The Five Principles of Change Leadership
Wednesday, March 15, 2017
“Inconvenient disruptions set the stage for meaningful change. The key is how you lead the change.”
By June Bradham, CFRE, Corporate DevelopMint
The right change leadership can catapult an organization through uncertainty to certainty -- through confusion and disruption to a whole new level of success. There’s no harder work for a nonprofit CEO or board Chair than leading this kind of change. But as Amazon founder Jeff Bezos once said, “You earn reputation by trying to do hard things well.”
Change leadership should not be confused with change management. They’re very different. Change management is a process driven by a model or methodology for controlling and communicating change. Control is the key word here. The purpose of change management is to glide through a transition with minimal disruptions.
Change leadership is powering up disruptions to inspire – to trigger and to sustain change. The disruption sets the stage for innovation and transformation. While there is much written on change management models from a host of consultancies and experts, the models for change leadership are evolving.
In the absence of clear models, the subject of change leadership has attracted a certain mystique. Harvard Business School Emeritus John Kotter, for example, likens change leadership to a 1,000 horsepower engine. With that much force behind it, Kotter says, change leadership can get a little out of control. “What you want,” he concludes, “is a highly skilled driver and a heck of a car.”
This description of change leadership may sound exciting. But it’s also likely to shake the confidence of most leaders. Especially when Kotter adds that, although change leadership is the big challenge of the future, “almost nobody is very good at it.”
But change we must. And it’s time we got better at it.
I’ve worked with a number of nonprofit leaders who are very effective at leading change. In the last few years, I’ve come down to five traits I’ve observed repeatedly in Change Leaders. By describing how these traits work in real situations, I hope to give leaders like you confidence to guide organizations through the great challenge – and the great promise – of organizational transformation.
1. Executive Presence Matters
Welcome to uncharted territory! You’re now responsible for creating and leading significant change. How you show up is critical. You must be confident without arrogance, and also be willing to acknowledge that there will be bumpy terrain. You have to propel the change forward while helping the whole organization stay positive and inspired.
Here’s an excellent example:
Corporate DevelopMint, my company, was asked to analyze the potential for restructuring the board of a prestigious nonprofit institution. While the vast majority of board members said that they felt honored to be chosen to serve, unfortunately this was the least fulfilling of all their civic engagements.
The board felt they had a limited voice and little impact. While the board, of course, had a vote, they felt the staff made all the decisions. Board meetings were, essentially, staff monologues. “Don’t make us suffer through more dog and pony shows,” one board member pleaded.
Knowing that our analysis was the catalyst for transformation, the board Chair took it to heart. She’s a highly respected business executive and known for her transparent but bold leadership. Her position as Chair, as well as her reputation for getting hard things done well, won her the respect she needed to move this project forward.
The Board Chair spent 12 months leading a Task Force that revamped the by-laws, eased long-time members off the board, adopted new criteria for membership, and increased the projects and programs to be undertaken by board members who, in the future, would be even more highly qualified.
The Chair’s quiet demeanor and reputation as an honorable executive leader allowed the organization to navigate significant change. The Task Force leaders she gathered around her were reputable, honorable men and women. The presence of these executives and their purely altruistic motives won the day.
2. Own Your Words
Owning your words gives power to your vision and values. Your message – both written and oral -- must be clear, consistent, and practical. Staff and board need to hear it so often that it guides their actions even when you’re not present. So write down your vision and values. Repeat them often to inspire and reinforce the change trajectory. Act on them publicly as often as you can.
Here’s an example:
A young but experienced CEO called Corporate DevelopMint to discuss his new position at a rural hospital in the Southwest. We’d worked with him twice before – on a capital campaign to build a new hospital in another Western town, and to examine the potential for a hospital foundation in the deep South. Now the CEO wanted to examine the potential for a philanthropy program in his new hometown.
The CEO had successfully attracted leadership and funds before, and he exuded that confidence. His vision for the hospital was bold. He ran an efficient organization. But there was a gap in funding his vision. He knew philanthropy would be transformative, but that achieving success with it would be challenging to all concerned.
To understand the scope of the challenge, he asked us to conduct a study to gauge his community’s attitude toward philanthropy. Our findings? Potential donors felt that the hospital had operated in a silo. Community leaders said, “It doesn’t feel like our community hospital.”
