As a turnaround specialist I am frequently asked, “What do you find is the common cause of failure in organizations?”  Unfortunately, that is not an easy answer.  Every case is different.  As lawyers are often criticized for saying, “It depends.”

I once had a group ask me to send them a case study of one of my turnarounds so that they could get a good feel for what I do and evaluate my candidacy for their CEO position.  I did.  A few weeks later they came back to me and said that they were not going to fill the position, but were going to handle it themselves.  Apparently, they chose to use that case as a guide for improving their business and save themselves some money.  I am guessing that they were inexperienced enough that they did not realize that each situation is different and requires careful diagnosis – data gathering and analysis – in order to chart the correct path to success.  It is now two years later; the business is still in the red; and, they are desperately looking for new sources of financing. 

My observation is that the most common area in which leaders fail is in accurately diagnosing organizational issues. 

 Having said all that, there is one common area from which organization failure emanates…Leadership.   At times, people get a bit frustrated with that answer because they do not understand what Leadership is.  Leadership is a somewhat nebulous term…it has many aspects…it is not black and white.  Being a leader requires having many skills; it requires recognizing what skill is required for any given situation; it requires moving rapidly from one skill to another as the situation demands. 

Further, I can say this.  My observation is that the most common leadership failure is in accurately diagnosing the organizational issues.  People feel the need to act quickly and often do not take the time to accurately determine the problem.  They fail to collect the right information, if they collect any information at all.  They fail to ensure that the data they are collecting is accurate and complete.  As a result, they solve the wrong problem.

As an example, I once observed an organization that was growing nicely but was not making any profits.  Year by year they grew in sales, but they never put any profits on the bottom line.  They assumed that the problem was that they were not managing their costs correctly, so they started cutting back staff.  Unfortunately, this put a heavy workload on the remaining staff and quality issues soon followed.  With the quality problems came customer dissatisfaction, declining sales and further losses at the bottom line.  The actual problem was that they did not understand their cost of doing business, and as a result were under-pricing their services.  They did not take the time to correctly diagnose the problem.  As a result, they solved the wrong problem, and actually created a bigger one by doing so.

Data is fundamental.  Analysis is critical.  As a leader, you need to take the time to accurately diagnose the causes of the symptoms you are seeing in your organization.  As one well-known CEO once said, “You can’t skimp your way to success.”

I am always surprised to find how few people realize that they are in leadership positions.  Most think that there is only one or just a few leaders in their organization, and that these are the people in the executive suite.  Not the case!

This is actually one of the reasons I conduct my leadership seminars.  Many people are in leadership positions and do not realize it, so they are unaware of the leadership actions they can and should be taking.  Another reason is because many people are put into leadership positions and are not given any training on how to be a leader.  Leadership training seems to be given only to those people who have reached the executive level.  Unfortunately, by that time they have been in leadership positions for years without any training, and they have likely learned their leadership skills by watching other people who have had no training.  They have developed bad habits and those bad habits have become routine components of their leadership behavior.  This pattern ends up perpetuating ineffectiveness among our leaders, and, unfortunately, that ineffectiveness ends up permeating the operations of the organization.

Any position in which you have people looking to you for direction or supervision is a leadership position.  What does this mean?  Does this mean that a person in a first line supervisory position is a leader?  Yes!  Does it mean that a person who is the president of a club is a leader?  Yes!  Does it mean that a person who is the captain of a team is a leader?  Yes!  There are many levels of leadership.  Now think about that question again … Are you a leader?

…the people reporting to you are looking for the same leadership from you that you are seeking from the CEO.

Let’s take the situation of a lower level supervisory or management position.  Now you realize that you are a leader – What do you do?  If you are not at the top of the ladder in your organization then you have the advantage, and the responsibility, to support the leadership efforts of your senior people.  That makes it both simple and difficult.  It makes it simple because, in a good situation, a general direction has been set and the steps to get there have been defined.  You, as the leader for your team within the larger organization, need to establish the direction for your department that is in line with the general direction of the business.  You need to to develop the plans and actions your department will take to support that direction.  You need to communicate that to your employees and make sure that they understand it and their role in it.  You need to establish an environment in your department that motivates your employees to achieve those goals.  You have to measure your progress toward those goals and take whatever corrective actions are necessary to ensure that you meet those goals.  The list goes on.

