in place. Cross-functional business solutions enable people to live out the new business model instead of remaining locked in the concerns of their day-to-day responsibilities. To achieve this, the organization has to mix things up, putting a finance person in charge of new footprints, assigning a sales representative or plant manager to a product launch team, pulling a legal person over into a marketing project, or creating one common functional solution across several businesses. This kind of mixing up is not the same as creating a formal matrix, which implies a hardwired structure, but rather identifying people who can take collective ownership of the transformation effort and putting them physically together with others in temporary working groups — especially when two or more traditional silos are involved in rethinking a common endeavor.

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