YSC Consulting - Leadership Resilience by YSC

LEADERSHIP RESILIENCE BUILDING STRENGTH AND ENABLING PERFORMANCE DURING TIMES OF CHANGE

ABOUT THE AUTHOR Shelley Winter is a Director in our Australia & NZ team, and is the Global lead for YSC Coaching and Resilience. Shelley began her career as a Registered Psychologist in the Royal New Zealand Air Force. As a Commissioned Officer, she specialised in organisational behaviour and aviation psychology. In 2003, she moved to the UK where she initially worked in the public sector as a Learning and Development Manager, and then joined YSC in 2005. During her time at YSC, Shelley has worked in YSC’s London, Sydney and Auckland offices, partnering with clients across EMEA and Asia Pacific. Interested in change and leadership transitions, she developed YSC’s Leadership Development framework and related services.

FINDING STABILITY AMIDST CHANGE Despite businesses investing over $60 billion in change management systems, frameworks, and skills each year in the US alone, change efforts repeatedly fail.

An important part of the reason why is that over the past few decades the challenge of organisational change has itself changed.

over the last five years – the most common being restructuring (74%), a change in leadership (64%), and downsizing (64%).

On the positive side, developments in technology and data analytics are enabling firms to both more rapidly cascade communications through their organisations and track the progress and impact of their change efforts.

However you want to characterise the time we live in, social, economic and commercial stability is not a part of it. People are experiencing change at unprecedented levels and, as a result, when firms engage in change efforts, they are effectively building on moving ground.

On the negative side though, the broader background context in which change efforts occur has become less stable; a heady concoction of accelerating technological change, unremitting global socio-political unrest, and persistent economic frailty. One result of this is that 98% of organisations have experienced some kind of major organisational change

To date, organisations’ response to this has primarily focused on using better systems and frameworks, in an effort to provide a kind of scaffolding to support change. Yet over the past few years, evidence has amassed showing that systems and frameworks do not in themselves create

a sufficiently strong and stable platform for change to take hold and work. They can certainly help, but they need something else, something to hold everything together and provide a secure base for building upon. And what the research has shown is that that something is people. Change efforts can only work if people make them work, and people can only make them work if they have the ability and skills required to adapt and change. Much of the research on this capacity for change has in recent years come together under the banner of ‘resilience’. So in this special issue report, we will explore exactly what Leadership Resilience is, why it has become increasingly essential for change management, and the practical steps firms can take to help build it. 03

THE BUSINESS CASE... Resilience is not a nice-to-have or something that is only needed in crises or trauma: It is a core business competence that every leader needs.

The personal case for resilience is clear and nothing new, and in fact seems to be increasingly heard. When we ask leaders about it (behind closed doors, to get an honest answer), the most common response we hear is along the lines of, “resilience is one of my strengths… or at least it used to be; but the pressure and change is just relentless, so it’s getting harder”. Even for those who have historically prided themselves on their resilience, it is becoming more of an issue. But that’s the personal case. What, though, is the business case and just why is resilience increasingly touted as a critical leadership competence every business should care about? 04 2018 YSC © 2018 YSC © 2018 YSC

The answer is simple: performance, innovation, and strategic change. PERFORMANCE Research has amassed showing what most business leaders already intuitively know: To perform well you need to be resilient. When resilience is lacking, motivation, discretionary effort, and organisational commitment all go down, and stress, absenteeism, and fatigue all go up. And the mathematics of this is simple: it all adds up to poorer performance. (Motivation, Effort, Commitment) + (Stress, Fatigue, Absenteeism) = Performance

And as with every other aspect of leadership, it is the knock-on effects that cascade through the organisation that can cause the greater damage, it is not just the impact on individuals. As leaders become distracted, overwhelmed or disengaged by the amount of change and pressure they hold, it negatively affects not just their performance, but also that of their entire team and broader business area. Nasty feedback loops can be created, as the stressed leader negatively impacts the performance of their team, which in turn creates more stress, which serves to only further impact the people around them, and so on. With a resilient leader, however, all this gets turned around and

they can have a positive, enabling impact on the people around them. So you need your leaders to be resilient, because what they feel and how they behave gets amplified throughout the organisation.

