Adapting to Change
2020 has been a catalyst for change in how businesses operate and interact with their audiences. Based on statistics from the Office of Advocacy of the U.S. Small Business Administration (SBA), small business employment has declined by more than 17%. Companies need to be flexible and revisit their business model in light of new regulations. Changing consumer habits have created winners and losers in almost every industry. Clear and consistent communication with others has never been more important. No matter the line of work, leaders must be prepared for turbulent, unpredictable times.
Over the coming weeks, we will be providing valuable information, resources, and advice on how businesses can navigate the tides of change through effective leadership and planning. In this post, we will cover what it means to be a leader during a period of significant change.
Leadership styles during change
Careful planning and bold decision-making are just two of the ideal behaviors of leaders during tough times. There’s a lot more that goes into it— from empathetic listening to agile learning. But with so many different types of leadership, it can be difficult to know which traits to focus on. Here are eight of the most common leadership styles.
Transactional Leadership – Think of the last purchase you made, whether it was a cup of coffee or a new car. You paid someone a certain amount, and you got the expected product in return. That’s how some leaders choose to do their job, like a transaction. They tell people what to do and then reward or punish depending on the results. No surprise that this style of leadership doesn’t get very far, as people typically don’t like being told what to do or how to do things.
Transformational Leadership – While some leaders may accept the status quo, others want to find ways to continue innovating and transforming the business as a whole. Transformational leaders want to inspire and empower followers by creating radical improvements or streamlining existing processes. They may be doubted often because of their lofty visions, but their desire to change things for the better makes them effective in stagnant teams.
Democratic Leadership – As the name implies, democratic leaders run their teams like democracies, taking into account the input and contributions of each individual. They prefer creative collaborations and healthy dialogue to problem-solving to assigning people a directive. While this is often a more egalitarian approach, it can also lead to problems when there is a significant debate between people with no consensus in sight.
Autocratic Leadership – Conversely, autocratic leaders tend to run their teams like dictators. Rather than hear what feedback or opinions their team may have, the autocratic leader makes decisions beforehand and then assigns tasks to the team. While there are autocratic leaders in big companies, for the most part, it is an unsuccessful leadership style that only leads to resentment and a lack of creativity.
Servant Leadership – Servant leaders take an unconventional approach to leadership— they focus on helping others first. They understand that before one can lead a team, they must first learn to follow. They may give up time or money, but their efforts are paid in double when they call on the help of that team member.
Bureaucratic Leadership – Almost everyone has had a leader that relies too heavily on rules and process documents. It can feel like the simplest task requires cutting through a web of red tape. While bureaucratic leaders have organized systems for governance, they may also be trapped in their ways and fail to adequately innovate.
Laissez-Faire Leadership – Laissez-Faire, which you may recognize from an economics class, translates into “leave it be”. In other words, this form of leadership takes a hands-off approach to team management. These leaders merely provide the direction, but then let the teams have freedom in governing themselves. The only downside: without proper direction or guidance, these teams can quickly devolve into chaos.
Strategic Leadership – Not all leaders can work closely with their team, due to their executive or professional responsibilities. Instead, they do their best to clarify the directive from up top, while ensuring that the teams they support can remain operating at maximum efficiency. This is no easy feat, as strategic leaders may be responsible for multiple teams at a time. But with the right approach, strategic leadership can be extremely fulfilling as well as pivotal to a company’s success.
As one can imagine, the effects of leadership can vary from team to team, depending on the style. Creative teams, such as the ones found in the arts and entertainment industry, may thrive in environments with laissez-faire leadership, whereas high-growth startups may require transformational leadership.
These different styles also point to the common mistakes to avoid for leaders, such as failing to discuss important subjects with team members or lacking any sort of direction. Leaders must instill a balance between autonomy, direction, and teamwork in order to surpass the common pitfalls that come with such power.
How to manage others during change
Discussing the ideal qualities of a leader is one thing, but actually managing people in the day-to-day is another. Despite one’s best efforts to organize resources and inspire followers, the hard truth is that leaders need a plan. That’s where the change management process comes in.
