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Leadership and Turnaround Strategy

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Leadership and Turnaround Strategy BAM 2014 This paper is from the BAM 2014 Conference Proceedings About BAM The British Academy of Management (BAM) is the leading authority on the academic field of management in the UK, supporting and representing the community of scholars and engaging with international peers. http://www.bam.ac.uk/ Introduction This article examines the sector-confirmed successful turnaround of a large metropolitan criminal justice organisation following the arrival of a new leader. It will consider leadership behaviours, which had a significant impact in order to explore the difference a leader, might make to organisational transformation or turnaround strategy. In 2009, staff morale was low and target culture deeply resented. Since a poorly planned and executed merger of a number of services in 2001, there had been three previous leaders and a short period under a Specialist Performance Improvement Action Team. In an attempt to address the performance deficits, there had been three significant structural re-organisations, which, in the context of additional legislative changes, had negatively impacted on employees’ attitude both to change and senior management as well as not achieving the required performance improvements. This was the environment into which the leader was invited by the appropriate state ministry, with a remit to address the challenges of a troubled organisation. Taking the personal account of the leader, this article will filter that personal narrative and test assumptions about the effect of leadership skills on transformational change. The narrative correlation of elite interview with public empirical results, participant observation and theoretical analysis provides a unique and innovative lens through which to consider corporate change. Such a method allows a deep, insider, change-leadership perspective, as well as providing an opportunity to compare the actions described with theory and evidence from the managing change literature. Indeed, quoting Dyer and Wilkins (1991, pp.618), “ However, we hope that many scholars will continue to try to tell good stories which have theoretical import”, we as authors have tried to capture the spirit of the ‘classic’ case studies, with their context, depth and narrative much advocated by Dyer and Wilkins in their response to Eisenhardt. Context In 2009, a new leader with a known track record for improving performance in a similar, albeit smaller organisation, was contracted for four months with the task of ensuring the organisation meet key performance targets in the first quarter of the new financial year. When a replacement was not found at the end of that period The Chief Officer (CO) was asked to stay for a further 12 months. Within the first four months this CO had rapidly improved performance and within nine months the targets which had been set (which could only be reached via a battery of sufficiently achieved KPI’s), of achieving Trust status for the organisation had been met. Analysing an organisation and its need for change is the first step for a leader (Kanter et al, 1992). Even before taking up post, the future CO had been briefed about the problems facing the organisation. Claiming awareness of “all that was needed to be known about its failings” from a serious case review that had attracted negative media attention, and in particular, “insufficient senior management awareness of locality, capacity and competence issues”, he found an organisation from director level down which had “lost its grip”. In terms of human resources, recruitment, frontline management, communication, training and accountability, the organisation lacked a performance culture. To his advantage the new leader found a general and high level of disgruntlement at being perceived as a failing organisation amongst staff and he viewed this as a motivating factor that would help make the changes that were required to radically improve performance and meet government targets. The leader’s personal narrative – themed in terms of change levers This section provides a narrative of the series of strategic instructions and actions, which flowed following the confirmation of the new CO’s position. Taking the levers of change concepts stated by this leader as a filter, we have placed the narrative within sections under the self-same headings he himself suggests. We have grouped these within meta-headings to cluster the conceptual nature of the descriptions. The leader states the tasks facing him as new most senior officer as: • Creating order from chaos at the corporate centre • Engendering a new culture of joint responsibility and accountability to the senior management group • Setting the tone and behaviour for the organisation • Earning the trust of middle managers • Issuing a small number of focussed and consistent messages • Spreading “home truths” to challenge organisational myths that supported a “can’t do culture” • Fostering a sense of pride in organisational success to move to a “can do” culture • Tackling Information Technology • Tackling the endemic problems in HR • Improving industrial relations with staff and the union Interpreting the narrative from the leader interviews, author familiarity and participant experience with the case suggested particular groupings of the above: ‘Creating order from chaos at the corporate centre’ and ‘Engender a new culture of joint responsibility and accountability amongst the senior management team and middle managers’ and ‘Tackling IT’ and ‘Tackling the endemic problems in HR’ are placed under the umbrella term: From loose to tight coupling ‘Setting the Tone’, ‘Earning the trust of middle managers’, ‘Fostering a sense of pride in organisational success to move to a “can do” culture’ and ‘Improving industrial relations with staff and the union’: Deliberately altering the climate ‘Issuing a small number of focussed and consistent messages’ and ‘Spreading “home truths” to challenge organisational myths that supported a “can’t do culture” ‘: Communicate effectively From loose to tight coupling The new CO considered that the kind of cohesive leadership expected from a senior management team was significantly absent. Compulsory weekly meetings of all operational and non- operational directors were established. Performance was made the focus of SMT meetings and everything that was discussed and planned in those meetings was guided by how it would improve performance. As well as weekly meetings, “away days” were arranged to ensure that the SMT developed a strong commitment to the organisational goal of achieving much improved performance. The CO considers the most important decision was to have instructed all managers to meet weekly. As well as the weekly meetings of the senior management team, he introduced and chaired weekly meetings of all second line managers (assistant chief officers). The purpose of these meetings was for assistant chief officers to provide highly detailed performance information from their areas/departments and to examine in depth the lessons to be learned from successes and failures. For public sector managers who had not previously been used to this degree of granularity, this represented a large cultural change, as did the public scrutiny of their department’s performance. The chief officer made absolutely clear to the SMT, as well as to the organisation, that a four month period had been granted to bring about a significant improvement in performance or the government would take alternative action. He was aided by a real sense of urgency about the task in hand, much along the now conventional lines suggested by Kotter (1996). Gersick (1991) suggests that a crisis serves to awaken staff from complacency or inertia. The new leader capitalised on the sense of urgency that lay behind the appointment as CO. The new CO was aided by an initiative that had already been developed and was ready for implementation. ’Onwards and upwards’* (OAU) was a new accountability and performance structure which external consultants had designed with input from operational staff to address under-performance. This represented a huge cultural shift for managers and staff, who were not used to such a level of accountability. The CO set the Management Information Team (MIT) the task of producing data to aid managers by identifying what work was outstanding and what work had not been completed on time. This team level data was to ensure honest discussions in management meetings, counteracting the previous perceived culture of middle management filtering information and telling SMT what they wanted to hear, described by Kotter (ibid) as management “happy talk”. Making the OAU strategy central to the transformation strategy, he personally monitored progress rigorously in meetings with middle managers. This level of attention to detail ensured that the required changes penetrated to every corner of the organisation. Generating coherence and alignment within the senior team led almost automatically to the creation of a ‘strong guiding coalition’ Kotter (ibid). To strengthen the senior coalition further, there was a requirement that the Directors become directly responsible for answering to the Board about the performance of their own departments, rather than speaking for them. The CO recalls the directors felt empowered by the recognition of purpose and authority in their role. Tackling IT A major barrier to success that the chief’s plans faced was the high number of working days lost per month as a result of the organisation’s poor IT infrastructure. He considered the seriousness and importance of the removal of barriers as critical to empowering people for change. Within two weeks the status quo was under challenge as matters were taken to Government Ministers and weekly meetings held with the IT provider until the problem was resolved and the system much improved. The significance of this was not only to reduce a huge source of stress but also actively and publicly to demonstrate listening and commitment to staff, essential to the process of building trust. Tackling the endemic problems in HR The CO identified that another stream crucial to the change management plan was tackling the endemic problems within the organisation’s Human Resource function.
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