CHAPTER 10

Framing Your Change Strategy

Fitting Your Approach to the Players

This chapter covers the ways you can deal with more distant powerful people. Because these individuals are less obligated to you, and not entirely sure of what you can do for them, this can be more of a challenge than working with your own boss.

If your goal is to change your organization for the better, you’re going to need help making these changes—specifically, from people who matter. You need to determine which individuals can either help or hinder you, who to take on, and in what order. This chapter will explore what matters to these people, and how you can use this information to get them on board.

Let’s look at the problem facing Kelly Prescott, senior regional account manager at a large international pharmaceutical company. Kelly was trying to win approval for a deal with a very tough customer, but not getting far with her boss’s boss, the senior director of national accounts. She thought he was being a jerk.

Before I can develop a contract with customers, I need to get my manager Amy’s buy-in. We then participate in conference calls or meetings to gain final approval. I then go back and forth with my customers before we finally strike a deal.

Recently, I was going through a very tough business case with Amy’s boss, the senior director of national accounts, and he was not budging. He didn’t seem to want to finalize the contract proposal for my customer. I knew my customers were going to be really upset; we were putting them in a situation where they essentially had no other option. I thought my boss’s boss was impossible, unsupportive, and providing totally unrealistic expectations.

After reflecting a bit, however, I realized that I needed to step in his shoes for a moment. His task as head of our department is our financial bottom line. We were in a dire fiscal situation at my company; it was a matter of survival. He was looking out for the company’s best interests.

Though it wasn’t normal protocol, I got my manager’s approval to approach her boss at our face-to-face meeting. I needed to prepare, have room to concede, and anchor hard in the beginning. Most importantly, I needed to keep my emotion out of it. In the end, he was so impressed that I approached him, had done my homework, had been prepared, and sold so hard, that he gave in on a couple of the points.

I learned through this situation that upper management’s motives might not always be what I want to hear. It’s their job to be tough, inflexible, and even a bit unrealistic at times. I also realize now how important it is to practice beforehand and remain unemotional.

Kelly had earned the trust of the first stakeholder—her boss—and then had to work on her boss’s boss. She realized while preparing that the latter was heavily influenced by senior management and the company’s current state. She was then able to depersonalize the issue and to work out an approach that he would take seriously.

One of the first steps in the influence process is to determine who the relevant stakeholders are. This isn’t that difficult when it is your boss; however, it can take close examination as you deal with senior managers, in or outside your organization. The more thoroughly you do your homework on this, the more prepared you will be. There are likely to be many stakeholders, each with his or her own particular concerns. You need to develop plans for identifying who they are, what they want, who to approach first, and how you will approach them. If you fail to identify powerful stakeholders from the beginning, you’re apt to be unpleasantly surprised.

This can happen to very capable people. For example, “Marie Truffaut” is a smart, intense manager in a very large diversified investment firm. Some of the firm’s investments are in deals put together by other big players. She was recently

. . . tasked with looking at the next fundraiser with a manager with whom we’ve worked for six years. I don’t see them as a good investor; they are at the bottom third of their peers, have lots of ego, spin, and are hard to deal with.

We discussed what we had to believe in order to invest in this fund, and knew it would be tough. While one of our larger older deals was with them, and it brought in 3.5 times our investment, the other six with them hadn’t done so well. Our new deal team did their research and decided not to invest.

Marie had been so focused on evaluating the merits of the new deal being offered (and so irritated by the past arrogant behavior of the fund manager) that she hadn’t thought about her own senior management. To her surprise, they were hard to convince that her firm should not go ahead.

I hadn’t realized that our own organization might not want to hear a no. Their reaction was: “How can we say no now after all the deals we have done with them? Investing with him might strike it big again, and he is well connected for other possible deals.” The fund manager is the kind of person likely to go right over my head to the top of our organization if we say no or make the terms as tough as I think we should. I didn’t sufficiently anticipate senior people’s thinking to see the challenge going forward.1

Marie was forced to figure out how to influence the internal senior managers as well as the fund manager. She might have gone about the evaluation of the deal differently had she figured out from the beginning who would care about the decision.

