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


Exercising Common Sense

That particular executive had never made a statement like this before. In the wake of that moment, the senior team was able to make a rapid course correction that filtered out to the rest of the organization. Such moments of truth are most powerful when they shatter taboos by ac­knowledging the proverbial elephant in the room.

Not every moment of truth requires a CEO to be the lead character. But all such moments have one thing in common: People step back and register some aspect of the business that has been unobserved to date and that is holding them back. One leadership team chose to draw attention to a flagrant example of “passing the buck” in a culture that had a long tradition of quietly tolerating the practice. The team made a big theatrical deal out of buck-passing. They announced an event called “the New Day,” in which the company ceremonially conferred “amnesty” on people who had passed the buck in the past, while formally decreeing that this wouldn’t happen in the future. The company-wide scale of this message, and the link to a previously “un­discussable” cultural habit, sent a powerful message about the organization’s commitment to transformation. Over the next few months, as senior leadership made a point of avoiding buck-passing in their own day-to-day work, it created trust and provided forward momentum.

Appropriate Communication
The mistake we often see at this juncture occurs when senior management misses the chance to bring a potential moment of truth to everyone’s attention, or sweeps an incongruity that everyone is aware of under the rug. Their rationale is usually an aversion to focusing on perceived failures or a fear of setting expectations too high. But sharing moments of truth in reality enables an organization to reset expectations and to convince people throughout the organization that the commitment to change is serious.

7. A detailed plan provides the blueprint. After senior leadership identifies targets and articulates a comprehensive vision for the future, leaders must start the work of developing a comprehensive guide to the changes ahead. This blueprint specifies the steps that will enable the organization to meet its targets, sets aggressive yet achievable timelines, addresses the change management issues that occur at every stage, and identifies new roles for people throughout the organization without getting too tied up in trying to detail the management chart.

Although the plan is supported, coordinated, and enforced at the senior level, it is not designed there. Details should be developed and executed in business units cross-linked to the transformation team. The purpose is to chart the course of change so clearly that managers will say of their own accord, “I get it! I see how we can pull $200 million out of our costs this fiscal year while improving our capabilities and extending our market reach!”

One mistake we see at this later stage is a shortage of details for the design and execution of the transformation. Organizations often try to skip directly from articulating the overall vision to rolling it out without doing the painful inter­mediate work. Cultures with a “Just do it!” work ethic (in which speedy execution is prized over quality) are particularly at risk, because they tend to equate a capacity to focus attention on details with nitpicking. Patience, persistence, and a realistic but aggressive attitude about highly specific timelines are all key to creating a map that keeps large-scale change on course.

8. Enabling triggers are built in from the start. The detailed map for the transformation should identify in advance triggering events that will clearly be important in moving the process of change forward. For example, one of our clients stopped budgeting for a number of smaller, declining brands; logic suggested they would have to be eliminated later. Subsequently, when the changes were announced, the difficult work of shutting down these product lines had already begun and there was more time to design the implementation. At another com­pany we worked with, redundant staff were encouraged to take early retirement before the change initiative was formally announced; when the work streams were cut, the people who had been doing those jobs were already gone. Building in these kinds of advance measures helps ensure that transformation timelines will be met. Timing departures ahead of making overall cuts in functions also minimizes the shock to the company. The focus of employees is shifted from feeling the loss to adapting to the new approach.

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