The new CEO 3: authentic leadership

What's this then?Once the new CEO has assessed the challenges of the business environment, the strengths and weaknesses of the business and which colleagues to trust, he or she can move on to the biggest challenge of all: how to move beyond traditional change approaches, with high failure rates, and become the key catalyst for consistently effective business change.

The first question to answer on the road to becoming a proactive business change catalyst is: ‘Where do business change ideas come from?’ Certainly some will come from new technologies that create new business opportunities and the new CEO can draw on key innovative individuals within IT. However, most change opportunities come from elsewhere – from other organisations or from natural innovators across the business.

Using a variety of informal network techniques, it is relatively simple for informal network specialists to identify innovative influencers and other local leaders of different types across the organisation. In this case the key individuals that will make up the new CEO’s innovation network will be those who are naturally innovative, influential with colleagues and who take an active interest in new external ideas. There will not be crowds of these people: perhaps 2%-3% of the total employee population in a typical organisation. The mechanics of setting up this network will require cooperation from other senior managers, who may need convincing, but local leader enthusiasm is always very high: light the spark and watch as these (previously unrecognised) individuals thrive and generate more good ideas than existing procedures can cope with. Then change the procedures that are restricting effective change.

The new CEO and many managers will become increasingly comfortable working with key influencers and other local leaders across the organisation. Get your informal network specialists to refine the selection criteria and they will readily identify a slightly larger population (perhaps 5%) of individuals who are the real natural change agents across the business. These will be those key individuals who are strongly influential with colleagues (sideways and downwards, not just upwards) and are by nature change-positive or at least open minded on change. Use them!

The results will change the organisation’s view of business change: poor designs will be recognised early, difficulties will be flexibly overcome, timescales and budgets will increasingly be met. Most important of all, if treated honestly and like intelligent adults, these key influencers will consistently win the hearts and minds of most of their colleagues.

The psychological contract

Experience shows that working effectively with innovative influencers and sector leaders (particularly knowledge leaders and collaborative leaders) requires a level of honesty and transparency that is rarely experienced in traditional top-down change initiatives. These informal leaders are capable and confident people: they are good at their jobs and not impressed by secrecy, deception or spin. They have discretion whether or not to collaborate fully in any business change situation and to change their minds at any point in the process. The ‘psychological contract’ between change sponsors and these key individuals therefore has to be consistently open and honest, even when life becomes difficult.

In practice, this means that change sponsors and their specialist colleagues must never lie or spin to save political face or to avoid potential confrontations. Ensure that change transparency is at a level where all key innovative influencers and other local leaders continuously know what is being considered (not just what has been formally agreed) for all relevant aspect of potential changes. And, because there are no secrets, everyone else knows very rapidly what is going on through (viral) highly effective informal communication networks.

There are few exceptions to this universal honesty and transparency: generally on the specifics of any takeover discussions or redundancies. Even here, high level communications at a strategic level should be openly discussed well in advance.

Inevitably, there will be some hurdles with this near-total transparency approach. The two most common challenges both come from managers:

  • ‘How come a junior member of my staff knew about the possibility of doing this before I did?’ (Because he asked and you did not!)
  • ‘Many directors feel that this is undermining their authority.’ (Directors have the ultimate authority to make strategic – not detailed – decisions when implementing networked leadership. Judge the approach on the results, not on the occasional dented ego.)

Because of these potential sensitivities, it is important to be transparent with managers and directors up front, describing the mind-set changes necessary to achieve high levels of change success, and managing expectations in advance.

Finally, remember that innovative influencers and other local leaders are not ‘yes men (or women)’ – not ‘nodding dogs’. They are the most fertile ground for change in your organisation but they will often not agree with every aspect of initially proposed changes. They are capable of improving key elements of any change initiative: provided all suggestions are judged objectively on their merits and not on who suggested them. This is the final, and very important, part of the psychological contract for effective change implementation.

Neil Farmer