Failing to Identify Key Stakeholders—in or outside of the Company—Can Be Extremely Costly

Take the case of “HemoSeptrix,” a biotechnology company based in the Cleveland area, whose failure to understand its own peripheral environment was profoundly damaging to its fortunes. [Disclaimer: The names of this company and the people involved, as well as specific facts of the case, have been changed for privacy reasons; nonetheless, the details concerning the events that unfolded are true as provided by a person close to the situation. The story is presented as a cautionary tale for those thinking about possible impacts of stakeholders.]

HemoSeptrix was created in 2001 to use the mapping of the human genome to develop a cure for a deadly blood disease that had no good treatment option. As with all such companies, everything is pointed toward eventually getting Food and Drug Administration (FDA) approval for the drug, once the company has developed a prototype, and passed through Phase 1, 2, and 3 testing. The entire process often takes 10 to 15 years or longer.

The company had been founded by Dr. Desmond Baker, a brilliant but extraordinarily difficult and irascible researcher in hematology, and Dr. Walter Beckman, a former professor and prominent venture capitalist. Baker’s discoveries at Case Western University showed promise of being able to stop the course of sepsis in postsurgical patients, and if it worked and was approved by the FDA, would become a blockbuster product surpassing $1 billion per year in sales.

Difficult Founder

Although acclaimed as a brilliant researcher, Dr. Baker was widely disliked within the hematology community. Seen by his peers as arrogant, distant, and aloof, and by his students as explosive and dictatorial in the lab, he had few friends among his colleagues. He seldom attended scholarly congresses (unless as an invited speaker), and was feared for his famous “acid pen” as a journal peer reviewer. Many promising scientists had felt the sting of his editorials and letters in those journals as well, sometimes to their lasting professional detriment. Two such scientists, Dr. Ram Chandran and Dr. Bronwyn Chambers, later became close collaborators and key opinion leaders (KOLs) in the field in their own right, despite their difficult early encounters with Baker. (Key opinion leaders are physicians who influence their peers’ medical practice.)

Although not without complications, the Phase 1 and 2 results were promising, but the Phase 3 trials started more slowly than anticipated. Getting hemataceptin to patients during the critical phases of sepsis proved logistically challenging, and (as with previous trials in sepsis) the wide variety of patients with the condition sometimes made it difficult to determine which patients fell within the trial’s scope. The HemoSeptrix team spent many sleepless nights seeking ways to get the trials back on track.

As the trials fell behind and pressure on the company mounted, Baker’s behavior changed dramatically. He became even more impatient than usual, and increasingly unpleasant to staffers, the board, investors, and even to Beckham. After receiving his third call in one week from board members complaining about Baker’s insults, Beckham admonished Baker, “Start behaving yourself. You’re alienating everyone in your path with your insults and tantrums—including some very canny people who have invested faith, time, and money in you and HemoSeptrix, and who deserve your respect. And it has to stop. Now.”

Baker lashed out. “How dare you? I’m the only engine this company has. I’m the only reason we’re already in Phase 3, and I’m the only one who can drive this home. I’ve worked 18-hour days for years to move this compound forward, and now you’re threatening me because I don’t suffer fools and let them know it? This conversation is beneath you, Walt,” he said angrily. Beckham sighed. “Dez, I’ve been in this business for a long time, and if I’ve learned anything, it’s not to anger people unnecessarily. You’ll never know when it’ll come back to bite you, but I can assure you—it always will.”

Two weeks later a young researcher published a review article in a second-tier journal that critiqued the methodology for data analysis used by Dr. Baker and his students (including HemoSeptrix lead biometrician, Dr. Sho Mineta) in the last article Baker wrote while still at Case Western. Baker dashed off a scathing letter to the journal, savagely chastising the young researcher for her “temerity” and “superficial, flawed, and sophomoric thinking.” Two weeks after that, he ridiculed her from the podium at the annual meeting of the American Hematological Association (AHA), where he had been invited to speak on hemataceptin. The young scientist considered suing Baker for defamation but, fearing further retaliation, deferred.

