Currently, I am working with a fantastic entrepreneurial leadership team on post-merger integration and finance transformation. The project is led out of the CEO’s office with the CFO being the internal project leader, while I, as the principal of my firm, OTB Advisory, is the consulting leader with accountability for results. The project supports a key Board of Directors’ mandate of this public company and covers all the functional areas (operations, HR, treasury, finance, procurement, etc.).
I was recently talking to a friend about what I did for work, including my current engagements. His comment: why pick such a difficult area? Isn’t it enough to know that most of these are a failure? Why not pick a safe, paved path? Isn’t it asking for trouble, especially in a consulting role where there is no internal support if things go wrong?
Well, I gave up a safe, paved path years ago. Chasing someone else’s dreams always leads to an empty life no matter how hard one tries to be happy. Leadership of others requires a healthy mind, and chasing someone else’s life is a recipe for a mental health disaster. Did that disappoint everyone at the time? Yes, and that was a critical building block of my understanding why change is sometimes necessary despite what anyone else thinks. While being a confirmation of purpose, it was also a major, life-changing lesson in how NOT to do it.
I have had a few years since to build a better model. Here are some key conditions for success I have discovered.
1) The absence of blame for mistakes is a deep, subconscious part of the culture. Fear can be a strong motivator. It is tempting to use it because the results are immediate. I am tempted daily still, despite believing strongly that it is not only the wrong thing to do, but also highly ineffective. Leaders who recognize the real cost of using fear as a motivator make a conscious, intentional choice to never use it. Results are slower to come but they are real and deep, and they stick. Nothing is worse for trust than leaving a bloody trail of change-making and dramatic impact. Lasting positive transformation and fear cannot coexist because fear kills creativity. Fear and stress can forge strong traumatic bonds but who wants to live with such unhealthy bonding? Not the people you want to be accountable for the success of your company.
2) Accountability must be real, and decision-making must reside with it. When companies grow quickly, possibly through acquiring other companies, achieving this can be difficult. Accountability is essential, and it requires training and leadership support to grow people into their new accountability mindsets. To contrast with 1), accountability and fear have little in common. Accountability means the power to control your department’s destiny within established boundaries. With power comes skill in doing this well as a team, which is a pre-condition for the job. If power brings entitlement and the feeling that opposing opinions must be “unpopular”, accountability does not exist because leadership does not exist.
3) Trust and credibility must be built daily. They are especially built or destroyed when dealing with disagreements, push-back and unmet expectations. Everyone has a perspective. Effective leaders can suspend judgment and focus on understanding the perspective and the world of others, while objectively assessing whether a pivot or a push is required. They can build consensus and accept change easily if their initial reaction or position was wrong.
4) Targets, wins and workplans will change as the work happens. Leaders must be able to communicate a big picture vision in a compelling way and set aggressive targets. They must also be able to revise and change them if facts so warrant.
5) Respect for different internal cultures is especially important. I do a cultural gap survey for change clients for two reasons: to understand their own view of their culture so I can adjust my own behavior and expectations; and to assess whether the team has deep, possibly long-standing, internal conflicts at the core of values and beliefs, that will cause a failure if not resolved. Culture is often seen as a huge factor in M&A failures. My experience is different. Culture is a huge factor when leadership skill is lacking. Here is an example in one sentence: “We paid for this so you must do what we say.” Do you want to be there? Don’t blame the “culture”.
6) Over-communication should be the goal. However, communication must be right for the audience and the timing must coincide with logical project steps. People must be energized by clear, honest, caring and transparent communication, not drained by it. Communicating wins is essential.
7) In leading change, one of the difficult tasks leaders face is overcoming their own expectations and mindsets that are based on the past. If a company was born as a smaller, entrepreneurial entity, over time leaders must not only shift their own skillsets towards leading large groups of people with remote delegated authority, but also shift their perspectives on their people, having faith in their ability to transform to a new, different state. I find that consultants can be especially helpful here because they bring an objective perspective, not tainted by the past.
Many PMI (post-merger integration) experts advocate speed. In some cultures, speed is natural. A sense of urgency and raising dissatisfaction are traditionally seen as critical for the first stage of any change. I agree with a caveat. If people do not feel heard during urgent action, it will not work. Speed must be sacrificed if a stronger foundation is needed with the people.
I reflect on where I was in my career even 5 years ago and I know I have transformed almost completely what I do and how I do it. It is always work in progress, and I try to be the leader I wish I had in my past. Most of my transformation was self-led because sadly, my mentors taught me what not to do. I am grateful for the opportunity to learn that. Disappointment is always a hint at a better way, and it so happens that happiness may need a misstep or two.
The question is, if you want a leadership role in our own life, and in the lives of others, what is your reason? It is a hard job.