Version 1.

0a – December 2010

Coaching, a decisive success factor for organizational transformation
Jérémie Avérous1, Certified Professional Coach December 2010

“During periods of major change, the performance aspirations of a company depends on many people throughout the organization learning new, specific values and behaviors.” Katzenbach & Smith, ‘The wisdom of teams’, 1993.

Introduction
Major organizational change, which we will call ‘organizational transformation’ in this paper, like a merger or a substantial reorganization of a company, is an event which proves always difficult to implement. It adds up the difficulties of personal change to the challenge of modifying the interrelationships between people. It occurs in a context which often produces high level of anxiety. As a proof that organizational transformation management is intrinsically difficult using traditional top-down approach, a number of such initiatives fail quickly, or lead to situations where the organization performance plummets. As organizational transformation often requires and involves significant change of behavior, change to the individuals’ outlook itself is key to its success. It is often overlooked. Applied in a structured manner, coaching is a decisive additional tool for successful organizational transformations. Coaching needs to be applied both at the individual and group level. This paper investigates the context of organizational transformation, and how to implement a successful coaching intervention in that context. Coaching applied comprehensively can increase significantly the speed, effectiveness and sustainability of organizational transformation, thus delivering a significant competitive advantage to the organization.

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The challenges of organizational change
The challenges of an organizational transformation are multiple. Challenges happen through all the different phases, from planning, to implementation and to consolidation. At the planning stage, the issues revolve about a review of the purpose of the organization itself, a clear definition of the objective of the organizational transformation, and the development of an achievable plan for its implementation. This plan needs to include proper metrics to measure its effectiveness. At the implementation stage, the issues revolve around simultaneous change at the multiple levels of the individual, team and organization. At the individual level, people are anxious, a condition which generally does not promote change, while they need to be able to change their habits and behaviors. Sometimes, they need to change significantly their occupation or even their life habits. At the team level, there is also a need to change the balance of the informal relations and distribution of tasks that might have developed over time. At the organizational level, upon implementation of the new formal organization, the change process needs to foster as quickly as possible the redevelopment of the informal organization that gets the organization to run effectively. At the consolidation stage, measurement of whether the organizational transformation has reached its objectives will indicate whether some improvements or remediation need to be implemented. Organizational transformation processes that are commonly considered are often very high level, founded on a rational and mechanistic approach. They rarely include listening to, and involving individuals down in the organization chart into the change process itself. Individuals are often supposed to simply implement a change decided higher up. Organizational transformation often fails because people in the organization fail to understand the purpose and the interest of the change, thus diminishing morale and involvement. People fail to understand what opportunities and value the organizational transformation brings to them. Transformations also can fail overall because the change creates such a turmoil in the organization that employees focus their entire energy on internal issues. Basic needs of customers or stakeholders are then not met any more creating difficulties for the organization as a whole. Coaching allows to enter in a deep learning partnership with individuals or teams so as to enable them to achieve their own purpose in a positive and fulfilling way. It involves deep mutual communication, mutual respect and demonstrated active listening. In the case of organizational change, it is a decisive tool to help people understand what change means to them and the organization. It also helps them enjoy the journey of change. Because they go deep into the needs and wishes of the individuals, delve into the interpersonal relationships, and act at the behavior level, individual or small group approaches like coaching are a necessary supplement to the high level approaches to organizational change.

How to ensure success of organizational transformations, and the role of coaching in setting up the right metrics
Organizational transformation is an expensive endeavor. It is investment – either defensive, when it is about putting the organization back on track, or offensive when it is about developing significantly the capabilities of the organization for a new growth phase. As any investment, it is a short-term expenditure with the intent to achieve a significant return on investment on the longer term. What is most astonishing is that most organizations do not take the time to setup the right indicators to measure the progress of the organizational transformation.

