Stacking the Deck

How to Lead Breakthrough Change Against Any Odds

David S. Pottruck

• Publisher: Jossey-Bass
• Year: 2014
• ISBN:
  9781118966907
• Edition: 1
• Topic: Business
• Subtopic: Business generale
• Index: Business

Change is a constant, and leaders must do more than keep up—they must innovate and accelerate to succeed. Yet people are often unnerved by change. As a leader during a time of transformation, you may stand up before teams that are indifferent, or even hostile, and need to convince them that change is necessary and urgent. More than money, time, or resources, the ability to lead these people determines your ultimate success or failure. What does it take to be an effective change leader and increase the odds of success?

Stacking the Deck offers a proven, practical approach for inspiring meaningful, lasting change across an organization. Stacking the Deck presents a nine-step course of action leaders can follow from the first realization that change is needed through all the steps of implementation, including assembling the right team of close advisors and getting the word out to the wider group.

Based on Dave Pottruck's experiences leading change as CEO of Charles Schwab and later as chairman of CorpU and HighTower Advisors, these steps provide a guide to ensure that your change initiative and your team have the best possible shot at success. In addition, established business leaders who have led extraordinary change initiatives demonstrate the steps in action. These executives include eBay CEO John Donahoe, Wells Fargo former CEO Dick Kovacevich, Starbucks chief executive officer Howard Schultz, San Francisco Giants CEO Larry Baer, JetBlue CEO Dave Barger, Asurion CEO Steve Ellis, Pinkberry CEO Ron Graves, and Intel's President Renee James, among others.

Leading an organization through major change—whether it's the introduction of a new product, an expansion to a new territory, or a difficult downsizing—is not for the faint of heart. While success is never guaranteed, the right leadership, process, and team make all the difference. For all leaders facing major change in their organizations, Stacking the Deck is an indispensable resource for putting the odds in your favor.

Part One
The Stacking the Deck Process

Breakthrough change is inherently unpredictable, making failures inevitable and flexibility an asset. You may find yourself needing to lead change in an environment that is indifferent or even fundamentally hostile to the new. How can you achieve breakthrough change more effectively and efficiently in such an atmosphere?

Stacking the Deck distills the techniques and processes I have learned through direct experience and hindsight into nine logical and sequential steps, described in Part . These chapters provide practical strategies and real-life stories that illustrate the actions leaders must take when implementing breakthrough change. In reading about the ways top leaders across the business world have navigated change, you can learn from their experiences before you are faced with challenges of your own. Understanding and using these steps will enable you to derive the full benefit of many decades of experience in change leadership—my own and that of other leaders—without needing to spend years acquiring that experience yourself.

As you use the Stacking the Deck process and revisit its steps for each change you tackle, you will find yourself capable of leading breakthrough change faster and more effectively than ever before.

Chapter 1
Step One: Establishing the Need to Change and a Sense of Urgency

Change has always been part of the DNA of business, but the accelerated pace of technological innovation means that leaders have less time than ever to show a success, recover from a downturn, or make a change stick. There is no fallow period anymore, no time for business as usual, and no patience. If you do not innovate, adapt, and persevere, you will be swallowed up by the hundreds—or thousands—of other people who do what you do and spend all their waking hours thinking of ways to do it better. You have to be nimble and look ahead. Being able to anticipate massive change, like embedding technology to improve your product or service, coming up with a new way to distribute your product, or dealing with a new service's sudden popularity, means that you spend less time knocked on your back, trying to catch your breath.

But no matter how well leaders understand the need for change, the challenges they must face in leading breakthrough change will be enormous. We can't deny that change is part of life. Yet in life and in business, some people embrace change and others actively avoid it. While “change” is theoretically a neutral word, in reality change represents the unknown, and people—some of whom you must lead—almost always find the unknown scary. As Terry Pearce, author of Leading Out Loud: A Guide for Engaging Others in Creating the Future, has said, “People hate change. People love progress. The difference is purpose.” These words offer an excellent starting point for any discussion about change. Progress implies an improvement, a move forward. And nothing progresses by staying the same.

Link the Purpose and Mission

In leading breakthrough change, we must first convince others—those to whom we report and those on our team—that our proposed change has a positive, necessary, and urgent purpose. To be convincing and to draw people to your leadership team, you have to be clear about the problem or opportunity you are tackling. First with the team and later with the larger organization, you've got to help people believe that the change facing them is actually progress. You will be most successful when you tie the change to the company's mission and show how the change will help achieve it.

If you are rolling your eyes at this reference to the importance of the company's mission, you are not alone. Even though nearly every company has a mission statement that is communicated to all employees from virtually the day they enter the company, and perhaps even in the recruiting process, company mission statements often become a joke among employees. Mission statements simply aren't lived up to in many companies. In these cases, tying the proposed change to a mission that no one believes the company leaders really care about is doomed from the start.

It is beyond the scope of this book to delineate the importance of establishing a strong company culture—the values the company lives by, the actions that make those values real, and a mission that inspires employee passion and commitment. And yet every executive interviewed for this book underscored the critical importance of employees believing in and feeling connected to the corporate culture. When employees believe in a mission, they get excited and passionate about contributing to the company's goals. Thus, connecting a breakthrough change to the company mission and explaining how it contributes to the mission can help employees see and appreciate why a change may be necessary—even critical—to the company's future success.

