These agreements are often
summarized in a “team charter” for
leading the transformation, and the
CEO can periodically use the charter
to ensure that the team is on the right
track.
Intesa’s Passera speaks of how he
brought his team together regularly to
“share almost everything,” to make it
“clear to everyone who is doing what,”
and to “keep the transformation
initiatives, budgets, and financial
targets knitted together.”
P&G’s Lafley emphasizes the
importance of spending the time
together wisely: “You need to
understand how to enroll the
leadership team.” As a rule of thumb,
80 percent of the team’s time should
be devoted to dialogue, with the
remaining 20 percent invested in
being “presented to.”
Effective dialogue requires a wellstructured agenda, which typically
ensures that ample time is spent in
personal reflection (to ensure that
each person forms an independent
point of view from the outset),
discussion in pairs or small groups
(refining the thinking and exploring
second - and third-level assumptions),
and discussion by the full team before
final decisions are made.
In this process, little tolerance should
be shown for minutiae (losing the
forest for the trees) and for any lack of
engagement. Face-to-face meetings,
as opposed to conference calls, greatly
enhance the effectiveness of team
dialogue.
Relentlessly pursuing impact
Organizational energy - collective
motivation, enthusiasm, and intense
commitment - is a crucial ingredient
of a successful transformation.
There is no substitute for a CEO
directing his or her personal energy
toward ensuring that the company’s
efforts have an impact.
Roll up your sleeves
brings data to the table.’”
Initiatives with a significant financial
or symbolic value require the CEO’s
personal involvement for maximum
impact. There may be several
beneficial effects, among them
ensuring that important decisions are
made quickly - without sacrificing
the value of collective debate - and
sowing the seeds of a culture of
candor and decisiveness.
The CEO also plays a critical role
in ensuring an appropriate balance
between near-term profit initiatives
(those that deliver performance today)
and organizational-health initiatives
(those that build the capacity to
deliver tomorrow’s results).
Leaders must be willing to leave
the executive suite and help resolve
difficult operational issues.
Peter Gossas, president of Sandvik
Materials Technology and a man
with lifelong experience in the
steel industry, observes, “If there’s a
problem, it can be helpful if I come
to the work floor, step up on a crate
so that everyone can see me, and
hold a discussion with a shift unit
that may be negative to change.”
He adds, “It’s hard for me to walk
into a melt shop and not begin
discussing ways to solve operational
problems.”
Hold leaders accountable
This is a lesson applied by John Varley,
CEO of Barclays: “For several years,
the focus on initiatives to improve
financial performance dramatically
crowded out attention on franchise
health, leaving us with a set of issues
in some businesses that needed urgent
attention. We are addressing those
issues.”
During the transformation, some
CEOs even choose to hold separate
review meetings for short and long
term objectives in order to ensure
that companies maintain a balance
between operational improvement
(tactical strategies, wage management,
productivity, and asset management)
and long-term growth (revenue
and volume growth through market
share, new products, channels
and marketing, M&A, talent, and
capability management).
Successful CEOs never lose sight
of their management responsibility
to chair review forums. Through
these, they compare the results of
the transformation program with
the original plan, identify the root
causes of any deviations, celebrate
successes, help fix problems, and
hold leaders accountable for keeping
the transformation on track, both
in activities (are people doing what
they said they would?) and impact
(will the program create the value we
anticipated?).
For CEOs leading a transformation,
no single model guarantees success.
But they can improve the odds by
targeting leadership functions: making
the transformation meaningful,
modeling the desired mind-sets
and behavior, building a strong and
committed team, and relentlessly
pursuing impact.
A central role for the CEO during
these review forums is to ensure that
decision making stays grounded in
the facts. As Narayana Murthy wryly
observes, “We have embraced the
adage ‘In God we trust; everyone else
Dr Clifford J Ferguson is the Managing
Partner of Rainmakers, and chairman of
Glad’s House. He can be reached via mail
on: [email protected],
or website; www.rainmakers.uk.com.
Together, these can powerfully
generate the energy needed to
achieve a successful performance
transformation.