What is a change management process?
A change management process refers to the strategic efforts of a company to support and empower its employees during a period of significant change to ensure organizational success. Although change can mean different things to different companies, businesses with a clear and consistent change management process are more likely to weather turbulent times.
Since the concept can be somewhat nebulous, it helps to use existing change management frameworks to organize a business’s efforts. One example is Dr. John Kotter’s 8-Step Process for Leading Change, which he first introduced in the book of the same name. Kotter observed several leaders and how they enacted their change strategy, before finally distilling it down to these eight steps:
Kotter’s 8-Step Process for Leading Change
– Create a sense of urgency – Followers must be united through an inspiring opportunity that must be acted on immediately.
– Build a guiding coalition – Create a team of effective leaders to steer the group’s efforts onto the right path.
– Form a strategic vision and initiatives – Illustrate how the future can be changed, and outline the initiatives that will make that future a reality.
– Enlist a volunteer army – Large scale buy-in is essential to large scale change. Discover like-minded people and recruit them to join the cause.
– Enable action by removing barriers – Inefficiencies and hierarchies will only hold your team back in the quest for true collaboration.
– Generate short-term wins – Small victories add up. Start by accomplishing the easier tasks to energize teams for larger challenges.
– Sustain acceleration – After the first large success, keep pushing harder. Be tenacious with change until the strategic vision is achieved.
– Institute change – Develop organizational assessments and continue to work in the new behaviors until they replace old habits.
The roles of a leader during change can vary depending on the stage, size of the team, and urgency of action. Most leaders will have to be experts in several areas while being careful not to insert themselves into every single problem or issue. Overall, leaders must act like shepherds, carefully guiding people while staying aware of their unique strengths and capabilities.
This framework is just one of many. McKinsey & Company have the 7-S Framework. Kurt Lewin’s Change Model only has three steps: unfreeze, change, and refreeze. Some companies may even opt to make their own change management framework. As is the case with change, there is no one-solution fits all, the best one can do is to understand the different frameworks available, and to adapt or modify them as relevant to their business.
Transforming to digital services
Digital transformation remains a top priority for businesses, especially now more than ever as people continue to work remotely. The farther teams operate from each other, the more they must rely on their toolsets and technology.
The advantages of digital transformation cannot be overstated. Efficiency, transparency, security are the most common advantages for adopting more technologies such as cloud computing, data analytics, and artificial intelligence. Why ask an employee to do something that can be automated, analyzed, and evaluated 24/7?
One of the best examples of digital transformation includes the concept of jobs to be done. The migration to digital can also provide valuable information into more complicated questions, like asking “why do customers buy our product, and how can we get them to buy more?”
Jobs to be done eschews the common notions of persona creation and instead seeks to understand the needs and situations customers find themselves in. Before, much of this was left to guesswork. But with the power of data, machine learning, and intuitive software, marketers can gain a better understanding of the most effective ways to reach customers at just the right time.
Rethinking the corporate culture
Over the past few decades, the process of rethinking corporate culture has coincided with major shifts in work habits. Particularly in 2020, how and where people work during change have become topics of heated debate.
One explanation points to the changes in how we work with each other. Companies once rented out expensive floors of space, only to section off their employees with cubicles. Today, startup culture has fundamentally changed that idea, instead of taking on a more “campus” approach to organizational structure. Almost everyone is on the same rank, few walls separate people from each other, and creativity and collaboration is becoming increasingly more important than efficiency and professionalism.
Yet another reason could be our relationship with technology. Zoom, Skype, FaceTime— these apps have only simplified and streamlined our ability to communicate despite great distances. Social media has managed to bring people closer than ever. Even the devices we use afford us greater access to information than previous generations could ever dream.
2020 has indeed introduced a number of changes that have upended entire companies. But while the nature of the change is unprecedented, businesses have been faced with daunting change before— from national recessions, war, shifts in technology. Companies have come out of these disasters stronger than before. The determining factor: leaders with a clear and cohesive plan to address these challenges. How can your business prepare for the changes ahead?