These are the SAME actions required of the senior executives, simply applied at a different level.    Remember this…the people reporting to you are looking for the same leadership from you that you are seeking from the CEO.  This does not refer to the magnitude of the decisions to be made, but rather an understanding of them.

In the case that you DO NOT endorse the general direction of the larger organization, then you have a different issue to deal with.  That is a discussion for another post.

” You must BE the change you wish to see in the world.”  Mahatma Gandhi

This is one of my favorites…though sometimes I struggle to live up to it!

As a leader though, it really does speak to the fact that we MUST “walk our own talk” if we expect others to support the changes we are trying to make in an organization.  That means that we must believe in ALL aspects of the change that we are trying to effect.  Seems obvious and simple enough.  However, at times I think leaders may be to quick to compromise away some of their core beliefs in order to get to an agreement.  They seem to do so almost unknowingly…perhaps not recognizing the danger that lies in front of them by doing so.  That danger is that at some point they will violate those norms because they do not TRULY believe in them.  When they violate them, they lose all credibility for the change they are trying to make.

In conclusion, when it comes to using participative processes (and I DO believe that participative processes lead to the best result) to design a culture, manage a change process, or move an organization forward, it is essential that your minimum requirements (as the leader) are met.

By BEing the change you wish to see in the world, you embody the essence of it…and you become a living example of the desired future you are trying to achieve.

A lot of us need to make changes in our businesses to improve performance and reach our goals.  The problem that frequently occurs is that those changes don’t stick…they don’t become a permanent new way of operating…nothing changes.  Why is that? 

There are many reasons why leaders have trouble making change stick, such as: 

• they lack confidence; they have their own fears of the unknown.
• they take small steps for fear of upsetting someone; ultimately they lose momentum and people lose interest and resort to their old habits and processes.
• they fail to go all the way; they do not think through all the related pieces and address them.
• they fail to manage the newness for others; they do not design and teach people new processes and behaviors in the scheme of the change.
• they do not clear all the obstacles to enable the change to stick.
• they fail to follow-through with activities and processes that reinforce the change.

Before we go too far on this subject, let me say that change management is a complex process which requires effectively managing many moving parts over a long period of time.  What I am writing here is a quick sketch of some issues I have seen which typically derail change processes.  There is a lot more to it.

…the less time you spend in actually MAKING the changes, the higher your likelihood of success…

When you decide it is necessary to make a change you must recognize that change brings with it uncertainty, fear and resistance.  Uncertainty because change, by definition, means doing something new.  Fear because doing something new means moving out of one’s comfort zone.  Resistance, because people tend to want to stay in their comfort zone.  Your change process must address these issues.

Let’s take each one of those pieces I described above. 

They (leaders) lack confidence; they have their own fears of the unknown.  It is totally normal to be cautious about those things that COULD go wrong in a change process.  As the leader, though, you must convey the confidence that the change is needed, is right, and will succeed.  However, confidence like that is not something that everyone naturally possesses.  If you do not have it, you need to get it.  Without YOUR confidence, you will NOT succeed.  How do you get it?  One way you can bolster your confidence is by making complete and well thought out plans, by involving key people in making those plans to ensure they are complete, well thought out, and have the buy-in of your key team members, and by continuing to monitor and update those plans through every stage of the change process.

They take small steps, lose momentum, and lose the interest and commitment of the team.  Often leaders will take small steps in making changes because they lack confidence or clarity in what they are trying to accomplish…address that as above and you go a long way to a more successful change.  However, there is more to it.  They may want to take small steps because they want to see how the change is effecting people before moving to the next step.  That is fine and appropriate.  However, do not let this process of evalution slow your progress and your momentum.  You can gauge the acceptance of the steps you plan to take up front by doing a thorough job of planning and involving the right people.  By doing so, you will be able to eliminate some of the smaller steps and move more quickly.  Understand, the less time you spend in actually MAKING the changes, the higher your likelihood of success because you will be moving people to the desired state more quickly and establishing clarity around how they need to operate within this new framework…they will be spending LESS time in a place of uncertainty and fear, and will be less likely to rely on old support structures and old patterns of behavior.

