The Roles of Leadership 

In past issues of Impact, we described the major “roles” leaders must take on to be truly effective.  These include:  The Role of a Visionary; The Role of Integrity, Honesty and Values; The Role of Releasing Potential and Energy; and The Role of Leading Change (Planned Change and Emergent Change). 

While each role is unique, they are also interdependent.  The skills leaders learn to perfect one role will also help them master the other roles.  In issues of Impact, we will continue to explore these leadership roles- what they are and how to hone your skills for each role. 

The Role of Leading Change in the Organization

Leading a change initiative is one of the most difficult tasks a leader can face.  It is a double-edged sword with many risks and opportunities.  For most leaders, managing a change initiative is a crucial role, but the responsibilities can vary widely depending on the type of change. 

Two Types of Change Processes

There are two types of change in an organization: planned change and “emergent” change.  In our last issue, we discussed the leader’s role in planned change, which refers to initiatives that are driven “top-down” in an organization.  In this issue we explore the leader’s role in “emergent” change, which refers to a culture where change can and should come from within the organization, at any level, and employees feel comfortable and are willing to offer ideas that will improve the business.

A “Readiness for Change” Culture

In “emergent” change, the leader must create and foster a “readiness for change” culture.  In this kind of culture, change is not only easily accepted, but also is actually embraced by the organization.  Further, change can be spawned from anywhere within the organization, not just driven top-down.  Organizations are becoming increasingly interested in learning how to create a permanent “cultural readiness” for change that goes beyond a specific change implementation project.  These organizations strive over time to create a corporate culture that is not only ready for change, but also accepts it and thrives in it.

The premise behind “emergent change” is that if a leader can create the right kinds of conditions in the organization, then change will naturally “emerge” on its own.  The question then becomes, what are those necessary conditions for this “readiness for change” culture?

Necessary Conditions for a “Readiness for Change” Culture

We believe there are four cultural elements that must be installed in order to create a “readiness for change” organization.  These are:

1. A workforce that is business literate
2. A workforce that has permission to act
3. A workforce that will challenge the status quo
4. Leadership that encourages a “readiness for change” culture

Next, we'll explore each one of these elements. 

A Workforce that is Business Literate

We define a business literate workforce as one that understands both the strategic context of the business and the personal impact they can have on critical business outcomes.    

Ensuring that employees understand the strategic context of their work is a critical leadership task in creating a “readiness for change” culture.  If employees understand what their company is trying to accomplish, what their customers are trying to accomplish, what their competitors are doing, and finally, what important trends are going on in their industry, then these employees are better able to interpret the need for a specific change and accept it.  Also, when they can see the organization’s “big picture,” they will be better equipped to make the right decisions and offer relevant ideas.

The second aspect of business literacy is efficacy.  That is, do employees understand the impact their job performance has on the critical drivers of the business, such as financial performance, operational excellence, and customer satisfaction?  When employees see the link between their job performance and the company’s operational and financial success, they are able to understand how a change in their day-to-day activities might affect the organization as a whole.  Likewise, when they understand the relationship between their job performance and the resulting quality of the customer experience, they will know precisely what action they must take to have a positive impact on the customer.

A Workforce that has Permission to Act

In order for employees to initiate change for improvement on their own, they must be allowed to do so.  Employees should feel they have permission to make the day-to-day decisions necessary to improve the customer experience, the operational efficiency, and the financial results.  They are more likely to suggest change and feel responsible for carrying out the change if they know they have the authority to make changes.  Further, changes will be more rapid if employees have the necessary autonomy, and thus don’t have to wait for permission to act.

A critical leadership skill is learning how to install boundaries and to encourage freedom to act within those boundaries.  Leaders throughout the organization must learn how to set the goal, communicate the boundaries, and then “let go.”  The more specific and understandable the boundaries, the better.  For example, a leader might tell a work team in a distribution center that they can make any process improvement changes they want as long as 1) customer service metrics meet or exceed standards, 2) quality metrics are met or exceeded, and 3) labor costs don’t increase (i.e., no increased overtime).  When “empowered” in this way, employees are more likely to take ownership of decisions and to become more committed to the resulting course of action.

