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By far the most complex and sensitive aspects of any change process – the ones that will crucially affect success or failure – are firmly rooted in the design and performance of organisations, and the skills, motivation and values of the people in them. A ‘bad’ strategy will bring great problems – and a ‘good’ strategy, badly executed, will have the same disastrous results.

Competence Gap Yet there is a big ‘hole’ in contemporary management competence, located at the interface between crafting competitive strategies and implementing them through the organisation. It now seems obvious that the HR function is not a fruitful nursery for developing the skills required to fill this hole. Nor are most other corporate functions like finance, planning, legal and secretarial, or corporate communications. Why? Because none of these functions naturally engender a rich understanding of the design and functioning of complex organisations.

In the 1980s there was great hope that the business planning and strategy function could provide the answers, but the early promise faded away when it became evident that rational analysis alone, without the full engagement of the organisation, was sterile as a basis for effective strategic action.

And if we look to today’s CEOs, especially those who come from a financial background, we see that all too often they also lack the necessary skills and insights.

What is needed is a new skill set, that can be infused into the repertoire of up-and-coming general managers.

Change Leadership Contemporary business needs a counterweight to the short-term financial orientation that emanates from many top managers. At a time when some in the financial markets and the press are beginning to question whether traditional analysis and strategies are really helpful in generating superior and lasting business performance, there is a unique opportunity opening up for ‘Change Leaders’ who can integrate business strategy with organisation development. These ‘Change Leaders’ would be people who can rise above the constraints of functional boundaries and take a ‘helicopter view’ of the business and organisation. They would see their job as bringing together the ability to:

- Understand the business and its surrounding environment - Understand how organisations, personalities and power dynamics work and how to engender effective action and change - Meld their organisation and business understanding to create integrated strategies - Plan, manage and co-ordinate major change projects.

On any board or business team, these perspectives would be worth their weight in gold.

13 Dimensions In order to be credible and effective, we see twelve dimensions in which Change Leaders must demonstrate competence:

1. Industry dynamics Understanding the strategic dynamics of their industries and how these are evolving – and what impact that will have on players in the industry

2. Economic factors Understanding the economic structure of their businesses and markets – and the factors that will make a competitor successful

3. Organisational modelling Modelling’ organisations that will be able to most effectively achieve business goals, implement key strategies and deliver operational effectiveness

4. Mediation Meditating between powerful individuals with large egos and strong self-interests in order to find a common agenda and alignment for strategic action

5. Organisational diagnosis Being able to diagnose and describe the strengths and weaknesses of the current organisation, identify gaps in organisational capability and define actions that will improve effectiveness

6. Understanding limitations Understanding the limitations of the organisation’s current capabilities – especially when a top team is considering moves such as an acquisition

7. Persuading colleagues Persuading colleagues of the relevance of organisation as a core strategic strength or weakness, and the business case for taking action to improve the organisation

8. Foreseeing impact Accurately describing and predicting the effects on business performance of organisational strengths and weaknesses – in ways that add value to others’ contributions and positively complement the Finance function’s perspective

9. ‘Live’ commentary Providing a ‘live’ commentary on the strengths and weaknesses of all facets of the organisation derived from personal contacts with managers and staff

10. Counselling / Coaching senior colleagues Counselling and coaching senior managers to help them cope with the business and personal challenges and pressures facing them

11. Understanding and managing change dynamics / levers Understanding the dynamics of change in large organisations and what leverage will be most effective. Planning and monitoring complex change projects

12. Using learning strategies Using learning strategies to support change and the development of new organisational competencies

13. Connecting organisational analysis with goals and objectives Designing processes that will routinely connect analysis of the strengths and weaknesses of the organisation, and key staff, with the evolving business goals and strategies.

Any takers?

Ian Pringle is Director of Human Resources, TDG plc, Charlotte Chambers is a Partner with Woodbridge Partners LLP and Don Young is Chairman, Value Partnership LLP.