Dealing with economic turmoil

The idea behind this article is that leaders make change happen – and to do so requires a multifaceted approach identifying and addressing the obstacles to change that are ingrained in every organisation. The Centre for Leadership Development has highlighted 5 key areas which are critical for senior executives to adopt.

Billy Linehan


Your organization has likely been charting a new course to get through today’s economic turmoil. But is your new direction getting you there?

History shows that change initiatives – realignment, restructuring, re-engineering and the rest – succeed only one time out of every four. 

Why so much failure? Because senior leaders blame their organizational problems on faulty structures, systems and processes, and those are the things they try to fix. They are partly right, but there is usually, a more powerful, factor at work too: the company’s culture. [Another factor may be the leaders themselves as the major obstacles to change]

 Change in operations, especially dramatic change, doesn’t work without deeper and more subtle change in corporate culture and in how leaders think and act. The systems, practices and beliefs that drove yesterday’s success – in other words, the organization’s culture – are always deeply ingrained. And they’re usually not what you need to move forward in a radically altered economic and competitive world. Change leadership, on top of skilled management, is what truly transforms organizational culture and drives bottom-line results.

 To successfully change a business in the face of the huge complexities of today, senior leaders need to have wider perspectives. Not all executives and leadership teams are ready for that, and the intense operational pressures of the moment can make it even more difficult. But some leaders do make bold moves even in the most trying circumstances.

The US located Centre for Creative Leadership has identified five requirements for getting a senior team ready to embrace change leadership and drive better performance.


1. The executive team must be engaged – really engaged.

 How often have you seen executives announce a new initiative, rally everyone to get on board with the change – and then fail to follow through themselves? When executives don’t genuinely change, no one will.

Why should others take on the risk when senior leaders won’t?

 It’s better not to go through the motions at all if your team has little commitment to making it all happen. Dismal change efforts only breed cynicism, and they make any future attempts less likely to succeed.

 2. The team must know and value leadership development.

 To change a culture, you must believe in the value of developing both individual leader capacity and organizational leadership capability. Key people in the organization have to strongly support learning, and the organization needs to have experience with and show appreciation for leadership development.

 One of our clients realized this early in his tenure as chief executive officer of a logistics company. He knew the organizational culture had to change before the company could become more competitive and responsive. But the gap between his vision and the experience of his long-time employees was too great. So he focused first on individual learning and creating a shared, new view of leadership development.

Since then, his managers have been getting more comfortable with learning, with giving and receiving feedback and with questioning assumptions–which are all core elements of change leadership.

 3. Senior leaders must understand that leadership at the top is a missing essential.

  “We have gone as far as we can with change management within operations,” the managing partner of a firm of solicitors told me. “Now we believe the real change must be in our leadership and culture, but we just don’t know how to do it.”

 This leader had a problem. He clearly needed to improve operations, but his change management wasn’t doing it thoroughly enough or fast enough.

He knew instinctively that he had to improve the human element, building talent, changing behaviours and altering the culture – key elements of change leadership.

 4. The senior team must be willing to take on new, different work.

 Changing an organization’s culture can never be done by formula or guarantee specific results. The senior team has to develop its ability to tolerate uncertainty and ambiguity, in terms of both business variables and human variables. A critical element of this is the willingness to dedicate time to wholly new challenges.

 At a manufacturing company we’ve worked with, the executives recognized that developing a culture that could welcome change would require considerable learning. But taking time out for it from focusing on manufacturing seemed bizarre and foolish to many. “Stop to do what? To talk? That’s nuts!” a few managers said. Changing that attitude was a very big undertaking. But the senior team was determined to make it happen, and the process took root and led to positive and permanent changes in business performance.

 5. The senior team must recognize the need to work across boundaries.

 Change leadership requires frequent crossing of functions, alliances, suppliers, partners and even whole chains of activity. It is about flexibility, collaboration and having less bureaucratic relationships – and it is at odds with hierarchical command and control. Such boundary-spanning or boundary-busting work is becoming more and more common, but it remains a challenge for many managers and organizations.

 You can transform your organization’s culture. Businesses can and do evolve to face new challenges. Individuals, teams and entire organizations can change their belief systems and attitudes and learn new behaviours. Executives can develop the ability to solve bigger problems. The first step is to understand where you are as an individual and as part of a leadership team. Are you ready?

  Based on an article by John B. McGuire of the Centre for Creative Leadership for