In the audience at the AHA meeting that day was Peter Chen, an eminent biostatistician often called upon by the FDA to assess the validity of statistical models and conclusions submitted by drug companies. Angered by what he considered Baker’s bullying, Chen evaluated the data in question and, although unable to confirm all the woman’s arguments, he too found flaws that raised fundamental questions about Baker’s conclusions.

Although Chen did not publish his findings, he did include several slides in a lecture shortly thereafter to doctoral candidates. The slides, captioned “How Many in Baker’s Dozen? We May Never Know,” mentioned Baker and Sho Mineta by name, and subtly implied that some of the data might have been intentionally misrepresented to strengthen the writers’ conclusions. The slides were circulated widely on the Internet and resulted in a number of thoughtful, and some outraged, letters and e-mails within the academic hematology community. Among the writers were Dr. Chandran and Dr. Chambers, who felt some vindication for Baker’s past treatment of them. Completely absorbed with the Phase 3 delays, Baker ignored Chen’s slides and the controversy that followed.

Beckham, however, did not ignore it. He assembled the board and gave Baker an ultimatum—quit or be fired. “Bullying a young woman on a national stage is so unbecoming a CEO, I can scarcely believe you did it. The damage you’ve done to HemoSeptrix is substantial. I’m sorry, Dez, but you have to go.” After some negotiation, they agreed that Baker would continue to be a “consultant” to HemoSeptrix. They agreed as well that he would retain a substantial equity stake in the company and a royalty stream from the commercialization of hemataceptin.

Progress after Baker

With Baker gone, they hired Jonathon Schwartzman, a new, nonscientific, professional CEO to continue the work. After overcoming many challenges, HemoSeptrix made it through Phase 3 trials after four more years, with good but not great or unambiguous results. The 10,000-page application went to the preliminary advisory committee of the FDA, which wrestled with it (at least in part because of the controversies about the data analysis), but finally sent it to the FDA with a positive recommendation. This kind of recommendation resulted in FDA approval 85 percent of the time. Everyone at the company was jubilant and excited both about being able to bring a lifesaving drug to market and the potential financial payoff for their long hours of work.

Known Stakeholders Ignored—At Great Cost

Part of the FDA process was seeking the opinions of the experts in the field (KOLs). After the advisory committee recommendation, two of the leading experts, Drs. Chandran and Chambers, who had fought with and thoroughly disliked Dr. Baker, the founder, wrote very strong negative letters to the chair of the FDA about not trusting the reported results. They also worked on the related scientific community to raise doubts about the integrity of the company and the data, even though Dr. Baker was no longer part of it. The result of these letters and the surrounding controversy led the FDA, on the basis of inconsistent results in two trials, to require an additional confirmatory Phase 3 study before reconsidering hemataceptin for approval. The setback would cost the company years, tens of millions of dollars, and any hope of a prompt acquisition.

Many in the company knew that outside experts would be listened to, yet they ignored who the relevant stakeholders in the field were and what their possible responses might be. If they had considered this, the leaders within the company could have talked to them, brought them data, reassured them about the distancing of the founder, and done a variety of things to ensure that they would at least get a fair and objective hearing. Their failure to identify and address concerns of the important stakeholders has led to the need to redo and extend Phase 3 testing, at a cost of many millions of dollars.

In the words of a senior company executive, in rueful hindsight, could all this have been avoided?

Simply put: Yes. Had the HemoSeptrix team taken the time to look, they easily could have found those who would influence the FDA against them and either made those people allies or, at the very least, neutralized their power over the decision. And the clues were everywhere.

