MIT Sloan Executive Education Blog

Strategic change: It’s a marathon, not a sprint

The Hollywood version of leadership involves the protagonist coming into a floundering organization and – through a mix of sheer charisma and gumption (and perhaps a well-placed music montage) – managing to turn everything around.

In her recent webinar, MIT Sloan Senior Lecturer, Dr. Elsbeth Johnson, reveals that strategic change is not quite as easy (or glamorous). In fact, if done right, it’s a little boring – but boring can be good! If, as well as being charismatic, leaders are also prepared to embrace the boring and mundane, they can set up the conditions their managers really need to deliver successful and sustainable change.

Based on findings from her recent research, Dr. Johnson developed the “Step Up, Step Back” model as a way to help leaders understand what they need to do to help their managers deliver the change they’ve asked for – as well as the most common mistakes leaders make when trying to implement strategic change.

Step Up, Step Back Overview
It’s a marathon, not a sprint. Plan on strategic change taking at least 2-3 years.

Step Up (Year 0-2):
During this phase, leaders need to be much more involved than they previously have been. Particularly, they need to focus on providing Clarity and Alignment to their managers.

Clarity is simply communicating what you want. Why is the change needed now? What outcomes will the change deliver? How should people behave in order to deliver these outcomes? (It seems easy, but oddly it’s at this Clarity stage that most leaders go wrong).

Having established Clarity, leaders then need to Align the business around the change they’ve asked for. There are four sources of Alignment – continue to talk about the change, role model the behavior you’re asking for, ensure resources (people and money) are allocated properly, and change the KPIs by which you incentivize and reward people for delivering the new strategy goals.

Step Back (Year 2-3)
Leaders usually find this step the most difficult because it can be hard to “let go.” But, critically, leaders ought to be stepping back here, not completely out. And assuming you’ve laid the foundations of Clarity and Alignment in Year 1, then you will be able (and should) Step Back. The work of leaders in this stage is to provide managers with Focus and Consistency. This means leaders aren’t in the weeds of the change, and they aren’t tinkering with it or adding in “additional priorities.” If you do any of these things at this stage, you risk creating confusion and possibly even conflict within the organization.

Leaders also need to be patient for the change to happen – because, by its very nature, strategic change is a long-term endeavor. Impatient leaders often think progress needs to be made faster than is possible, and that can often design-out the deep fundamental change that needs to happen. As is the nature of a J-curve, you need enough time for the returns to materialize, so leaders need to make peace with the fact that this will take years not months; and that things may get worse, before they get better.

Watch the full webinar here for the complete overview of the Step Up, Step Back model with additional insights on realistic J-Curves, how to best execute change, and how to avoid common pitfalls.

Following the webinar, we had questions we couldn’t get to. Dr. Johnson took some time to address them here:

Is the “Step Up, Step Back” model for everyone – or just certain types of industries?
I’ve used it now in a range of sectors and across five continents, so it doesn’t seem to be confined to certain sectors or national cultures – i.e. the typical drivers of preferences around levels of prescription from leaders. I do think it is less useful – and probably less needed – in very small organizations, because their size means that change is usually easier and faster than in large companies. But with that exception, I think this approach is useful for leaders and managers in most organizations.

A lot of questions centered on the rate at which change happens – usually not fast enough. You mentioned there’s a balance between not “tinkering” yet remaining aware of environmental changes that may impact initial strategy. Currently, it feels like everything is constantly changing and evolving. How do we adjust and keep pace and stay competitive with peers in the same boat without being stuck in a never-ending “start over” loop?
The vast majority of the time, it’s simply nonsense to say that “everything is constantly changing.” The leaders who say that are the ones who feel overwhelmed by the number and type of variables that are changing in their sector, and – frankly - the vast majority of that problem can be solved by them spending more time understanding the trends that are coming. It’s not impossible to do that – it just takes time, effort, and ability.

Quite separate from this are so-called black swan events, such as Covid-19, which are genuinely unforeseeable – unless by small minorities – and so analyzing them is impossible until they arrive. And, as I said in the webinar, in the immediate aftermath of that kind of event, my advice is be as tactical as you can, react as fast as you can, and use the data that comes from action to tell you more about what works in this emerging phenomenon. That requires a different mindset from leaders – one where they accept that they don’t know and can’t know – but that’s what they need right now if they’re not to make the situation worse rather than better.

