Decision vs. Behavior Change

Some of the most painful moments of my business career have been watching CEO’s attempt to drive change with one arm tied behind their back – or with one eye blindfolded, or both.

They see and know only those changes that can be driven by decisions and mandates from the top – make a flashy acquisition, cut costs, invest in new technologies, hire or fire an executive. (See: Marisa Meyer @ Yahoo.) These types of actions can drive change and create value – done properly, but that’s a different story…

But these top-down decisions typically only address a small fraction of what should be on a CEO’s agenda. Sadly, these leaders don’t see -- or do not have the tool kit to deal with -- the types of improvements that require fundamental changes in skills and culture.

The failure to distinguish between decision-driven and behavior-dependent change has created more ex-CEO’s (and failed efforts) than any other single mistake. The basic concept is simple: “transformational change” (in performance, strategy, market positioning, etc.) can be created in two very distinct ways: (See summary chart.)

· Decision-driven. Big “yes/no” decisions driven from the top. Think M&A, entering/exiting new markets or geographies, re-branding, etc.

These are typically the comfort zone of traditional leaders and have a well-known set of tools. Think: Option identification, Cost-benefit analysis, GANT charts, Scenario Planning, etc.

· Behavior dependent. These are the improvements that require hundreds if not thousands of people to do things differently to improve quality, productivity, service, speed to market, safety, etc.

These changes are inherently messy, slower and non-linear. And hence can be quite frustrating to the leader looking for quick, bold actions and results. And they require a very different mind- and tool-set. Think: agile teams, process redesign, stakeholder management, etc.

Why is this distinction so fundamental? A leader needs to know what game they are playing and leading. Apply the wrong mindset and tools and failure will soon follow.

Now for a few nuance to make sure you capture the full value from this concept:

1. Both decision and behavior change add value. It’s not “either-or.”

2. Most transformational changes require a mix of decision-driven and behavior-dependent changes. The key is getting the balance and sequence right.

3. Start with the decision-driven change – when you can. They typically set the foundation and offer a quicker pay-back. No sense speeding product development if you are going to sell the division.

To help apply this concept to your own challenge and workshop this with your team, list your top 5 to 7 strategic priorities in tabular format and identify the mix of decision and behavioral actions to drive value creation. (See “Value Creation Analysis” Illustration.)