"RESILIENCE IS DEFINITELY ONE OF MY STRENGTHS – BUT HAVE YOU GOT ANY TIPS ON HOW I BECOME MORE SO…?" INNOVATION Tough times and new challenges can spark innovation. Of that there is no doubt. But only if you approach them in the right way. Tackle them with lowered resilience, and the associated stress, fatigue and reduced effort will lower people’s ability to think creatively and develop innovative solutions to meet their customers’ new and changing needs. The focus tends to shift to just delivering what needs to be done and sticking to what one already knows – so closing down possibilities rather than opening them up. Approach challenges with resilience, however, and leaders can create the right sort of environment for their people that is needed to drive innovation and continuous improvement. So while it is innovation techniques and processes that may get all the headlines in the management journals, it is resilience that creates the adaptive thinking and confidence for this innovation to occur. CHANGE A related, but broader, issue is people’s ability to change and adapt and implement new strategies. We increasingly hear leaders report that the changes required to cascade new and evolving strategies through their businesses seem to be becoming harder to achieve. And a big part of the reason for this seems to be that change itself is something that is getting harder. We live in a world

in which we are surrounded by a heady concoction of accelerating technological change, unremitting global socio-political unrest, and persistent economic frailty. And it is against this backdrop that leaders have to try to drive business change and transformation. So change is not just about changing anymore; it is about adapting and learning whilst also trying to cope with all the background flux. To help change happen, organisations have historically taught change management skills – how to create frameworks and processes, as if laying down tracks for people to follow. But what they are having to do more and more is to also equip people with the personal skills needed to follow the

tracks and maintain their balance amidst all the change. And that is where resilience comes in. Over the past few years, then, the business case for resilience has grown to an extent where we have now reached a tipping point. The days when resilience was a niceto-have or something to be taken for granted have gone. The times are just too hard, too competitive; and the stakes too high. Every ounce of performance counts, every improvement and innovation is needed to stay ahead of the game, and the ability to change and adapt has become an everyday core competency. And for each of these, businesses need resilient leaders.

CHANGE FATIGUE – CLICHE OR REALITY? We have been told for some time now that the pace of change is increasing. It has become a new normal to hear it said. But are things really speeding up and becoming less certain? In short, yes, and here’s the evidence: Corporate longevity is decreasing: US companies listed on the NY Stock Exchange before 1970 had a 92% chance of existing ten years later (in 1980), but companies listed after 2000 have only a 63% chance of being around now, even after controlling for economic downturns. Exec tenure: The typical tenure of CEOs has reduced significantly over the past decade. 30% of Fortune 500 CEOs have lasted fewer than 3 years in office; 2 out of 5 CEOs fail in their first 18 months on the job and, in 2015, turnover among global CEOs reached a record rate of 17%. M&A: 2015 was the most active year for M&A with 42,300 deals announced worldwide. Enterprise change: The average organisation has experienced five enterprise changes in the past three years. These include culture change (78% of organisations), restructuring (69%), market expansion (61%), key leadership transitions (52%) and merger and acquisition activity (29%). In the 90s and early 2000s; change management was an event that people prepared themselves for and found a way to ‘get through’. It now seems ceaseless.

INOCULATING AGAINST ORGANISATIONAL TOXINS Laying behind each of these three core business benefits of resilience is the simple fact that the more senior people become, the more important their level of resilience is for their organisation’s success. This is because what leaders largely do is set the environment that people work within – the things they focus on, the way they behave, and how decisions are made. And this environment can either inoculate and protect a business from the negative impacts of tough, uncertain and challenging times and use them as a platform for growth – setting it up for success; or it can inadvertently amplify all the negative impacts. "I

FEEL LIKE I’VE CLIMBED A MOUNTAIN, I AM ABOUT TO REACH THE TOP BUT I FIND ANOTHER MOUNTAIN." The most obvious such impacts are commercial challenges, the need for efficiency, good risk management, and sustained revenue growth. But tough, uncertain and challenging times can also do something more insidious – they can change how people behave, and not necessarily for the better. We call these negative behavioural effects organisational toxins, because they can become like cultural poisons, lurking beneath the surface of dayto-day operations, while poisoning a businesses’ ability to respond effectively. The most personally obvious such toxin is stress. Unsurprisingly, levels of stress in senior leaders have repeatedly been found to be higher in tough and uncertain times, and while stress can have all sorts of impacts on people, few leaders are made better by it. Then there is gossip and political behaviours. Both of these have been found to increase with higher uncertainty and lower business optimism, and both undermine the core business foundations of trust and collaboration. 06 2018 YSC © 2018 YSC © 2018 YSC

