It’s an understatement to say the pandemic presents the biggest challenge institutions of all types have faced in decades. Leaders are in the process of reimagining their strategy and values in the context of the “new normal” that they are facing, requiring their organizations to fundamentally transform their systems of organizing, managing, and leading to enable effective execution of their new direction — and do so quickly! The author of this article who has considerable experience in both working and studying corporate transformations points out six common interrelated reasons that often lead to failures to transform. He refers to them as hidden barriers. Leaders often don’t know — or sometimes choose not to know — about the hidden barriers that stand in the way of their institution’s transformation. People often don’t speak up about these barriers, fearing career derailment and even firing (for example Boeing, Wells Fargo, Volkswagen, to name a few). This in turn makes it impossible for senior teams to learn about these barriers and to take corrective action.
Hidden barrier #1: Unclear values and conflicting priorities
Often, the underlying problem is not this or that strategy, but rather the process by which the strategy was formed — or the lack of any such process. In these cases, the strategy is often developed by the leader along with the chief strategy or marketing executive and only then communicated to the rest of the senior team for discussion.
Hidden barrier #2: An ineffective senior team
Most of the time, this ineffectiveness comes from the top team not speaking with a common voice about strategy and value.
Hidden barrier #3: Ineffective leadership styles
When it comes to individual leadership, there are two ineffective styles: a top-down approach that does not involve team members sufficiently and a laissez-faire, non-confrontational style.
Hidden barrier #4: Poor coordination
Coordination across silos — functions and business units or geographic regions at the corporate level critical to effective execution of strategy — is always a challenge. Ineffective senior teams whose members defend their fiefdoms are unable to agree on how to reorganize and reshape the culture to overcome naturally occurring obstacles to coordination and collaboration.
Hidden barrier #5: Inadequate leadership development
Research has shown that leaders usually develop not through training, but by carrying out challenging new assignments. This requires managers to sacrifice for the larger good by giving up their high potential leaders to other parts of the organization for their development. When this doesn’t occur naturally and regularly, it is tied to several hidden barriers already mentioned.
Hidden barrier #6: Inadequate vertical communication
The necessary information about an organization’s strategic direction and values does not circulate from the senior team to the lower levels and the necessary information about the barriers to that direction and those values is not recirculated from the lower levels to the senior team.
To survive this pandemic, leaders must confront the reality of their competitive environment and the hidden barriers that make their organization ineffective. The inability to confront any of these hidden barriers, and to foster an honest conversation about them between the top team and lower levels, makes it impossible to transform them into the strengths your organization will need to survive the Covid-19 crisis.