It’s one thing to be the impetus to disruption, and quite another to have it thrust upon us. This has never been starker than with the recent events surrounding COVID-19. The virtues of digital and market disruption abound; yet when disruption takes the shape of a terrible contagion, it understandably shakes us to the core. It becomes our defining moment. As such, we have been struck by the candor of some of industry’s most respected leaders in their ability to transcend our terrible plight to galvanize their company’s purpose.
We’ve witnessed firsthand a CEO of a leading healthcare organization speaking passionately of his founding principles to deliver proactive, preventive care to his patients and affirming it by his call to action to contact each and every one of them during this crisis. Or the chairman of a leading aviation company who donated their company’s services to support humanitarian missions aligned with its founding principle of bringing people together to change and enrich lives. There are no doubt other examples to enumerate. Navigating the “fog of war,” these individuals are positioning themselves as iconic leaders for rediscovering their company’s purpose.
Originating with psychologist Fredrick Herzberg’s seminal work on intrinsic motivators and popularized by Daniel Pink’s Drive, the foundation of motivation is having purpose. While no doubt the vagaries of a crisis require leadership to first and foremost survive, a business’s long-term health and ability to thrive are arguably rooted in its purpose or mission. This is the crucible of renewal. It is what inures its stalwart supporters. This virtue is compelling not only in humanitarian terms, but in terms of value creation as substantiated in the book Firms of Endearment. Companies that balance all its stakeholder interests create an order-of-magnitude increase in shareholder value by comparison with their industry counterparts, growing 1025% in the last 10 years while the S&P 500 returned 122%.
So where does this lead us? By embracing change during this tumultuous period, those who venture into this brave new world can reinvigorate, reinvent, and renew their organizations, ever mindful of today’s landscape and its myriad stakeholder interests.
Reinvigorate Your Purpose
As Simon Sinek espouses in his TED talk about the Golden Circle, the “Why” is where to begin: What’s your purpose? What’s your cause? What’s your belief? Simply put, this is why your organization exists: like the aforementioned businesses, to deliver proactive, preventive care while bringing people together to change and enrich lives. Distilling it to its essence, “The goal is to do business with people who believe what you believe,” Sinek explains. This is the recipe for inspired leadership. Use this opportunity to rediscover and revitalize your organization’s purpose. Speak convincingly with your stakeholders, and in full transparency, when rekindling your “why.”
The importance of purpose as a fundamental strategy is reinforced in a recent article, Put Purpose at the Core of Your Strategy:
- It helps enable companies to redefine their playing field. Purpose serves as a guide in completely redefining the playing field, propelling companies to expand into high-growth areas.
- It allows companies to reshape their value proposition. Focus on reshaping the value proposition often leads to innovative products, services, and business models.
The article goes on to outline two approaches to defining corporate purpose: retrospective or prospective. The retrospective approach “requires that you look back, codify organizational and cultural DNA, and make sense of the firm’s past,” much the same as our earlier example of the CEO of a leading healthcare organization. Alternatively, the prospective approach “reshapes your reason for being” – the focus is external, as we surmise was the case in our example of the chairman of a leading aviation company.
Reinvent Your Business
Invoke your internal force majeure clause. In all likelihood, the compelling need to rethink how to conduct business given social distancing has already precipitated change in some measure. But why stop there? Why not capitalize on this paradigm shift to reinvent how you do business. When is the last time you rationalized your supply chain, sales distribution, or fulfillment channels? Or is it time to create new offerings? Here are some examples of transformative change:
- Implementing major strategic and cultural changes. As a market leader in packaged applications, Microsoft moved to the cloud to include Office 365. With Microsoft’s appointment of Satya Nadella as CEO, it is morphing into a company with an inclusive culture based on collaboration.
- Adopting radically different technologies. When Apple introduced the iPod in October 2001, there were more than 50 players in the market. Aided by Toshiba’s small disk drive technology and high-speed internet, Apple became the dominant player (literally and figuratively)
- Making significant operating changes to meet new supply and demand. In August of 1998, Amazon expanded its product line beyond books. In February 2005, it launched Amazon Prime. Most profoundly, by July 2010, Kindle e-books outsold hardcover books. And this was just the beginning.
- Reforming product and service offerings to meet unexpected competition and dramatic reductions in revenue. In 1993, IBM posted what at the time was the biggest loss in the history of corporate America, $8 billion. Consequently, IBM transformed from an IT equipment manufacturer to a services and software company. (Who Says Elephants Can’t Dance?)
Regardless of which option you choose, use this period of disruptive change to rethink the business and “double-down” on improvement, change, and innovation to strengthen your organization for when it emerges in the recovered economy. Harvard Business School professor Amy Edmondson introduced the importance of psychological safety to innovation, which is detailed in her new book, The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation, and Growth. The premise is that in order to capitalize on people’s creativity and “spark,” we need to provide an environment for innovation where people can freely express their thoughts and opinions without ridicule or intimidation; “People must be allowed to voice half-finished thoughts, ask questions from left field, and brainstorm out loud.” This is paramount to unleashing your organization’s creativity to reinvent.
Renew Your Organization
As Franklin D. Roosevelt was attributed to saying amidst the Great Depression, “Courage is not the absence of fear, but the assessment that something else is more important than fear.” Aligned with your organization’s reinvigorated purpose, elevate those in your organization who inspire trust and a renewed sense of purpose as your emerging leadership; the perennial “go-to” people to whom seemingly everyone turns for guidance and advice. Empower influential personnel to whom people will listen. Instill them as your requisite change catalysts and anoint them as your “change ambassadors.”
Author Jon Katzenbach refers to these key influencers as “authentic informal leaders.” Organizational theorist Karl Weick observed people engaged in sense-making processes by interacting with others as a means of interpreting change. With the ambiguity and uncertainty resulting from disruptive change, securing employee buy-in and adoption has become increasingly crucial to the success of organizational change. In addition, the more you can understand your employees’ perceptions, the easier it will be to establish a culture of flexibility and adaptability. Maintaining a pulse on your organization’s sentiments and perceptions of imminent change through informal “change ambassadors” is an imperative.
Given prevailing conditions, there may well be some learnings from the Satir Model of Change, developed by family therapist and author Virginia Satir. The model was expressly designed to help people improve the way they cope with major, unexpected change. Specifically, in the stage of Chaos, what’s required is help in building a safe environment that enables people to focus on their feelings, acknowledge their fear, and use their support systems. Reaffirming the importance of your people is paramount in establishing a culture where everyone feels valued and plays a role in your organization’s renewal. Just as the world musters a legion to find the cure to COVID-19, you too can muster the masses to drive a renewed vision and purpose, one that is compelling to all your stakeholders.
Investing in change management is critical for the success of your organization now more than ever. To learn how to focus and improve your digital transformation journey, download our eBook, Seeing 2020: How to Focus on Digital Transformation without Losing Sight of Your People.