In a 2016 speech, UK Prime Minister Theresa May said that political events showed how change was in the air. With Brexit withdrawal plans underway, the UK is preparing for a seismic shift.
But what if May was a business leader? What if the UK was a multi-million pound corporation and Brexit was a major corporate change? Importantly, what can business leaders learn about change from their political counterparts?
Any type of change begins with a vision.
“The UK’s prime minister could use Brexit as an exercise to bring people together,” says Dan Cable, Professor of Organisational Behaviour at London Business School (LBS).
Brexit could be reframed as finding common ground. May could take it as an opportunity to try a new approach, involving fewer rifts and divisions and more agreement and momentum. The message from government would need to be: “We’ve left too much of the country behind, I’m seeing this as bringing together a divided government and building a unified country.”
Professor Cable says: “What if she treated it as a chance to have bipartisan discussions, to find middle ground… a watering hole where we can come together and find a new way of working? That would create a different reaction. If the message was, ‘If we can get this done together then we can get other things done together’ – that’s productive language. People might sign up to that.”
One of the challenges for May is that the outcome of Brexit is uncertain. Professor Cable says: “It’s hard for her to point to the ‘destination postcard’. To lead people through change successfully, you need to give them a visceral, almost tangible picture of what it will look like when it’s working.”
The tip for business leaders here is to create a compelling image and “make it salient enough that people can almost hold it, savour it”. It’s critical you craft a purpose that resonates with people and offers a sense of hope.
Professor Cable points to US President John F Kennedy’s 1961 ambitious promise to send an American “safely to the moon before the end of the decade”, an example of a powerful destination postcard. NASA didn’t question the goal at the time, it just spent time and money – 5% of the US federal budget – on making it happen. “People believed in the vision. People thought, ‘This is worth it’.”
Change has to be worthwhile because it’s hard, and, as research shows, self-control is an exhaustible resource. For instance, take psychologist Roy Baumeister’s 1998 study on self-control, which involved tempting people with chocolate (and radishes) and testing their willpower. This, and scores of findings after it, proved that self-regulation is not a skill to be mastered. Willpower is like exercising a muscle: it gets fatigued and loses strength when it’s over-used.
Professor Cable says: “People need to be able to visualise why the outcome is going to be worth the pain. Having specific examples of what will work better helps get people on board. If you can’t show people the why, you don’t even get out of the blocks.”
Great companies understand why they exist, says Richard Jolly, Adjunct Professor of Organisational Behaviour at LBS. In turn, employees understand the purpose, direction and strategic priorities. He says: “Everyone plays a part. You need coordinated top-down, sideways and bottom-up action.
“Top-down action sets the direction. Sideways action connects different parts of the business that need to collaborate to create sustainable competitive advantage. Bottom-up action takes place at the coalface of your business – the sales reps, the social media executives, the general managers. The front-line is also often where businesses increasingly find the source of great ideas.”
Getting a change programme to actually happen, whether it’s with Brexit or in business, is an exhausting, demanding challenge. It has to make sense to a cross-section of stakeholders and can’t seem like hard work to the people making the biggest effort. “Without them,” Jolly says, “change won’t work.”
It’s not strategy that makes companies fail, it’s the inability to get people to collaborate, Jolly says.
Consider, for example, Sony, which has distinctly Japanese values such as a family feel and stiff loyalty within units of the business. The rise of Apple and its brightly-coloured laptops prompted Sony to change values to take its operations to a new transnational level and keep pace with a growing competitor. But the Sony illustrates what happens when strategy doesn’t translate into results.
Jolly says: “Over the last fifteen years, Apple’s share price has gone through the roof – but it had to develop new technical capabilities to get there. Sony had all the capabilities in place for its strategy to work except one: collaboration.”
What went wrong? Sony’s divisions failed to work together. The phone department refused to work with film. Music didn’t coordinate with PlayStation. It’s a common problem, says Jolly: “Social capital is about getting people to work together with a shared ambition. The Remain campaign for Brexit catastrophically failed to create a sense, across the country, of this shared ambition.”
“People must feel they can rise up and lead change. Great ideas don’t happen in the CEO’s office, they happen far away.”
A tip here is to communicate any potential early wins to build momentum. Success, however small, is critical in times of uncertainty as it signals confidence.
“The fish rots from the head” is a phrase often used to link problems to the person in charge. It suggests that culture is defined by behaviour at the top.
“I too often hear the phrase ‘cascading information’ in companies that want to communicate change,” says Jolly. It assumes there’s an expedition leader at the top of a mountain with a vessel of information that they pour down the mountainside, with maybe a few drops reaching the people beneath the summit.
“People who operate with a ‘command and control’ philosophy do not inspire change. Change is inherently stressful. The word itself sends people’s physiological stress reactions through the roof. Confident teams able to cope with stress are built and strengthened by leaders who are plugged in and emotionally savvy.”
Smart leaders ask smart questions and are sensitive to their teams’ capacity for change, Jolly says. They are leaders who ask: how can I help you deal with the strains of your environment? How can I clear the way? What can I do or say to help you cope?
Perhaps the UK’s prime minister should be asking these kinds of questions right now.
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