Leading change is both a top-down process and a bottom-up process. The goal is to educate and energize colleagues at every level, especially those on the front lines, about the power of your plans, and to be educated and energized by the pragmatic wisdom of their experiences. Change programs work when they shape the behaviors and unleash the enthusiasm of the people closest to the work — the technologists who write code, the front-line employees who interact with customers, and customers themselves, who have the deciding vote on whether a company is doing something worthwhile. Put simply, it’s hard to reach people’s hearts and minds if the CEO’s head is in the clouds.
There seems to be something of a trend among high-profile executives championing ambitious plans for change — stepping down from their lofty perches and into the trenches of the business.
Recent reports described how Laxman Narasimhan, the new CEO of Starbucks, spent several months before he assumed his role doing all sorts of things inside the company, including brewing and serving coffee at various locations. He devoted 40 hours to becoming certified as a barista, and then spent time at Starbucks shops in the U.S., Europe, and Japan. Narasimhan said it was “startling” to learn how hard it could be to pair the proper lid with the proper cup, one small sign of how complicated the company’s operations had become, and he experienced firsthand the different ways customers pay for their orders, from cash to loyalty cards to phone scans, and what that means for service times. The experience was so instructive, the CEO said in a letter to associates, that he plans to spend half a day each month working at different Starbucks locations, and he wants senior executives to do so as well.
Meanwhile, at Uber, change-minded CEO Dara Khosrowshahi recently decided that one way he could help the company become more attractive to drivers, who were not signing up in the numbers required for Uber to meet its targets, was for him to spend time as a driver himself. He delivered passengers, as well as food orders, in and around San Francisco, and experienced first-hand what so many drivers had been complaining about for years — from how hard it could be sign up with the company to how Uber punished drivers who rejected trips. His experience encouraged him to “reexamine every single assumption we’ve made” and helped shape Project Boomerang, his big change initiative.
These are fun and entertaining stories, and they reflect well on the CEOs. They are also an important reminder that one of the great risks for change leaders is that they get so immersed in crafting disruptive business models, deploying slick technologies, and approving flashy marketing campaigns, that they become isolated from those who truly make the business go — the customers who buy a company’s products or services and the people who deliver them. Ultimately, change programs work when they shape the behaviors and unleash the enthusiasm of the people closest to the work — the technologists who write code, the front-line employees who interact with customers, and customers themselves, who have the deciding vote on whether a company is doing something worthwhile.
Put simply, it’s hard to reach people’s hearts and minds if the CEO’s head is in the clouds.
Legendary management guru Tom Peters, who, at age 80, recently announced his retirement, has preached the gospel of MBWA—“Managing by Wandering Around”—for nearly all of his career. He and his In Search of Excellence coauthor Bob Waterman discovered the concept (and the acronym) when they spent time with Hewlett-Packard CEO John Young, himself a leadership legend. “I’m in love with the term,” Peters explains. “But I’m really in love with it as a metaphor. A metaphor for being in touch. A metaphor for not losing touch with your employees, your vendors, your customers. There is a discipline to getting out of your office, getting close to where the work is really done, and making sure that the normal course of affairs does not keep you from doing that.”
A few years ago, Harvard Business School professors Michael E. Porter and Nitin Nohria published a massive study based on the ultimate artifact of management discipline — the calendars and daily schedules of big-company CEOs. One of their key findings was that when CEOs spent time with colleagues (as opposed to customers, investors, or other external constituencies), they spent nearly half that time with direct reports, and another 32% with the top 100 managers. They spent only 6% of their time with rank-and-file employees. “CEOs face a real risk of operating in a bubble and never seeing the actual world their workers face,” Porter and Nohria warned, which hurts their “legitimacy and trustworthiness.”
It also hurts their feel for the intricacies of the business — opportunities for small-but-meaningful innovations and easy-to-implement workarounds that their high-level change programs might be missing as well as the hidden obstacles to adoption of their plans, or unlikely sources of support, they can’t identify from the corner office.
A few years back, I studied the remarkable turnaround of a health care company called DaVita, the second-largest dialysis provider in the United States. Then-CEO Kent Thiry championed all sorts of big strategic ideas and dramatic culture-change initiatives to transform a troubled organization in the life-or-death business of treating patients with end-stage renal disease. The campaign was so successful it attracted a big investment from Warren Buffet and became the subject of a business-school case study.
