Picking the right transition strategy

Published February 3, 2009 by TNJ Staff
Career Advice

Transitions into new leadership roles are nothing less than corner-office crucibles. They test executives’ mettle from day one, with pressure to diagnose, strategize, delegate and communicate effectively. Think that’s an overstatement? Consider the results of a recent survey I conducted: 70 percent of the 143 senior HR professionals who responded either agreed or strongly agreed with the statement “Success or failure during the transition period is a strong predictor of overall success or failure in the job.”

Leaders in transition reflexively rely on the skills and strategies that worked for them in the past; after all, their previous successes are what propelled them to the new opportunity. That’s a mistake.

My work over the past decade, observing hundreds of executives navigating their way through a range of management roles, shows that executives in transition must gain a deep understanding of the situation at hand and adapt to that reality. This is why I developed the STARS model — a framework for assessing business situations and helping new leaders figure out how to tailor their strategies accordingly.

“STARS” stands for the five common situations leaders may find themselves moving into: start-up, turnaround, accelerated growth, realignment and sustaining success. The model outlines the characteristics and challenges of, respectively, launching a venture or project; saving a business or initiative that’s in serious trouble; dealing with rapid expansion; re-energizing a once-leading company that’s now facing problems; and following in the footsteps of a highly regarded leader with a strong legacy of success.

By using STARS to assess the situation you’re moving into, you can better understand the organizational changes needed and, correspondingly, the personal adaptation that will be required.

ASSESSING THE BUSINESS SITUATION

To see how the situation shapes the transition strategy, consider how Stefan Eisenberg (not his real name) adapted his approach when he moved from one role to another. A hard-driving, German-born executive, Stefan had successfully led the turnaround of the European manufacturing operations of an international consumer products firm based in the United States. As vice president of manufacturing, he had moved decisively to restructure an organization that was broken: He centralized the most important manufacturing support functions, closed four of the least efficient plants and shifted a big chunk of production to Eastern Europe.

Stefan’s success in Europe led to his appointment as the executive vice president of supply chain for the company’s core North American operations. The job was much bigger, combining manufacturing with strategic sourcing, outbound logistics and customer service.

In contrast to the situation in Europe, North American operations were not in immediate crisis — which was the essence of the problem. The organization’s long-term success had only recently shown signs of slipping. But Stefan’s own assessment of the organization indicated that serious problems were brewing. The business was addicted to firefighting, reacting in crises rather than tearing out problems at the root. Furthermore, executives relied too much on “gut feel” to make critical decisions, and information systems provided too little of the right kind of objective data.

Using the STARS model, Stefan was able to recognize the clear differences between the realignment situation he was heading into (where clouds were gathering but the storm hadn’t hit yet) and the dramatic turnaround he so successfully managed in Europe (where urgent needs demanded urgent actions).

ORGANIZATIONAL CHANGE

The right strategies for creating organizational change flow directly from the STARS situation you’ve inherited. Once you’ve clearly outlined your new challenges, you can more effectively apply the following principles to ease your transition and increase your odds of long-term leadership success: organize to learn about the business, establish A-item priorities, define strategic intent, get the leadership team in place fast, identify where you can secure early wins and create supporting alliances.

Let’s look at how Stefan applied a couple of these principles. Take organizing to learn — figuring out what to learn, from whom to learn it and how best to accelerate the learning process. In the turnaround situation, Stefan needed to rapidly assess the organization’s technical dimensions — strategy, competitors, products, markets and technologies. In his new leadership role, cultural and political learning mattered more: Getting people to acknowledge the need for change is much more a political challenge than a technical one.

Stefan also had the good judgment to secure early wins differently in the two situations. In turnarounds, leaders must move people from being in a state of despair to seeing a light at the end of the tunnel. Stefan had done that in Europe by closing ailing plants and shifting production. In the realignment, Stefan’s most important early win was to raise people’s awareness of the need for change by putting more emphasis on facts and figures: He revamped the company’s performance metrics in manufacturing and customer service, and introduced external benchmarks and hard-nosed assessments by respected consultants. All this enabled him to pierce through the unfounded optimism and denial that pervaded the organization.

