The crisis has raised numerous questions about how the business world operates, and especially about long-term versus short-term strategic thinking. Marc Sniukas, Senior Consultant at Doujak Corporate Development, says that the crisis requires the implementation of an innovative approach to management. As his colleague, Alexander Doujak, points out in Hard Cuts & New Growth – a new book co-authored with Barbara Heitger – the concept of Un:Balanced Transformation can provide the tools for just such a change. In April, Sniukas will lead a paperJam Business Club workshop on Managing Cuts and New Growth.
How can business leaders adapt to meet the challenges of the crisis – are they being forced to reassess the very core ideals of their business model, to think “outside the box”?

“I think the crisis is a good test for business models, to see whether they work or not. And I think it is also a good test of whether your organisation is really capable of adapting, if it is flexible enough to cope with the current challenges. In terms of what is needed from leadership or executives, I don’t think it is a matter of thinking outside the box. What is required is much more a complete change in mindset. People are focused on fire-fighting, short-term measures, on downsizing and decreasing costs such as cutting travel budgets or marketing and training expenditure. I think that is too short-sighted. There needs to be a change of perception about how to manage a company, moving away from an “I’m in charge” style of leadership to a more facilitative leadership. This involves setting the stage and facilitating the process of getting the work done and incorporating all the networks that exist within a company.

But in uncertain times, how difficult is it to stay focused on long-term visions when many decision-makers have to worry about short-term survival?

“It is very difficult, because we are not used to thinking in both dimensions, what we might call a bi-focal view of things. This is also where the concept of Un:balanced Transformation comes in. What we saw in our work is that there are change projects where you have to downsize on the one hand, but the downsizing and cost-cutting are not going to give you any competitive advantage in the future, or even in the short term, because everybody is doing it now. So the question is how you can simultaneously secure the future and build capabilities for growth and innovation for the long term and mid term. Too many people are still sticking their head in the sand and hoping the storm will pass, which I think is not going to happen; well at least not very soon.

Can you briefly outline the “Un:Balanced Transformation” approach and the tools it provides to resolve contradictory targets?

“The basic idea is that there is not just one type of change project. There are different types of situations that require different approaches. These are based on how urgent change is for the company and how capable the company is of change. Un:Balanced Transformation is a mix of top-down and bottom-up approaches in certain areas, but it is also about how you see change and how you see people. The more traditional approach to change management, for example, would see people as a cost – as is happening now during the crisis with layoffs – whereas the new approach would see people as an asset that you have to use and also engage in the process.

There are two very different mindsets of how change is done. The first is the classic approach, again very top down that might even involve an external consultant coming in to tell you how things should be done. Then you have the more balanced approach that comes from the social sciences, group dynamics, organisational development school that says that nothing has to happen top-down but rather bottom-up. The problem with this softer approach is that it takes a lot of time, whereas the former approach might be faster. But if you choose the hard option you have to worry about having everybody on board. So the Un:Balanced approach is doing all these things and specifically working with tensions. We believe it is not all about cooperating but it is also good if you have competition among teams because it makes you more innovative and come up with more creative ideas. The new approach does focus on resolving emotional conflicts, because we believe that emotions can be a strong driver or inhibitor of change, but also creating more cognitive conflicts, for example cutting and growing at the same time and really challenging people.

So conflict can be good?

“My guess would be that not allowing conflict to be shown is causing a lot of problems for companies. We tend to think that conflict is something bad, which is not necessarily the case. I had a professor who always said that conflict is the only way to integrate, to bring people together and build a better team. Anybody who has worked in a team will probably agree that once you have resolved a good conflict, work tends to improve – even if there is another conflict looming on the horizon.

Do you think in the long term the crisis could be an opportunity for a paradigm shift in people’s approach to management and change? Human instinct and innovation could really come to the fore?

“Yes, particularly in terms of innovation. Scientific studies have shown that if things are going badly, or the future is uncertain, then people are more willing to take risks and experiment. Whereas, if things are going well it is more difficult as an executive to try and change the company because people won’t see the need for change. Then again, it depends on your approach – if you are downsizing it may de-motivate people and will not inspire them to view the long-term possibilities.

But even if new strategic thinking results in innovative ideas, how do business leaders go about transforming those ideas into reality?

“I still tend to think of innovation as a black box. Ten years ago everyone said you need to “think outside the box” – which is easier said than done – but what we still don’t have is a framework for innovation, a proper idea of how it could work. There are different dimensions to innovation. Firstly there is the content, what do we want to innovate? Is it the basic products and services, the processes of how a company works, or is it at a more strategic level such as creating new markets and new business models? Another dimension is the context, which means you require a culture that is ready to take risks, where failure is accepted because it is a necessary part of the learning process, where you have the right people who are willing to collaborate.

If we talk about creating new markets, much has been made of so-called Blue Ocean Strategy over the last five years. How important is this concept in today’s globalised business environment?

“Blue Ocean Strategy and strategic innovation emerged from the fact that the tools being used in strategy these days were created for more stable environments, for long-range planning. They offer a new perspective on how to achieve that competitive advantage. Of course, in the crisis it is probably the last thing that people think about. But if you get your executives and your second or third line managers to think about being ready for the long term, it could be an opportunity. As I said, with cost-cutting it all depends on how you do it – just trimming the travel budget won’t solve any problems because you still have the same business model. So when the good times return you will not have tackled the root cause of the problem, which is probably that you do not have the flexibility to react fast enough to a changing environment.

Are specific characters, certain personality traits, more open to change management than others?

“I’m not really a friend of saying that some people are born to be leaders, which was a popular notion in the 1950s and 1960s. There is some work being done on transformational leadership, and connecting that to being more innovative. The characteristics required for that would be someone who is an inspirational motivator and can present a purpose to their organisation. That means explaining why the organisation exists and what it does; that it is not just about making money but maybe there is a higher vision of what it would like to achieve. You also need to present an intellectual challenge to people, which is about promoting creativity and innovation as well as coaching and training individual employees.

But a major factor of change is the fear of what is going to happen. Here, too, in the book we address what we call “the logic of emotions”. There are certain phases which a typical change project goes through which includes acknowledging that these feelings exist and that only by addressing them can we allay those fears. If you provide room to discuss these emotions on a broader level, then individuals realise that others have the same feelings and concerns.

You run courses at two American business schools. What marked differences do you note between the attitudes of business leaders in Europe and the United States, and in particular their acceptance of change management?

“The Americans are much more hands-on. In Europe it is more about talking, thinking things through and planning; the desire to have a 100% solution before taking action. Americans are more open to experimentation, the mentality is much more “let’s see what happens and adjust as we go along.” Europeans only want to implement a plan once it is in place.

What sparked your interest in strategy and leadership?

“At university I became interested in strategic innovation because it was something new. Originally I was more focused on numbers and control analysis, and I had this very classic view of business as a machine. But then I learned that it is not all about numbers, but also about humans – the numbers and the plan can be as good as you want, but if you don’t acknowledge the people then it’s not going to work. So my interest in the more social side of organisations became more prominent and now it is all about combining both worlds. At our company we tend to think of organisations as living organisms and the whole eco-system surrounding them – suppliers, customers, maybe the government, the shareholders; really all the stakeholders.

It is becoming more and more important for organisations to be able to react fast and flexibly to changes in the environment. It is leadership’s duty to encourage collaboration and informal organisation and to provide the tools to enable this across functions, across departments, across business units. Cooperation rather than competition is becoming more important.