Early on in the turnaround process, Thiry designed a program called “Adopt a Center” in which senior executives (including the CEO himself) were required to develop a personal connection to a specific dialysis treatment facility — to spend time there, get to know the staff and patients, do work that did not require medical certification. When Thiry first told me about the plan, I assumed the idea was for executives to teach rank-and-file employees the basics of the business. This was a company, after all, that was fighting for its financial life. But that wasn’t the idea at all. The goal was for front-line caregivers to teach the executives why the business mattered. This was a company, after all, whose “customers” were literally fighting for their lives until they could receive a kidney transplant.
Later, as DaVita’s financial condition stabilized, Thiry raised his expectations for senior executives in a formal program called Reality 101. Every official with the title of vice president or above spends a week on the front lines of a dialysis center, helping to set up and tear down equipment, assisting in basic procedures such as blood-pressure monitoring, and experiencing in human terms the highs and lows, the laughter and tears, that everyone experiences in a typical week at one of these facilities. Reality 101 had an impact on front-line caregivers who worked alongside senior executives; they spent time with leaders who might have seemed like names on an org chart rather than colleagues, they came to understand a big-picture vision about change that might have felt abstract. But the impact that really disrupted individual mindsets, that shook people’s assumptions, was on senior executives who experienced the business in all its humanity.
One of the great threats to the long-term success of big organizations, Thiry argues, is when executives allow themselves to lose touch with what happens in the trenches, and when people in the trenches come to believe that the people in headquarters don’t understand their day-to-day struggles and problems. Reality 101 is one of many DaVita initiatives to maintain and strengthen a sense of empathy, not just between the company’s people and its patients, but between the company’s high-ranking executives and its front-line staff.
“This whole thing could not have happened if we relied simply on working through the executives,” Thiry told me. “The key to the transformation was that the front-line people, who got energized about the notion of a different kind of place to work and be a part of, swept along the executives. Two-thirds of the executives who got ‘converted’ in this process weren’t converted by me, they were converted by the energy and enthusiasm they saw in the centers. They experienced personally and emotionally how hard it is to take care of patients, how responsible you feel when you’re operating that equipment and delivering treatment. A lot of executives allow their empathy muscles to atrophy. Reality 101 reawakens the empathy muscle.”
That is a powerful insight, and it applies senior leaders in all sorts of fields, whether the business is serving coffee, driving passengers, or saving lives through dialysis. Leading change is both a top-down process and a bottom-up process, a matter of galvanizing ideas and unleashing passions. The goal is to educate and energize colleagues at every level, especially those on the front lines, about the power of your plans, and to be educated and energized by the pragmatic wisdom of their experiences. Even the most brilliant blueprint for change can benefit from a healthy dose of reality.
Today’s uncertain and volatile economic landscape has made it more important than ever for Chief Executive Officers (CEOs) to proactively step into the front lines and lead their companies. With their namesake title come numerous responsibilities for CEOs, and the most important one is to stay in touch with the state of their business and those of its customers. It is essential for CEOs to be visible, assess the situation, ask the right questions, and be available to address challenges and take courageous decisions.
If they step back and let their team take the majority of the responsibility, the severity of the crisis will not be accurately understood or addressed properly. As companies actively work to reduce their overhead costs, CEOs must recalibrate their spending and focus on more customer-centric initiatives. A CEO who is actively involved in the front lines improves the overall efficiency of his/her team’s operations.
Furthermore, the actions taken by a CEO on the front lines can positively demonstrate solid leadership amidst uncharted chaos. A leader who takes clear and decisive steps to confront the challenges of the crisis can create a sense of hope and optimism. Additionally, participation from the CEO encourages the rest of the team to stay motivated, creating an environment of collaboration, trust, and camaraderie.
Understanding customer needs, responding to the market, investing capabilities to power digital channels, and managing costs and risks are just a few of the many tasks that require a CEO’s attention. Without a CEO’s presence in the front lines of his/her business, a property can quickly become obsolete, leaving the company to suffer from an inability to innovate, remain competitive, and adjust quickly to a rapidly changing environment.
In conclusion, a CEO must be engaged in the trenches, establishing a strong sense of direction, and showing that he/she is willing to stand up for his/her business. Although the crisis and its implications already bring significant disruption and change, a true leader will face difficult times head-on and implement new strategies and solutions for better outcomes.