PERSONAL CHANGE

The state your organization is in also has implications for the adjustments you’ll need to make to manage yourself. This is particularly true when it comes to figuring out whether you are reflexively a “hero” or a “steward.”

In turnarounds, leaders are often dealing with people who are hungry for hope, vision and direction — which necessitates a heroic style of leadership, charging against the enemy, sword in hand. Realignments, by contrast, demand something more akin to stewardship — a more diplomatic and less ego-driven approach that entails building consensus around the need for change.

Adapting a personal leadership strategy successfully depends greatly upon the ability to embrace the following pillars of self-management:

ENHANCING SELF-AWARENESS. Is your personal bent more about heroism or stewardship? Psychometric testing can help you get a baseline reading of your leadership style, as can 360-degree and other observational feedback. If you are 100 percent “hero,” then it may be best for you to stick to turnaround opportunities. For most leaders, though, reflexive responses can be adapted when necessary.

EXERCISING PERSONAL DISCIPLINE. Wise leaders in transition ask themselves, “What am I good at — or what do I like doing — that I need to do less of?” They also ask, “What am I mediocre at — or what do I dislike doing — that I need to do more of? And then they consciously, deliberately fight to make those things happen every day.

BUILDING COMPLEMENTARY TEAMS. You simply can’t do it all, and you can’t completely turn into something or someone you’re not — which makes the precise mix of heroes and stewards (every organization needs both) on your leadership team all the more critical.

Executives can make change easier on their companies as well as themselves by using the STARS model to develop a common language that will accelerate everyone’s transition into new roles and opportunities.

(Michael D. Watkins is a co-founder of Genesis Advisers, a Newton, Mass.-based leadership development firm specializing in transition-acceleration programs and coaching. He is the author of “The First 90 Days: Critical Success Strategies for New Leaders at All Levels.”)

SIDEBAR: THE STARS FRAMEWORK

Have you inherited an organization or project that is being launched as a START-UP venture, facing crisis and in need of a TURNAROUND, vaulting into ACCELERATED GROWTH, drifting into difficulty and due for a REALIGNMENT, or working at SUSTAINING SUCCESS as it confronts maturity? The situation (or mix of situations) should influence how you approach your leadership transition.

START-UP
Assembling the capabilities (people, financing and technology) to get a new business or initiative off the ground

CHALLENGES
— Building the strategy, structures and systems from scratch without a clear framework or boundaries
— Recruiting and welding together a high-performing team
— Making do with limited resources

OPPORTUNITIES
— You can do things right from the beginning.
— People are energized by the possibilities.
— There are no rigid preconceptions.

TURNAROUND
Saving a business or initiative widely acknowledged to be in serious trouble

CHALLENGES
— Re-energizing demoralized employees and other stakeholders
— Making effective decisions under time pressure
— Going deep enough with painful cuts and difficult personnel choices

OPPORTUNITIES
— Everyone recognizes that change is necessary.
— Affected constituencies offer significant external support. — A little success goes a long way.

ACCELERATED GROWTH
Managing a rapidly expanding business

CHALLENGES
— Putting in place structures and systems to permit scaling
— Integrating many new employees

OPPORTUNITIES
— The potential for growth helps to motivate people.
— People will be inclined to stretch themselves and those who work for them.

REALIGNMENT
Re-energizing a previously successful organization that now faces problems

CHALLENGES
— Convincing employees that change is necessary
— Carefully restructuring the top team and refocusing the organization

OPPORTUNITIES
— The organization has significant pockets of strength.
— People want to continue to see themselves as successful.

SUSTAINING SUCCESS
Coming in on the heels of a highly regarded leader with a stellar record of accomplishment

CHALLENGES
— Living in the shadow of the former leader and managing the team he or she created
— Playing good defense before embarking on too many new initiatives
— Finding ways to take the business to the next level

OPPORTUNITIES
— A strong team may already be in place.
— People are motivated to continue their history of success.
— A foundation for continued success (such as a long product pipeline) may be in place.

