Transitioning People Through Constant Change

In my previous series of posts called “Kill the Hierarchy” I discussed the need for organisations to flatten the organisational structure if they are to survive in what is now described as a VUCA environment - volatile, uncertain, complex and ambiguous.

Change is constant and unpredictable. Organisations have to be able to respond quickly to ever-changing conditions. Employees need autonomy and allowed to self-manage.

In this series called ‘Let Go!’ I explore what I believe one of the biggest challenges facing organisations that wish to create this autonomous workplace. This is getting managers to let go. Managers need to become leaders and surrender control.

No one ever did anything awesome or great just because they were told to!

The ‘Let Go’model shown the diagram below, illustrates that respected leadership comes when managers surrender control and are prepared to tolerate risks.

Respected leader

A true leader get’s out of the way and lets their people get on with their jobs.

A leader that surrenders control and has a high tolerance for risk is respected by their team(s).

This leader provides staff with autonomy – that is, the right to work how they like, where they like and when they like. Everyone is allowed to self-manage and make decisions without recourse to someone else.

Everyone is encouraged to innovate, experiment and take risks. In a world that requires organisations to respond rapidly to constant change, this is only sort of workforce that is going to enable the organisation to not only survive, but also thrive.

These are leaders who understand what letting go really means and think autonomy, delegation, influence and innovation – not organisational chart.

They know that what you do or don't do, defines you.

In order to gain control, leaders must relinquish control and trust their people. There is no greater way to lose control than try to control everything!

When leaders get out of the way, processes are faster and leaders are no longer the bottleneck.

Employees are clear about what they can decide.

These leaders get respect because of their self-confidence, clarity, availability and their trust in people.

Leading examples

The following are examples of respected leaders who have earned that respect by allowing employees to take risks and giving them the freedom to do their job their way. They got out of the way!

Warren Buffet, CEO of Berkshire Hathaway, leads 300,000 employees with a values-based, hands-off style that gives leaders wide leeway and incentivises them like owners. The result is on of the US most valuable companies. As of August 2017 he was the second wealthiest person in the United States and fourth wealthiest in the world.

Bill Gore founded W.L. Gore, in 1958. W.L. Gore is an American multinational manufacturing company specializing in products derived from fluoropolymers and had an estimated $3.2 billion revenue in 2017.

The Gore website describes the leadership that allows everyone to create and take risks.

“Gore is a different kind of workplace. Instead of the traditional ideas of bosses and employees, we have leaders, diverse teams that work together, and personal commitments that each Associate makes — and keeps — to help our enterprise grow.

Bill Gore once said, "The objective of the enterprise is to make money and have fun doing so." Because of our distinctive working environment that fuels our business and engages our Associates, we’re still meeting that objective on a daily basis more than 55 years later. We work hard to foster an inclusive environment where every Associate can contribute creative ideas and take calculated risks to explore new opportunities.”

Gabe Newell, CEO of Valve – the leading video game developer, says that the company is more profitable per employee than either Google or Apple. It has around 250 employees and an estimated worth of $2 to $4 billion. At Valve leaders are rotated on a per-project, per-team basis. It allows employees to choose the type of work they want to do

The Valve Employee Handbook describes how its leadership tolerates risk.

“Nobody has ever been red at Valve for making a mistake. It wouldn’t make sense for us to operate that way. Providing the freedom to fail is an important trait of the company— we couldn’t expect so much of individuals if we also penalized people for errors. Even expensive mistakes, or ones which result in a very public failure, are genuinely looked at as opportunities to learn. We can always repair the mistake or make up for it.”

Jim Donald, CEO of Extended Stay America, handed out ‘Get out of jail free’ cards to over 9000 employees telling them that they could call in the card when they took a big risk for the company. No questions would be asked or penalties incurred! This was to encourage employees to take more risks and be innovative.

One outcome was a hotel manager who decided to cold call a movie production company when she heard they would be filming in the area and ended up bringing in $250,000 when the crew decided to stay at the hotel.

Ricardo Semler is CEO of Semco Partners, who spent 30 years working on distributing decision-making authority out to everyone in the Brazilian conglomerate.

Semco has become one of the most radically different companies. It doesn’t have a mission statement, a rulebook, or any written policies. It doesn’t have an organisation chart. Subordinates choose their managers. All information is made public.

Under his leadership, Semco grew from $4 million in revenue to over $160 million in about 20 years.

Bottom line

Rob Markey, writing for HBR, describes in Leading By Letting Go, how when Jim Bush took over American Express’ service operations in 2005, he was suddenly responsible for many thousands of call centre staff.

The leadership followed the command-and-control approach in the call centres, which involved prescribed scripts, strict, call monitoring and call handling, and there was no room for innovation.

Customer satisfaction was ok, but competitors were knocking at the door. Employee turnover was also high as a result of low morale and was imposing a financial burden on the organisation.

Bush recognised that every customer interaction is an opportunity to make people feel good about their relationship with American Express. Every contact offered an opportunity to increase the likelihood that the customer would praise the organisation to others. This would be viral marketing that would beat the competition and increase growth and profit.

As Markey put it:

“So Bush decided to let go. He eliminated the scripts. He stopped focusing on call time and declared that from now on representatives would let customers set the pace, determining how much time they would spend on each call. He elevated the hiring process, seeking out people with the right personal qualities and values, often with experience in the retail or hospitality industries rather than in other call centres. (The centres’ high turnover helped him change things on this front pretty quickly.) He even changed the name of the job. He called the service reps customer care professionals and gave them business cards, along with higher pay and greater flexibility in scheduling their hours.”

Bush created a system that enabled and encouraged the customer care professionals to deliver outstanding service on their own, day in and day out. The system had four important elements:

1. The professionals had a clear goal, which was a warm, caring interaction with customers. How they achieved that goal was up to them. The achievement of the goal was measured using Net Promoter Score (NPS).

2. The professional had guardrails so they knew what they could and couldn't do so that within the guardrails they were free to use their own judgement without recourse to anyone else.

3. The organisation sought fast feedback from a sample of customers after each transaction using NPS. The feedback flowed, without any alteration, to the team leaders and customer care professionals, so that they could see where they should do more of the same or make improvements.

4. Team leaders and experienced staff were given time to coach and support others based on the feedback. They helped bring new starters up to speed faster. They drove continual improvement whilst teams shared and learned from each other.

The results:

· Call handling time dropped

· NPS scores doubled

· Customer advocacy increased

· Employee attrition halved

· Consistent 10% annual improvement in service margins within 3 years

In 2017, American Express earned the highest ranking in the J.D. Power award for customer satisfaction with U.S credit card companies for the ninth time since the award was introduced in 2007.

In short

Leadership is not power. Leadership is not bestowed with the allocation of a title. True leaders influence and inspire. Respected leaders encourage innovation, experimentation and risk taking. Respected leaders put their trust in their people. They promote self-management and autonomy.

When an organisation has respected leaders, it will be buoyant on a sea of unrelenting change and uncertainty. It will thrive.

“You do not lead by hitting people over the head – that’s assault, not leadership” – Dwight D. Eisenhower

Coming up!

This was the last in the Let Go! series of posts. More posts on their way over the coming weeks and months, exploring how we need to take a fresh and radical look at organisational change management, and the changes we need to make if we are to thrive.

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Also remember that older posts from me are available via the Resources section.

Let Go! Respected Leader