1. Create a sense of urgency around a single big opportunity.
This is absolutely critical to heightening the organization’s awareness that it needs continual strategic adjustments and that they should always be aligned with the biggest opportunity in sight. Urgency starts at the top of the hierarchy, and it is important that executives keep acknowledging and reinforcing it so that people will wake up every morning determined to find some action they can take in their day to move toward that opportunity.
Sufficient urgency around a strategically rational and emotionally exciting opportunity is the bedrock upon which all else is built. In my original work 15 years ago, I found that ridding an organization of complacency was important. In my more recent work, I’ve seen ongoing urgency emerge as a strong competitive advantage. It can galvanize a volunteer army and keep the dual operating system in good working order. It moves managers to focus on opportunities and allow the network to grow for the benefit of the organization. Without an abiding sense of urgency, no chance of creating a grander business will survive.
For clients, my team has begun by having the executive committee take a first pass at articulating the strategic opportunity. This makes sense because its members are in a position to see the big picture and because their role in nurturing the dual structure is vital—particularly in the early days, when it is most vulnerable to the forces of resistance. (For the story of how one sales executive at a technology firm created urgency, see the sidebar “The Dual Operating System in Practice.”)
The Dual Operating System in Practice
Paul Davidson, a sales executive for a B2B technology firm (I’ve disguised his name and some company details), had seen sales growth slip for a number of years. When his division started to lose market share, he commissioned an outside study, which recommended both a new strategy and an implementation process that Davidson judged to be too rigid and complex for the kind of rapid change needed. So he persuaded his division head and the CEO to support a more dynamic approach to change.
Davidson knew much of what he wanted: a less costly sales operation, a broader range of distributors, the ability to move into the marketplace faster, and more focus on high-growth Asian markets. To get started on making those changes, he convened the sales division’s executive committee for a daylong meeting and charged it with creating a statement of opportunity. I can’t share the statement (my team worked with Davidson), but here are its main points:
We have an opportunity to increase our sales growth by 50% or more in two years, and to become the number one sales organization in the industry.
This is possible because (1) customer needs are changing, requiring competitors to change (but it is not guaranteed that they will change fast enough), (2) markets in developing countries are starting to explode, and (3) we are not operating at peak efficiency within the company.
We have not changed fast enough to keep up with external demands, even though we have great people. We are capable of changing faster—we’ve done it in the past.
We can create a very successful field organization that we’re deeply proud of.
Davidson put the eight accelerators to work for his company. First he pulled together an “urgency team” made up of 20 volunteers from across the field organization who had credibility and who had embraced the opportunity statement—intellectually and emotionally—as soon as they heard it. This group agreed to an ambitious goal: getting buy-in from at least 50% of the 1,500-member sales division. The urgency team spent three months devising dozens of ideas for forging a broad understanding of, passion for, and commitment to the opportunity. It organized meetings, created support materials, and built an intranet portal filled with information, videos, blogs, and stories about the ways in which individuals on the sales team were already changing.
Next the urgency team, working with the executive committee, invited employees to apply for a role in the guiding coalition. The application form asked why they wanted to be on the GC, how they planned to manage the additional workload, and more. About 210 people applied, and 36 were selected, mostly—but not entirely—from middle management and below. They functioned without a formal leader, though a facilitator organized meetings and phone calls. Despite initial awkwardness about the range of formal status across the GC, a new organizational logic arose: For any given activity, the people with the relevant information, connections, motivation, and skills took the lead.
With input from top management, the outside study, and colleagues throughout the organization, the GC developed a vision and a strategy. The vision statement is confidential, but it said roughly this: “Within 12 months we will be using intermediaries successfully more than we ever have; our growth rate in emerging markets will be at least twice what it is today; we will have developed a discipline around innovation; and decision-making time will be cut in half, from a month to two weeks. We will be a proud, passionate group, still gaining momentum to make us the most admired sales organization and the best place to work in the industry.” The statement was perfectly rational, but there was also a lot of heart in it.
The guiding coalition then took a first pass at identifying specific initiatives. Its members agreed on five, including attracting and hiring outstanding people with Asian experience, and making the product-introduction process faster and more efficient. The vision and list of initiatives went first to the executive committee, which was generally enthusiastic but worried that the GC might be taking on too much too fast. The GC extended the timetable on one of its initiatives and went to work.
