Getting Employees Excited About a New Direction

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1 REPRINT H02I7C PUBLISHED ON HBR.ORG NOVEMBER 20, 2015 ARTICLE CHANGE MANAGEMENT Getting Employees Excited About a New Direction by Douglas A. Ready

2 CHANGE MANAGEMENT Getting Employees Excited About a New Direction by Douglas A. Ready NOVEMBER 20, 2015 When your company is in trouble a new competitor or technology threatens your business model, your cost structure changes, the economy tanks you have one job as a leader: to get the company back on track. The crisis provides compelling reason for change and, if companies can weather it, they can emerge stronger. But no company today can rest on its laurels. Disruptors can come from anywhere, any time. Leaders especially those in large, successful organizations must create an environment where people thrive on passion and purpose, and are as agile and innovative as their 2

3 potential disruptors. How do you take a successful company one already highly regarded by employees, customers, and shareholders alike and reignite people s passion? How do you energize and galvanize them around a new course? That was exactly the challenge that Dave McKay faced when he was appointed President and CEO of the Royal Bank of Canada (RBC) in August, McKay was a proven and successful executive at the highly regarded Toronto-based financial services giant, having most recently led the group s personal and commercial banking division. Moreover, McKay was following two iconic CEOs: Gord Nixon and John Cleghorn, both of whom successfully navigated RBC through the choppy waters of the financial services industry over the previous two decades. Few would have criticized McKay for staying the course, as RBC was profitable, highly regarded by clients, and scandal-free, emerging from the global financial crisis of 2007/8 relatively unscathed. However, staying the course wasn t an option for Dave McKay. I want RBC to matter to our clients, to our people, and in our communities both here in Canada and around the world, wherever we do business. These were the first words McKay said to me in a discussion set up by RBC s Chief Human Resources Officer, Zabeen Hirji. I had written an HBR article along with my coauthor Emily Truelove in the aftermath of the financial crisis that focused on the things that made the difference in how some companies came through that dark period even stronger than before. We pointed to companies that placed a premium on building three organizational capabilities simultaneously being purpose-driven, performance-oriented, and principles-led a process we call creating collective ambition. I had known McKay and Hirji from advising the company on its leadership matters for many years, but now both were in powerful and influential roles at the company and were ready to act. McKay was struck by the simple message of collective ambition: place organizational purpose at the heart of your business model and make sure your vision, strategy, brand, and values are all closely linked to it. Using those principles, RBC ignited the passions of 80,000 people, breathing new life into an already successful company. Here s how: 1. Connect organizational purpose with individual meaning: Agenda setting for a leader is no easy matter. There are plenty of issues that can attract one s attention and consume one s energy and more than a few stakeholders who are eager to capture your share-of-mind for their units initiatives. Despite these temptations to be pulled in a variety of directions, McKay focused like a laser beam on bringing RBC together through the power of finding its core purpose. McKay reasoned that by articulating why RBC existed as an organization, the process itself would serve as the glue that would bind the organization together and the grease that would enable bold and decisive action. This wasn t a matter of stagecraft on McKay s part. He had reflected deeply on the matter, as he knew that this was not a journey to be travelled in a half-spirited manner. 2. Embrace leadership as a collective accountability: While an all-encompassing process such as this requires C-suite leadership, it will be doomed to fail if it is labeled as the CEO s initiative. Shaping 3

4 RBC s Collective Ambition was a remarkable effort. It involved socializing the idea with RBC Group Executive (GE), the company s top eight leaders. Here, Zabeen Hirji, a member of the GE, played a key role in gathering input and building momentum among her GE colleagues, but also was mindful to not have this be an HR initiative. McKay created the RBC Collective Ambition Champions Group comprised of key business and functional executives who were opinion leaders and important culture carriers, and thus critically important in building broader buy-in and ownership. This group, which also included some younger leaders, acted as a sounding board, and as early advocates and mobilizers. Per Scott, a respected VP of HR for RBC was enlisted to work with McKay, Hirji, and the Champions to develop the articulation of RBC s purpose, vision, values, and priorities for a new competitive era in a way that engaged and united employees and leaders across the company. RBC also incorporated discussion about purpose into the curricula of the company s enterprise leadership programs to build awareness, and gather input for the effort. 3. Find your collective voice: A Vision and Values Jam was one of the defining moments in RBC s search for its Collective Ambition. One thing RBC had to reflect on as part of this rigorous process was its history of being paternalistic and agreeable almost to a fault. Given such a culture, launching a process that would invite inputs and yes, potential criticism from every single member of the company in an open and real-time format, set more than a few nerves on edge. But that s exactly what the Vision and Values Jam was all about. RBC s Jam was held over 55 consecutive hours with Dave McKay and all members of the GE as well as 40 other leaders involved in asking questions, giving opinions, reacting to posts, and fielding responses to unfiltered commentary on RBC s purpose, vision, values, and desired leader behaviors. It was a remarkable success. More than 20,000 people weighed in from 22 countries, posting more than 17,000 threads, comments, and replies. As Chief HR Officer Hirji put it: We found our collective voice through the Jam. What happens when all RBCers are invited to contribute ideas, suggestions, and opinions about what RBC does well, where we can improve and what it will take to succeed? We found out enthusiasm, candor, and inspiration. The Jam was three great days of idea generation and dialogue. The process paid dividends for McKay s leadership brand as well. The top-rated discussion from the Jam was the CEO s Ask Me Anything session, which is now a recurring event. 4. Unleash new energy: Organizations are literally teeming with the potential to do great things, to go beyond what s expected and to become game-changers. Yet, so few do. As a result of thousands of conversations, dozens of interviews and focus group sessions led by the GE and subsequent layers of leaders, and through the engaging dialogue encouraged in RBC s leadership programs, and employee input through the Jam, the company crafted a powerful purpose statement: Helping Clients Thrive and Communities Prosper. This purpose statement strikes at the heart of who RBC is as an organization and who RBCers are as employees. The company s newly-articulated vision: To be among the world s most trusted and successful financial institutions, spoke directly to the importance of trust as RBC s most powerful currency of all. The company s much-admired core values were modernized to provide direction for a new age and yet remain true to what it holds dear as an organization. By telling a powerful story about why RBC 4

5 exists as an organization and by creating a collective and distributed leadership capability to realize that potential, the leadership team has unleashed the beast from within. There is now a palpable energy that permeates throughout the organization. The stage is set. An organization of 80,000 people has come together around a renewed sense of purpose that has reignited the entire workforce. Now the hard work begins. But I for one will bet on this company becoming a benchmark for what it takes to become a game-changer: purpose-driven, performance-oriented, and principles-led. Douglas A. Ready is a senior lecturer at MIT s Sloan School of Management and the founder and president of ICEDR. 5