Anyone who has tried instituting change at work or worked for someone making the attempt knows that the experience can be rough. As Mary Shelley wrote in Frankenstein: “Nothing is so painful to the human mind as a great and sudden change.”
In his timely, new book, Stacking the Deck: How to Lead Breakthrough Change Against Any Odds, David Pottruck provides useful guidance about making change happen that could help you keep your job, get a promotion or snag a new position.
I spoke with Pottruck, a self-proclaimed “change junkie” who is a former CEO of Charles Schwab and a Senior Fellow and adjunct faculty member at the Wharton School’s Center for Leadership and Change Management, to hear him expound on his advice for change agents and the people who work for them.
Highlights, including personal reflections from Pottruck about what he learned from being fired at Schwab for a change he didn’t make, below:
Next Avenue: What does “stacking the deck” mean for leading breakthrough change at work? It sounds like something dishonest.
Pottruck: When you start trying to lead breakthrough change, the deck is stacked against you. You have to figure out how to restack the deck to succeed. Organizations are built for consistency, reliability, predictability and risk minimization and breakthrough change is the opposite of all that. So you need to challenge conventional systems, processes and culture.
It’s no wonder so many attempts at breakthrough change fail; it’s not the idea, it’s that the implementation was ineffective.
Do you need to be a CEO to lead breakthrough change at work? Or is this something that middle managers or team leaders can do?
No, you don’t have to be CEO. The advice in the book grew out of my experience as a professor in the Wharton Executive MBA program, where the average student is about 35 and has 10 to 15 years experience. Most are operational executives running a division or unit within a company. Those are the people I had in mind.
What’s your definition of “breakthrough change” at work?
Most companies are focused on making incremental improvements to improve the quality of their service, reduce costs and reinvest in future opportunities. But in addition to incremental improvements that must be relentless, there are occasionally opportunities for breakthrough change that are disruptive to the company and the people in the company and the marketplace. They change the future trajectory of things to create breakout success or a reduction in costs from the implementation of a new way of doing business or new technology or a new way of thinking. It’s exactly the disruption within the company that often becomes the most difficult piece of the process to manage.
What are the top reasons breakthrough change fails?
The number one reason is that we underestimate the resistance to new ideas from internal forces. People who are asked to lead the implementation are, by and large, excited by the idea and presume others will be, too. Unfortunately, that’s not what happens. Most people are resistant to the idea of change; it introduces uncertainty. They worry that maybe my job will change and I won’t be able to do it or maybe I’ll become less important. Maybe my role will be eliminated.
The second reason is it’s a huge amount of work. You can’t just make a speech, tell everyone there are exciting new prospects around the corner and think you’re done. You need to communicate over and over and over, continuously communicating progress to build momentum.
And the third reason breakthrough change fails is that you have to have the talent. Being successful at it is more than teamwork, it’s the quality of the team.
How can someone trying to lead breakthrough change inspire people and deal with their resistance?
Leaders have to explain why this is important and why we need to do this. If you present it as strictly a set of numbers, that won’t be successful. You need to talk about the emotional and qualitative reasons for change.
For example, one time I wanted to make a big change at Schwab. So rather than talk about numbers, I brought in four customers who were complaining about our services. They talked about their disappointment dealing with Schwab as loyal customers for 15 years. That tugged at our employees’ pride and responsibility and it was compelling to them that we couldn’t let these customers down.
You also say that it’s a mistake not to present change as urgent. Why?
Leaders often hear: ‘Why don’t we wait? Let’s not be hasty or premature.’ They run into resistance that’s grounded in delay. If change needs to be made, it almost never benefits from waiting. The opportunities to create a competitive advantage start to shrink and delay eats away at the benefit of change. Acting with a sense of urgency focuses everyone’s attention and gets them moving.
You also say that one key to successful breakthrough change is dividing it into small goals and that Howard Schultz did this at Starbucks. Tell me about it.
Big breakthrough changes can often take years to be completely implemented and before you see the full benefits. It’s very hard to maintain enthusiasm for years. So, it’s immensely helpful if you can break a project into components with achievable milestones you can celebrate to build momentum.
When Howard Schultz came back as CEO of Starbucks and the company was having a hard time financially, he broke things down to his store managers. He said: If we can have one more sale a day, one more five dollar purchase, that would make a difference. So how do we get that one more customer? And then how does that become two customers and then three? And it worked magnificently.
What are the personal benefits for leading breakthrough change?
You test yourself, you develop skills, you have the courage to take on immensely difficult projects and learn from success or even the lack of success when you fail for the right reasons. Our career skills, talents and experiences are what define us in the marketplace as someone who is employable and desirable for the next opportunity. People who are hiring want to know what you have that distinguishes you from everybody else.
What’s your advice to people who are worried about their jobs because they work at a firm that’s planning breakthrough change?
Trying to resist change is a losing proposition. The only real choice is to continuously invest in yourself to become more knowledgeable and to have relevant skills. If change is successful at work and you’re not a part of it, you will fail.
But breakthrough change often does mean job cuts.
That’s right. If you work for a part of company that will see downsizing, you could sit there and hope it won’t happen to you or you can start to learn new skills to be more relevant in the growing parts of the economy. You need to be proactive.
But employment prospects can be slim for people in their 50s and 60s.
You could have a defeatist attitude about this and think ‘nobody wants to hire me’ or you could adopt a different one — that you bring a lot to the party. It’s up to you to sell yourself.
You’ve spent your career leading breakthrough change but you were fired as CEO of Schwab. What did you learn from that experience?
The period from 2000 to 2004 was extremely difficult for our company; the market was in a downward direction, the economy was struggling and the whole dot com thing imploded. We had built up so much capacity for volume that we were constantly trying to downsize the company. I was reasonably skilled at growing companies but hadn’t spent time downsizing them. So when I was asked to do it, I tried to do it myself and my heart wasn’t really in it; I didn’t want to fire thousands of people. I let the company down, I let the board down and Chuck [Schwab] lost confidence in me. And I became that change that needed to be made.
It was a devastating, humiliating, dark moment. What I learned is that I didn’t die; my past accomplishments didn’t get erased. And I learned that some things I’m good at and some I’m not as good at.
I also learned that all the people I struggled with laying off because I thought I I owed them loyalty — they all got laid off anyway. I didn’t really protect anybody; I just undermined my own future.
On other hand, what I got was a whole new exciting future ahead of me to do other things. This was a chance to explore all kinds of new options and to work with startups and early-stage companies again, which I found eminently gratifying. I also had a chance to spend more time with my family and on the things that are important to me. I learned that from adversity comes opportunities.
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