(First published at c-suitenetwork.com)
Most mid-market organizations are very vulnerable to stagnation because they operate in industries that rarely change. Often they recognize it too late, which decreases their chances of successfully reversing course. By understanding the two scenarios of change—proactive and reactive—leaders can be better equipped to take the first steps of change, and preferably choose to be proactive.
All companies are at risk of stagnation—and almost every company has, or will, become so at one time or another.
It’s a sneaky thing. Stagnation is like a slow growing, toxic mold. It eventually takes over your company, stifling culture, development and progress, and hindering the organization’s ability to grow.
“It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.”
Getting off the path to stagnation requires making a deliberate change within the organization, especially to be able to break from the grip of status quo.
Fundamentally, this happens in one of two ways: Proactive and Reactive.
In this scenario, the organization recognizes it’s on a path to stagnation and proactively “self-inflicts” change before there’s any permanent damage to the business, the culture or the brand.
A proactive approach is optimal to the situation. It allows time to develop organizational buy-in, and action is taken well before things become critical, providing the longest track for successful course correction.
While a preferable approach, being proactive does comes with its own set of challenges. Often, a concrete “burning platform” doesn’t exist yet. Pain points such as rapid declines in revenue, or budget cuts and layoffs haven’t occurred yet either, making it difficult to align management and rally employees against the need for change.
Timing and tone is important. It can be counterproductive for leadership to try to implement change plans too early, or come across as alarmists. Employees might ask: Why is leadership rocking the boat?
In this scenario, the organization has typically been (knowingly or unknowingly) at some level of stagnation for some time, yet doesn’t recognize the need to change until a trigger-event forces them to reactively attempt to reverse course.
Examples of triggers are numerous. Some take the form of a single major event, such as the loss of a major customer, or an aggressive new competitor. Triggers also come as a series of small event, with one eventually becoming “the final straw that breaks the camels back.” Examples include the terrible sales forecast that comes after several consecutive quarters of sales decline; or a key employee who leaves at the end of a wave of employee departures; or a distributor who’s been slowly displacing you with another manufacturer finally notifies you that you’re no longer their preferred brand. And so on.
In reactive scenarios, reversing the path requires a different set of strategies in order to avoid dire outcomes and time becomes a critical success factor. More often than not, urgent action is required, the runway is short and there’s minimal room for errors.
In these situations it may not be necessary for leadership to invest as much time in communicating and building support for the need to change. The “burning platform” is already visible and known to the organization. There is tangible pain or threat.
Instead, leadership needs to rapidly craft a change plan, and begin communicating it—and stress, or amplify, the specific actions the business (and individuals within the organization) must take in order to reverse the path and achieve a successful outcome.
Are you unsure if your company is on the path to stuck or stalled?
Read our previous installment here.
Reversing the path of stagnation in any scenario is inherently difficult. Programs that attempt to shift organizational culture and capability frequently fail, in large part due to the “rejection culture” that pervades stagnant organizations.
Anna Catalano, former group vice president, Marketing of British Petroleum explains, “Within any stagnant company an army of anti-bodies (i.e., attitudes, behaviors, policies, etc.) have grown around it in order to protect it from anything that seeks to change the status quo. Invaders are thrown out very quickly because there is an interest in protecting the body.”
The key to success lies in the ability to disrupt these anti-bodies and introduce a new set. This takes perseverance and an unlimited supply of enthusiasm.
Understanding the specific nuances of proactive and reactive situations, and employing the accompanying ideas, can help you get back on the path to growth.
Ask yourself: what’re we waiting for? Ideally, you’ll become proactive once you answer the question.
1. Create and tirelessly socialize a “change perspective.”
Create a compelling reason for the need for change. This helps others understand and see the consequences of not changing, and the positive future that can be achieved by making change.
Focus your “change perspective” narrative on opportunities vs. problems. What the organization can achieve if it changes is often a more motivating message than a focus on what’s wrong or will be missed if there isn’t a change.
Unless you clearly paint this picture for them, it’s hard for those in the comfortable “status quo zone” to understand the need for change and ultimately buy-in to and support the change plan.
2. Build a team of “change champions.”
Culture and processes will likely be stacked against you and will try to maintain the status quo. A team of “change champions” comprised of representatives from all levels of the organization will help you overcome these anti-bodies, communicate the need for change and rally the organization.
3. Create an open and ongoing dialogue with employees.
Talk to them. Meet with them. Ask them three questions: “If you owned this business…”
Encourage them to be candid. If your current culture doesn’t already allow for direct and open feedback, provide a way for them to anonymously answer. Then listen. Use this input as the foundation for discussions with employees. Provide safe-harbors for them to elaborate on their comments.
4. Develop a Big Hairy Audacious Goal.
BHAGs often incite a potent combination of excitement and fear, and can serve to invigorate and align an organization to transform. For instance, our company helped Clarke, a provider of environmental products and services, reframe their company purpose from satisfying our customers—to protecting communities. We then set an ambitious BHAG: To create an organization with the reach to help make the lives of over 660 million people around the world more livable, safe and comfortable every year.
5. Begin building momentum and morale.
Implement small but symbolic employee-suggested changes, such as jeans Friday, or simplifying an over-engineered company process. Start celebrating employee successes and recognize small wins and contributions. Focus on individual and group achievements and risk-taking vs. revenue or financial goals.
6. Immerse yourself in the customer.
Host a customer forum and/or immerse yourself in the customer. Work for them for a day. Sit down and have candid conversations. What problem is important to them and how do they express their frustrations with existing solutions? Observe how they use your product. Learn from them – how do they see you, your products and your company, your competitors?
Share what you learned with everyone – employees and partners. Discuss it as a group. Take action and begin immediately improving what you can.
7. Revitalize your brand.
Transforming an organization requires capturing the hearts and heads of your employees, partners and customers. It’s hard to reverse the path of stagnation when the organization is seen, and thought of, as “still the same company.”
An outdated, unclear or uninspired brand can act as an anchor inhibiting transformation. Revitalizing your brand can accelerate it by tangibly conveying your revitalized mission, vision and values, culture and persona, and customer promise. It’s one of the most visible and symbolic signals of change, and provides a focal point for the new energies of the organization.
8. Make a few hard decisions that you’ve been putting off.
For example, part ways with low-performing or bad-attitude employees; the abusive customer; the chronically under-delivering supplier or the underperforming product line or business unit.
9. Involve a dispassionate outsider.
Involve a dispassionate outsider in the process to help you objectively assess your situation and options. Outside experts, because they don’t have pre-existing biases, will help you honestly see weak spots to which you might be blind, and can play a very helpful role in helping you make good decisions and create the optimal change strategy.
A proactive approach reverses the path of brand stagnation.
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