Each month, "Management Matters" addresses management and leadership issues essential to achieving exceptional business results while growing and developing people. Please enjoy "Management Matters", and pass it on!
All Content © LeaderPoint
In 1986, Shearson Lehman’s research department – the lifeblood of any Wall Street brokerage house — was ranked 15th by the benchmark agency, Institutional Investor. Jack Rivkin was brought in to turn around this vital function. He encountered a number of barriers (e.g., counterproductive incentives, undisciplined workforce) that made change difficult, if not outright daunting. He was given the charge to return Shearson back to a top 5 research firm. A great target, but how would he and his management team achieve such a lofty goal? Does the change management literature help us?
The emergence of “Change Management” as a field is indicated by the extensive writing on the subject. The Harvard Business Review has an edited book on Change, just like it does for other fields like leadership. Major textbook publishers have sub-categories that include titles specific to change management or leading change. Yet, the phrase “change management” is redundant, since the purpose of effective management is seizing new opportunities that require some form of change to the way things are currently done. Routines require no management, merely administration.
It is easy to blame people for getting in the way of change. After describing several seemingly intractable turnarounds such as a Brazilian railroad, Chip and Dan Heath conclude, “We all hear a lot of ‘common sense’ wisdom about change: People don’t like to change; people resist change; people are set in their ways; people are stubborn. But here we’ve seen something else entirely [tunarounds where people embraced significant changes]. . . Clarity dissolves resistance” (Heath and Heath, p. 72).1 In fact, people don’t dislike change but they are too often stuck in situations that conspire against it. Actually, some very time-tested management tools will guide any change effort, including the one faced by Rivkin at Shearson Lehman.
First, set a target that resonates with the people doing the work. A common example is John F. Kennedy’s challenge to send a man to the moon and return him safely to earth by the end of the decade. Rivkin’s charge was actually one that was relevant to his staff: “We will be in the top 5 of Institutional Investor’s annual research rankings.” While this target is certainly important, it likely will not change the day-to-day behavior of the analysts.
Second, create a work context that allows people to focus on results. Given the morale problems and dysfunctional work habits in the group, Rivkin sought to focus them on the work needed to achieve the consequence. In this case he announced a monthly goal for analysts to initiate at least 125 client conversations per month. Sometimes, leaders in turnaround situations must script some early moves to re-establish focus.
Third, implement a management system. It seems counterintuitive sometimes, but changing the culture is not that difficult if those in charge can redirect systems and processes to rally people towards accomplishing desired outcomes. In addition to having 125 client conversations per month, analysts took notes on their conversations and posted them to the intranet – making both the quantity and the quality of contacts public record. Of course, analysts did not want to fall behind their peers, and they had access to information they did not have before. “The analysts started asking one another: ‘How do you make so many calls? Where do you find the time?’” As part of his process Rivkin asked that client presentations cite at least two colleagues’ work so they would see themselves as a team and eliminate the tendency to constantly say “I – I – I.” This requirement had the added benefit of exposing analysts to more sources of information. This system reinforced behaviors that would lead to the desired results – improved rankings by Institutional Investor.
Rivkin successfully brought the analysts together to accomplish the work that needed to be done to improve results. The sentiments in the department changed markedly as they focused on what Rivkin had made important. “I.I. or die” (Institutional Investor or die) became the catchphrase of this sentiment. In three years, Shearson went from 15th to first on I.I. ratings.2
Change management is planning and implementing. Identify the desired consequence, focus people in the context, and develop systems and processes that will keep people focused on the critical work that needs to be done — encouraging peers to share information, providing feedback on results, and celebrating milestones along the way. That is a great way to lead change – including that of the culture.
1By Chip and Dan Heath, Switch: How to change things when change is hard. Broadway Books © 2010
2From Heath and Heath, pp. 94-96.
For more information about LeaderPoint, and to access our Reading Room of management articles, visit www.leaderpoint.biz, or call 913-384-3212.