Companies aren’t uniform entities. They’re collections of individuals, each with different ideas and talents. That means to arrive at truly transformative change, you need a strategic, collaborative approach that takes advantage of your team’s unique abilities. Going the opposite route — playing taskmaster to overhaul your organization at any cost — will only waste your employees’ potential, and could lead to massive turnover. In that scenario, you’ve not only failed to achieve the change you desired, but you’ve also lost some of your top talent.
In the examples below, we’ll look at how some of the world’s top CEOs managed major change efforts without rigidity or excessive competition. What strategies did they use to succeed? Read on to find out.
Strategy #1: Satya Nadella of Microsoft softened a key rivalry.
Steve Jobs vs. Bill Gates. Apple vs. Microsoft. It was a rivalry worthy of a TV movie — and one Gates’ successor Steve Ballmer sought to sustain in the years of Apple’s iPhone dominance. Proof? He didn’t allow any Microsoft Office apps to appear on iOS devices.
An understandable choice, given his company’s history, but ultimately not a sound one. When Ballmer took over as CEO, Microsoft was worth $604B. In 2013? $269B. Meanwhile, Apple was well on its way to becoming the first company in history to hit a $1T valuation. When Satya Nadella replaced Ballmer in 2014, it was clear he needed do something different.
His strategy? Don’t compete. Microsoft wasn’t going to beat their competitors in the phone game, so why keep trying? Instead, Nadella focused on Azure, the company’s cloud computing service — an offering with huge growth potential. As a result of this decision and others, Microsoft stock has rebounded in a major way.
Had he continued in his predecessor's footsteps to compete at old games rather than pursuing new innovations that played to the company’s current strengths, Nadella probably wouldn’t have found much success. Instead, he’s seen as Microsoft’s 21st-century savior.
Strategy #2: Tony Hsieh of Zappos embraced patience and open-mindedness.
Tony Hsieh isn’t your typical CEO. Case in point: He lives in an Airstream Trailer. He’s also committed to Holacracy, a management methodology that does away with traditional hierarchy and distributes power horizontally across a company. The goal of Holacracy is to enable and empower employees to manage themselves. As you can imagine, implementing such an unconventional methodology into an existing organization presents a real challenge. Structures, processes, responsibilities — so much needs to change, and that can be taxing for teams both large and small. So what was Hsieh’s secret?
“Commitment, patience, and open-mindedness,” he told Inc. “Holacracy isn't just about a new set of rules; it's also about a new mindset for everyone, and a lot of the rules may seem strange and uncomfortable at first.”
In some ways, this was really the only attitude Hsieh could embrace. It would come off as mighty hypocritical, after all, to issue strong top-down directives when your ultimate goal is to dismantle typical power structures. That said, there’s a lesson here other leaders can learn: When your organization is working toward a paradigm shift, you must accept that you don’t have all the answers and that the process might take longer than you expected. Flexibility will help you avoid failure.
Strategy #3: Mary Barra of General Motors sought input from leaders across the globe.
Mary Barra’s story at General Motors is similar to Satya Nadella’s at Microsoft. In 2014, she took over an industry behemoth that had fallen from its former heights. The company had declared bankruptcy only a few years before and was now facing a major recall controversy. What’s more, GM suffered from “a culture of blame and bureaucracy.”
In order to change this culture, Barra sought contributions from top company leaders at a semi-annual gathering: “Two years ago we asked a simple question before everybody came to the meeting: If you could change one behavior across the organization, what would it be? We came up with about five or six things we all wanted to improve—including driving accountability, owning each other’s problems, a relentless desire to win, and having candor and transparency. People were able to walk out the door and start to behave that way.”
By facilitating a conversation among leaders — rather than just dictating what they should do — Barra modeled the very culture she was trying to create. Instead of condemning the behavior of others and demanding they do better, she modeled a healthier, more effective way of dealing with problems.
Know other stories of CEOs leading major change initiatives in a people-centric way? Let us know in the comments!