Recently, McKinsey Quarterly (membership required) interviewed Corrado Passera, CEO of two successful corporate transformations. He led revitalization efforts at Italy's state-owned postal service, Poste Italiane, and Banca Intesa, a bank/financial institution.
A number of Passera's tactics for leading change should sound familiar, as they are closely aligned with some key components of market-based management. Here are a few words from Passera describing his approach.
...at the beginning you really have to understand where you are, what happened in the past, and why it happened. You have to identify the remaining strengths and assets you can use to build for the future. You have to appreciate the main constraints on developing the organization.
You need to propose a mission that is, at one level, a dream but is also achievable. Too much of a dream and people will not believe in it. Too much emphasis on survival and they will not accept the sacrifices. I personally wrote what amounted to a short book -- not like an analyst's presentation, with figures and graphs, but a book written in human language, telling people where we were, where we wanted to go, and how we were going to get there.
Each person in the organization has to find a credible reason for making an effort and supporting the project. I call this the 'return on sacrifice.' If you fail to get the right mix of sacrifices and benefits, the process will either start with various components moving in different directions or it will not get under way at all.
Change initiatives only take root through a well-functioning top team and committed leadership across the organization....And in each of the big boxes of the organizational chart, you must have people...who not only support your business but share your values.
Obviously, there are healthy tensions...If necessary, you have to get rid of individuals -- even the talented ones -- who quarrel and cannot work together. If you choose the right people, everything else is a lot easier.
You also have to be clear about which responsibilities are individual and which are collective....That calls for a compensation mechanism that simultaneously rewards personal results, groups results, short-term results, and long-term results.
Finally, Passera says that you have to manage restructuring AND growth at the same time. Efficiency/cost initiatives alone won't likely save a dying company and focusing on growth without getting expenses in line will not work either.
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