Leaders, look before you leap

Learning & Development Magazine

Make sure staff understand the logic of change before you take action, says Stephen Schneider

The spotlight is on corporate leaders as never before, while tenures in the top roles are becoming shorter, increasing the pressure on chief executives to quickly make their mark. The result is a tendency towards short-term thinking. In the rush to push up share prices and keep headlines in the City pages positive, are we losing sight of the real task of leadership?

At its simplest, the task of leaderhip is to move an organisation from A to B. There are four elements to this. First, a new CEO needs to understand the organisation’s history – how it arrived at point A. Second, the new CEO needs to identify what they want the company to look like in the future. The gap between these two points prescribes the journey on which the CEO will be taking the organisation and its people.

At this point, in the rush to make an immediate impact, new leaders often skip the third crucial element – the identification of developmental themes that need to be embedded in the organisation, to provide the compelling logic as to why people need to change. Instead, they rush into the fourth element, practical action, introducing a raft of initiatives that are excellent solutions to the wrong problem.

The story of a newly appointed chief executive at a major hotel chain illustrates the point. The CEO arrived as a newcomer to the business. For the first three months, he disappeared into the belly of the organisation on a quest to understand the company's core issues. The business was regarded as solid and dependable – but fuddy-duddy and reactive. It was stuck in its ways, with little ability to meet the challenges of a rapidly changing market.

The issue was exacerbated by the fact that the company had a major problem retaining young talent. Although its three-year training programme attracted top talent at graduate level, within two years of completing the programme, the best talent left. Dynamic young people simply could not see opportunities for early career progression and took their chances elsewhere.

It was inevitably the weaker candidates who were left to rise up the ranks, and it was a generation of these less dynamic individuals that occupied the space in the management tier immediately beneath board level.

Our CEO realised that devolving authority away from the centre was the key to creating a more vibrant business. he would give able people genuine authority and reward them for the exercise of that authority.

Having considered the key developmental themes, he was ready to prescribe practical actions. One was the creation of a junior board. Six of the brightest graduates were given classic boardroom roles mirroring the main board. They were invited to reflect on some of the strategic issues challenging the main board and asked to come up with suggestions to move the situation forwad.

The influence of the junior board had visible, positive impacts. First it stemmed the flow of bright young talent out of the organisation. Second, the junior board's input changed the view of 'how things are done around here' and brought a new lease of life to the organisation.

For example, the junior board recommended that a cash budget be given to hotel floor managers to deal with some customer requirements without having to refer to a higher level of management. This meant, for example, that when a customer spilt soup over his suit, the floor manager could respond swiftly to the customer's need, simply taking the suit to a dry cleaners and sorting the problem within two hours.

So, the key difference that meant success for our hotel chain CEO was the time invested in identifying the real problems and making sure the solutions were designed to fit. In short, deep thinking about the business and the involvement of others made for solutions that worked.