How to Be an Effective Leader During Radical Changes
Everyone wants growth, but how can you best lead your business through times of rapid expansion and change?
By Krista Endsley (CEO, Abila)
Creating a new company out of an existing one is no less of a challenge than creating a new company altogether. Successful spinoffs, the offspring of established companies, require building new assets, retaining talent and nurturing important customer relationships – it’s where intangibles and tangibles collide in the process of building a whole company.
Managing the process is challenging with a myriad of factors to consider, including employees, partners and customers. It requires looking at processes, systems, policies and strategies that fit well in one context, but all have to be reevaluated, confirmed and/or modified in the face of transition. What’s created, if well-executed, is a new vision of opportunity and the freedom to accomplish based on that new vision.
For our company Abila, we were transitioning from a three billion dollar international conglomerate (Sage Software, Inc.) to an individual private company. Four months after establishing Abila, we acquired a new company, adding three locations, 170 employees and doubling our operating revenue. To say the least, it was a time of radical organizational change.
These transitions came with both challenges and enormous opportunities, including building a foundational infrastructure for Abila, tactically maneuvering through new benefits and policies, as well as integrating a new work culture and getting people to trust the new leadership.
It’s impossible to overstate the importance of a strategic and mindful leadership team in fueling the success of major business changes. Leaders have to shape and define the vision of the new company, and establish a clear picture of that vision for all invested in order to position the company for ongoing transformative success.
Communicate, Communicate, Communicate
Fear and anxiety can run through a company like a wildfire if leadership chooses not to communicate. With a spinoff and acquisition, one is concerned about their talent and future. Communication bolsters morale and enables employees to be powerful brand ambassadors, which is more essential during transition than ever before.
The communication strategy and messaging must be a shared activity within the leadership team to ensure consensus on what will or will not be shared. And it’s most effective way when leaders can provide transparent logic for their decisions and actions.
Engagement and communication with customers and partners is also vital during change. This was a tremendous focus for our executive team during the first six months. Customers can easily get confused and frustrated by uncertainty and lack of information during times of radical change. The team must be aware that it’s easy to alienate important customers and partners, but it’s also imperative to get the message across about the focus and offerings of the new business and ensure the new brand stands on its own. Gaining employee, customer and partner support, as well as buy-in, is a critical first step in managing change.
Honesty and Trust Are a Must
If employees, customers or partners feel that business leaders are arbitrarily withholding information, it can create serious trust issues. Integrating the culture and getting people to trust new management is one of the biggest and most impactful challenges we faced at Abila. Without trust, communication and relationships don’t matter.
The top reasons people stay at a company are because of their direct boss and the ability to trust executive management. If there is a break in the trust, it can be devastating and many great people can prematurely make the decision to leave the business, based on assumptions instead of facts.
Different types of deals drive very different messages about the scope, content and impact of business changes. Be very clear with employees when talking about likely outcomes and possible scenarios.
A common pitfall is for new leadership to communicate to employees early in the deal that there will be a “blend of equals” when it comes to benefits, policies and procedures etc, so as not to upset employees.
However, as systems and processes are overhauled, that outcome rarely happens and, in our case, the benefits and cost offered were vastly different between the two companies. We could not sustainably offer some of the same components so we communicated, struck a balance and explained why we made the decisions that we did.
There were many positives and everyone had to contribute at some point. If leaders lose credibility within the ranks, productivity slows and loyalty can diminish.
It’s simple, but true – one of most powerful tools that helped our executive team navigate these pitfalls was listening. Authentic listening to staff, customers and partners has really helped us identify key concerns regarding the transition from their perspective.
Listening also enables us to break down the barriers that cause people to withhold trust, while giving us a starting point for fostering collaboration. I’ve realized that as leaders we had the advantage of being ahead in processing the radical change that our company faced because we had been privy to information from the start.
Patience is needed by management to allow employees, customers and partners to digest the evolution.
Attention to Details
Developing a strategy to measure employee engagement is also critical in ensuring a smooth transition. Employee behavior directly influences customer behavior, and customer behavior directly affects revenue growth and profitability overall.
It is extremely important to measure engagement levels whether through surveys or other means in order to gauge the employees understanding of the new company’s business objectives.
Effective communication is a powerful tool for supporting and accelerating organizational change, including mergers, acquisitions and other business transactions. The way an organization helps people handle change directly drives business outcomes.
The investment of time, energy and resources in communication not only wins the hearts and minds of employees, customers and partners, but inspires greater productivity with a direct and immediate impact on the bottom line.
A thoughtful, comprehensive approach with a sharp focus on all forms of your human capital, from partners to employees, can make all the difference in the new company’s success.
Do you think it is easier to lead with a partner or to lead alone?
About the blogger: Krista Endsley is the Chief Executive Officer for Abila and has more than 20 years leading teams in the software industry for both large and mid-sized companies. Most recently, she led the acquisition of Avectra, which more than doubled Abila’s revenue.