A Workforce that Will Challenge the Status Quo

If employees feel their ideas are listened to in an accepting, open environment, they are more likely to recommend creative “out-of-the-box” solutions.  In an “emergent change” culture employees must feel comfortable offering ideas that may run counter to the usual manner in which business is done.  If leaders allow such “constructive disagreements,” then the workforce will become more creative.  Further, employees are more likely to embrace change and be a part of change if they feel they can voice concerns and disagreements. 

Role of the Leader in Creating a “Readiness for Change” Culture

The role of the leader in creating this type of culture is to initiate and reinforce the three ingredients described above. 

First, leaders must create and then support a workforce that is business literate.  This means there must be a willingness to share strategic goals of the company, major industry trends that will affect the business, and what’s going on with both customers and competitors.  In our research, we have found many companies practice almost the opposite.  We have found that only a few people at the top really understand the strategic plan.  We have also discovered that, when asked, most employees can name very few trends in their industry.  In many cases, employees can usually name their competitors, but they don’t know what their competitors are doing in the marketplace.  And finally, we have discovered that in some situations, employees can’t identify all their customers, much less understand the unique needs of these customers.

In our definition, business literacy also means that each person understands the impact they can have on the financial, operational, and customer service success of the business.  In our experience, employees typically give better responses when we ask them to tell us how their job performance can affect the various financial “drivers” of the business (sales, gross margins, expenses, profits) than they do when we ask them how their job performance can impact customer satisfaction or dissatisfaction.  In manufacturing companies, we have found that operators, and especially mechanics, oftentimes can do a fair job of verbalizing how their job performance affects operational efficiencies, but many other employees are unable to do this.  Overall, we find that leaders could do a much better job of helping their employees understand the linkages between performance on individual jobs and the resulting impact on success measures of the organization.

Creating a business literate workforce requires a leadership group that is committed to sharing business context information.  Sharing information doesn’t necessarily mean classroom instruction.  This can be accomplished through many avenues, such as informal conversations carried out by supervisors, posting customer satisfaction comments, customer visits (internal and external), group discussions, short presentations from time to time by general managers, and one-on-one coaching.  There are many ways you can educate your employees to increase their business literacy, and leaders should be creative in their methods of education in order to keep it interesting and ongoing. 

Secondly, leaders should support a workforce that has permission to act.  Leaders must learn how to set boundaries and to give people permission to make decisions within those boundaries.  We have seen leadership groups succeed at this by having them go through an exercise we call “Release of Power” planning.  Following this process, leaders list decisions that people lower down in the organization are not making now, but could be making if properly armed.  We then have participants list the boundaries on decision making that would make them comfortable, the measures that would have to be put in to place in order to monitor success, the training employees would have to get, if any, and the information that they would need to start receiving that they have not yet been receiving in order to make these decisions.  By going through this planning process, many leaders are able to get more comfortable with providing an environment in which employees feel they have permission to act.

Finally, to make this work, we must have leaders who encourage employees to be creative and feel comfortable in challenging the status quo.  To help leaders in this area we sometimes pose the following proposition and series of questions: Think about the last time someone in your organization approached you to challenge a decision or idea.  How did you respond?  Did you ignore it?  Did you focus on the person while they were speaking, ask pertinent questions and consider the pros and cons of their idea?  If you decided not to implement the idea, did you explain why their idea was not accepted and encourage them to come to you in the future with more ideas?  If no one on your staff has come to you with challenges to ideas or the status quo, this may signify that they aren’t comfortable discussing these issues with you.  If you are unaware how your employees feel about expressing their opinions and ideas, voicing concerns and challenging your thoughts, then ASK.  What you find out may surprise you. 

If your organization is ready and willing to act on change quickly, you will remain one step ahead of your competition.  Establishing a “readiness for change” culture allows everyone in your organization not only to accept change, but also to welcome it and flourish under the changing conditions.  While this culture cannot be established overnight, in time with the proper leadership in place, your organization can develop the conditions necessary for change to “emerge” on its own.     

Taking on the role of creating and fostering an environment ready for change is a step towards becoming an outstanding leader.  This article completes our series: The Roles of Leadership.

© 2004 Cornelius & Associates

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