Similarly, hard times also tend to see an increase in siloed operating. People become more head-down and focused on just achieving their immediate objectives, and less willing to do anything – like helping others – that places pressure on their resources. And related to this, there is the danger of a descent into detail. As hard times tend to increase focus on delivery and targets, so leaders can all too easily find themselves more drawn into the detail of delivery. Everyone seems to step down a level as delegation becomes derailed, and strategic thinking is forgotten. Finally, come three toxins that all undermine decision-making. First, group-think – the tendency for debate and dissenting voices to be suppressed – becomes far more common. Second, decisions tend to be driven more by short-term pressures. And third, comes changes to the pace of decision-making. Businesses tend to show one of two responses here, with leaders becoming either more rapid, or more risk-averse and slower. This is sometimes entirely appropriate, but it also increases the likelihood that decision-making will become too fast or too slow. These, then, are the cultural impacts that tougher business conditions can breed and the extent to which organisations are effected by them tends to be almost entirely due to the resilience of their leaders. There is good news here, too. Because while we might commonly think of resilience as a personal quality that someone either has or does not have, in fact the research shows that it is something that changes over time, and can be developed and grown. Which brings us to how to practically and proactively do so.

YSC’S MODEL OF LEADERSHIP RESILIENCE that it is admirable and shows fortitude. But without flexibility of thought alongside perseverance, leaders can find themselves tenaciously pursuing a path that is no longer viable or relevant. Perseverance without keeping the bigger picture in mind to adjust the path that we take leads to burnout. Recovery is the resource people are most familiar with, but often de-prioritise when pressure increases. It is making time to reflect, rest and re-energise. Lastly, Adapting is using change, failures or mistakes and new experiences as a source of learning. Unfortunately, most of us stop prioritising our resilience when the

The model consists of five key resilience skills or resources: Support, Confidence, Striving, Recovery and Adapting. All of them can change over time and all can be developed.

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Resilience is multi-faceted – it is more than bouncing back and recovering from a setback. It is about managing our energy and having strategies to draw on when faced with change and challenge. Support is the social strategy. Studies show us that having quality relationships and drawing on those in times of stress decreases our negative emotions and increases our ability to problem solve. Confidence is the belief in our capability that extends beyond our comfort zone. It is deep enough to see setbacks as temporary and not personal, and it is a stable core than enables us rise to new challenges. Striving is a mix of perseverance and flexible thinking. In recent years, perseverance has been almost overly focused on, in the belief

pressure comes on. We stop asking for support, we start to doubt ourselves, we lose sight of the bigger picture, we don’t give ourselves time to re-charge, and we become more rigid – sticking to what we know. YSC has developed a diagnostic called the Leadership Resilience Profiler™, which helps leaders to audit their current resilience practices. This is not a tool for checking whether someone is resilient or not. It is a tool that helps show leaders their current resilience behaviours, profiles the degree to which they are fostering the five resources in their teams, and provides some strategies and tips to increase these.

PR O ST M OT E S R IV I NG

By combining academic research from psychology and organisational change with real world client insights, YSC has developed a model of Leadership Resilience that helps businesses identify the levels of resilience in their leaders, and helps leaders build these resilience levels in both themselves and their people.

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SUPPORT

CONFIDENCE

Support represents the ability to build positive relationships which create systems of support that can be drawn upon during stressful events, times of change or challenge. Even in the absence of challenge, positive relationships in the workplace increase enjoyment and job satisfaction.

Confidence represents the capacity to build belief in one’s abilities to perform a task, respond to challenges and achieve goals. Confidence is cyclical: performance or achievement of goals affects confidence which in turn affects performance. Therefore, setting tasks or goals at the right level of difficulty to build confidence is key to growth.

