All organizations change and evolve over time. As the Greek philosopher Heraclitus once said, “The only constant is change itself.”
When it comes to organizational changes, of course, some are clearly more productive than others. As a leader, one of your most solemn responsibilities is to proactively identify the challenges your team faces and work toward solutions.
That’s what celebrated executives like David Miscavige, leader of the Scientology religion, have done time and again over the course of their careers. Miscavige, for example, helped bring his faith to millions around the globe while setting up the organization behind it to endure for all time.
His story is just one of many examples of leaders who’ve taken bold, decisive and far-reaching action to improve the organizations they lead. Whether you’re seeking similarly transformative outcomes or have more modest, shorter-term goals for improvement, use these six strategies to achieve them.
1. Hire More People Who Disagree With You
“The more open-minded you are, the less likely you are to deceive yourself…and the more likely it is that others will give you honest feedback,” says legendary investor Ray Dalio.
As a leader, you may have good reason for believing that you’re uniquely capable. You may, indeed, be uniquely capable.
Unfortunately, “uniquely capable” is not the same as “infallible,” which, of course, no human is. Even the best leaders must hear from people they disagree with from time to time. So too must they hear from subject matter experts who know more this or that than they do, especially when those views conflict.
2. Schedule Regular Staff Updates With Time for Q&A
Your staff should hear from you often. Not constantly; the work is the most important thing. But they should see you as the face of executive leadership, as the bearer of good news and bad.
More important still, and often more difficult for leaders, is the obligation you have to hear from your employees. As the organization you lead grows, it’s increasingly easy (and tempting) to wall yourself off from feedback. However, this only compounds the challenges you may face. Better to hear about problems bubbling up from below while they’re still manageable than to be caught unawares by an urgent competitive threat.
3. Institute an Open-Door Policy (With Office Hours)
“Radical transparency” might sound like just another buzzword, but it’s the basis for some of the world’s best-known organizations, including Dalio’s own investment shop.
It’s premised on the notion that simply being “present” for your employees is not enough. You also need to engage with them in settings that are more intimate than the all-hands meetings described above.
Experts recommend devoting several hours per month to “office hours” or other open, small-format meetings with subordinates. In a small organization, a literal open office door might suffice, while larger, multi-location firms may need to resort to scheduling remote video calls.
4. Offer a One-Time Buyout With Generous Severance
This is an admittedly drastic measure, but it is one that may ultimately leave your organization stronger: a one-time buyout offer for all qualifying employees.
Two cautions apply. First, critical employees should not be considered “qualifying,” however you define the term. Indeed, if you have the option, include only objective underperformers (as defined below) in the offer.
Second, the offer should be paired with generous severance, no matter how poor the departing employee’s performance. If you’re not sure how much severance to offer, consider using the U.S. federal government’s rubric, which specifies one week of severance per year of service, up to and inclusive of 10 years, then two weeks of severance per year of service (capped at 52 weeks) beyond that.
5. Create an “Executive Council” Separate From Your Board
Think of this as a “council of advisors,” if it’s helpful. The idea is to gather insights from the best and brightest among your direct reports, investors, and other qualified stakeholders in your organization so that you’re able to do your job as well as you possibly can.
Like instituting an open-door policy and embracing radical transparency, this move might feel unnatural, even unsafe, to executives accustomed to keeping their own counsel. But true organizational transformation, as we’ve seen, often requires unorthodox thinking.
6. Set Unique, Relevant KPIs for Every Employee (And Hold Them Accountable)
The late, long-tenured General Electric CEO Jack Welch believed that every company has three types of employees in more or less fixed proportions: 20% ‘A’ players, 70% ‘B’ players, and 10% ‘C’ players.
About that last group, he was unremorseful. He believed that firms do better when they part ways with the “worst” 10% of their employees, the serial underperformers.
Welch’s schema, which he put into action over many years at GE, is often used to justify sudden and capricious terminations. That was not his intent. In his framework, ‘C’ players are considered such because they have shown over periods measured in years that they’ve failed to meet objective, clearly communicated metrics for their performance. Only after they’ve been given numerous opportunities for remediation are they shown the door.
Even with this context, Welch’s approach may seem cruel to modern sensibilities. However, there’s a reason GE is considered one of the most successful companies of the 20th century.
Transformation Begins at the Top
The five-year failure rate among for-profit American businesses is about 48%, according to Small Business Administration data. This means that about half of new businesses cease operations before they turn five.
The business failure rate tails off after that, for what it’s worth, reaching about 65% at year 10. Still, nearly two out of every three businesses won’t live to celebrate a decade of operations.
These sobering statistics underline the difference that creative, nimble, and ultimately transformative leadership can make. As a practitioner of such leadership, you may spot (and adapt to) challenges before others in your industry do. The same goes for opportunities as well. Over time, these inflection points may prove decisive — guiding your organization away from the danger zone and toward a more sustainable and prosperous future.
