Do organisations need a Chief Change Officer?
If change is a constant in today’s business environment, isn’t it time that all organisations had a Chief Change Officer at the top table? Two senior leaders discuss the merits and remit of an executive dedicated to leading change.
By Adrian Moorhouse, Managing Director & Richard Parker, Client Director
With the success of change initiatives, or should I say notorious lack of success, still headline fodder, the quest for an effective change formula perpetuates. The reported failure rate of large-scale change programmes has hovered around 70%1 over many years as the drivers for transformation intensify. Organisations must respond to changes in the marketplace more quickly than ever to maintain relevance for their customers. Consider the current retail environment, where those who have failed to respond effectively to changing consumer habits are left trailing in the wake of retailers who have remained responsive and progressive. So, what does managing constant change mean for the make-up and skill set of a top team? I spoke with Adrian Moorhouse, Lane4 Managing Director, experienced executive team facilitator as well as Non-Executive Director and Richard Parker, Former CEO of the British Bobsleigh & Skeleton Association and Client Director at Lane4 to hear their views.
In what ways has leadership of constant change impacted the role of an executive team over the last five years?
RP: Top teams have had to change their ways of working, needing to operate more holistically because large-scale change initiatives are affecting their organisations across multiple functions. Leading beyond their functions and managing change as a group is more commonplace but, rarely easy to get right. I’ve experienced an increased need to be more receptive to how change is felt across an organisation, as well as the fact that technology is one of the most prevalent reasons driving change. Yet, I’m not sure that all top teams know enough about digital transformation and its specific features, so they often default to their CIO to manage a change that is incredibly wide-reaching.
AM: That said, we know that technology is just one of the key drivers in the changing workplace. There’s globalisation, 4 generational workplaces and mobility too so it’s important to notice all of these when developing change management strategies and considering how change should be led. Executives have got to consider how to manage multiple simultaneous change initiatives as one. Gone are the days of completing one programme before starting the next.
What skills do senior leaders need to deliver change that meets its intended outcomes?
AM: If we’re talking about transformational change in its truest or most ambitious sense – which for me is an intense set of activities designed to enhance company performance significantly – we mustn’t forget that they do, and should take up a large amount of a top team’s time and attention. The problem lies when the team has generally led through more steady state periods so simply isn’t used to the pacier, challenging nature of transformation. Our research shows that for transformations to be successful, organisations must focus more on the people side of change.2 Without helping employees to understand the change, care about the change and have the skills to behave differently, then change will never be successful.
RP: Too often we hear from our clients that they feel ill-equipped to engage with the messier, people side of change. This is where we see skills lacking most despite the notion being relatively well trodden in management research. Getting your people aligned and engaged will make the change more likely to succeed but getting this right is hard, and it starts from the top. We also know that transformation will only make sense if the company can stay relevant in the marketplace serving old and/or new customers. To maintain relevance, companies need to innovate constantly so leaders also have to create environments where employees feel safe to test new ideas and learn from failures.
What do you see preventing the C-suite from leading change effectively most regularly?
AM: There is very rarely a lack of desire to lead change well but due to the breadth and complexity of their roles and competing priorities, I often notice a lack of alignment among the top team on the scale of the change and its ultimate vision; an underdeveloped understanding of the emotional impact of change; difficulty managing ambiguity themselves; reward systems based on past performance rather than future, as well as teams not incentivised to truly collaborate. Another really important and overlooked conversation for the C-suite is how the change might affect them personally at an identity level. They may be asked to do things very differently and to unlearn a whole host of ways of working – things that got them to where they are today. This can have quite an impact on people. Letting go of what has been and feeling safe to move towards something that’s not always completely clear is a big step for anybody being asked to change.
RP: I would echo that and add that other typical derailers are leaders not spending enough time considering people’s real concerns (job safety, wellbeing, finances) and planning the next change before people have had any chance to adapt to the current one. I understand how it happens because senior leaders get very focused on the end goal so that’s where we can support. So, if this is all so complex and hard to get right, doesn’t it make total sense to have somebody dedicated to it on the top team?
AM: We’ve had this conversation with a number of CEOs recently as they wrestle with the best way to lead change. Firstly, you need to establish their remit and reporting lines, asking yourself what exactly are they in charge of and do they have the right skills? If you’re looking for someone with sophisticated programme management skills and experience in leading transformation offices, it might be that they lack the necessary people skills that are at the heart of successful change. The ideal candidate is somebody with the combination of both the rational and analytical skills, combined with a true understanding of and empathy for how people are wired and their likely emotional responses to change. My experience tells me that is a very rare find.
RP: If an aligned top team is critical to successful change, anybody with a primary accountability for driving change needs access to the top team and the ear of the CEO. Even if they do not sit on the executive team, they should report to the CEO in my view.
AM: At Lane4 we liken the role of an individual or team managing change to that of a musical conductor. In musical terms, this conductor would manage what’s known as a ‘polyphonic’ composition; one where multiple melodies are being performed at the same time, distinct, but in harmony with each other. Each melody is independent and yet intertwined with the wider performance. We also believe that change has to be led as a collective at the C-suite. Making it one person’s sole responsibility risks an unhelpful absolution of responsibility for the rest of the team. If creating a dedicated role gives focus to the entire top team, I see the merits. If it seemingly gets others off the hook, I would avoid it at all costs.
RP: The context, pace and scale of change also inform whether an individual holds a significant or dominant change responsibility. If the organisation is smaller in scale and has an aligned top team already, appointing a CCO might not be necessary. However, in a complex organisation appointing a CCO – even on an interim basis to create the narrative, language, processes and tools to allow for transformation to become part of the culture might be advisable. The key, however, is for leadership teams to focus on the people side of change rather than the role itself.
1 Bucy, M., Hall, S., & Yakola, D. (2016). Transformation with a Capital T. McKinsey Q (Nov 2016).
2 Walters, A., & Maitland, A. (2017). All change is not Equal. Lane4 White paper retrieved from https://www.lane4performance.com/insight/whitepaper/ organisational-change-all-change-is-not-equal/