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TechKnowledge: A Conversation with Gary Grates on Change Management

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This is certainly a time of change for companies today.  Knowing what to do about it and how to build strength out of adversity takes a lot of work and a willingness to change.  When I want great insight into change, I’ve often asked Gary Grates, President and Global Managing Director of Change and Employee Engagement for Edelman.  Gary’s walked the hallways of the Fortune 1000 for many years and, more importantly, he’s one of the world’s top experts on “change”. 

 

Hope you enjoy our interview.

 

Q: Gary, we all know we are in a time of change, but what do people typically forget to think about in a time like this?

From an organizational standpoint, Bob, the missing element especially for leadership is that people have been/are experiencing change in other parts of their lives.  As such, change efforts inside companies begin with a respect and recognition of this fact.   Like everything else in our lives, clarity, consistency, and coherence are essential to getting people's attention and keeping it.  However, we still see managers and communicators treat change as an event or worse a campaign not realizing that people have basically turned the volume off and aren't paying attention. Too often, the rhetoric doesn't match the actions and people lose interest and leadership loses credibility.

Q:  Change management is a discipline not always well understood in companies.  Tell us why the art of change management is so important.

Simply because business is in a constant state of change.  There are no "down" or 'rest" periods, so to speak.  Competition, technology, societal shifts, consumer trends, geopolitical realities all conspire to keep business in state of flux. So the challenge is how do you design a management model that allows for people to listen, learn, engage, and comprehend what's needed from a strategy, focus, and skill standpoint to remain competitive.   If you look at the automotive industry, for example, the Germans, Japanese and now the Koreans continue to change the game considerably in terms of cost, value, quality and production efficiencies. The result is a domestic industry that has made great strides to be competitive but are still falling short in terms of consumer trust, brand perception, reliability, and operational flexibility. Expand that to the current economic situation and the impact on the financial industry, energy industry, transportation industry, health care, etc., and you can see why the ability of institutions to recognize and integrate a change mentality is critical to survival.  

Q: You need to listen to learn.  And listen again and again. Do you see this happening with good results as you walk the hallways of companies?  If not, why not?

Unfortunately not at the rate necessary.  You bring up the essential ingredient of progressive leadership – the capacity to learn.  Think about the current state of affairs domestically.  It's been a real failure of leadership.  But why?

Some of the best, most effective business leaders in history have been those that have built their organizations on the foundation of their original idea.  Two names come to mind in that regard: Sam Walton and Michael Dell. Their drive and determination to succeed helped them realize their dreams.  Their unique vision kept them focused, able to steer their organizations past the shoals of imminent disaster not once but consistently!  As their companies grew, they excelled because they were able to convey that vision to keep them and their teams focused and connected toward common ends.  They never lost touch with the most important audiences: their employees and their customers. They were so well connected with their customers that they created new markets and satisfied needs before their customers even recognized them as needs.  But let’s face it, most CEOs got to the top by climbing the corporate ladders, anointed on the basis of surviving the battle to the top rung – which is not to say that such experience isn’t worth something. But along the way, most such leaders lose touch with the basis of their organization’s being, its core personality and what truly makes it successful.  Many arrive in the E-suite with a sense of entitlement, ready to assume the privileges they’d seen granted to its previous occupants: the private club memberships, the corporate jets, the limo ride to and from the office each day, etc. 

I know of one CEO who even had his own private express elevator that ran from his personal parking space in the basement garage to his top-floor office.  This little perk helped assure that he would never have to mix with the hoi polloi that comprised the employee population in the rest of the high-rise corporate headquarters. Another business leader, interviewed recently on NPR, was practically whining about having to fly commercial now that his company has had to sell its fleet of private jets.  What he apparently hates most is standing in lines.  Oh dear.  In that his company sells consumer products, perhaps he could make lemonade from lemons and learn something first-hand about his target market.  That is to say, perhaps he could listen and learn. And that’s the point here.  The key responsibility of leadership is not to sit atop the pyramid and observe from above the fray, but to get into the trenches; because it’s in the trenches, alongside the employees and customers that a CEO truly learns. 

