Leading Business Change - An interview with Dr Karin Stumpf
Dr. Karin Stumpf speaks to Ibi Thomson about the major pitfalls and critical success factors for organisations undergoing major transformation.
Karin works with multinational companies implementing strategy changes, such as DaimlerChrysler, Universal Pictures, Deutsche Bank, Bombardier Transportation. Formerly a consultant at both McKinsey and Deloitte, she has worked with clients in over twenty countries, successfully supporting them in driving corporate strategy. Karin regularly lectures at the Swiss Institute of Technology, among others. She holds an MBA a Ph.D., and a master's degree in science and organizational psychology. Her company Acrasio is based in Berlin, where she lives with her husband and daughter.
You recently published “Leading Business Change – A Practical Guide to Transforming Your Organisation”. What prompted you to do this?
I have spent my last 20 years working with executives around the world. What still strikes me is that we have a tendency to make similar mistakes, over and over again. The most common one is to think that one leader can transform an organisation by him- or herself. When I searched for books that would help managers and directors become better transformational leaders I found either “technical” workbooks for change experts or lighthearted parables that showed the need for change, but not the “how to”. That is when I decided to write “Leading Business Change”.
In the book you combine the fictional character Mr Schmidt, tasked with outsourcing parts of his organisation, with practical and structured guidance on business transformation. I can easily recognise the issues my clients face throughout Mr Schmidt’s journey. Was there a reason you chose this approach?
When I started writing I always had my clients in mind: hard-working, busy managers. I wanted my book to be easy to read, not too long (length of a plane journey from Europe to the States) and include stories my readers could relate to. My working title was “Mr. Schmidt’s transformational journey”, Mr. Schmidt being a classic international leader. That is when I decided to start each chapter with the fictional story of Mr. Schmidt, showing what can go wrong (or right) on an organisational change journey.
You talk about having an adaptive methodology which is broken into three key phases. Could you explain this and why you feel it is important?
Changing your organisation is a lengthy and complex process, but my objective as consultant is to make this more manageable. Seeing it as a three-phase process, rather than a multitude of activities helps leaders focus their energy. Each phase focuses on a different group of stakeholders, as each group will have specific requirements and expectations. This is true of every project I have worked on. What varies across companies is their strategic goal, their size, their culture, etc. That is why an adaptive methodology is key. There is no “one size fits it all”. I give executives guidance, but also remind them that they know their company best and that they need to use theirknowledge to implement organisational change.
Could you expand a little on the three phases? What are they? Which typical stakeholder groups are involved in each and why?
- The beginning of each change project is about mobilising the key stakeholders. These are individuals who have the power to make the project a success, either through providing a budget or resources. The key activities here are about aligning the different visions. Only then are you ready to plan your transformation project.
- With the resources made available to you can start crusading inside your organisation. You need to start designing what your new organisation should look like by reaching out to the impacted group. This is also about sharing ownership and getting buy-in for the final structure.
- Once you know what your new organisation is going to look like, you are ready topopulate it with people. This where all the previous work done with key stakeholders will pay off: you will encounter resistance, but you won’t be alone to actively address it. By deploying your change, you will finally see results and be able to measure success.
Many popular studies show that 70% of major transformation initiatives fail (McKinsey, BCG). As you progress through the story of Mr Schmidt, his failings begin to appear quite clearly. What are the major pitfalls that leaders of change should be aware of?
The major pitfall is trying to enforce change. Leaders will always encounter resistance, but there are often gold nuggets in the criticism. Finding these and including them in the change implementation is what will make the programme successful. Listening skills are therefore key.
Don’t act solo
The second biggest mistake is trying to do it alone. One person cannot do it all and therefore it is critical to delegate the responsibility to all relevant parts of the organisation. The more people take ownership of the project, the less it is likely to fail.
One size does not fit all
Last but not least, trying to use a standardised approach is another potential mistake. The danger here is that employees don’t feel like they own the methodology, and consequently, the change programme itself. Trust the knowledge inside your organisation and adapt your change process to the needs of your company: this is how you will become successful.
I know that much of your experience comes from working with some of the largest companies in the world. Do you believe the same pitfalls apply to the SME segment?
In principle, the three pitfalls mentioned earlier also apply to SMEs. But the most prevalent one is the last one. If you have ever read other change management books you will see that following standardised methodology requires a lot of effort and resources. This is something smaller corporations usually lack. It is essential to adapt your approach by making it simpler and more manageable. There is no need to overcomplicate the process; for example, moving three business roles around can be done just by speaking to the relevant people.
Spoiler alert: by the end of the story, Mr Schmidt has learnt from his mistakes and seems far better equipped to lead business change in future. What are the lessons learned here?
We might be giving the end away, but yes, Mr. Schmidt has learned from his mistakes. He has learned to ask for support, because he wasn’t able to manage all parts of the change programme alone. He also realised how important it was to include people, to listen to their criticism and gain knowledge from them. Facing regular challenges along the way he had to accept that things regularly turn bad. This is inherent in long lasting change projects. Remaining calm during difficult times was certainly a tough challenge for him. But most importantly he learned to listen to his wife!
At Interim Partners, our Return on Interim methodology focuses on agreeing what success looks like as an outcome and then tracking performance towards it. For us, the primary measure of success is in its economic value. How do you define success?
Every journey starts with defining what you want and where you are heading to. KPIs are an important tool to specify your goal. Similarly to your ROI system, I ask my clients, once they have agreed on their vision, to define their objectives and KPIs. What happens too often, is that these are put aside, almost forgotten. In the middle of your project you might realise that you won’t achieve your objectives, but this is OK, as long as you are open about the “why” and adapt your numbers. Forgetting about them until the end doesn’t help.
But numbers are one thing; perception is almost as important. Success is often seen through the eyes of others. And they will tend to see the negative. So it is important to proactively communicate the positive as well as the negative aspects of the change. But to get the most honest answer about the change you need to go back two years later and ask: is it working (do people use the new processes)? And have you (as an organisation and as a person) learned something for future projects. If the answer to both is “yes”, then I would consider it a successful project.
What advice would you give to anyone tasked with leading change?
Gandhi once said: “be the change you want to see in the world”. I would translate this for the corporate environment to “be the change you want to see in your company”. The role of a leader starts with being a role model. Following that, a leader needs to be a good two-way communicator, willing to listen. Embracing change also means having regular interactions with the relevant employees. You will need to mediate when you encounter resistance, motivate in case of challenges and make clear cut (read: unpopular) decisions to get the project moving. You will have to push yourself, get out of your comfort zone, but in the long run it will help you become a better leader!
Ibi Thomson is the Principal for the CIO Practice at Interim Partners.