Today many managers are forced to lead with their hands tied. Stock options have lost much of their power to motivate. Each round of disappointing earnings has tended to lead to more layoffs and deeper budget cuts. Yet even under these dismal circumstances, managers are expected to deliver the kind of uplifting returns that shareholders grew accustomed to during the nineties.

Take Rod Eddington, British Airways’ chief executive. Eddington was brought in to turn around BA when the company was haemorrhaging £200 million a year and was forced to cut 23 per cent of its workforce and £650 million in costs. Not to mention the threat of terrorism and a shaky global economy. Eddington, of course, is not alone.

Vivendi Universal’s new chief executive, Jean-René Fourtou, or Ed Breen at Tyco, are examples of executives facing similar challenges.

How can today’s managers effect dramatic change when time and money are scarce? As management researchers, we have long been fascinated by what triggers high performance or brings an ailing organisation back to life. In an effort to find the common strands underlying such performance generation, we have built up a database of more than 125 business and non-business organisations. Our research found four hurdles that consistently prevent managers and HR professionals from effecting high performance: the cognitive hurdle that blinds employees from seeing that radical change is necessary; the resource hurdle that is endemic in firms today; the motivational hurdle that discourages and demoralises staff; and the political hurdle of internal and external resistance to change.

To effect performance, HR needs to understand how to knock these hurdles over fast and at low cost. Our research found that the key to this is what we call “tipping point leadership”. The theory of tipping points hinges on the insight that, when the beliefs and energies of a mass of people create an epidemic movement towards an idea, fundamental change can happen. Unlocking an epidemic movement, however, doesn’t require the epidemic effort most companies attempt. On the contrary, it rests on concentration of efforts, not diffusion. It builds on the reality that in any organisation there are people, acts, and activities that exercise a disproportionate influence on performance – like in bowling where hitting the kingpin knocks down the other nine pins. Contrary to conventional wisdom, meeting a massive challenge is not about putting forth an equally massive response. Rather it is about conserving resources and cutting time by focusing on identifying and then leveraging the factors of disproportionate influence in an organisation – the kingpins.

To achieve tipping point leadership, organisations must identify what factors exercise a disproportionately positive influence on each of the four elements (see diagram, overleaf).

How to remove the cognitive blinder – fast
Most companies that want to wake up their organisation to the need for radical change make their case by pointing to the numbers. But numbers simply don’t cut it. To line managers, the case for change seems abstract and remote.

Units that are doing well feel the criticism is not directed at them, while managers of poorly performing units get nervous and defensive, and often start scanning the job market instead of trying to solve their problems.

To get around this, managers need to make people experience harsh reality first-hand. That’s the kingpin to knocking over the cognitive hurdle. People remember and respond most effectively to what they see and experience – “seeing is believing”. In the realm of experience, positive stimuli reinforce behaviour while negative stimuli change behaviour. Simply put, if a child puts their finger in a pudding and it tastes good, they will put their finger back in it again and again. No parental advice is needed to encourage that behaviour. Conversely, if a child puts their finger on a burning stove, they will never do it again – no parental pestering is required.

Tipping point leadership builds on this insight in two ways to inspire fast change that is internally driven of people’s own self accord.

To break the status quo, employees must be put face-to-face with the problem. When New York senior police officers were told to stop commuting to work in cars and to take the “electric sewer” (the subway) instead, they immediately saw the horror citizens were up against – aggressive beggars, gangs of youths jumping turnstiles, jostling people and drunks sprawled on benches. With that ugly reality, the officers could no longer deny the urgent need for change in their policing methods.

Numbers are disputable and hardly inspiring or memorable. But putting your managers face-to-face with poor performance is shocking, yet practicable. It exercises a disproportionate influence on tipping people’s cognitive hurdle. The managers of a major food supplier to hospitals in the US had focused on negotiating terms and conditions to lock into long-term contracts with hospitals that they claimed had no loyalty to suppliers. When the top managers were brought to the hospitals and made to try the food they produced, they gasped. No wonder customer loyalty was absent. It set them to totally rethinking the food items, food preparation, and taste of food sold to hospitals.

To tip the cognitive hurdle, you not only have to get your managers to see operational horror, you have to get them to listen to their most disgruntled customers firsthand. Do you ever wonder why sales don’t match your confidence in your product? Simply, there is no substitute for listening to dissatisfied customers directly. Philips Lighting North America was a very proud company. So proud that the sales force were convinced they were doing a first-class job even though they weren’t gaining market share and General Electric dominated the industry. That’s when the new business head had his sales force listen in on a phone conversation between himself and Bernie Marcus, the founder of Home Depot, the largest retail customer in the US lighting industry. “So Bernie,” he said. “How is our sales force doing?” Bernie replied: “Your sales force?” (His voice rising to a near shout.) “They never follow through with what they commit to, deliveries are late, quantities and styles are wrong. It’s a disaster. There are only excuses, no corrective action.” A dramatic attitudinal and behavioural turnaround occurred fast, as there was no place left for the sales force to hide.

How to overcome resource constraints
As managers today are asked to do more with less, how do you pay for reform? Most reformist managers do one of two things. Either they downsize their ambitions, dooming the company to mediocrity and demoralising their workforce. Or they fight for more resources from their bosses, bankers or shareholders – a process that can take time, and diverts attention away from the underlying problems that got them in trouble in the first place. That’s not to say that this is not necessary or worthwhile, but in today’s economy it is tough, to say the least.

