Copyright © 2015 by H. James Dallas. All rights reserved.
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Library of Congress Cataloging-in-Publication Data:
Dallas, H. James, 1958-
Mastering the challenges of leading change : inspire the people and succeed where others fail / H. James Dallas.
pages cm
Includes index.
ISBN 978-1-119-10220-5 (cloth)
ISBN 978-1-119-10223-6 (ePDF)
ISBN 978-1-119-10221-2 (ePub)
1. Organizational change—Management. 2. Leadership. I. Title.
HD58.8.D337 2016
658.4′092—dc23
2015022947
Cover Design: Paul McCarthy
Cover Image: istock / © kyoshino
For my wife Celest;
daughters Cherie, Angela, and Natalie;
and all of the outstanding people
who made a difference in my life
and the lives of others.
Bill Hawkins
President and CEO, Immucor
Someone once said, “When the rate of external change exceeds the rate of internal change, the end is in sight.” That's a difficult reality for business today because the rate of external change in most industries is dizzyingly fast and accelerating still. Leaders need skills optimized to help people adapt, perform, and innovate in this turbulent environment.
Medtronic, the company where James Dallas and I worked together, operates in health care, by its nature a very dynamic environment. But there was probably no more dynamic period in the company's history than the period we worked together during which I was the CEO and James was the CIO. No situation could better prepare a leader to write a book on change, or even the book on change. James not only had a front-row seat, he was instrumental in helping us control our destiny and zig when everyone else was zagging.
Medtronic's culture is rooted in the five-point mission statement that our founder Earl Bakken wrote in 1960, focused on alleviating pain, restoring health, and extending life through innovative medical products. People's lives were dependent on our judgment, our actions, and our values. It was the mission that guided us to do the right thing every day, whether it meant suspending shipment of our number-one product when it fell short of our own performance expectations or increasing our investment in R&D when others were cutting back due to the economic downturn.
James was hired in 2006 to lead an initiative to implement a company-wide enterprise resource planning (ERP) system. This was technically challenging on its own, but it also required overcoming one of the company's biggest leadership challenges: how to align an enterprise that was made up of many distinct businesses. The company had gone through a significant acquisition spree in the late 1990s and early 2000s, and each business was protective of its autonomy. To succeed in his mandate, James had to obtain extraordinary commitment from a lot of different people, across multiple businesses and geographies, many of whom didn't initially see the value of having a unified system. Even among those who saw the value, there were many who doubted it could ever be successfully implemented. It was a huge leadership challenge, and even more so because he started out as an outsider—some guy from Atlanta. What we didn't anticipate was the economic downturn in 2008 or the uncertainty in our industry caused by the Affordable Care Act. As another former CEO of Medtronic and now a professor at Harvard, Bill George recently said, “Never waste a good crisis.” James was not one to waste a crisis or to let external forces disrupt internal goals. He never wavered. He delivered.
When we interviewed James for Medtronic, I felt that he was the guy that you wanted to take a chance on. It was more than his track record. James was both confident and humble, he had a strong IQ and EQ, and he was authentic and principled—the guy you listen to when the stakes are high and the obstacles to change are great. Remarkably, the stories and lessons in this book help elucidate the actions and habits that add up to that level of executive presence, and the traits that allow for successful follow-through thereafter. Things like extraordinary transparency and disciplined execution, and the ability to recognize and groom talent and rally people to the finish line.
One of the recurring themes of the advice in this book is also one of the things I respected most about James: He never hesitated to roll his shirtsleeves up. Every quarter, at any public company, there's a big push to make sure you finish strong. The nature of our business meant that there were a lot of products that got shipped out in the last three or four days of the quarter. James would clear his calendar so that he could be on the ground in the distribution center or working with customer service until midnight when we closed the books. Seeing senior management right there on the floor, serving coffee or doughnuts or pizza, running interference or making decisions, made a huge difference for people. Because of James, they didn't mind working late.
That was something we had in common. We never expected anything of anybody that we didn't expect of ourselves. People felt that. They felt a sense of responsibility, or even of duty, to a senior leader who was willing to get in the trenches with them.
James is one of few change agents who has lived to tell the tale, and anyone who reads this book will benefit from his remarkable storytelling. On top of all this, it could be said that James epitomizes the American Dream. Relying only on the currency of principle, purpose, and ambition, he's an African-American man who went from nobody in Georgia to CIO of a major Fortune 500 company. Sadly it's almost uncommon these days to find people who have not only climbed the ladder from the bottom, but have done so with integrity as their primary strength.