With more than 25 years as a senior leader in the pharmaceutical and medical device industries, Ginger Graham has a successful track history with change. Now the president and CEO of Two Trees Consulting, she made it clear that many of her largest opportunities and successes have been born of very difficult circumstances. Ginger well understands that “crisis opens the door for change and new solutions.” As an example, she explained that at age 37 she became CEO of a privately held business that was in turmoil after a number of leadership changes and product recalls. The company, Advanced Cardiovascular Systems, had leading technology in the world of interventional cardiology. But when Ginger came on board, they were losing market share and had received a warning letter from the FDA. There was finger-pointing and blaming; in those stressful times, she “quickly learned about people and how they operate.” Employees, people who were there for the mission, were disillusioned and worried about what would happen next. She was faced with a classic burning platform, a situation in which the need for change is obvious and immediate.

“One of the things that we set about doing was describing our purpose, reminding people of the incredible value of the business. We were literally saving people's lives.” This was no exaggeration. “The great need, in our case, was the fact that our products were lifesaving and life-changing and there was a reason that the company had made such a difference and could continue to make a difference.

“We employed this knowledge to reenergize people by engaging them on the purpose of the business. And we did things like bring patients back to all company meetings to really underscore why what we were doing mattered.” Putting real faces on heart patients who would have died without the product was an extraordinarily powerful way to underscore the importance of the company's product line and bring the focus back on the company's mission.

Renée James, president of Intel, also emphasized the importance of the connection between the change and the mission: “I think a lot of the big transformational changes are about being on a mission and believing in it. People choose every day to get up and go to work on the mission. At the end of the day, how that mission resonates with your people makes a huge difference. If you ask my tech security team what they do, they would answer, ‘We make the world a safer place.’ Wouldn't you like to get up every day believing you are making the world a safer place?” If Renée's staff is convinced that a breakthrough change will add to their ability to make the world a safer place, then she is more likely to gain their support for the change.

Know the Need

Not all of us can logically link the change we're proposing to a need as compelling as saving lives or making the world a safer place. And even if it's only that the absence of change will ultimately lead to a negative outcome, you can find ways to enlist people in the change. In explaining the need and its urgency, you must convince people that staying put is not an acceptable option and will eventually lead to failure.

One problem with staying where you are may be an erosion of competitive position. You may perceive this to be occurring or to be close on the horizon, but others may not yet have noticed. Blackberry and Nokia once had overwhelming advantages in the mobile phone space, but those advantages soon eroded away to nothing. Another reason for change that's even more challenging to communicate is the potential loss of a compelling opportunity to grow. Huge, obvious problems that are clearly threatening are far easier to communicate. For example, the rising strength of the Internet, Amazon, and iTunes left established companies such as Borders, Blockbuster Video, and Tower Records behind. But it's hard to convince people about what isn't obvious to them or already reflected in the hard numbers.

And what if the need seems to be insurmountable or the numbers seem to point to an impossible task? That was certainly the case when Larry Baer and Peter Magowan gathered forces to keep the Giants from being moved from Candlestick Park in San Francisco to Tampa, Florida. When the newly formed ownership group first bought the team in 1993, they took on debt payments of $20 million a year. As Larry, now the Giants' CEO, said, “That was a lot more debt than other clubs and it put us at a competitive disadvantage.” Plus, the goal was to build a new park, despite the fact that attempts to build a new park had failed on four recent ballot measures. That part of their vision demanded patience. But the debt wouldn't wait—and the costs of planning and building a park would make that initial debt seem like small change. They needed to attract backers and significantly more funding. And win or lose, new ballpark or not, they had ongoing costs for payroll. When they most needed money and proponents, they were faced with a constant stream of naysayers, from “people in the community all the way through the institution of major league baseball.”

Books and case studies are devoted to describing how they did it; Larry conveyed a sense of their driving urgency: “We didn't have time and we didn't know enough to do a business plan. Sure, we could have come up with some fantasy, but we didn't really know what we were getting into. Instead, we had this life or death urgency. We were in crusade mode and assembled smart people who, in the heat of something that they were passionate about, would figure it out. No matter how many brick walls they ran into, people kept trying and they figured it out.”

Larry explained the need to just keep at it during times like these: “The message we got from the research came down to this: ‘Shut up and play ball.’ So from soon after acquiring the team in January of 1993 to December of 1995, just shy of three years, we went underground.” They worked at it and they paid close attention. When the Sunday paper did a weekend series with suggestions from fans, they took note, knowing that in time, they would implement those suggestions and celebrate the people who came up with the ideas.

Whatever the purpose of the change you are proposing, convincing others of its need requires effort; and it's almost always much more effort than you expect. Even if the need seems logical and inescapable to you, others won't necessarily recognize that at first. People's inability to assess the facts and admit to the need to do something difficult and uncomfortable can seem exasperating. But remember that you've been facing the issues and planning the change for some time; you have to make the case in a compelling and thoughtful way. Even when you do, not everyone will be on board. And while you don't need all the employees on your side, you do certainly need some. For that, you must find the strength to move forward and win over the ones that you can. Getting into their shoes will help.

Understand the Big Picture—and All Perspectives

When it comes to convincing others, understanding your audience's perspective is paramount. When I took over the branch network at Schwab and began instituting what I thought were small changes, it didn't occur to me that I would need to make a special effort to get the men and women in the branch offices on board. It was clear to me that my changes were urgently needed; but it took a long while for me to realize that it sure wasn't clear to the average branch employee. Our perspectives were very different, in part because I had access to information that branch employees did not.

I noticed early in my tenure at Schwab that our corporate culture was wary of sales—almost anti-sales, in fact. Having come from Citibank and Shearson, where selling was perfected to an art form, I found this quite a shift in ...