Studies have shown that resilient people have strong networks and active relationships. It is not about the quantity of relationships, but the quality of your connections and how you draw on your network for support. Key relationships serve several purposes: they can just be there to listen, they can provide us with different perspectives and they can normalise some of our emotions. Positive relationships are also one of the strongest predictors of a long life.

SUPPORT IS • Knowing when help is needed. • Talking through challenges. • Proactively offering support. • Processing negative emotions.

SUPPORT IS NOT

Studies have shown that people with high levels of confidence are less reliant on external sources of validation; they are more persistent in the face of challenges and put more effort into achieving their goals. The stronger the conviction that one can successfully execute a task, the more positive effect on performance. There is a caution however, that overconfidence can have negative effects on performance.

CONFIDENCE IS • Knowing your strengths and weaknesses to draw on in difficult times. • Acknowledging your strengths and weaknesses. • Having the courage to seek out new challenges or put yourself in new situations to learn. • Putting self doubts into perspective.

• Going it alone to be strong. • Waiting for people to ask for help. • Only being positive.

CONFIDENCE IS NOT • Believing that you are better than everyone else. • Only focusing on strengths and ignoring your weaknesses. • Only doing what you know. • Believing everything will go perfectly.

STRIVING

RECOVERING

Striving represents the ability to persevere by seeing multiple routes to a goal in the face of challenges. Essentially, striving encompasses a broad-minded approach and perseverance. Whereas many people overcome obstacles by channelling their energy into one strategy, true striving is being creative in seeing numerous approaches to reach the goal. Perseverance, goal setting and willpower are often referred to as ‘grit’. Willpower is the degree of determination to keep working toward the goals. Willpower is like a muscle, you need to use it to build it up and it can be over-used.

Recovering represents the ability to re-energise towards a goal following a setback. In order for people to successfully rebound from challenges they must take time to mentally, physically and emotionally recharge. This resting phase is critical, yet most individuals and leaders tend to short-change this part of the healing process. Recovery calls for people to employ different strategies and routines to effectively manage energy levels and maintain balance in the face of competing demands. People with greater resilience tend to engage more deeply with their experiences, enabling them to better process emotions, reflect and develop perspective. This means that they are better placed to refocus their efforts and direct their energies towards achieving their goals.

Studies have shown that people who are high on grit or perseverance are more likely to achieve their goals and more motivated to learn through challenges. Goal-setting studies show that goals focus attention and efforts to generate purposeful activity and they increase determination to succeed.

STRIVING IS

Studies have shown that good eating, sleeping and physical habits decrease the experience of stress and increase resilience. Recovery activities that become habits help to manage one’s energy, to be able to respond to setbacks and to create sustained momentum for change.

• Moving towards a goal. • Hope, backed up with effort. • Perseverance with a flexible focus.

RECOVERING IS • Proactive energy management to be at your best and to re-energise after setbacks.

STRIVING IS NOT • Sheer effort alone. • Doing the same thing over and over and expecting a better result.

• Using multiple physical and mental strategies to manage your energy. • Understanding that setbacks are normal. • Acknowledging recovery is different for everyone.

• Beating someone else. • Change for change’s sake.

RECOVERING IS NOT • Complacency or laziness. • Procrastination. • Relying on vices.

ADAPTING Adapting represents the capacity to incorporate new learning to evolve with a changing context. It encompasses a tendency to reflect on past experiences, to form insights and new strategies for the present and anticipate future challenges. More adaptable people will display greater sensitivity to the nuances of their changing context and agility in the way that they respond to these dynamic demands. Studies have shown that resilient people learn from their experiences and develop new perspectives. Resilient people also identify opportunities to apply their new insights. Adaptive thinking is integral to being a learning organisation that fosters innovation and evolves with the change around them.

HOPEFUL THINKING IS LINKED TO HIGHER LEVELS OF INNOVATION. It is linked to better divergent thinking – including generating of ideas and adding more detail to ideas.

96% OF SENIOR LEADERS FEEL SOMEWHAT BURNED OUT. A third describe it as extreme.

ADAPTING IS • Learning from past experiences to form new perspectives for the present. • Seeking out new contextual information in the present to anticipate the future. • Letting go of thinking that is no longer relevant to the current context. • Generating new ideas or opportunities to go after in the future.