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It is primordial that from the onset, key indicators be set that underpin the objectives of the organizational transformation. Further to the usual hard indicators (production rates, financials), softer indicators need to implemented, that can be measured periodically using standard methods (i.e. standard questionnaires about employee’s feelings on specific issues related to management, leadership, mood etc). In the case where organizational transformation only involves one business unit of a larger organization, the other business units can also be taken as benchmarks to check whether progress is swifter in the business unit undergoing the transformation. Setting key indicators appropriate to the transformation objectives sought by the organization is a challenging endeavor that is nevertheless primordial for the successful implementation of a coaching program. Coaches are used to these challenges and can help executives design and setup the appropriate indicators, as well as be instrumental in measuring them in an independent manner. Once these key objectives and indicators are set, a focused transformation effort can be organized and planned to achieve significant progress on these areas, according to the guidelines detailed above. Coaching is the key tool to achieve the expected personal and interpersonal changes. Because the actual investment in the transformation plan and the actual progress on the key indicators can be followed up periodically, it is possible to make the necessary adjustments that circumstances demand. The follow-up of the key indicators and their business impact allows to compute a raw return on investment on the transformation project in general, and the coaching intervention in particular. If the coaching intervention is appropriately focused, and uses a feedback loop based on appropriately defined, measurable indicators, the return on investment is proven to be always very high.

What coaching can bring to organizational transformation, and how the coaching intervention needs to be structured
At the planning stage – for executives At the planning stage, the top executive group needs to clarify the real intent of the change. They need to understand how the organizational change they envisage fits into the overall purpose of the organization. They also need to ensure that they reach a clear common understanding of the change project, its reasons and objectives. Coaching can help bring clarity quicker and more effectively to the executives about what they need to do to prepare themselves. It can also help them to face the challenge of the upcoming organizational change. Organizational transformation is indeed a significant personal challenge for executives, with high stakes. It can be a stressful journey full of anxiousness. People in the organization might get hurt or disoriented. Decisions need to be taken that put people’s career and life at stake – including for some executives themselves. Emotionally difficult encounters need to be prepared. Change thus needs to be prepared carefully from a personal point of view to reach a state of deep commitment to the change. This will ensure the right level of perseverance and consistency during the change implementation itself. Personal coaching at this stage is a key contributor to ensure that the change is believed in and will implemented consistently.

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Executive coaching during the change preparation will lead to a personal action plan to be implemented during the change itself, to complement the formal overall change implementation plan. In addition, organizational transformation will often lead to significant change in the executive team itself. The executive team needs to be rebuilt as an effective team, develop mutual confidence and support, manage unavoidable internal conflict properly while allowing the necessary discussions to happen, and more generally, invent the way of working that are right for them moving forward. Team coaching can in this instance help the executive team move more quickly in an effective team state. At the implementation stage – for executives During the implementation change, continuous personal coaching of executives is a useful tool to ensure that they indeed implement their personal action plan. Coaching can help clarify the emotional states of the executives as they go through period of doubts or highly emotional situations. Team coaching of the executive team is a useful complement to enhance the effectiveness of the team in implementing the changes. Coaching is also an important tool when it comes to preparing executives to handle difficult situations, like for example a meeting with an individual that needs to be dismissed from the organization. Coaching, through its action orientation, can allow the executive to rehearse this difficult situation so as to go through it as appropriately and professionally as possible. This is indeed a gift to both the executive and the person that will be dismissed, and ultimately a gift to the organization on the long term. Other such cases that can be usefully rehearsed in coaching involve difficult public declarations and presentations in front of the employees. One very important issue to tackle is the informal organization. It is not just the formal intermediate and upper management that need to be get involved in the change implementation; the leaders of the informal organization have also to be identified and involved. Identifying and involving the leaders of the informal organization is often the key to success of a major transformation. This issue is often neglected, because recognizing it also means somehow that the formal organization does not have all the levers. But it is a reality and it needs to be leaned into if major organizational change is to succeed. At this stage, the role of a coach is to clarify with the executives who could be these leaders of the informal organization, and help them broaden their views from a usual hierarchical change implementation plan. At the implementation stage – for individuals & teams driving the change During implementation, traditional hierarchy has a role to play in showing the way and taking the people-related decisions, but this is not enough to ensure success. One of the most salient characteristics of organizational transformation is that beyond the obvious changes to the formal organization and processes, the change can only be considered completed if the informal organization has also shifted. Coaching is an ideal useful lubricant making change much easier by dealing with the softer sides of the expected change. Because coaching is a tool that accelerates personal transformation, including behaviors, it is extremely useful for changing the habits and behaviors of the people who are the most affected by the change. Coaching is a time and resource consuming activity and cannot be proposed to all individuals in the organization, even when practiced in the form of group coaching. On which individuals