They fail to go all the way; they do not think through all the related pieces and address them.  As I mentioned above, change management is complex.  You must think through ALL the related pieces and ensure that the change is appropriately designed to address those pieces.  For example, take what some may not even think of as a change process – you hire an additional sales manager for one of your product lines, a new position.  Seems simple enough.  However, it IS a change…to the structure…to people’s job responsibilities…to processes.  Here are some of the related pieces that need to be thought through.  Who is currently doing that job?  What needs to change in his/her responsibilities and job description?  How do you manage that change with them?  Who reports to the person that previously managed that function?  How do you inform them?  How might their job responsibiltities change?  What other departments do they interface with?  How might their work processes change?  Do any customers need to know?  The list of questions goes on.

They fail to manage the newness for others; they do not design and teach people new processes and behaviors in the scheme of the change.  People do not change old habits and patterns of behavior quickly or easily.  Leaders often fail to recognize that change requires establishing and learning new processes and behaviors to replace the old.  Without them, people will resort to the old ones.  The more complete and well thought out your new process designs and behaviors are, the better the change will take hold.  This requires planning, design, communication and education.  It also requires monitoring to ensure that the new design is operating as expected and that any flaws in the design are modified immediately.

They do not clear all the obstacles to enable the change to to stick.  Unfortunately, there are also vestiges of the old process, structure and behaviors that must be removed in order to maintain clarity about the new design being implemented.  Sometimes that may mean structure changes as we discussed above.  Sometimes that may mean utilizing a new piece of equipment, process changes to support it, and training to use it.  At times it may mean removing individuals.  Those are difficult decisions and the leadership must have the strength of conviction to make those decisions.  Many times leaders feel that this will be too upsetting to the remaining employees.  However, if the change is needed you MUST make those tough decisions.  If you allow the old structures or individuals to stay in place you WILL find that people will move more slowly to embrace the new.  In fact, though not at all intentionally, they will subvert the new process simply because it is easier to continue to work in the old familiar processes and behavior patterns.  Also, for the record, I must say that it has been my observation that employees are a lot more resilient than you think.  They understand the need for change and that sometimes that means that tough decisions have to be made in the interest of the organization as a whole.

They fail to follow-through with activities and processes that reinforce the change.  All related activities have to change to reflect the new design.  For example, job titles and organization charts may need to change, communications and marketing materials may need to reflect the changes, customers may need to be informed.  In addition, progress reports toward reaching the desired state, along with a reminder of what that new desired state is, must be communicated regularly by the leader to reinforce the change.

People resist change even if it is clear that it is for the better.  Change, by definition, brings something new to the table; something unknown.  Research has shown that there is a reluctance to change because people fear the unknown .  As a leader responsible for making change happen you must take full account of all these aspects to drive a successful change process and make it stick.

Every time a person leaves your organization it presents you with an opportunity to improve your business.  As a leader you must seize these opportunities.  They are the most often presented cost-free opportunities you will have to improve your business.

How often do we just automatically open a requisition to replace a person who has left the organization?  Nine times out of ten is my experience. 

I am frequently confronted by people asking for approval to replace a person who has left the organization.  My first question is, “Do we need to replace this person or can we do without them?”  I am stunned by the answers I often get.  ”Yes, they are really busy in that department.”  “People are really burning out.”  “If we don’t replace them other people will leave.”

Sorry, I don’t buy it.   These comments are subjective at best.  Has no one ever observed the practice that people make it look like they are busy so they don’t get assigned more work?  When a person leaves the organization how often do we think in terms of the opportunity to redefine responsibilities, create development assignments for people, or restructure and permanently reduce staff. 

As a leader you must seize these opportunities.  They are the most often presented cost-free opportunities you will have to improve your business.

First, you must have metrics in place to be sure that you are effectively managing the level of resources required to handle the volumes…simple.  Those metrics will tell you if there is truly a need to replace an opening.

Second, automatically replacing an opening misses the opportunity to do something new and creative that will benefit the organization and the employees in it. 

• Does the vacancy present an opportunity to do without the position and improve the profitability of the business? 
• Does the vacancy present an opportunity to reassign work, give more responsibility to people, and give pay raises to those who remain? 
• Does the vacancy present an opportunity to provide development assignments to others in the organization?  