ENGAGEMENT IS HIGHLY LINKED TO THE RELATIONSHIPS YOU HAVE AT WORK... • Having a close friend in the workplace improves employee engagement by 50%. • Engagement is highly influenced by the relationship with the line manager.

ADAPTING IS NOT • Reacting. • Expecting all change to be transformational. • Discrediting the past. • Keeping your head down and surviving change.

70% OF PEOPLE WILL EXPERIENCE IMPOSTER SYNDROME AT LEAST ONCE IN THEIR LIVES.

MARKETS DEMAND THAT COMPANIES AND PEOPLE ADAPT AND CHANGE CONSTANTLY. 88% of companies appearing on the Fortune 500 list in 1955 were not on it in 2014 (having merged, gone bankrupt, or fallen off the list). (AEI, 2014). 10 2018 YSC © 2018 YSC © 2018 YSC

HOW TO BUILD RESILIENCE... In recent years there has been a surge of interest in Resilience, as organisations have begun programmes to boost the resilience of their leaders and broader workforce. In their rush to do so, however, many of them have fallen into one of three common pitfalls.

can do, too, from one-on-one work with a coach to discussing in teams or with peers what to do, and – importantly – tracking progress with their manager. With all such solutions, the aim is to develop small behavioural routines that people can repeat day-in, day-out. IT’S HOW AS WELL AS WHAT Finally, there are three critical things to remember about how you set up interventions to make sure you succeed in raising resilience levels. WALKING THE TALK

PITFALLS Focusing on well-being. In a recent survey of over 100 HR leaders, we discovered that the majority of their organisations provided well-being programmes, such as exercise classes, nutrition advice, and education on mental health issues. Almost half the group had tried introducing mindfulness programmes. These are all important and necessary for resilience in terms of managing our physical and mental energy, but they are not enough. Leaders and their people also need thinking, learning and social strategies to deal with increased performance pressures and change. Reaching for a quick, one-off fix. Wanting a quick solution, firms can be tempted to bring in one-off interventions. Yet these rarely have the desired impact. If you want a sustained effect, you need a sustained programme. Relying on education. Interventions that are purely educational are not enough to create change. Instead, to work, education needs to be accompanied by supporting processes – techniques and tools – that people can use to help them change.

rely just on education? For an answer, we need to look to the psychology of change, and follow three simple steps. STEP 1: DIAGNOSE CURRENT RESILIENCE The first thing people need to be aware of is what their current resilience is like – where their resilience is strong, and where less so. Rather than being a single thing, Resilience is made up of a mix of skills, like confidence, persistence, adaptability, finding support, and recovering. Knowing which of these components they have strengths or weaknesses in enables people to know what they need to do to improve their resilience. STEP 2: KNOWING WHAT TO DO The second step is where the education comes in – suggesting tools, tips and techniques people can try to improve their resilience. STEP 3: BUILDING RESILIENCE HABITS

Habits are things that we do regularly, automatically and unconsciously. As such, they are a kind of holy grail of behaviour change, because once you have created them, they tend to last. HOW TO GET IT RIGHT Research shows that just giving people information on how to build habits can How then can firms surmount these significantly improve the changes that challenges and provide programmes that do not just focus on well-being, are they will make to their behaviour. But not just one-off interventions, and do not there are plenty of other things firms

Resilience needs to start at the top. Behaviours of the Executive team and their leaders set the cultural tone for the organisation. They are the enablers or inhibitors of a resilient culture. WE DON’T ALWAYS DO WHAT IS GOOD FOR US Raising awareness is not enough. Education sessions may start a new conversation around resilience but on their own they rarely lead to change. People need the opportunity to create a personalised approach to identifying and committing to resilience strategies that will work within their rhythms. Acknowledging their individuality in the intervention helps leaders to choose meaningful personal changes. However, running interventions in groups ensures that there is a collective change effort which fosters peer support and uncovers organisational barriers to resilience. IT IS NOT ALL ABOUT YOU! When we hear the word resilience, we are automatically self-centred, we think about our own resilience. We compare ourselves to others (and secretly hope we come out best). But resilience is a collective resource, and as a leader you are in a unique and empowering position to enhance the resilience of those around you. It is a gift for life that you can offer your people. Facilitating resilience growth in others will become a fundamental leadership competency in the future. 11