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should then coaching focus to achieve the greatest effectiveness, and what type of coaching should be implemented? The target for coaching should be the group that will effectively have to drive the change, and lead the organization through it. Inside the group of formal and informal leaders, there will always be 3 categories: the wait-and-see majority, and the minorities of the enthusiasts and of the opponents. The objective is to create a critical mass of change agents in the organization that will catalyze the overall organizational transformation. Coaching the enthusiasts can be done but they generally do not need a deep intervention, as they are already motivated by the change and hence, ready for personal change. Coaching the opponents will take a lot of efforts for limited results, except if one of the opponents is a key individual that needs to be brought into the change because of his position. Hence, the most effective is to concentrate on a critical representation of the wait-and-see majority to get them moving in the expected direction – identifying the prime movers and the informal leaders of the organization. It will take some time to identify a limited list of formal and informal leaders of the organization that could be the most effective group to be targeted. This group will have the potential to drive the organization’s change. It will also be in a position to feedback issues to senior management issues and possibly, modify the organizational transformation plan. This might lead to the creation of a ‘change council’ regrouping these target leaders. Involving them in the governance of the change process is key. Shifting the informal organization takes often a lot of time. It is about reestablishing the relationships and interactions across the organization, that make it work. Because it is all about interpersonal relationships, coaching can greatly help accelerate this phase. During the implementation of the transformation, coaching can be effectively deployed to help the chosen formal and informal leaders modify their behaviors, and overcome difficult situations they might encounter. It will be particularly useful to identify avoidance patterns and overcome self-limiting beliefs. The availability of a coach will also help these leaders avoid the feeling of loneliness which might sometimes occur when one tries to implement a change. As a summary, coaching during the change can be done at two levels. Group coaching for the council of formal and informal leaders - the group of people targeted to drive the change. And implementation of targeted individual coaching for these leaders, to help them overcome the personal difficulties associated with the implementation of change. At the consolidation stage At the consolidation stage, the objective is to achieve a new organization that is able to further improve and evolve by itself. As part of the close-out of the coaching intervention for the organizational transformation it is important to check that the level of organizational self-awareness is sufficient for a continuing growth and development of the organization. At that stage, targeted coaching interventions can help raise the level of awareness and capability for continuous improvement in those parts of the organization that might be lagging behind. To achieve the objective of a learning organization that is more able to undertake transformation by itself, the organization might also want to implement a program to develop internal coaching resources moving forward.

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Conclusion
Organizational transformation is a key moment in the life of any organization. It is a crucial and stressful moment where failure can mean the end of the organization itself. Conventional transformation approaches, based on the formal organization, and rational analysis, have shown their limits. Complementary new approaches are much more susceptible to be successful, that take into account the transformation of the informal organization and of the people themselves. They ensure success in a holistic mode – both at the organization and the individual level, increasing the well-being of the individuals in the process. They are based on coaching, in a combination of one-to-one and group coaching. Some success parameters can be identified: - they have to be implemented in a framework that allows to measure their effectiveness continuously through appropriate indicators; - the approach needs to be comprehensive, from the top executive group to the executive themselves, to a key slice of formal and informal leaders who will drive the effective transformation of the organization; - the coaching intervention needs to be structured as an integral part of the transformation process itself. Coaching is a key transformational technique and organizations would greatly benefit from using it in a consistent and structured manner to help them through their transformations. While coaching in organization transformations will certainly become a standard leadership tool beyond the ongoing Fourth Revolution2, organizations that implement already this type of approach will acquire a significant competitive edge. By drawing effectively on the talents of their highly motivated individuals and of the informal organization, they will transform swiftly and deeply, planting the seeds of a sustainable long term success.

Notes 1 For more information on the author, visit the author’s personal website at www.jeremieaverous.com 2 see www.thefourthrevolution.org. The Fourth Revolution, coming after the revolutions created by Speech, Writing and Broadcasting (printing), is the current fundamental shift in humankind collective cognitive capability created by cheap long-distance interactive communication. It will fundamentally change many assumptions of our previous Industrial Age, notably in the field of organizations, management and leadership. Useful references Katzenbach & Smith, The wisdom of teams, 1993 Katzenbach & Khan, Leading outside the lines:how to mobilize the informal organization, energize your team,and get better results, 2010 O’Neill, Executive coaching with backbone and heart: a systems approach to engaging leaders with their challenges, 2007 Goldsmith, Hesselbein (ed.), The organization of the future 2, 2009 Lencioni, The five dysfunctions of a team: a leadership fable, 2002 and ancillary workbooks.

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