James did exactly that. I hope his book guides many other change agents to lead their companies to greatly exceed the rate of external change—with the full weight of their character propelling them.
First, I'd like to acknowledge and thank my family, who have always believed in me: my wife Celest; daughters Cherie, Angela, and Natalie; mother Edna; father-in-law Carl Gibson II; mother-in-law Beverly; and siblings Deborah, Joe, Theresa, and Waymond. You all are my most important supporters.
Thank you to all those who have inspired, mentored, and sponsored me: my grandmother Momma Jessie, Gabe Lance, Al Jackson, Jim Bostic, Pete Correll, Lee Thomas, Pat Barnard, Earl Bakken, Bill Hawkins, Art Collins, Omar Ishrak, Gary Ellis, Janet Fiola, Carl Wilson, Mike Blackwell, Dave Peterson, Darrel Untereker, Mr. Prather, Coach Prichett, Coach Wall, and the Brimstone Consulting Group. Thanks also to the individuals whom I have mentored who are too numerous to name, but from whom I've learned more than they ever learned from me. Remember, never limit yourself.
Thank you to my best friends in the world: Gabe and Tina Lance, Alicia and Henry Reed, John and Carol Thompson, Bob and Jeanette Pfotenhauer, Jim and Edie Bostic, Selwyn and Janice Vickers, Greg and Debra Morrison, Bill and Susan Hawkins, Barb and Jim Szczech, Brian and Jeanette Ellis, Carlton and Shayla Weatherby, Gene and Elaine Norman, Jacob and Joyce Gayle, and Bob and Barbara Bostick.
Finally, thank you to all the people who contributed to this book, either by pushing me to write it or by helping me along the way: Jennifer Milch, Yvonne Bryant-Johnson, Vanessa McCants, Claire Derricho, Becky Blalock, Cindy Kent, Karen Murphy, and Sara Grace.
Very early in my career, when I was a fairly green project manager, I experienced an eye-opening defeat. I was leading my first major project for Georgia-Pacific in Atlanta. Georgia-Pacific primarily made building and paper products, but it shipped so much product that people often thought it was a trucking company. Shipping was our second-largest cost after wood fiber. My job was to streamline a freight-rating system that would process thousands of transactions a day across six building product businesses with over 100 manufacturing sites. I spent months analyzing the situation and gathering high-level requirements.
The day came for me to present my recommendation to the most powerful men in the company. I was more than nervous; I was uneasy. My presentation would define me for these men, to whom I was still an unknown. At the same time, I was confident in my recommendation. My team and I had figured out a way to standardize all the businesses onto one of the existing systems. This approach would save the company from an investment of millions of dollars and several years of development, and it required fewer people to support it.
I didn't have to wait long to wonder what they thought of my brilliant plan. Not five minutes into my presentation, I was interrupted by the most senior guy in the room. We'll call him David.
“This is the worst idea I've ever heard in my life,” David spat out. My boss and my boss's boss were completely silent. So was I. I very quickly regained my composure, but it didn't matter. Before I left the room that day, a new project leader had been assigned.
The news spread quickly throughout the company. I went from being a highly regarded “up-and-comer” to the corporate equivalent of the guy no one would sit with in the high school cafeteria.
What I came to realize was that David and some of the other people in that room had already decided—before I walked into the room, even before I was assigned the project—that the correct recommendation was that we needed to develop a new system. It didn't matter how much sense my presentation made; as soon as they realized I was operating outside of their expectations, they stopped listening.
This was a powerful lesson in the politics of change. I realized then that creating impact requires a lot more than a good recommendation and the right job title. It requires you to be able to move others' minds from point A, a known, comfortable place, to point B, the great and threatening unknown.
I committed myself to figuring out how to manage those challenges. I would no longer first and foremost be a project manager; I'd become a change leader.
