Roughly 10,000 executives have attended the ‘Leading Change and Organizational Renewal’ (LCOR) program at HBS and Stanford over the past 25 years. Each participant brings a different challenge to solve: “I want to make my company more responsive to change”; “we need to accelerate execution of our strategy”; and, “our growth efforts are start, stop, with new ventures struggling to succeed.” They leave LCOR with a new way of looking at these challenges and a methodology they can replicate to overcome them.
What my co-leader at LCOR, Professor Charles O’Reilly, and I are learning is that the story doesn’t end there. Many of our LCOR participants take the opportunity to use this approach and design new ways for leading change within their corporations. I wanted to showcase a few of these approaches. I can’t share all of the company names, as some of the information is confidential.
LCOR in Action: 4 Approaches
Strategic Leadership forums
Executives at firms like CSC, Moody’s, and General Dynamics have turned LCOR into a workshop to align senior leaders around a plan for executing a new strategy. Many CEOs I meet struggle with what one of them calls ‘permafrost’ at the layers of management one or two below the senior team. This workshop gets this population actively engaged in a change effort.
At CSC, the SLF is a multi-day strategy workout in which teams first work to understand the new strategy – a step that’s easy to miss, but crucial to building commitment to the shared goals – and then analyze what it will take to be successful. In these sessions, Charles and I share some of the research on the sources of ‘inertia’ in corporations and how to overcome it. However, the bulk of the time in these forums is focused on applying the problem-solving methodology that we teach to the specifics of how to execute the strategy.
We’ve witnessed real turning points at these sessions, where leadership teams confront tough issues and take collective ownership. This kind of clarity generates momentum quite different to a regular corporate workshop. It’s not appropriate for us to give specific business advice, but in a number of cases, these sessions have made a major contribution to business performance.
One well-known technology firm has taken application of the methodology to the next level through what they call a ‘Sprint’ process. Sprints break a change program down into manageable components and keep executives motivated to implement them. This particular firm has found that this approach has unleashed extraordinary enthusiasm within middle management – they see it as a way to act on issues that they have known about, but have been unable to do anything about. The Sprint approach contains and directs this energy towards a clear purpose.
At LCOR, we talk about how change programs are frustrated by politics and the power of informal, social networks. The Sprint process appears to have helped this firm to bypass these barriers by making the change program open and inclusive. They’ve done this with transparent reporting of recommendations, achievements, and barriers.
Strategy Process – many firms find that their annual strategy process has a bias toward incremental improvement rather than tackling major, perhaps more risky, opportunities, and that there is very little focus on how to execute the strategy across the organization. A few firms – IBM being the most notable – have elected to embed LCOR directly into the strategy process. The goal is to use the model, which links strategy to execution to business results. It is a framework that allows senior leaders to talk about what is most important, rather than simply going through the motions of writing a strategy white paper.
A strategy process built on LCOR principles starts by identifying the largest performance and/or opportunity gaps that the business faces – these are quantified statements of the key issues that need to be addressed, e.g. “we are losing share to competitors,” or “our new product innovations perform below expectations”. Then they embed the logic of clarifying the strategy and doing root cause analysis on the gaps (i.e. “why do we have a gap?”) This drives an authenticity of conversation that is wholly different to the ‘kabuki drama’ of many annual strategy processes.
Dialogue and Common Language
I should also say that Charles and I have been delighted to take LCOR into companies sharing some of the insights that we teach our students with executive teams. The value of this type of education is that it helps form a common language about how to describe and address some of the major issues facing a corporation.
One of the most exciting things about being an academic is watching people put your ideas into practice and seeing them make a difference. Through SLFs, Sprint Teams, Strategy Processes, and Dialogue that’s what’s been happening. I celebrate the diversity of these approaches and would love to hear from former students and colleagues about what they are doing to renew their organizations and lead the next wave of innovation in their respective industries.