Great CEOs are often impatient visionaries. They know where they want to take the company, but are frustrated with the time and effort involved in the process to make it happen. When Covid hit in 2020, thousands of rigid companies, which historically demonstrated massive resistance to change, were suddenly transforming overnight. They adopted virtual working models, figured out new supply chain solutions and opened up a range of sales channels. It is reasonable for any CEO to want to leverage this newfound corporate adaptability for all kinds of new transformations in 2022. But they will discover the survival instinct that enabled employees to adapt to working remotely two years ago doesn’t apply to new initiatives driving tech adoption, implementing new operating models or fixing the employee experience gaps that are undermining talent retention today.
Here’s the warning all CEO’s need to consider: only one in three transformation projects succeed in meeting business objectives, and the biggest and earliest failure risk is the lack of executive alignment.
Yes, all the CEO’s direct reports may nod their heads in agreement to the four bullets on a PowerPoint slide outlining the specific implications for a major upcoming change management initiative, such as digital transformation or new environmental, social and governance strategy. But, when asked separately, each executive is likely to have a completely different understanding of what’s really changing for their department, employees and customers, and what they need to do to make that change happen.
Based on my experience working with many Fortune 500 CEOs and their teams, here are proven techniques to reduce the risk of executive misalignment.
1) Get detailed
Demand that the change management plan detail exactly what’s changing and why for every impacted department and employee before it is brought to the executive team for consideration. Clarify how the company is going “from this… to this”, so there is understanding of the current state and what will happen once successful change is in place. That way, leaders are more likely to be on the same page about the implications and benefits, making it hard to walk back in the future.
2) Engage executives in new ways
When executives are asked to review a fully baked transformation plan to offer their approval, we’ve seen some instances where they say, “This is a great plan for the business, but of course it won’t work with my division.” To get collective executive alignment on the change that will apply across the total enterprise, we’ve turned passive reviews of plans into active facilitations of decision-making on the specific transformation initiatives required to meet the stated goals. In these sessions, all executives have a say on all the “gap-closure” priorities across every function and division of the company.
3) Make it Personal
Even when change is good, humans are hardwired to resist. It’s natural. To get executives onside with change, it is critical they understand the vision in detail and can connect it to their own personal ambitions. On our change consulting engagements, we do one-to-one interviews with every single executive to make sure we deeply understand their lens on the business and their own drivers and motivations. Then, when we develop and present the plan for alignment, each executive can explicitly see how both corporate goals and, to some extent, their own goals are addressed in the plan. Ultimately, every single CEO-led growth strategy depends on behaviour change of two types of people: your employees and your customers. Understanding and applying the psychology of why people do and do not want to change is foundational in making sure the entire executive team has the same understanding and enduring commitment to the transformation as the CEO.
Q&A with Ewan Main
Q: Why is executive alignment such a challenging endeavour?
A: Every executive’s view of a proposed transformation will be shaped by unconscious bias. They may believe there’s no reason to disrupt the status quo, or the pain of the transformation will outweigh business gain. To get around this, it is critical to anticipate the reality of resistance and have arguments that are thought through. A CEO may tend to take a command-and-control approach, simply saying, “this is happening”. But building in the time to address every executive’s bias will help ensure an alignment decision gets made and it sticks.
Q: Why do so many companies simply accept such a high change management failure rate?
A: In our experience, change management failure is almost always caused by people factors. Leaders who failed to lead. Employees who weren’t equipped with the right skills. Lack of effort in getting people to adopt new behaviours and stick to them. Surprisingly, when we did some research with people who buy change management consulting services, many said they disliked transformation projects because it required the hardest thing to do in any company: change people. It is a lack of attention to the people side of change; that basic understanding of the psychology of how human brains react to change and the successful techniques that turn resisters into advocates. Daggerwing’s whole consulting approach is designed to break the cycle of change management failure. Unlike many competitors, we focus on the people side of transformation, so we can do change right the first time and make it stick.