Leadership is crucial for business. Leadership is a starting point of strategy. It’s the magic elixir for achieving sustainable growth and value creation. Leadership is at the heart of engaged employees, innovation and vibrant cultures. It is what makes organizations thrive and prosper. Yet for all its importance, leadership is widely misunderstood because many people consider leadership and management to be the same. This confusion is evident as these two terms are routinely used as if they were interchangeable.

While they are both very important for a business, they are not the same. Management and leadership are different, though both are important. Most businesses will not be successful over time without the contributions of both management and leadership. But make no mistake, they are different.

(Author's note: this is a long-form (7,500 word) thought leadership article on the importance of transformation in the execution of growth strategies. To download the PDF version, go here.)

 Summary

Growing a business is a daunting task for many, if not most, executives. While growth is considered fun, and what executives dream of being engaged in, achieving sustainable growth is another story. For example, meaningful growth requires leadership skills, not simply management know-how. While executives may bristle at this assertion, their angst is based in the assumption that they are already skilled leaders—typically, nothing could be further from the truth. They likely are skilled managers, but they equate management capabilities with leadership capabilities. Therein lies the problem.

Successful growth strategies, by definition, require transformation of the organization, which can only happen with strong leadership. Strong leadership is ultimately needed throughout the entire organization and must start as a model from the very top.

By Larry G Hoelscher, Partner & Bob Chapman, PhD, Managing Partner of KingChapman

Leadership is the starting point for strategy, execution and transformation. Building a cadre or core of leaders is a critical success factor. Yet too often leadership is thought to be exercised only by executives and a few other chosen individuals. We say that is not only wrong, but it robs organizations of a most precious resource for executing strategic change and transformation. How then does this mistake keep occurring? 

I frequently hear the question, “How do I know that we are doing the right things to execute our growth strategies and transform our organization?” What a great question! To have the insight to craft such a question, one has to be aware that executing strategies and transforming organizations requires something “out of the ordinary”. Success in creating value through growth strategies and transformation requires an exceptional approach. Simply doing more of the same is unlikely to be successful, so something out of the ordinary is required. This level of change requires strong leadership. It will not happen simply through good management. Strong leadership must be actively involved.

This brings us to the question of “how do I know we are doing the right things?”

The answers center around:

* “Are you being a leader?”

* “Can your leadership fingerprints be seen on the execution actions and change efforts?”

Begin with Value

Laying the foundation for successful transformation begins with stark clarity on how the organization creates value. Then an assessment is made of the level of value which meets or exceeds expectations of key stakeholders. Growth is the secret for sustaining outstanding levels of value creation. Outstanding success in delivering value will lead to the desired branding, competitive position and reputation for the organization. The reasons for transforming an organization should be obvious to those who are looking with “open eyes”. It should be well understood that success in this current transformation will require changing the mindset of frontline employees, which in turn will translate into their actions on what may initially seem like “fuzzy little things” but can turn into big things. 

Elements for Achieving Success in Transformation

We assert that achieving success in transformation requires:

1. Dynamic, strong leadership. The word leadership is used here to have meaning very different from management
2. Clarity on the Invented Future which the transformation is designed to achieve
3. Clarity of the architecture or design for the transformation
4. Comprehensive use of change elements known to be effective in transforming organizations
5. Engaging the hearts and minds of people to the point that they drive change

This article is co-authored by Bob Chapman & Larry Hoelscher

Think back over the last month. How many times have you heard any of the following statements or something close to it?

• “We operate in silos, and that is blocking us from getting the needed improvement!”
• “We are continually waiting on them to deliver … there is nothing we can do.”
• “The right hand doesn’t know what the left hand is doing.”
• “I need the organization to work together better.”

Can you see a theme present in all these statements? Even though action could be taken to improve performance in the business, it is somehow blocked. Absent that blockage, those speaking or thinking these statements would initiate the appropriate action.  

So what is stopping them? Usually, the blockage occurs because others need to agree on the actions needed and take them. There is dependence on others to take action, and for whatever reason the desired action is not occurring. The people and groups with whom the dependency exists are either unaware of the desired action or have thus far been unable or unwilling to act.

We were blown away – so simple and yet so . . . perfect!

When we began working with Neos Marketing, we posed a simple request – is there a way to demonstrate “transformation”, either visually or physically? Neos took up the challenge. And the result was brilliant!

First – a brief definition for transformation (from Webster’s Dictionary):

transform, v.

Etymology: < Latin transformāre, < trans- prefix + formāre to form, < forma form. Compare French transformer (14th cent. in Godefroy Compl.), also Old French tresformer

1. a. trans. To change the form of; to change into another shape or form; to metamorphose. 

b.transf. To change in character or condition; to alter in function or nature.

2. intr. To undergo a change of form or nature; to change.

1. The action of transforming or fact of being transformed.

– a. The action of changing in form, shape, or appearance; metamorphosis.

– b. A changed form; a person or thing transformed.

2. transf. A complete change in character, condition, etc.

 So how we can show people a visual representation of that? By using a metaphor.

Success in post-acquisition integration is essential to the success of any M&A. Even if the strategy behind the acquisition is brilliant, it must also have brilliant leadership in execution to achieve success. Based on our experience and research, we have identified five critical success factors for leaders in post-acquisition integration, in implementing organizational change and integrating new organizations.

These factors are:

1. Communication, communication, communication
2. Maintaining stabilities
3. Integration of management processes and systems
4. Organization design
5. Winning hearts and minds

Recently, I was picking up my car after its routine maintenance, including tire alignment. We all know the consequences of poorly aligned tires on a car: tires wear out too fast, the car will have the tendency to pull to the right or left, making driving more tiring, etc.

As I got into my car, I had an interesting insight. Once my car got fully aligned, the moment the car touched back on the ground, tire alignment automatically starts to go out. When I left the dealership, I paid more attention to the bumps in the road, potholes, and other street issues that were going to impact the tires’ alignment.

This analogy is a good one for what leaders and their teams face in business, and particularly in any M&A integration process. Creating alignment with a new leadership team, post merger or acquisition, is an absolute must for the M&A initiative to generate the value expected. Just like my tires, however, generating alignment is not only a “first thing to do” phenomenon, it is an ongoing leadership challenge. It must be continually created, generated, tended to, and fostered because alignment is an element that is always on its way out. After all, all of us in business recognize that, like the streets we drive on, market conditions are never static, and are never promoting more alignment. As I said, alignment is always on its way out.

A critical element of success in post-acquisition integration is identifying the right jobs to drive performance and then selecting the right people for those jobs. Selecting people for key positions in the new organization is among the most critical steps in the integration process. These choices are key to determining if the acquisition is accretive in value. It also provides the foundation for future success of the business and adopting a powerful organizational culture. At KingChapman, we think about how leaders can succeed in dealing with the Conundrum of People in M&A. In over thirty years of consulting in acquisitions, we find that getting the right person in the right job is critical to future success. It provides an excellent opportunity for leadership in bringing two or more organizations together. Placing the right people in the right jobs is also crucial communication to people in all organizations regarding their leader’s commitments and values.