It’s a two-way street. By engaging the people in the organization, the leadership gives people a greater sense of self-worth, and connection to the goals and vision of the organization.  At that point, the line is blurred between our everyday understanding of “leading” and what the CEO should be doing more of: Learning.

It starts with "Listening."

Q: What are the best examples of companies who have adapted to change that you have personally seen outside of technology?

There are actually quite a few.  Two prominent ones come to mind: Wal-Mart and PepsiCo. 

Wal-Mart has endured much scrutiny and curiosity from many fronts – media, politicans, communities, labor unions, etc. – and yet has been able to open up channels of communication with all these groups and better understand the basis of their comments or criticisms.  That insight coupled with new found relationships has enabled them to change some of their practices or policies and reshaped their business approach without compromising their stong values.

PepsiCo under the astute leadership of CEO Indra Nooyi has adopted a new mantra – "Performance with Purpose" – which is a strategic platform that helps people balance the need for strong, consistent financial performance with social reponsibility, integrity and individual respect.  Not an easy thing to do in today's marketplace.  But this mindset is shaping everything PepsiCo does from investment, product development, people growth, preservation of natural resources, and involvement in major societal issues around the globe.  

You can't optimize your workforce or your core competencies without constantly informing your thinking and decision-making and communicating openly and aggressively throughout the enterprise.  Both these companies do it very well!  

  

Q: The world is increasingly global.  In fact, 10 languages reach 95% of the online population.  What issues does this present for a company and how do you overcome these obstacles?

First, that all business is local.  In our opinion, being a global organization is actually the result of being senstitve and respectful to local issues, nuances, mores, and realities.  In that sense, organizations must be clear about macro values, a macro vision and mission, and a macro strategy but adept at implementing/reinforcing those points everywhere they conduct business.

The great equalizer as you well know, Bob, is technology.  Today, people have access and connection to anyone in the world at anytime.  In that sense, being diligent and disciplined about your core beliefs is essential to maintaining organizational integrity.  Equally important is being open, transparent, and consistent with how you communicate and engage people – employees, customers, communities, shareholders, critics, media –  in the business and its issues, concerns, aspirations.

Q: Ok, our pens are ready.  What are the top 5 things we should think about and do, starting tomorrow?

While there are no "10 steps to heaven" in dealing with effective change management, below are a few insights from our experience:

 

1)  Change starts at the top — The CEO and leadership team drives organizational behavior so any effort at changing the business model or performance must begin in the C-Suite.

2)  The key audience in any change effort is Management — Often, organizations focus their efforts on the workforce in general believing that it's the emp loyees who need to change behavior,mindset, skills, etc.The most important group to coalesce around change is actually the management.  managers must be brought in early and often and given the tools and support necessary to effect and enable change in their respective areas.

3) In thinking about employees, view them as a public constituency not a captive audience — People are smart, sophisticated human beings running households, raising children, and actively invoilved in their communities.  As I said earlier, it's essential that your change management design and process including communications be geared to reflect this reality. Organizations need to realize that they must be diligent in providing facts, rationale, purpose, interaction, discussion, debate and relevance to get and kepp people's attention.

4) Never forget, an employee's understanding of strategy is "seeing and feeling" patterns of behavior and decision-making, not listening to corporate speak — Actions speak louder than words as Emerson reminded us so recognize that if people are to believe and engage in a change effort, they must consistently see decisions, actions, results that reflect the direction being touted.

5) "Where am I?"– Answer this question and you will have solved a major obstacle in organization change. People are searching for meaning and purpose in their work lives especially as work/family balance becomes blurred.

6) Change the conversation, change the results — Rethink how and what you communicate about any change initiative with the focus being on instituting a new conversation internally.  To do this, keep the marketplace – competition, customer, trends – first and foremost in aligning our internal messaging.  This will provide the proper context and frame of reference to discern how the company thinks and acts and answer the "why" as it relates to change.

 

Well, that was actually six steps, not five, but I can adapt to change, so no problem. 

 

Thanks again Gary.  Always insightful to speak with you. 

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