I started by taking some time to study change management as a whole and our department's track record in particular. I was stunned to find that 75 percent of recent, major change initiatives had failed to achieve their goals. Speaking now, after 25 years in organizational management, I am no longer stunned. I would say that's about average, whatever industry or department you're looking at. The pace of change has picked up dramatically, but the success rate has not. A recent McKinsey whitepaper puts the figure at 70 percent.1
As the years passed, I developed a comprehensive set of techniques and came to see successful change management being driven by four things: priorities, politics, people, and perseverance. Not coincidentally, these are the four sections of this book. You'll find my focus is a little different from what you might have learned in a typical change management course. I took all those courses, too, and what they cover is important. But this is what I've learned as a practitioner, and it's not covered in the three Ts of project management: tasks, timing, and technologies. I've found that without these additional skills, everything else you learned is useless. (See my opening tale of woe.)
Part I: Priorities covers how to develop and launch a change initiative. By priorities, I don't just mean those you'll set for the organization. I mean those that already exist within the individuals and the cultural DNA of the organization. In this section, you'll learn a particular method of gathering data that leads to much more accurate insight; how to pick the core team; and finally, how to prioritize tasks to move forward quickly.
Part II: Politics covers the practice and theory of influence—how to build the alignment you need to persuade and motivate others. Politics are driven by the boundaries, both real and emotional, that give people their sense of safety, significance, and control. In this section, you'll learn why Captain Kirk should be your new role model, the best kind of messaging and the words to avoid at all costs, and, finally, techniques to overcome resistance to change.
Part III: People provides the insight into relationship building and human nature that you'll need to sustain and monitor progress along the way. You'll learn how to get to know people well enough that you understand their boundaries. You'll leave the section with a better understanding of how to build trust among your teams and a crash course in managing the group dynamics that can throw the best plan off course.
Part IV: Perseverance is all about how to fix the things that break along the way and how to create a newer, better way of doing things. Believe me, things break. Perseverance is also about how to institutionalize change and imbue it with purpose so that your efforts don't start with a bang and end with a whimper.
Leading change isn't easy, as the meager success rate tells us. But what that means is that those few who master it find themselves in a tier above their competition. Their careers climb high and fast.
I am glad to say that my track record as a change leader ended up being quite a bit better than average. I was fortunate to work for two global, multibillion-dollar companies within different industries that grew significantly during my time with them. When I joined Georgia-Pacific in 1984, annual revenues were around $4 billion. They were just under $20 billion when I left 22 years later. When I joined Medtronic in 2006, revenues were around $10 billion. They grew to more than $18 billion in the seven-plus years I was with the company. My point here isn't that I created all that growth, but that the growth made the ability to lead change a job requirement.
At both companies, I brought people and processes together to leverage what was common and maximize what was unique. I led upward of 15 acquisition integrations, 10 enterprise resource planning (ERP) implementations, 10 shared services implementations, 5 quality and customer service improvement programs, and over 300 various other projects. I also created three innovation centers.
My track record in all those initiatives wasn't 100 percent, but I feel comfortable (if not exactly modest) putting it at 90 percent—not over my entire career, but certainly during the past 20 years after I had honed the methods I lay out in this book.
Throughout my career, I've paid attention to a powerful tutor called “trial and error,” making a conscious effort to turn every misstep into a revelation. In my early days, that kept me busy. But once I got out of my head and shifted my attention to the people whose lives I'd be changing, leading came naturally.
We all come from unique circumstances that give us particular skills and abilities. I'm an African-American male who was born in 1958 in the South, raised by a mother and grandmother whose household was rich in wisdom (especially my grandmother's, as she told us often) but poor by traditional metrics. Speaking from where I am today, you could say I started beating the odds at a very young age.
As a kid I played the violin. In my neighborhood, that wasn't just unusual, it was freakish. I did it anyway. Being in orchestras led me to interact early on with people from other walks of life. Quickly I became a very astute observer of what made the people around me tick—an invaluable skill when you need to convince others to change their thinking when the status quo suits them just fine, thank you. So while most of the stories and tactics in the book come directly from my career, I've also included some “life stories” that I've found particularly instructive over the years.
The bottom line is that leading change isn't easy because it is not totally a science. That's why the failure rate is so high. Managing each initiative requires science and art, because the people dynamic is always unique. What I can promise is that you will increase your success rate by paying attention to those dynamics and respecting the “people” part of the equation. This book provides a wealth of tools to do exactly that.
Experience will still be your greatest teacher. I'm sharing mine to give you a jump-start and to let you know that you are not alone in the trials and travails you have experienced or will experience when leading change. Most important, I'm sharing them to let you know that the art can be learned and that you can overcome and benefit from any obstacle that you encounter.
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