How do you make this happen?  Make sure that all replacements and new hires require your approval.  Require that all requisitions are accompanied by metrics which justify the hire.  Make sure that the metrics make sense and are calculated correctly (subject of another post to come).  Make sure that all other options have been explored before you approve the hire.

This one brings with it a heavy message of responsibility…

“You never touch someone so lightly that you do not leave a trace.”    Unknown.

As leaders we have the opportunity to touch many people…to effect the lives of many.  It is a responsibility that must be taken seriously.  How we manage our own behavior…our own actions…often effect people in ways that we cannot even begin to imagine.  It is important that we not be careless in making those choices.

Cool quote I heard…

“Your constituents don’t care how much you know until they know how much you care.” – Unknown

That kind of speaks to developing your skills of listening to your constituents and acting on what you are hearing.

If you go to the bookstore and look in the business management section under Leadership, you will find book after book after book listing THE skill or skills that a leader MUST possess in order to be successful.  There must be hundreds of books extolling some virtue or set of virtues as being the definitive answer to the age old question, “What are the skills one must possess to be a good leader.”  Well, if one of those books is actually right, then it follows that there are hundreds of others that are wrong.  Too bad for those authors!!!

The truth is that there are actually hundreds that are RIGHT!  These books are lists of skills that HAVE worked for someone, at some time, in some situation.  They are all good skills and they are all right.  There are hundreds of skills that a leader must have at their disposal in order to handle all the situations they will face.  However, any one of those skills can also be wrong depending on the situation, and how and when you use them.

This is where most leadership books fall short.  They are a fixed set of skills.

Leading needs to be a way of looking at situations, determining the needs of your constituents, and determining what actions you need to take.

The requirements of a leader are not fixed.  By definintion, leading means going first and getting others to follow.  By going first you are facing new challenges, obstacles, threats and opportunities.  It is highly improbable that a fixed set of skills that worked for someone at some time in some situation will work for you in an entirely new situation. 

It is like a tool box.  If you have a tool box with wrenches, a pipe-cutter and soldering equipment which you used for some plumbing work, and you take that tool box to a job where they ask you to repair the roof, you will be ill-equiped to handle the job.  The box may be full of good tools, but those tools may not be the right ones for the job you have to do.

The same is true with leadership.  If you have a specific set of skills, and you try to handle every problem with those skills, you will surely be ill-equiped for some of the challenges you will face.

A leader’s ability to face those challenges and achieve business success lies in the support and motivation of the people he or she is leading.  Earning that support and motivating people to achieve the goals and objectives of your business requires understanding and meeting their needs, within the context of the business goals and objectives, of course.  Those needs will change from one situation to the next.

Therefore, it follows that the tool box for leaders needs to be a process, not a specific set of skills.  It needs to be a way of thinking.  It needs to be a way of looking at situations, determining the needs of your constituents, and determining what actions you need to take and what skills you need to employ to meet those needs.

Ambiguity is, by definition, a lack of clarity.  In one of my earlier posts I discussed the importance of establishing clarity as an element of earning the commitment of employees to the goals and objectives of the business.   Without clarity people are not sure in which direction they are going, how they are going to get there, nor their role in getting there.  Consequently, they will not commit to supporting your goals and objectives. 

However, leaders often find themselves in situations which lack that kind of clarity.  How do they bring clarity to situations in which the information they are working with is ambiguous or incomplete?

First, leaders need to understand that they must be comfortable operating in an environment that is not always well defined; it goes with the territory of leading.   

Second, leaders need to accept the fact that the higher their level in an organization the more complex decisions become.  That complexity comes from a lack of information, conflicting information, or conflicting goals among those affected by the decisions to be made. 

Finally, leaders need to accept the fact that not all situations can be fully and immediately clarified, and that they may need to operate in a gray zone for some period of time.  They need to accept that coming to closure on an issue is NOT always the right thing to do.  Sometimes it is best to let a situation progress until more information becomes available.