Rather than focus immediately on raising money, the CEO embraced this vision:
“Success will be judged by the view of the hospital as a collaborative partner and a good neighbor, measured both quantitatively and qualitatively. When the public states, we have the most wonderful hospital, the employees and physicians are everywhere we look, then the hospital family will have embedded into the community.”
The CEO owned those words. He sold the concept to his board. He hired us as his consultants because he trusted us to uncover the attitude changes that would be required. He assigned dozens of staff to help embed the hospital more deeply in the community, then oversaw their efforts to build and organize teams, establish internal communications and education about the project, and initiate conversations with external community leaders.
These efforts were on top of the stretched staff’s day-to-day work. But the CEO, clear in his vision, had high expectations that the staff would help him move beyond the old hospital culture to pave the way for successful fundraising.
This hospital’s change is still in mid-stream. But there’s no question that this CEO owns his own words and successfully inspires staff to join him in an exciting transition.
We’ve all heard this expression so often that it makes our eyes roll back in our heads. But you really do need to “be the change.” Writing and speaking about change will never be enough. You need to hustle – because it’s the only way to create and maintain transformation. Despite your best efforts, there will be moments when your organization stops seeing the good. A strong hustle keeps change in motion.
Here’s a good example:
Corporate DevelopMint was called to assist another mid-size community hospital. While the volunteer leadership of the hospital foundation was strong, the call to action was weak. Like many hospital foundations, this one often had to invent their own fundraising projects with little guidance from hospital staff.
The foundation’s new chair was a respected member of the financial community. The hospital was ready to embark on a major building program including new patient tower, emergency department, and specialty services. The chair suggested launching a capital campaign.
Though the community had a history of philanthropy, the foundation’s donor numbers were low. This hospital was not the “carriage trade” hospital but a large public entity. A place to go if you were “really sick,” the community said. A philanthropy study told us just what we expected: few donors had relationships with the hospital, so considerable cultivation would be needed.
Not one to be deterred, the chair was determined to raise millions. Quite simply, he got his hustle on – and mine too. He called every morning at 7 AM, bursting with all the ideas he’d had overnight.
I suggested starting the campaign by celebrating one of the community’s giants on his 93rd birthday. Needless to say, the chair was thrilled with the idea. For this organization a bold move was required. Sponsor levels were $50,000 and $100,000. The minimum gift to attend was $10,000. By really hustling, this leader and the foundation staff were able to direct $3 million toward the hospital’s capital projects. This was run like a small campaign, but it was essentially an event. Bold move for sure.
I’m not sure I’d ever have the guts to recommend this strategy again, but the board chair and the celebrant had stellar reputations and were ready to hustle. They were willing to go way beyond the standard fare of event-driven philanthropy. The result was a stronger relationship between the hospital and the foundation. Also, this success helped the foundation embark on its own road to change. Today, it has a highly successful advancement program and is clearly the top-performing fundraising organization in its community.
4. Don’t Confuse Process with Progress
The beginning of change is exciting, but the test will come in the middle phase. Inertia can set in. Leaders and organizations can grow weary, confusing the process with genuine progress. “We’ve done so much already,” they’ll sigh. “Let’s take a break.” Don’t do it. It may sound trite – but change is a movement, not a destination.
Back to the rural hospital. The effort to embed the institution more deeply in the community required all non-clinical areas of the hospital to rebrand, focus on customer service, increase patient satisfaction, refine community benefit work, clearly show the hospital’s economic impact, and more. This is a major effort that includes more than fifty employees over months of analysis, planning and, yes, process. Nonetheless, the CEO has remained focused on progress.
One example of progress was the patient satisfaction scores of admissions, which went from 45% to 85% positive in a straight-line progression. Oddly, the employees with low scores had no idea that their scores were so low.
The CEO used his reputation and his voice to educate and stimulate. Mangers held focus groups with both employees and patients, and educated employees about what drives scores. The hustle was strong. The voices were in unison. Soon, it became unconscionable for admissions scores to be low.
Over the past 15 months, the hospital not only developed a process but now sees significant progress. The staff has a feel for what it means to achieve something great, but hard, together. At the same time a new Director of Philanthropy has been hired and volunteers, physicians, and employees are all talking about the potential for philanthropy. Throughout this process, the CEO kept his eye on the prize – genuine progress.
5. Skin in the Game
In Change Leadership, one can come out of the process looking like a hero -- or not. Harvard Emeritus Professor John Kotter says that if you’re a Change Leader, you can’t really make sure “that everything happens in a way you want at a time you want.” To be a Change Leader you have to have skin in the game. And the process may end up taking a piece of your own hide!