It’s vital to keep your eye on the ball; however, it can sometimes cause you to miss some key players. External stakeholders and groups have the potential to affect any organization or critical change project. For example, when clothing company Victoria’s Secret was attacked by the Forest Ethics Campaign for not using recycled paper in its catalogs, many of its executives wanted to ignore them, but when people started picketing in front of their stores, they realized this was not a good idea. Every company lives in an ecosystem that has multiple stakeholders who can be more or less visible and active—but who must be identified. Finding relevant stakeholders, in or out of the organization, is a critical task. And the reasoning and analytical process is the same whatever their level of power.

Start with a Power Map

You must start by figuring out what you want to accomplish and who is involved in that issue—people who need to cooperate in some way, those who should be informed or consulted, and those who will be directly impacted by what you’re doing. See Tables 10.1 and 10.2. It is worth being overinclusive in the beginning, adding anyone who might be an important influencer of the person or people you want to directly influence. As you go further, you may be able to eliminate some of these people, and keep the task from becoming too overwhelming. But if you are taking on a large issue, the relevant list may be quite extensive.

TABLE 10.1 Power Map

TABLE 10.2 Power Map (Part 2)

Stakeholder Power

Conduct a preliminary assessment of each stakeholder’s power. How much access to information, resources, and people do they have? What is your relative power in relation to each? (Keep in mind that you may well be able to increase this as you go along). Can you continue without their cooperation? Would their cooperation be helpful but not necessary to have? Or can you work around that stakeholder?

Partnership Mind-Set

Don’t forget that you need to approach even those who appear to be significant active blockers with a partnership mind-set. When people are resisting, it can be hard to sustain real concern for them and their interests. They might have a piece of knowledge or perspective that could make your proposal even stronger and more likely to be accepted by the “powers that be.” Don’t treat them as enemies until you can be sure that they have no potential organizational benefit.

You need to carefully examine the interests, power, knowledge, and agendas of every relevant individual, group, or organizational stakeholder—and determine who influences others. Although you might not be able to sway a powerful person, he or she might respond to someone else’s argument. Who has those connections? This complete analysis is critical for selling ideas or proposals, gaining backing for projects, neutralizing resistance, or otherwise making a difference.

Determining exactly what matters to the stakeholders can be an intensive process. (We will show more about how to do this in the next chapter, “What Do the Powerful Care About?”) Though it was extraordinarily complicated for Kelly Prescott, it required that she check with colleagues to get a sense of what mattered to her boss’s boss. She was able to do this once she considered what his role made him value.

The following are some questions that will help determine stakeholder interests:

• What is the issue or set of issues at stake?
• Who are the relevant stakeholders?
• What are their interests/stakes?
• What is the intensity with which the stake is held?
• What claims come with the stake?
• What differences and similarities exist across these stakes/stakeholders? (This is helpful if they are all going to be dipping their oar into the issue.)
• How can these stakeholders affect the issue?
• What actions can you or your organization take to affect the interests of each relevant stakeholder?
• What are your fallback plans?2

There are some other things you can do to collect data on needs in the organization when they are not immediately apparent. As we have already suggested in previous chapters, the wider the net of relationships you can build before you need them, the easier it will be to figure out what people care about and make exchanges with them. But if you do not already have these relationships, you can always do some research. Ask people you do know what the various stakeholders pay attention to, how they like to be approached, and what land mines to avoid. Asking people for this kind of information usually deepens previous relationships. It is a form of giving currency to ask for information because it assumes the person you are asking is important or astute enough to know the answer.

This process should allow you to identify people who can help you target the right individuals. Just be sure to be careful about how you ask and explain your interest in these people. If you frame it in terms of benefits to the organization rather than a personal power grab, word may get to your influence targets and dispose them favorably to your approach.

Of course, you need to be just a bit cautious about the quality of the information you are receiving, and beware of rumors or loose opinions that could lead you in the wrong direction. For example, “Monica Ashley,” an employee in charge of a radical product development effort at “Heal-Inc.,” was opposed by a powerful senior scientist who her boss and others said was impossible to influence. As a result, she never really talked to this man—and her failure to at least try to partially neutralize him increased his opposition and made her life quite miserable.3 The moral here—make sure you can trust the accuracy of your sources, or at least take them with a grain of salt, and decide whether to augment information with some direct data collection.