Assuming things eventually normalize and calm down a bit… Does it really take 2-3 years to implement strategic change? Are you sure there’s no way to speed this up – or an industry that’s an exception? (Similarly, are there certain industries that may take longer on average)?
Yes, it really does take that long. And no, there’s no way to speed it up, so leaders ought not to kid themselves. The reason that it takes at least this long is that it’s a STRATEGIC change – rather than anything incremental – and that, by its very nature, requires a fundamental change in what the business does or how it does it. Such a change – typically to either capability or culture or both – entails J-curves. And if you don’t give the change long enough, then all that happens is you stop the change pre-maturely, often at a point where you’ve incurred some or all of the pain, but not yet seen the gain. So, while you may want it to take less time, and you might think that your sector is the exception, that’s just not what the empirical research tells us.

Any tips on how to account for people in your organization (whether leadership, managers, staff, or any other shareholders) who may be resistant to change – thus delaying (or possibly sabotaging) the J-Curve process to achieve strategic change?
The advice I always give leaders who complain about resistance to change is that the first place to look is yourself: what looks like resistance is often feedback for you about how well (or not) you’ve led the change so far. If we accept (as I do) that most people want to come to work and do a good job, then leaders need to enable them to do this. And they do that by establishing Clarity about why the change is needed, what it will deliver and how people ought to behave in order to deliver that outcome. Then leaders need to work to Align the organization around the change they’ve asked for. Most of the complaints we hear from managers in the research is a result of leaders failing to deliver on these two dimensions – i.e. they either haven’t been clear enough and/or they haven’t aligned the business around the change they profess to want. So look to yourself first.

If you genuinely believe you’ve delivered what managers need in these two dimensions, and especially if feedback from other (and hopefully the majority of) managers is that you have, then and only then can you call it resistance by those who are still not changing. And you then need to deal with it as such – i.e. find out why they are resisting and make it clear that this isn’t ok. Ultimately, this might become what Jim Collins would call a “bus” conversation – and leaders shouldn’t be afraid of having those. But only once they’re content that they’ve done all that they needed to do as leaders.

How do you get everyone to buy in to the end goal – and their responsibilities to achieve these goals - especially as many initiatives may layer upon (and compete against) each other across departments in the organization?
If you do the Clarity and Alignment dimensions successfully, this should be much less of an issue. In particular, by making sure the managers tasked with delivering the change have the resources they need to deliver clear outcomes – which are measured and rewarded accordingly. Remember though that this model needs to be adopted at the highest possible level of the organization – by the CEO and the Senior Leadership Team – in order to be most effective. All of the “leaders” on which this research was based were CEO and their fellow C-suite members. If you can’t get that to happen, then there is no doubt that you will have more limited success in doing it locally within a small and less senior part of the business. Unless, that is, you are truly siloed, in which case you can use that to your advantage and just get on and do your own thing without worrying about how other verticals or business lines might react.

But if done at the enterprise P&L level, then Clarity and Alignment (especially by Metrics) should mean that 1) there aren’t any competing KPIs and 2) that everyone is clear how this new strategy fits with what’s gone before. That latter point is important because it helps managers know what of their existing work they can keep and what ought to be ditched – which both frees up bandwidth for the change, and removes potential conflicts with it

Finally, the question everyone asks about everything these days: How has Covid19 impacted this, for better or worse?
As I said on the webinar, the advice for trying to do strategic change right now is, first, determine whether you need to – rather than just doubling down on tactics. That’s what most of the organizations that I work with did from March to August. Then, at least while the world is still virtual but the business is starting to get back to something akin to “normal”, , actually the Step Up, Step Back advice is probably even more important than during the old normal – because people need Clarity and Alignment even more than before. So it’s not different – it’s just more.

Dr. Johnson teaches in the following Executive Education programs:
Advanced Management Program
Leading Change in Complex Organizations

Guest post by Elaine Santoyo Goldman

This entry was posted in on Thu Oct 08, 2020 by MIT Sloan Executive Education


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