Multidimensional Leadership

Dis­rup­tive tech­nolo­gies. New busi­ness mod­els. Dig­i­tal­iza­tion. And not least, unfore­see­able glob­al events like the Covid-19 pan­dem­ic. The dynam­ics of trans­for­ma­tion encom­pass all busi­ness con­texts. Clear­ly, trans­for­ma­tions are essen­tial for com­pa­nies to remain rel­e­vant and suc­cess­ful. The cen­tral chal­lenge of this process: get­ting the entire work­force on board and leav­ing nobody behind. Those affect­ed need to be includ­ed and acti­vat­ed to help drive the nec­es­sary changes, so that a moti­vat­ing sense of being an impor­tant part of the trans­for­ma­tion can grow from within.

“In 80 per­cent of cases, trans­for­ma­tions fail due to—often passive—resistance on the part of employ­ees, and simul­ta­ne­ous­ly due to insuf­fi­cient abil­i­ties to guide and fos­ter change on the part of their lead­ers,” explains Dr. Wolf­gang Freibich­ler, a part­ner at Porsche Con­sult­ing and an expert in new and suc­cess­ful modes of col­lab­o­ra­tion. He sup­ports top man­agers in guid­ing their trans­for­ma­tions. “Inter­est­ing­ly, one of the main rea­sons why trans­for­ma­tions stall or fail has to do with a sci­en­tif­i­cal­ly out­dat­ed under­stand­ing of how the brain works,” he con­tin­ues. The expert is con­vinced that insights from behav­ioral eco­nom­ics make it pos­si­ble “to reach peo­ple not only on ratio­nal but also instinc­tu­al lev­els.” Freibich­ler and his team of spe­cial­ists have iden­ti­fied five forces with the abil­i­ty to spur and safe­guard nec­es­sary changes.

Strate­gic change man­age­ment is the key term here. Not all of its under­ly­ing sci­en­tif­ic insights are brand new, but hard­ly any are broad­ly applied in prac­tice. Accord­ing to Freibich­ler, the main dif­fer­ence between strate­gic and tra­di­tion­al change man­age­ment is a mat­ter of “how peo­ple are made part of the change in these spe­cial sit­u­a­tions at work— and espe­cial­ly by whom.” His advice: “Get­ting peo­ple involved is a high-level task, and by that I mean a task for the top executives.”

Freibich­ler under­lines that in addi­tion to address­ing con­scious thought, lead­ers need to com­mu­ni­cate on sub­con­scious and instinc­tu­al lev­els. More­over, emo­tions should play an over­ar­ch­ing role. “The key is to appeal to peo­ple not only log­i­cal­ly, but psy­cho­log­i­cal­ly in many ways. In other words: peo­ple for­get facts, but they will always remem­ber how they felt in a par­tic­u­lar sit­u­a­tion.” Mod­ern lead­er­ship requires well-devel­oped inter­per­son­al skills—real empa­thy, applied to each and every individual.

Freibich­ler lists a num­ber of major com­pa­nies known for putting strate­gic change man­age­ment into prac­tice. Along with the insur­er Axa, phar­ma giant Novar­tis, and the Otto mail-order group, Spo­ti­fy and Tesla may serve as vivid exam­ples. Elon Musk, for instance, pin­points his vision­ary goal and offers an eas­i­ly under­stand­able mis­sion to both inter­nal and exter­nal tar­get groups. The same can be said of Ama­zon founder Jeff Bezos, whose clear and con­cise mes­sage is to “make cus­tomers’ lives eas­i­er.” For Freibich­ler, this is an exam­ple of the first of the five forces: “Every­one at a com­pa­ny needs a clear and pos­i­tive vision, and the eyes locked onto the com­mon goal. With this in mind, lead­ers should enthuse and encour­age their employ­ees to drive change with passion.”

Com­mu­ni­ca­tion is the sec­ond force for suc­cess­ful change man­age­ment. “Here, too, it’s the top man­age­ment that needs to set the tone,” says Freibich­ler. “As role mod­els, top exec­u­tives should intro­duce change with authen­tic­i­ty, empa­thy, and the nec­es­sary author­i­ty. Not just once, but con­tin­u­ous­ly through­out the trans­for­ma­tion. The mes­sage needs to be emo­tion­al in nature and is to be com­mu­ni­cat­ed con­sis­tent­ly and across all chan­nels used by the tar­get group. And, if it is to be effec­tive in shap­ing the process of change, it can­not be repeat­ed often enough.”

