Module-2

The leader's roles

First, consider the roles a leader plays within a startup organization:

 Idea generator. It’s the leader's job to come up with new directions and
new possibilities for the organization (and solve tough problems).
 Decision-maker. When it comes time to make a hard decision for the
company, the leader is the one who has to make it.
 Team-builder. The leader hires, fires and inspires people to work their
hardest under his or her banner.
 Image-maker. The leader is also the figurehead of the company and the
“face” of the brand.

There are undoubtedly other roles that a leader plays, but these are the primary
influential ones. And all of this is nice in theory, but how much of an impact
does it actually play?

The reason is that the early stages of a startup are where leadership matters the
most -- before the leader analyzed in the studies appeared on the scene.

As the CEO of a startup, you’re working with a softer, less developed idea,
alongside a small team and a lot of unknowns. The market, the idea, the
workforce, even the culture of your company are all still volatile, shifting
concepts, and it’s your job as leader to help align them.

Business transformation starts with

leadership transformation
Leaders today are inundated with reasons to transform their organizations in search of
better outcomes. New market entrants erode profit, competitors seem to be always
moving ahead, all while customers seek higher quality and cheaper sources of service.

The pace and appetite for change is exhausting. Yet comparatively, it feels like your
organization is sinking deeper into the mud. “We want to change, but the culture here is
too difficult to change.” It’s a frequent remark we have all heard and said, but what does
it mean?

Culture is the original business meme. Its meaning and usage are as abstract and
intangible as the word itself. “If we just fix the culture, we will be successful”—a
statement full of positive intent yet lacking a clear directive or step to take.

A new culture is not a browser plugin. Leaders cannot simply select an extension, and
download and install it from the web. Nor should leaders expect the update to be
applied only to others and not to themselves.

The prevailing thinking is the need to change people’s mindsets. The belief being if we
tell people to think differently, they will act differently. All-hands meetings are called,
PowerPoint decks are prepped, and an executive tour is scheduled to rally the troops
for the mission ahead. A one-, maybe two-day training session is delivered, and the
metamorphosis begins. But it does not.

Culture is our behaviors. It is the actions we perform. The way we talk and how
we treat one another. The way we behave reflects the values and expectations we
have of ourselves and of one another.

The single most important action of any leader is to role model the behaviors they wish
to see others exhibit in the organization.

Actions are what matter, not talk

Culture change does not lead with words; it leads with action. By changing the way we
behave, our actions begin to change the way we observe, experience, and eventually
see the world. By seeing and experiencing the world differently, it changes the way we
think about the world. People do not change their mental models of the world by
speaking about it; they need to experience the change to believe and feel it.
Figure 1. John Shook’s Change Model.

John Shook was the first American manager to be hired by Toyota. He moved to
Japan without knowing a word of Japanese, just with a desire to immerse himself in the
organization for a prolonged period of time to learn the Toyota Production System by
doing it.

What he observed was not a group of managers telling people what to think or how to
perform their work. Instead, he experienced the deliberate practice of
experimentation, reflection, and improvement by all employees in the entire
organization. Toyota had developed a set of behaviours that advocated continuous
learning and adaptation to new circumstances.

What Toyota understood is that culture and circumstance is always unique and
changing, and to manage change, one has to be ready to learn, adapt, and apply
new changes as they are happening.

A journey for leadership and behavior.

Shook’s model highlighted that transformation starts from our behavior. Therefore,
to start changing culture we need to change how people do their work.

In our experience, a very effective first step for a major transformation is to start with a
set of hand-picked initiatives that do things differently. We did this together with the
engine manufacturing company Wärtsilä. Wärtsilä is over a century old manufacturing
company that serves roughly half the ships in the world and has five billion dollar
revenues—not a typical Silicon Valley startup.

To kickstart the transformation, leadership provided sponsorship and support to four

cross-function teams to explore new ideas and ways of working. The purpose of these
teams was to bump into and make visible the cultural glass walls that so often had
stalled and hindered other initiatives.

Rather than have the four teams take courses or workshop ideas, the underlying idea
was to have four teams experience a new way of working for real. This was ensured by
selecting the top strategic innovation initiatives for the teams focus on.

The second step was to create an environment to cultivate the new ways of working. In
other words, we made the workspace inspiring; different; and, importantly, we let the
team personalize it to make it their own. We provided guidance, tools, and innovation
frameworks for the people to leverage.

To embrace Shook’s philosophy, it was extremely important that the teams had a
mandate to work differently and to really experiment with new ways of working and new
behaviour. The mandate created a psychological safety net for them. Failure is
expected when working creatively and trying out new ideas, and therefore, it was critical
to enable safe failure and learning opportunities.

To further facilitate the cultural transformation, the teams broadcasted their intermediate
results in demo sessions to the whole company. This turned out to be both popular and
effective in further spreading the transformation by showing concrete results rather
than talk of trying things differently.
Figure 2. In the demo sessions, the audience gave scores to the teams, and the winning team
always won quality craft beer. The happy winners of demo #1 from left: Shelley, Henri, Jan, and
Martti of Wärtsilä. Image courtesy of Risto Sarvas.

Throughout the eight-week program, the teams fully experienced working in new,
interesting, and unforeseen ways. Rather than just reading a book or taking a course on
Lean, Agile, and design thinking, the teams had to apply the new methods and mindsets
while creating meaningful outcomes for the business. For the individuals participating in
the program, it was an extremely effective way to safely learn new ways of working, and
perhaps more importantly, to learn the limitations of the former company culture.

Jump-starting the transformation today

What did we learn from running this, and similar programs?

First, jump-starting the cultural transformation with a couple of spearhead projects, the
right people, and leadership support is very effective. The projects will demonstrate that
the company’s own people can achieve the desired results and business outcomes with
new ways of working.
Second, the people who have experienced new ways of working are transformed.
Applying the new behavior into real projects transforms their thinking about innovation
and the whole company, which makes them the key people in spreading the new
culture.

Finally, choosing the people to spearhead the projects is critical, as those people will
become the ambassadors for a bigger cultural change in the organization. They will tell
the stories and others will listen. They will introduce the new ways of working to others,
as they are the people who know best how the new thinking applies to your company.
They are the first penguins to dive into the cold water, swim, and survive.

However, none of this matters if you, the leader of change, don’t change as well. As the
leader of this change, you are penguin number zero: the very first person who has to
change your behavior. You need to be transparent about your vision, words, and
actions. You need to work according to the new culture you wish to see.