That's not how we do it here! by John Kotter & Holger Rathgeber - Book Review

That's not how we do it here! is a fable which addresses the issue of how organisations and the individuals within them can respond to the present phenomenon of constant change. Whereas their previous fable, Our Iceberg is Melting, tackled the issue of how to lead change in a crisis situation, illustrating Kotter's eight step process for Leading Change; this book builds on Kotter's work in Accelerate XLR8. The essence of Kotter's argument here is that that established hierarchical managerial structures do not provide the agility for organisations to respond sufficiently quickly to the demands of the ever changing world of modern business. 

The fable is set in a Meerkat colony in the Kalahari Desert. 

1. Kotter first presents us with an established colony which has rigid leadership and management structures which are tried and tested and have seen the colony thrive in the past; and where innovative ideas are greeted with "That's not how we do it here!". However the colony is incapable of responding to the new challenges that a changing environment brings (drought, attacks by vultures).
2. Kotter then presents us with a "Start-up" Meerkat colony where there is shared vision and shared ownership. Meerkats are given the licence to explore new ideas and to solve problems creatively. However, this colony hits problems when it grows to a size where there is a loss of accountability and a lack of the discipline that allows larger organisations to operate.
3. Finally, Kotter presents us with his model which has features of both the established and the start-up models, thus allowing complex organisations to operate in changing environments.

At the heart of Kotter's approach is a different way of looking at the relationship between leadership and management. Organisational size and complexity demands management ; technological and other forces demand leadership. The modern era demands an approach that has the best of traditional leadership and management models. He illustrates this in the following grid:

1. Most organisations are in the bottom right quadrant: 'well run but bureaucratic and unable to change quickly'; 
2. Start up organisation are in the top left quadrant: 'Innovative, adaptive and energetic, but chaotic.
3. Kotter's model is in the top right quadrant, 'Well run and Innovative, adaptive and energetic.'

This book only touches on Kotter's theory in this respect and readers would be well advised to invest in  Accelerate XLR8 for deeper insight.

Once again this is a hugely accessible book which enables leaders to help their organisations understand why there is a need for change and paints a clear picture of what that better organisation might look like once that change has come.

The importance of putting values at the heart of a global organisation.

Pharmaceutical giants probably don't spring to mind when thinking of values driven organisations, so it was great interest that I learned of the changes that are taking place in one of the world's largest drug companies.

I first visited Novartis five years ago. Then it was an organisation, like most others, driven by a culture of profit and individualism and where "work-life integration" had replaced any notion of "work-life" balance. The company boasted that its Campus had several restaurants, a supermarket and a post office so that domestic chores did not force employees to leave early and thus the firm could maximise the length of the working day. The performance management structure primarily rewarded results. The only hint of what was to come was that there was a recognition in their appraisal structure that an individual getting great results through poor 'attitudes and behaviours' was fundamentally bad business.

Novartis PRP Matrix up to 2014

Five years on and, after six months of company-wide consultation, Novartis have just launched their new values. The 23 values that were neither known nor understood by their employees have been distilled down to six core principles, two for each of the three areas:

1. Patient and Customer: innovation and quality;
2. Team: collaboration and performance; and
3. Self: courage and integrity.

The order of these values categories say much about the vision for the organisation for they put the needs of customer/patient first, and the needs of the team above those of the individual. The shift from a 'me' culture to an 'us' (team and society) culture is significant.

So how are these values worked out in the organisation? Well drugs companies do have a good story to tell. They do change lives. They do make the world a better place. Novartis invests billions in new drugs - of course they do it to make a profit, but without that profit there wouldn't be investment.

The organisation has shifted from valuing the individual to the team rather than the individual. Hence collaboration and team performance at the centre of the values structure. The clearest evidence of this shift is in the performance management matrix. The bonus structure use to reward results over attitudes and behaviours. From January 2015, that will not be the case. Results and values will have equal weight. 

Novartis PRP Matrix prior from 2015

The personal values of courage and integrity emphasise the need for individual employees to live up to their responsibilities and to operate within an agreed ethical framework.

Novartis is able to attract some of the world's greatest talent and they actively look to appoint high-fliers who have 'agility' i.e. who are able to apply their skills in different contexts as they around their global postings at two-year intervals. Interestingly, no one spoke of 'work-life integration', rather they had introduced more flexibility about working hours and locations (campus wide wireless VLAN).

The world needs ethical drugs companies.  
I shall follow Novartis' progress with great interest and wish them every success in this venture.

(I would like to thank the Talent Management team at Novartis Basel for their wonderful hospitality and for sharing their vision with a group of headteachers - priceless INSET.)