Estimated reading time: 7 minutes
(Editor’s Note: Today’s article is brought to you by our friends at DDI, a global leadership firm that helps organizations hire, promote, and develop exceptional leaders. They were recently named to the Forbes America’s Best Employers 2024 list. Congrats to them and enjoy the read!)
I recently published an article on how to create effective organizational change through leadership development. The article focused on everyday changes we face like when team members change, or when we experience changes in our scope of work. Changes like these happen regularly and we need to be prepared to accelerate through them.
But it occurred to me as we were talking about everyday change that we also need to talk about transformative change—and how leaders can drive change effectively. That’s the focus of today’s article.
To help us understand more about transformative change, I asked Matt Paese, Ph.D., senior vice president of leadership insights for DDI to share his thoughts. Matt has advised thousands of organizations on leadership effectiveness. He is the lead author of two books: “Grow Your Own Leaders” and “Leaders Ready Now: Accelerating Growth in a Faster World”.
Matt, thanks so much for being here. Let’s start by defining transformative change. Can you provide an example of how transformative change differs from the everyday changes we manage?
[Paese] Transformative change is necessary when an organization discovers that its culture, how they work, is misaligned with its strategy, what they are trying to achieve. For example, we’ve all been reading in the news about Boeing, which has been failing to achieve its strategic objectives and has let down both investors and customers. A safe assertion is that for Boeing to regain its footing they must radically enhance the alignment between their culture and strategy. For that, transformative change will be necessary.
“… the fundamental difference between big transformation and small change is the extent to which people are required to rethink, question assumptions, and alter habits. Change requires that we swap one approach for another, and transformation tends to require lots of those swaps, which can be difficult to understand, embrace, and enact.”
Transformative change involves numerous smaller changes, all of which must be coordinated to align ‘how we work’ with ‘what we are trying to achieve’. More specifically, transformation might be aimed at, say, moving from an efficiency culture to a quality culture. That broad transformation might require many smaller changes in processes, systems, technology, structure, people, and others. Each of these, by itself, would be a change, while together they amount to a transformation.
Note that these ‘smaller’ changes may not feel small at all to the people in the middle of them. Change that is part of transformation can still be very ‘big’, requiring strong change leadership skills.
When you boil this down to the human experience of change, the fundamental difference between big transformation and small change is the extent to which people are required to rethink, question assumptions, and alter habits. Change requires that we swap one approach for another, and transformation tends to require lots of those swaps, which can be difficult to understand, embrace, and enact.
As you’ve mentioned, transformative change can be daunting. When an organization is thinking about something of this scale, where’s a good place to start the conversation? Meaning how does the organization start preparing the leadership team for large scale change?
[Paese] The simple answer is to start with a reason, and to articulate why change will lead to good outcomes. But there’s a trick to this that many leadership teams get wrong. They talk about change from the perspective of the business, using financial returns and shareholder value as the ‘why’ of change. These are naturally crucial, but transformation requires a human connection to the change, and for that, leaders must describe the ‘why’ of change through the lenses of customers and employees.
- How will customers’ lives change because of our transformation?
- How will the experience of work transform for all our employees?
Starting with those connections and being as vivid and specific as possible is essential to building engagement in the change process.
If the organization knows they need transformative change, but they don’t know if the team is ready, how can the organization assess their leadership team?
[Paese] With regard to team readiness, there are formal assessments that can help leadership teams understand both their readiness for change as well as their skills for doing so. These aren’t surveys or ‘paper and pencil’ measures of perceptions or mindsets. They are actual change exercises and simulations aimed at helping leaders rapidly build self-awareness by seeing their own habits and behavioral tendencies in action. With rapid feedback and insight, leaders can adjust both individual and team efforts to be more aligned with the changes that need to be made. These critical insights can help organizations better understand strengths and critical development needs, provide a roadmap for coaching priorities, help facilitate accelerated growth and development, and more.
In my experience, the leadership team is often at different stages of experience and expertise. How can organizations design a leadership development solution that meets the needs of all participants?
[Paese] Very few leaders feel equipped to drive transformation. Our research indicates that 63% of leaders feel these skills are among the most critical to master, but only 29% ever receive any development to help do so.
For leaders, making change happen is an individual challenge and a team challenge. Development processes must build both into the solution. Recently with a large multi-billion-dollar business unit, the president of the unit was seeking to drive a rapid, post-pandemic transformation. He started with himself, participating in a high-speed, but in-depth assessment of his own approach to change, with help from an executive coach.
While he was isolating his own development priorities, he launched a similar process for his entire team, coupling individual self-insight experiences with team experiences. The combination allowed for leaders to pinpoint and hone their own change strategies, and for the team to align around common areas of emphasis as they sought to coordinate their efforts and speak with one voice to the rest of the organization. The results have been electric, generating extraordinary organizational enthusiasm and engagement in the change process.
Last question. For those organizations that aren’t going through transformative change right now, what’s the benefit of preparing leaders in advance for large scale change?
[Paese] In a recent keynote presentation, I asked a large audience of board members and CEOs, ‘How many of you are working on significant organizational transformations right now?’. About half the hands went up. I asked them to keep their hands up, and then asked, ‘For the rest of you, how many of you anticipate the need for transformation within the next 12-24 months?’ After that question, nearly every hand in the room was up.
In today’s context, if you’re not in the midst of a significant organizational transformation, just give it some time. Chances are you will be soon enough. Leaders who are prepared in advance are better equipped to handle the challenge smoothly and keep the team focused and motived as you accelerate through change.
I want to extend a huge thanks to Matt for sharing his expertise with us. If you’d like to learn more about preparing your leadership team for transformational change, check out DDI’s Leading Through Change challenge site. It includes articles and a sample learning journey you can review and share with your team.
As Matt mentioned, even if your organization isn’t planning a major change right now, that doesn’t mean it’s not imminent. During this year’s World Economic Forum in Davos, business leaders cited being able to respond to the speed of change as being tantamount to business success. Don’t expect that to shift anytime soon. Their second concern? Talent. Put those together and it paints a very realistic view of how competitive the business world is today and the need to give leaders the training and tools to succeed.
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