The original urgency team’s methods helped the GC take the vision and the strategy to the entire field organization, using training, communications tools, the portal, and face-to-face conversations, which proved to be particularly powerful. The more team members talked to colleagues, the more excited people became. I was at one lunch where a GC member spoke, and as the group broke up, the man next to me said, “For the first time ever, I understand where we need to go, and how. And it really makes sense!”
Six months in, the GC had five major initiatives in place, each of which had from one to six subinitiatives. The initiative to hire excellent people in Asia, for example, sprouted a subinitiative to bring new people up to speed more quickly. The focus was on eliminating barriers to accelerated movement in the right direction.
The people involved talked, e-mailed, and met as needed to get the work done. In the main GC meetings, members reported progress, shared information, solicited ideas, and asked for help (“Who has experience with the Japanese market?”). Senior managers helped to ensure that lower-level employees got the information they needed to make smart decisions. Lower-level people added frontline information that ordinarily wouldn’t have made it up the hierarchy to the executive committee.
The guiding coalition came up with a big, visible win six months into the process: It built a new, simplified IT tool at a remarkably low cost in a short period of time. (IT had been a time-consuming trouble spot.) First an initiative team interviewed users to understand why the existing system was failing; then it reached out to the volunteer army for expertise. One e-mail request for help, sent to 100 people, elicited 35 responses within four days. Salespeople and their managers loved the end product. Success with this single effort, observed in the field organization and broadcast on the portal, accelerated progress by removing a big barrier and boosted the dual operating system’s credibility.
The company never let up. I have lost count of how many initiatives it has completed over the past three years and how many barriers have been removed. Many mistakes occurred along the way, but the system continues to improve, and version 2.0, now at the division level, is without a doubt more sophisticated than version 1.0.
The biggest accomplishments so far have been institutionalized in the hierarchical organization and integrated in daily operations. In cases where strategic changes don’t fit some aspect of the company culture, the relevant team looks for ways to change the culture. To a large extent this happens naturally if the new approach produces better results; but sometimes changes are so big that nurturing is needed.
Three years after Davidson began to create a dual operating system, his field organization, and increasingly the entire division, are handling important issues in a new way. No one on the executive committee is overwhelmed by being appointed to help guide two or three strategic initiatives at once. Despite all the change, complaints about change fatigue in the core business are few.
The results are dramatic. The system has accelerated the creation of new partnerships, new ways of dealing with direct customers, a faster product-introduction process, shorter response times on complaints, superior data for the product development group on shifting customer needs, and faster growth in Asia—it was up by more than 60% in 2011, compared with 25% three years ago. And the division has started to win back market share, which the financial community has rewarded with a 55% increase in the company’s market cap.
These are still early days. If the dual operating system is to achieve its true potential, it must spread to the entire enterprise. I think it will. That’s when the company will become a model of both strategic agility and short-term efficiency: Today’s results will grow stronger and stronger while the whole organization works together to sense threats and respond to them before it’s too late—and, more important, to seize and exploit opportunities at a pace that will ensure that it flourishes for years to come.
2. Build and maintain a guiding coalition.
The core of a strategy network is the guiding coalition (GC), which is made up of volunteers from throughout the organization. In my work with clients, people fill out applications to be on the GC. With a sufficient sense of urgency, you may get 10 times as many applications as there are roles in the network’s core.
The GC is selected to represent each of the hierarchy’s departments and levels, with a broad range of skills. It must be made up of people whom the leadership trusts, and must include at least a few outstanding leaders and managers. This ensures that the GC can gather and process information as no hierarchy ever could.
All members of the GC are equal; no internal hierarchy slows down the transfer of information. The coalition can see inside and outside the enterprise, knows the details and the big picture, and uses all this information to make good enterprisewide decisions about which strategic initiatives to launch and how best to do so. The social dynamics of the GC may be uncomfortable at first, but once a team learns how to operate well, most members seem to love being part of it.
3. Formulate a strategic vision and develop change initiatives designed to capitalize on the big opportunity.
The vision will serve as a strategic true north for the dual operating system. A well-formulated vision is focused on taking advantage of a big make-or-break opportunity. (If no such opportunity exists, because you operate in a rare pocket of competitive stability, you may not need this system quite yet. But keep your eyes open: That situation won’t last.) The right vision is feasible and easy to communicate. It is emotionally appealing as well as strategically smart. And it gives the GC a picture of success and enough information and direction to make consequential decisions on the fly, without having to seek permission at every turn.