The board Chair who risked making board members angry because they wouldn’t continue on the board; the CEO whose community won’t have a needed new facility without philanthropy; the board leader who risked embarrassing the celebrant if the big sponsors didn’t engage – all had skin in the game. It’s the only way to make a huge leap forward.
Here’s another example.
A former consultant at Corporate DevelopMint was hired by a university to hit their first billion dollar campaign. That meant going from $50M per year to $100M
Three bold actions were required. The Board of Trustees of this public university would have to vote to launch a campaign of this magnitude. The Board would also have to approve a significant new investment in development. Finally, a Board leader with strong executive presence and considerable wealth would have to step up to lead the campaign. The Board had to have skin in the game – and they did. Seven years later, the university hit its billion-dollar goal.
Skin in the game is not just for those raising $1 billion. Anyone who wants to see a paradigm shift in the way homeless people are treated, food is distributed, children are protected, etc., will need to take a risk. While the scale may be different, the characteristics of a Change Leader are not.
A Remarkable Success
Finally, I want to describe a situation in which all five principles of change leadership were actively at work. As a result, the institution is sailing through a significant transition with a remarkable degree of harmony. The institution is a fiduciary foundation affiliated with a major public university. Change leadership was instigated by the new Dean of one of the larger schools on campus. The Dean wished to examine the need for more than 50 volunteers who were involved either on the foundation’s board or on an affiliate, non-governing group.
Corporate DevelopMint’s first step was to interview all the volunteers, sharing with them the Dean’s bold vision for the school and discussing their desire and capacity to help him achieve it. The Dean was highly respected. The volunteers all applauded his dreams for their school. At the same time, some began to realize that they personally may not be in the best position to help the school progress as far as the Dean would like to take it.
Our analysis of the situation, which was provided to every board member, summarized the insights of the 50+ interviewees – which, by the way, were close to unanimous. We also outlined a process for moving forward. A Task Force was named by the board to examine our findings and come back with specific recommendations.
The Task Force included the most respected members of the board, and it took its mandate seriously. Facilitated by Corporate DevelopMint, the group met regularly for about 12 months. Ultimately it recommended disbanding the ancillary group; reducing the number of board members; adopting term limits and bold new criteria for board membership; and creating a new staff position to provide visionary leadership for the foundation.
The Task Force spent more than 80 hours carefully reviewing each proposed action and having sensitive conversations with other board members about new board requirements for giving and engagement. In some cases, board members were gently transitioned. For those staying on the board, terms were staggered.
Critical to this process was the fact that all volunteers – both board members and members of the ancillary group – had immense respect for Task Force members. They saw them as peers who were accustomed to doing hard things well.
Today, the board consists of 19 members, with term limits that require many of them to end their service in the next three years. In that same time period, approximately nine highly qualified new members will be recruited into the group. The search has already begun for the new staff leader, with everyone in agreement about what that role will entail.
This whole process was started by the Dean, who had his hustle on. That hustle was communicated to the Task Force which had skin in the game, owned its own words, and also showed tremendous executive presence. There was, however, the middle phase of much angst and confusion because of threatened role changes. Those that wanted to own the “way we do things”, became upset and tried at every stage to implode the process. The Board Leaders, however, had only the best interest of the nonprofit in mind, not their personal territory and were able to keep a steady hand on the rudder and navigated the temporarily rough waters forward.
The new staff leader will be charged with propelling the group through the Change Management Process process – so that inertia doesn’t undermine the bold moves currently underway.
As you can see from the examples above, change leadership isn’t easy. But it’s also not some esoteric skill that mere mortals can’t hope to emulate. Nor is it necessarily as hazardous as Professor Kotter’s race-car-driver metaphor implies.
If you’re a for profit or nonprofit CEO or board chair, you already have some of the five traits described above. You can cultivate all these characteristics and begin feeling more confident about your ability to lead – not just manage – organizational change.
A consultant is helpful. Essential, perhaps, in situations where tempers are ready to flare. Find a hard-boiled one who’s guided change many times before. Look for executive presence, hustle, and the other characteristics described above. Choose someone who most of the people involved can instinctively trust and respect.
And – corragio! – take heart. The key is how you lead the change – and the skills you’ve already developed will serve you very well in this arena.