Also, dia­logue needs to level through­out the entire work­force and across hier­ar­chies. Freibich­ler empha­sizes that both realms of the brain, name­ly rea­son and instinct, need to be addressed equal­ly. “Lead­ers need to lead the charge and start by speak­ing direct­ly with their employ­ees, at all hier­ar­chies. There­by irra­tional fears or reser­va­tions can be put to rest by indi­vid­ual dia­logue. As a result, anx­i­eties and con­cerns are dis­man­tled. At the same time, direct exchange allows for lead­ers’ enthu­si­asm to take root in their employ­ees on an emo­tion­al level.”

That being said, words have to be fol­lowed by deeds. In par­tic­u­lar, a com­pa­ny’s guid­ing prin­ci­ples and KPIs need to be adapt­ed — the third force of strate­gic change man­age­ment. They rep­re­sent the nec­es­sary orga­ni­za­tion­al frame­work that lays the ground­work for achiev­ing the trans­for­ma­tion’s vision­ary goal. As Freibich­ler observes, “If the reg­u­la­to­ry con­text is not adapt­ed, pos­i­tive behav­ioral pat­terns are high­ly unlike­ly to take hold.”

The fourth force of change inter­prets work process­es in a more mod­ern way to reflect future real­i­ties. “Exist­ing types of col­lab­o­ra­tion should be fur­ther devel­oped into agile work modes that break up depart­ment lines. As a result, cre­ativ­i­ty and inno­va­tion poten­tial are unlocked, which oth­er­wise would have been left untapped in iso­lat­ing silo struc­tures,” says Freibich­ler. A key con­cept here is New Work. “Com­pa­nies are called upon to reshape their phys­i­cal and dig­i­tal work­spaces accordingly.”

Freibich­ler goes on to explain that lead­ers are to set exam­ples and to embrace their func­tion as role mod­els, prefer­ably through “observ­able behav­ior” that aban­dons tra­di­tion­al sta­tus insignias. Exclu­sive and exalt­ed exec­u­tive offices, still in use at many offices today, are “power sym­bols of the past.” As he empha­sizes, “Only when lead­ers dis­play sin­cer­i­ty, exert trans­paren­cy, and make them­selves acces­si­ble can the very impor­tant exchange of views and infor­ma­tion with every­one involved take place. Prac­ti­cal­ly, this can be achieved by estab­lish­ing open work­spaces that are home to all hierarchies.”

The fifth force behind suc­cess­ful change con­sists of devel­op­ing new and future-ori­ent­ed skills. Accord­ing to a sur­vey of the largest 100 com­pa­nies in Ger­many, only about a quar­ter of all employ­ees today already pos­sess the skills their com­pa­nies will require in the future. “Sophis­ti­cat­ed meth­ods of improv­ing col­lab­o­ra­tion and work atmos­pheres are worth­less unless employ­ees know how to put the desired trans­for­ma­tion into prac­tice,” Freibich­ler con­cludes. Com­pa­nies there­fore need to offer attrac­tive train­ing oppor­tu­ni­ties that put all employ­ees in a posi­tion to “keep devel­op­ing in large­ly self-deter­mined and indi­vid­ual ways.” Stan­dard work­shops off the rack of a train­ing provider are by no means up for the task.

A more promis­ing approach than train­ing pro­grams from exter­nal providers is the estab­lish­ment or expan­sion of strong in-house acad­e­mies. “That type of for­ward-look­ing invest­ment always pays off, not only in eco­nom­ic terms but also with respect to a com­pa­ny’s image, iden­ti­ty, and attrac­tive rep­u­ta­tion as an inno­v­a­tive employ­er.” Freibich­ler also argues that train­ing pro­grams should be inte­grat­ed in everyone’s nor­mal work­days. “These pro­grams should not be viewed as alien, but instead become a nat­ur­al part of every­day work. That is in fact the best way to fos­ter cru­cial life­long learn­ing habits. When learn­ing is viewed pos­i­tive­ly as a per­son­al gain, effects are maximized.”

The expert for trans­for­ma­tions speaks from expe­ri­ence when promis­ing his clients: “When com­pa­nies com­bine and orches­trate the five forces of change in an opti­mal way, they will har­mo­nize behav­iors and atti­tudes of their work­force with the trans­for­ma­tive goals of their business.”