Critical Catalysts for Effective Organization Change

In these challenging times, executive teams must frequently drive quantum-leap changes in business performance. Unfortunately, these change efforts frequently fall short of their objectives.

To maximize the chance of success, executives must ensure six critical change catalysts are in place:

1. Vision: Where are you trying to go with the organization? A vision provides a rallying cry for the organization and provides necessary context for the strategy.
   
2. Strategy: What is the strategy for getting there? A pragmatic strategy provides focus, a basic business model construct, and critical boundaries for the desired changes.
   
3. Action plan: What specific steps are required? To create value, strategies must be broken down into discrete steps required to accomplish the goal. Ideally, these steps should be aligned with other change initiatives across the organization.
   
4. Skills: What skill set (e.g., functional, analytical, political, IT, collaboration) is required to successfully execute the action plan? For significant change efforts, holistic skills are just as important as more tactical skills.
   
5. Resources: Are the right resources (e.g., personnel, capital, leadership bandwidth) at the right magnitude allocated to the effort? Are they actually being applied? To enable change, an appropriate level of resources must be budgeted and applied to the change effort. While all companies are resource constrained (particularly those involved in a turn-around), starving a change effort for resources is usually a quick path to failure.
   
6. Incentives: Are incentives in place to properly motivate the organization? The full spectrum of incentives should be considered (e.g., monetary, promotion, recognition). For intensive change efforts, significant incentives for key personnel may be warranted.
   

For incremental change efforts, most companies rely upon their existing policies, processes, and organizations to drive change. However, major change efforts (e.g., restructuring, turn-around) typically require substantial deviations from a company's norm.

Without a tailored approach, major change efforts frequently fall short due to a handful of missing catalysts:

• Strategies and operating plans incorporate over-optimistic assumptions.
  
• The team's skill set lacks holistic perspectives leading to (i) missed critical interdependencies in the action plan, (ii) mis-aligned policies, processes, or goals (e.g., sales comp plan vs. margin target, cost reduction vs. retention of key talent), and (iii) wide-spread sub-optimization in project execution.
• Budgeted resources (i) are not applied in a timely matter due to over-commitment or excessively long transition-times, (ii) do not match the required skill sets (e.g., stretched "development opportunity"), or (iii) lack sufficient leadership bandwidth to provide appropriate guidance and "air cover."

While change introduces many unknowns, the six catalysts underpin all successful change efforts. Fortunately, these catalysts are largely within the control of the executive team.

Monday Morning Actions

• Select a key change effort that is currently underway and identify deficiencies in the effort's critical change catalysts.
• Pursue external assistance where critical skills or resources are not available within the organization.
• Incorporate a catalyst assessment into the project approval/funding process.