So can you increase performance with fewer resources? When it comes to scarce resources there are two factors of disproportionate influence that managers can leverage to dramatically free up resources and multiply their value.

These are what we call resource hot spots and cold spots – the kingpins to knocking over the resource hurdle. Hot spots are activities with low resource input but high potential performance gains. In contrast, cold spots are activities with high resource input but low performance impact.

To identify hot and cold spots, HR professionals should ask two questions. What actions consume the greatest resources but have scant performance impact? And what activities have the greatest performance impact but are resource starved? How is it that at prime time check out hours in hotels, for example, customers are lined up several people deep, while employees stand without a client behind the concierge desk? Couldn’t the hotels create a leap in service by training people to be multi-skilled and jump to the cashier’s job at prime checkout hours? This is a clear example of a hot spot.

In searching for cold spots, a good place to begin is by eliminating or reducing administrative activities that consume substantial parts of employees’ time but add marginal value.

How to motivate your kingpins.
How do you motivate the ranks to make change happen? When most business leaders want to realign people’s incentives they turn to massive top-down organisational restructuring initiatives. But this is often a cumbersome, expensive, time-consuming process. For the change momentum to have real impact, employees at every level have to move en masse.

To trigger an epidemic movement of positive energy, the key is to concentrate efforts on your kingpins. These are people who are natural leaders, who are well respected and persuasive, or who have an ability to unlock or block access to key resources. When they are influenced, the rest of the organisation follows fast.

At the heart of motivating key influencers in an enduring way are two activities. First you have to put them in a “fishbowl”, and second you have to exercise “fair process” when driving performance through. Both are indispensable. Consider the New York Police Department (NYPD), which in two short years transformed itself from the worst to the best police organisation in America in the 1990s.

William Bratton, the department’s chief of police, had to motivate 35,000 police officers to do an about-turn in virtually everything they did. To achieve this, he began to identify his key influencers. He zoomed in on the 76 precinct heads. Why? They directly controlled between 200 and 400 police officers each. Getting these 76 heads galvanised to the new police strategy would have a natural ripple effect. These were, in short, his kingpins. The next step was to turn the stage lights on and set up the fishbowl. Bratton’s fishbowl was a bi-weekly crime strategy review meeting that brought together the city’s top brass to review the performance of the 76 precincts with all 76 precinct commanders in attendance. As each precinct commander was questioned on decreases and increases in crime in their areas, enormous computer-generated overhead maps and charts were shown behind them illustrating their performance. The commander was responsible for explaining the maps, how his officers were addressing the issues and why performance was going up or down.

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How to knock down the political hurdles
Politics is an unfortunate reality of any organisation. The more likely change becomes, the more fiercely employees married to the status quo will fight. To knock down the political hurdles, ask yourself two questions: first, who are my “devils”? Who will fight me? Who will lose the most by change? Second, who are my “angels”? Who will naturally align with me? Who will gain the most by change? These are your kingpins in knocking over the political hurdle.

The key here is to not fight alone. Get the higher and wider voice to fight with you. Isolate your detractors by building a broader coalition with your angels to discourage the war before it even has a chance to gain steam.

One of the most serious threats to Bratton’s reforms came from New York City’s courts. Believing that Bratton’s new policing strategy of zero-tolerance would overwhelm the system with small crime cases, the courts opposed his reforms. To overcome this opposition Bratton clearly illustrated to his supporters, including the mayor, district attorneys, and jail facilities, that the court system could indeed handle the extra “quality of life crimes” and in the long term their caseload would be reduced.

Then Bratton’s coalition, led by the Mayor, went on the offensive in the press with a clear and simple message: if the courts did not pull their weight, the city’s crime rate would not go down. The courts were isolated before the debate began. How could they publicly resist a policy that would not only make New York a safer place to live, but would ultimately reduce the number of cases brought before them? Bratton had won the battle: the courts would comply. He also won the war: crime rates did indeed come tumbling down.

Key to winning over detractors is knowing all the attacking angles and building up counter-arguments backed by irrefutable facts and reason. For example, when the NYPD’s precinct commanders were first requested to compile detailed crime data and maps, they balked at the idea, arguing that it would take too much time.

Anticipating this reaction, Bratton had already done a test run of the operation to see how long it would take: no more than 18 minutes a day, which worked out as less than 1 per cent of the commanders’ average workload.

HR is perhaps better placed than anyone else to assess the impact that change will have on individuals and groups and therefore identify the angels and devils. In doing so they can provide a key support role to managers.

Dramatic change is never easy. Dramatic change fast with limited resources is even more difficult. Yet, by consciously addressing the hurdles to tipping point change and focusing on factors of disproportionate influence, as outlined above, you too can practise this strategy – leadership that enables radical transformation in performance.

About the authors
W Chan Kim is the Boston Consulting Group Bruce D. Henderson chair professor of international management at INSEAD business school, France. Renée Mauborgne is the INSEAD distinguished fellow and affiliate professor of strategy and management. They are co-founders of the Value Innovation Network. This article is based on their two writings in Harvard Business Review, “Tipping point leadership”, April 2003, and “Fair process: managing in the knowledge economy”, January 2003. They can be contacted at chan.kim@insead.edu and renee.mauborgne@insead.edu

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W Chan Kim and Renée Mauborgne will be presenting the closing keynote address at the institute’s annual conference in Harrogate (22-24 October). For more information contact the CIPD on 020 8263 3434 or visit www.cipd.co.uk/annualconf-ex

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