Delivering strategic transformation: a role for the Extended Leadership Team

Delivering strategic transformation can be hard, and one factor which makes it difficult is having the resource to pull it off, in a time frame which is useful. A lot of organisations describe themselves as resource-constrained, in both the public and private sector. There’s a couple of reasons for this. Perhaps the main reason for this is the ongoing drive for efficiency, a drive towards ‘more with less’, gradually reducing the resource (of all types) utilised in running business operations. The lean and efficient organisation focused on today’s business has stripped out any redundancy, reducing the amount of resource available, its flexibility and the richness of the creative ‘gene pool’. And as this happens, as the organisation gets leaner, any spike in demand calls for additional capacity which the organisation no longer has. Another reason is a loss or weakening of the link between resource and performance, which clearly need to be balanced – how much performance for how much resource? If more resource is available, more ambitious goals can be set. If less resource is available, then the organisation needs to cut its cloth accordingly regarding its performance, but often this doesn’t happen, leaving the organisation feeling stretched: same goals as before resource cuts, but less resource to do it.

There is always a challenge for organisations in how much to focus on today’s operations, and how much to focus on designing and adopting the operations required for tomorrow. Different organisations have different ‘profiles’ of how they enact change; some deliver frequent, small and incremental parcels of change, and others execute infrequent radical or disruptive change, although the total ‘amount’ of change could be the same in both cases. Either way, organisational leanness is particularly pronounced when an organisation wants to undertake some form of change or transformation, as there is insufficient capacity to take on the challenge of changing the organisation. In a stretched organisation, and despite senior leaders in an organisation stressing the importance of strategic transformation, the pressures of today’s delivery take precedence and it proves really hard to shift sufficient management attention to identifying and shaping future opportunities.

This is really important, because the rate-determining factor for transformation is generally the availability of appropriately skilled management resource, and the ability to release this without compromising the delivery of today’s operations. This is borne out when we talk to management or leadership teams. They articulate their ambition or strategic direction to us, but tell us that they can’t start to execute it because of time pressure: they are describing insufficient agility, or insufficient ability of their organisations to switch resource from run-type activities to change-type activities.

And there’s another thing. Some changes should be handled at the most senior level of the organisation, because of the breadth of their impact, the skilfulness and expertise required to handle them, or because of their inherent risk, perhaps (the transformation may have the potential to hole the organisation below its ‘waterline’). Other changes are better handled by the managers directly in charge of the affected operations; their intimate knowledge of those operations and their stakeholders is critical to design and implement the changes successfully. Different orders and types of change purposefully handled at different levels in the organisation, then. Yet many organisations seem to think that change is something that ‘leaders’ do, and that it should all come ‘from the top’. In some cases, the leadership team hunkers down, and puts up walls between itself and the rest of the organisation. The leadership team can become paralysed; it is unable to act because it has insufficient capacity to design and handle the required transformation, and it is unable to act because it has insufficient capability (in terms of detailed knowledge of the front line of operations) to design and handle the required transformation.

Enter the Extended Leadership Team. We define this as the direct reports of the leadership or management team – and potentially some of their direct reports too. When the leadership has the courage and openness to relax its boundaries and invite its direct reports into debate on strategy and transformation, positive things happen. Holding strategic discussions with their direct reports creates a much larger cadre of people who have really understood and internalised the strategic direction for the organisation. It improves the quality and robustness of the strategic thinking, as their direct reports can ‘sanity test’ the feasibility of proposed plans, bringing their insight from running today’s operations. Critically, involvement of the extended leadership team creates capacity, the organisational ability to execute a stream of valuable change at lower levels in the organisation (for which the leadership team doesn’t have the expertise), as well as supporting the leadership team in designing and executing strategic transformation. In addition, it builds overall management capability within the organisation. Two or three levels of managers collaborating on a shared goal is an extremely effective way of building alignment around the organisation’s direction and values, as well as developing the next level of managers.

It is possible to engage an Extended Leadership Team for a specific programme of work, or as ongoing groups which are tasked with managing different domains of the organisation by the leadership team, with clearly delegated powers. This provides a way to disseminate understanding out into the organisation, and also network and aggregate intelligence from the organisation, information about the organisation and about its environment which can be hard to reach because it is buried at an operational level. It creates true communication, two way dialogue through the organisation. And when extended leadership teams are established on an ongoing basis, they can be quickly mobilised for strategic transformation, prepared, aligned, and ready to go.