Comment: CEO Follow-Up Needed to Effect Change

money on what we thought would be a huge initiative, but after the excitement wore off we kind of went back to doing things the same old way."

It is a story heard many times. Most CEOs expect that others in executive management and on staff will focus on defining the tasks involved in change management: executing the strategy, overseeing implementation, aligning compensation, measuring results, informal reinforcement and evaluation.

But the CEO's role in the change process consists of defining the strategy, initiating the implementation, then staying the course. The first two are the easy parts; CEOs are good at them, which is part of how they got the job.

Staying the course, which at our firm we call "executive constancy," is a bit tougher. It means being steadfast in instilling change, no matter what. It means getting outside the 90-day, analyst-driven mind-set. It means being patient with incremental changes while the urge to tinker, scrap, or strangle may be almost uncontrollable. It means having the self-confidence to know that being a visionary is what is expected of you, and that your vision is better than 20-20.

The enemy of executive constancy is time. The CEO has to allow time to effect change and then find time to drive it. We inevitably ask CEOs how they see their roles changing during this process. We are often asked by CEOs what they should be doing differently to ensure this gets done. The answers are easy. It is the actions that are constrained by time, which is unlikely to change.

Some approaches for better leveraging time have become evident. They take no more time than the CEO would normally devote to driving change, but the leverage from the time spent will make a substantial difference in performance.

For starters, talk about behaviors, not concepts. When I was working for a large bank in New England, we started an aggressive commercial sales program. The CEO showed up for the kickoff, but all anyone could remember him saying was that the bank needed to become more focused. He said the word "focused" about 10 times, and when he was finished we were all definitely determined to be more focused, whatever that meant.

The CEO could have spent the same 10 minutes describing the behaviors he expected from calling officers: "I want you to look for high-deposit, nonborrowing customers. I want you to ask three tough, high-gain questions on every call. I want an average of one referral for every two calls made." Those are behaviors, not concepts, and people will walk away knowing what to do. Can we afford to have them not knowing exactly what they are to do?

Second, attend team meetings to provoke thought, not inhibit dialogue. It is assumed that getting the CEO to come to an important project meeting demonstrates the importance and seriousness of the issue. But I have seen that causing everyone else to feel uncomfortable, and no meaningful discussion takes place. The lesson is that the CEO does not have to spend all day with the group. But while he is there he should do things that stimulate productive thinking and gain commitment to change.

One CEO, following this idea, sat for the last two hours of an all-day meeting, then got up in front of a flip chart and asked, "If this meeting ended right now, what would each of you do differently back on the job tomorrow morning? Let's go around the room." He wrote answers on the flip chart, praised the team for its work, said "Let's do it," and then left. That short exercise had a profound effect. They had never seen him as a facilitator before, and the rest of the meeting was focused on making the commitments achievable.

Make use of the company grapevine to communicate the CEO's agenda. E-mail may be a big technological advance, but it doesn't work nearly as fast or as powerfully as the grapevine. Just like the Federal Reserve watchers who try to figure out which way interest rates will move, each company has a group that watches the CEO's every move. It is easy to put this power to positive use.

Two years ago, the CEO of a superregional bank in Arizona wanted to make weekly sales meetings mandatory. Normally this would mean asking for reports on the meetings and perhaps attending a few at the start. This CEO had a different plan. He asked each regional manager to send him the schedule of meetings for the upcoming quarter. Then he attended the first sales meeting of the Tucson group two weeks later, unannounced. By the start of business the next day, every regional manager knew that if you scheduled a meeting, you should be sure to conduct it; you never know when he'll show up.

Invest time in developing the metrics that prove change is taking place. CEOs are used to looking at numbers -- growth in new accounts, assets, fee income, returns on assets and investment. But by the time you get those numbers, commitment to change may be long gone. Direct your project team to build a measurement tool of "leading indicators," that is, the number of new sales tactics, hours spent calling, appointments booked, referrals made, and so on. Waiting for the conventional results puts a CEO in the position of chief reaction officer.

Group meetings and large bank functions can serve to get at the truth of what is going on. Years ago I worked for a New York bank CEO who never wasted a moment on small talk, even at a party. He would grab branch managers and ask, "What's working best for you in your sales plan?" and "Where are you having problems?" He got some good information.

Why is so much written about change and what we have to do to bring it about? Because it is messy and difficult. Orson Welles' character, Harry Lime, famously said in the movie "The Third Man," "In Italy, for 30 years under the Borgias, they had warfare, terror, murder, bloodshed. They produced Michelangelo, Leonardo da Vinci, and the Renaissance. In Switzerland they had brotherly love, five hundred years of democracy and peace, and what did that produce? The cuckoo clock."

CEOs who accept the mess and discomfort, stay the course through change, and focus on the right things to do and say, are the ones who fulfill board mandates and enable growth in shareholder value.

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