OPTIONAL SIDEBAR: ONE LEADERSHIP STYLE DOES NOT FIT ALL

Research suggests that six fundamental principles will help leaders make effective transitions into new roles. The type of business environment dictates how those principles should be applied. Here’s a close look at turnarounds and realignments, which call for very different strategies.

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1. ORGANIZE TO LEARN
Figure out what you most need to learn, from whom, and how you can best learn it.

TURNAROUNDS
— Focus on technical learning (strategy, markets, technologies and so on).
— Prepare to act quickly.

REALIGNMENTS
— Focus on cultural and political learning.
— Prepare to act deliberately.

2. DEFINE STRATEGIC INTENT
Develop and communicate a compelling vision for what the organization will become. Outline a clear strategy for achieving that vision.

TURNAROUNDS
— Prune noncore businesses.

REALIGNMENTS
— Hone and leverage existing capabilities.
— Stimulate innovation.

3. ESTABLISH A-ITEM PRIORITIES
Identify a few vital goals and pursue them relentlessly. Think about what you need to have accomplished by the end of year one in the new position.

TURNAROUNDS
— Make faster, bolder moves.
— Focus on strategy and structure.

REALIGNMENTS
— Make slower, more deliberate moves.
— Focus on systems, skills and culture.

4. BUILD THE LEADERSHIP TEAM
Evaluate the team you inherited. Move deftly to make the necessary changes; find the optimal balance between bringing in outside talent and elevating high potentials within the organization.

TURNAROUNDS
— Clean house at the top.
— Recruit external talent.

REALIGNMENTS
— Make a few important changes.
— Promote high potentials from within.

5. SECURE EARLY WINS
Think through how you plan to “arrive” in the new organization. Find ways to build personal credibility and energize the ranks.

TURNAROUNDS
— Shift the organizational mindset from despair to hope.

REALIGNMENTS
— Shift the organizational mindset from denial to awareness.

6. CREATE SUPPORTING ALLIANCES
Identify how the organization really works and who has influence. Create key coalitions in support of your initiatives.

TURNAROUNDS
— Gain support from bosses and other stakeholders to invest the required resources.

REALIGNMENTS

— Build alliances sideways and down to ensure better execution.

OPTIONAL SIDEBAR: IDEA IN PRACTICE

Once you understand the state of the organization or initiative you’re heading up, you can more effectively apply certain fundamental principles (several of them listed here) to ease your transition and increase your odds of long-term success. Your business situation should shape how you apply those principles. Turnarounds and realignments, for instance, require distinct approaches.

ORGANIZE TO LEARN ABOUT THE BUSINESS.

EXAMPLE:

IN TURNAROUNDS
The situation is dire. Managers need to rapidly assess the company’s strategy, competitors, products, markets and technologies.

IN REALIGNMENTS
There is smoke but no fire — yet. Technical comprehension is important, but more crucial is learning how to navigate the cultural and political landscape.

ESTABLISH A-ITEM PRIORITIES.

EXAMPLE:

IN TURNAROUNDS
The strategy and organizational structure of the business are preventing it from achieving its goals. Managers need to address shortcomings immediately — for instance, by slashing costs.

IN REALIGNMENTS
Strategy and structure usually aren’t broken — at least not beyond the point of repair. Initially, managers need to focus on systems, skills and culture. For instance, they may ask: “Does our culture encourage firefighting or collaborative problem solving?”

BUILD THE LEADERSHIP TEAM FAST.

EXAMPLE:

IN TURNAROUNDS
Managers will often clean house at the top of the organization and recruit new senior talent from the outside.

IN REALIGNMENTS
The leadership team may be quite strong, albeit in need of a few high-payoff changes (firing those who don’t support the new vision or promoting high potentials with innovative ideas).

IDENTIFY WHERE YOU CAN SECURE EARLY WINS.

EXAMPLE:

IN TURNAROUNDS
Managers can achieve critical early wins by moving people from a state of despair to one of hope — for instance, by closing ailing plants and shifting production to refocus the organization on its core strengths.

IN REALIGNMENTS
Often, the most important early win is to raise people’s awareness of the need for change. One way a manager can accomplish this is by revamping performance metrics in manufacturing or customer service to focus employees’ attention on critical weaknesses in those areas.

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TNJ Staff