Managing the Change: From Startup to Multinational Corporation

Our businesses increasingly operate in an environment we might define as VUCA: an acronym for Volatile, Uncertain, Complex, and Ambiguous.

The first use of this concept dates back to the military, specifically to the Cold War, and was then adopted in economics textbooks to describe an environment characterized by rapid and unpredictable change, uncertainty, complexity, and ambiguity.

In such a context, organizations must be able to adapt quickly to a constantly changing world, anticipating future challenges. Adaptability and agility, thereby, become imperative to respond to uncertainty. But when can an organization's internal change process be called successful? What is the role of leadership in ferrying even the most change-resistant staff?

As CEO andFounder of PQE Group, a company I established in 1998 and which is now a leader among pharmaceutical consulting companies, I have been through and have experienced several business transformations. We started in Florence as a small Italian startup with six members, while today I can rely on more than 2,000 employees. The pandemic forced us to rethink the work organization while continuing on the internationalization path. Today, we have 40 offices spread over all parts of the world. In the following lines, I will discuss what I have learned over these 25 years about change and its management. 

The first lesson, and perhaps the most significant, is that change is a process, not a single event. It goes through a series of stages that altogether take a considerable amount of time. Skipping even one of these stages will only lead to the illusion of a speedy victory at the cost of genuinely satisfactory results. Comprehending the stages of change and the pitfalls inherent in each phase will increase the chances of success.

The second overarching lesson is that mistakes in any of the stages of change can have a devastating impact that will nullify the benefits laboriously achieved in the previous steps.

Leaders need to design and conduct a campaign of persuasion which begins months, or at least weeks, before the actual turn-around plan is actualized. As in any political campaign, could a presidential candidate hope for a win without a supporting campaign and a strategic communications plan? For firms, it becomes crucial to have an internal communications department that can advocate for and advise managers at all stages of change to ensure that employees listen and digest complex messages, questioning old patterns to embrace new ones.

I have delved into change management in literature and at the hands-on level. I have found the model proposed by John P. Kotter, a leading expert on the subject and professor emeritus at Harvard Business School, exemplary. 

According to this model, there are eight stages of the transformation process. They are intrinsically related, and only by understanding the pitfalls and timelines specific to each step can we avoid lukewarm results and miserable failures.

1) Create urgency.

By nature, I hardly get stuck in front of the risk factor and do not tolerate the phrase "we've always done it this way." However, one mistake I have made is to underestimate how difficult it can be to lead people outside their comfort zone. Appeals to sacrifice and self-discipline are met with cynicism, skepticism, and instinctive resistance in the absence of a severe threat or perceived actual urgency on the part of employees. While at this stage it is necessary to examine every aspect of a potential crisis as well as the state of the organization and the market in which it operates, it is equally necessary to convince at least 75% of managers that the status quo is riskier than change itself.

2) Building a team of change agents.

Creating a change support team and genuine brand ambassador for the project within the company is essential. These individuals do not necessarily have to coincide with the HR department. From my experience, I have learned that to build a strong coalition group suitable for removing obstacles to change, you must rely on employees who can influence as many colleagues as possible. These only sometimes coincide with the management level.

3) Establish a vision.

This is a stage that, at first glance, may appear simple, but it is so only if you have a clear picture of the goal you want to achieve through change. The risk here is to craft a vision that needs to be more specific or supported by a strategic plan. A quick tip: If you cannot communicate your vision in five minutes, it is unsuitable for directing the change effort.

4) Communicate the vision.

Employ newsletters, town halls, in-depth articles, and the company's social networks — all channels capable of broadcasting the vision should be leveraged and optimized. It is worth remembering, however, that communication is not only about words but also about deeds. Nothing creates cynicism among the troops more than behavior inconsistent with our words.

5) Remove any obstacles to change.

Encouraging employees to take risks and propose unconventional actions and ideas is the beating heart of this phase. To do this, removing any system or structure that could undermine the vision is necessary. What kind of obstacles do we have within the company? For example, a structure that is too top-down undermines our employees' innovation ability, as well as performance-appraisal systems based on individual results. 

6) Plan and create short-term wins.

As we have said, fundamental transformation requires congruent time. In the absence of achievable short-term goals, the risk is that the renewal effort will be thwarted and many of the people who embraced change in the first five steps will join the ranks of those who resist transformation.

Short-term goals must be designed, not hoped for: this implies a dynamic behavior of managers who will need to set out in the annual plan the ways to achieve the improvement, the gains, and a system of recognition and promotion for the staff involved.

7) Consolidate progress without anticipating victory.

Victory should not be celebrated in an anticipatory manner. Still, leadership will need to use the successes obtained in the short-term wins to consolidate the change, using the credibility gained to deal with even more complex challenges.

8) Incorporating new approaches into the corporate culture.

When, then, can change be considered successfully finalized? At the very moment when new behaviors are rooted in the corporate culture. There are two main factors for institutionalizing change in the organization's social norms and shared values.

The first concerns the people's conscious involvement in demonstrating how the new approaches, behaviors, and attitudes have contributed to improved performance. The second component, on the other hand, consists of devoting adequate time to ensure that the next generation of top managers truly embodies the new approaches.

This model is a litmus test for tackling and directing change toward success. However, we must keep in mind that each project is unique and requires approaches that can be different in intensity at each stage. The resources, message, and objectives are always various. After all, perhaps the most important lesson I've learned in these 25 years as an entrepreneur is only one: "Change is the only constant," as Heraclitus said — a theory that took shape in 500 B.C. and that today, is more current than ever.