Therein lays a big part of the problem for leaders.  The difficulty for leaders in ambiguous situations is that they often feel that a decision must be made, a conclusion must be reached, and that THEY must make THE right decision and come to closure NOW.  Often they find themselves frozen because of the complexity of arriving at the single right decision that satisfies everyone.  They need to keep in mind that often there is no single right decision.  The important piece is that people need DIRECTION from the leader, not necessarily THE SINGLE RIGHT DECISION.  

However, leaders must also be aware that it is more difficult for employees to exist in a gray zone than it is for the leader.  Therefore, they need to recognize that each step they take in leading their businesses through complex issues requires redefining and reestablishing clarity for their teams.  In complex and ambiguous situations, the leader should define the direction in which the organization will move, and make it clear that at each step along that path he/she will redefine and communicate the right next step as necessary to get to the desired goal. 

How do you do that?

• First, get clear on what information you will need to reach that final conclusion.  Be relentless about working toward and getting that information.
• Meanwhile, lay out the action plans for all the options you are considering.  Look for the overlaps in actions associated with any of those options, and take those actions while you accumulate more information.  That enables you to move the organization forward while keeping as many options open as possible.
• Make small decisions that move you toward a conclusion but which also keep as many of those options open as possible.
• Identify indicators which will confirm or refute your choice as being the right one, and monitor those indicators.
• Reassess, redefine and take the next step accordingly.
• At some point the final decision will become clear and you can move to closure.

Do not feel pressured to have THE all encompassing answer immediately.  Be mindful of the goal you are trying to reach, the general direction you must take to get there, and steps that will move you continuously in that direction.  Take one step at a time and reassess.  Determine the next step and communicate.

It is like navigating a ship in the fog.  First rule: slow down.  Second rule: make small moves so you have time to change them if they prove to be wrong, but keep moving in the direction you need to go.

Though I frequently talk about the importance of being inclusive as a leader, there are some aspects of being a leader that are better mandated.  Establishing the culture of your organization is one of those aspects.  Actually, that is not entirely true, but to a large degree it is.  First, let me address the NOT ENTIRELY TRUE  part since that is a shorter discussion. 

Establishing a culture does require involving the key leaders of your organization because the culture of the organization must be something that they also believe in.   Including them in determining those aspects earns their buy-in.  In addition, you must have an effective process to get to that point so that you do not develop a list of values for your organization that does not truly reflect the beliefs and values of your leadership team.  Okay…done with that part.

If you do not build a culture in your organization one will emerge anyway, and it will likely NOT be the one you want. 

However, the core of the culture of your organization must be yours as the leader.  There are some elements of that culture that must meet your own standards regardless of what anyone else thinks.  It is your obligation to yourself and it is your responsibility to your organization to spell out who you are and what you fundamentally require of everyone in your organization.  If the culture is not something that you TOTALLY buy into as THE leader, then you WILL NOT adequately lead that business, because IT WILL NOT BE SOMETHING THAT YOU BELIEVE IN.  Inevitably you will bend on those values at some point and your credibility, as well as that of your organization culture, will be damaged.

As a result, when you assume a leadership position you must be very clear on exactly what those minimums are for you…they are non-negotiable.  You must make them clear to everyone.  You must be unwilling to accept anything less than those non-negotiables.  Be very careful how you choose them. 

For me there is only one non-negotiable…Teamwork.  Anything that violates that principle and you’re gone.  Of course, there are many elements that make up that value to me.  They include:

• integrity
• honesty
• support for others
• taking personal responsibility
• respect for others

Understand, you do not need to be the CEO to build a culture.  If you manage a department you can, and should, build a culture for your department.  If you are a first-line supervisor you should do the same.  However, in any position other then the CEO you should be mindful to build your “departmental” culture within the context of the larger culture of the organization so that there is not a conflict between the two.  Your next question might be, what if the larger organization culture is not something I agree with?  If that is the case then you may need to have some discussions about the existing organization culture and how to change it, or you may need to find another organization in which you find a better fit with your own values.

Finally, one might say, why bother building a culture if it can be so fragile and cause such damage if it breaks?  The answer is that if you dont build a culture in your organization, one will emerge anyway.  Left to its own devises that culture will NOT be what you, as the leader, value and what you think will be the most effective to get you to your organization’s goals.  Your task will then become changing that culture, and that is more difficult than building one correctly in the first place.