In creating one company’s vision statement, the guiding coalition sought input from top management, a consultant’s report, and colleagues throughout the organization. The vision statement described what the sales group, which was dealing with market losses, could look like in a year if it accelerated toward a big opportunity. It outlined pragmatic goals but framed them with emotional resonance, using words such as “proud,” “passionate,” and “admired.” As a result, the group vowed to work better with partners, double growth in emerging markets, innovate constantly, and halve the time it took to make decisions.
Next the GC identified the five strategic initiatives that its members deemed critical to achieving the vision and that they wanted very much to work on, including “innovation in attacking growing markets.” Inspired by the vision and guided by the initiatives that flowed logically from it, everyone within the network became an author of strategic change. That’s very powerful.
To keep the two parts of a dual operating system connected and aligned, we have found, the GC must show a draft of the vision and initiatives to the organization’s executive committee for comments. A well-functioning GC will treat the committee’s comments as highly valuable input but won’t automatically accept them as commands.
4. Communicate the vision and the strategy to create buy-in and attract a growing volunteer army.
A vividly formulated, high-stakes vision and strategy, promulgated by a GC in ways that are both memorable and authentic, will prompt people to discuss them without the cynicism that often greets messages cascading down the hierarchy. Done right, with creativity, such communications can go viral, attracting employees who buy in to the ambition of the message and begin to share a commitment to it.
Sufficient urgency around a strategically rational and emotionally exciting opportunity is the bedrock upon which all else is built.
This point tends to prompt skepticism from people who have seen attempts to motivate a workforce fail. But if the right messages are sent from a passionate GC to colleagues who feel a sense of urgency, the volunteer army will start to gather. I’ve seen it happen. Motivation is an issue when people are forced to work in boxes within a hierarchy where workers become bored, new ideas aren’t welcome, and managers aren’t effective. And it does not take many volunteers to get a network launched: Again, 10% of the total employee population will do. That’s 500 people in an organization of 5,000.
5. Accelerate movement toward the vision and the opportunity by ensuring that the network removes barriers.
Perhaps a sales rep has gotten customer complaints about bureaucratic hang-ups. He doesn’t know how to fix the problem and doesn’t have time to think about it. Someone in the network gets wind of this and says, “I’ve seen that. I volunteer. I’ll put together a group and attack it.” That person writes up a description and sends it out to the volunteer army, and five people immediately step forward. They set up a call to begin learning why this is happening, figuring out how to remove the barrier, and designing a solution—a better CRM system, perhaps. The team probably includes someone from IT who has technical expertise and can help identify where the money for the new system might come from. The team works with additional volunteers who have relevant information—from whatever quarter may be germane—to act quickly and efficiently. The time between the first call and this point might be two weeks—a model of accelerated action. The network team settles on a practical solution that properly supports the sales team. Then its members take their thinking to the CIO, who gives feedback and may offer the budget and the resources.
The volunteer army is not a bunch of grunts carrying out orders from the brass. Its members are change leaders who bring energy, commitment, and enthusiasm.
Design and implementation occur in the network and are instituted within the hierarchy. And if the network is truly operating hand-in-glove with the hierarchy, the people in the hierarchy are champing at the bit to get the new CRM system.
6. Celebrate visible, significant short-term wins.
A strategy network’s credibility won’t last long without confirmation that its decisions and actions are actually benefiting the organization. Skeptics will erect obstacles unless they see proof that the dual operating system is creating real results. And people have only so much patience, so proof must come quickly. To ensure success, the best short-term wins should be obvious, unambiguous, and clearly related to the vision. Celebrating those wins will buoy the volunteer army and prompt more employees to buy in. Success breeds success.
If wins are not forthcoming, that in itself is useful feedback: Something is wrong. A committed GC, with many eyes and ears to take in the reality of the situation and with no status or territory to protect, can quickly tweak either the decisions it has made or the methods used for implementing those decisions.
7. Never let up. Keep learning from experience. Don’t declare victory too soon.
Organizations must continue to carry through on strategic initiatives and create new ones, to adapt to shifting business environments, and thus to enhance their competitive positions. When an organization takes its foot off the gas, cultural and political resistance arise.
Here, again, is why urgency is so central to the strategy part of the dual operating system. It keeps people going. If it is weak to begin with, or neglected, the volunteer army’s determination will flag, and the temptation to slow down or stop will become irresistible. The volunteers will start focusing on their work in the hierarchy, and the hierarchy will dominate once more.
8. Institutionalize strategic changes in the culture.
No strategic initiative, big or small, is complete until it has been incorporated into day-to-day activities. A new direction or method must sink into the very culture of the enterprise—and it will do so if the initiative produces visible results and sends your organization into a strategically better future.