Sequencing of Action

The map you’ve developed can help you develop a strategy. Who will you start with? Are there any in the critical path who need to be influenced before you can go forward with any hope of succeeding? Are there any stakeholders you can ignore, or only need to neutralize? Do you have access to the critical ones? If not, how can you gain it?

It will help the process if you determine in which of the following categories your stakeholders fit:

• Innovators (likely to be favoring change and out front in trying ideas)
• Early adopters (ready to test new ideas)
• Early majority (open-minded and will go with what looks promising)
• Late majority (get on board once they see things moving in a new direction)
• Resistors (hold out against what they don’t like or don’t see how to use)4

You can use this scheme to determine where you stand, and who requires what kind of influence attention. Once the early majority is on board, the change crosses a tipping point that makes it likely to be adopted. This can help you sequence those you have to influence; you need innovators and early adopters on board to get some momentum started, so it helps to identify their interests early and make sure they are supportive. You can pay less attention early to likely blockers, but be sure to not make them feel excluded lest they dig in for reasons that have little to do with your actual concept.

The following scenario provides an example of how to consider stakeholders and their needs. Jo Ann Herold was chief marketing officer at the HoneyBaked Ham Company, where she sold marketing plans internally.

Because Herold needed a lot of people to cooperate, she concentrated on doing what was needed to move varying constituents:

I have learned to adapt presentations to the people in the room. Everyone is there with a different hat and talking from their perspective. I try to think about how it will affect each person, and find a way to articulate how it will impact their area. How can I address their issues up front?

Take, for example, the catalog. Our sales were not hitting where we wanted last year, so we introduced a shipping incentive at the last minute. We knew that it would hurt our bottom line if it didn’t get results. I worked with our finance department to determine the incentive’s financial impact. I worked with operations to be sure they were ready to pack the extra boxes, and with ops folks to be sure they were staffed for extra sales. I worked with purchasing to make sure the suppliers had the right inventory. I had to work with the marketing team to get the e-mail blast out, and made sure the phones were staffed so we could take extra orders. I was able to influence a lot of people to make it happen quickly.

You need to speak others’ language. I know that I have to understand how the functions fit in the bigger picture; the more I know, the more effective I am. Without that understanding, marketing people are labeled as “wacky.” You can be very effective when you understand the totality of the business—and realize that internal customers are as important as external.5

This kind of thought process often sounds obvious after the fact, but it can be hard to maintain when you are passionate about how wonderful your idea or plan or project is. It can feel frustrating to slow down enough to persuade powerful senior people who may be driven by different goals, perspectives, vision, preoccupations, and a number of factors that are not automatically visible to you. That’s why it’s so essential to identify all possible stakeholders and their concerns.

The following is a positive example of working out the complexities for a tough cross-divisional assignment with lessons in influence from a sophisticated manager named “Lucia Emerson.” She works at “Grandetech,” a very large international high-tech manufacturing organization. Her usual job is in supply chain in a program management role, always leading virtual teams, with sites all over the globe.

Remember, good work has to be paired with all the stakeholder planning and influencing activities.

We turn next to a more detailed view of how to figure out just what is important to each of the powerful people you need to influence. This is an extension of the basic approach spelled out in our influence model in Chapter 4, but even more focused on distant high-powered people who you may have to diagnose from a distance.

Notes

1. Personal interview with Allan Cohen, September 2011. Used with permission.

2. This list was developed by Liam Fahey, a strategy consultant, whose ideas have helped shape ours.

3. See “Monica Ashley” case, Cohen and Bradford, www.influencewithoutauthority.com.

4. This now widely adopted model was originally developed by George M. Beal, Everett M. Rogers, and Joe M. Bohlen, “Validity of the Concept of Stages in the Adoption Process,” Rural Sociology 22, no. 2 (1957): 166–168.

5. All of her comments were made to Allan in interviews and appeared in his article “CMOs and Influence,” The Chief Marketing Officer Journal (February 2009).