Baroness Thatcher and the challenge of embracing change

The heated debate and street demonstrations that erupted as soon as the former Prime Minister’s death was announced illustrate rather brilliantly two key elements which I see as indispensable to obtain an endorsement  – or at least acceptance –  of profound change, be it within a company or on the broader scale of a whole nation :

  • the importance of justifying the need for change by communicating also about the alternatives to the proposed change;
  • a recognition that driving change inevitably results in casualties.

Understanding the alternatives in order to accept the chosen course of action

The broadening of the gap and poor since the 1970s is a fact, but there is no consensus on whether Margaret Thatcher made Britain a better or worse place (all depending upon one’s own definition of “good”).

The media shown us archive footage of garbage bags piled several storeys high in London’s Leicester Square, bodies in storage waiting to be given a decent funeral, power cuts and empty supermarket shelves during the lorry drivers’ strike, and the violent protest and riots which spread across many parts of the country after the Prime Minister decided that enough was enough.  Interestingly, many of those demonstrating today against the Thatcher legacy or propelling the Munchkins’ controversial “Ding Dong! The Witch is Dead” song to number two in the hit parade are too young to remember the unpleasantness and violence of that era.  But what they are protesting against is the state of the world today.

Yes, today’s world is indeed a hard place, with high unemployment in mature economies under ever growing pressure from emerging markets, and many people have good cause to be unhappy.  But any situation, good or bad, can only be assessed by comparison with other possible outcomes.  Where would thirty more years of under-investment, ageing infrastructure and declining competitiveness have led the British economy?  We are living through tough times, but the alternative had no drastic action been taken three decades ago does not bear thinking about and most of the media and politicians have missed an opportunity to emphasize this point sufficiently.

Likewise when businesses embark on some radical change, such as a merger or major acquisition, most of them deploy their best efforts to communicate their vision and strategy to their staff and other stakeholders, but seldom is there any articulation of what the alternative courses of action might have been and why the one they chose is the best.  Beyond creating awareness and promoting a degree of understanding, how does the Executive team of a business hope to generate acceptance and adoption of a proposed change if the scenario is not placed in the broader context of other alternatives ?

Communicating about the alternatives to the chosen course of action is of course twice as much effort as just focusing on the latter, but it does pay dividends :  an unpalatable scenario becomes acceptable if it is perceived as the least of several evils.

Utopia : profound change with no casualties

We all know that leading change can be tough, the reason being that invariably one or several of the stakeholder groups affected by the change will prefer the status quo, or possibly a course of action other than the chosen one.  If that were not the case, the change would happen spontaneously, fuelled by the aligned aspirations and expectations of all involved.  In reality, any profound change will require many individuals to make a great effort, or accept an erosion of the circumstances they currently enjoy, or fall victim of the change.

Accepting (even reluctantly) that a forthcoming change will require an effort, and might be detrimental to one’s interest, requires an understanding of the alternatives, as explained above.  However, for those the change will cause to be casualties, only two things can help them to accept their fate : compensation or, when this not affordable, recognition.

Businesses undergoing a transformation will take the compensation route to at least partly alleviate the adverse impact suffered by their casualties, be it in hard cash as well as additional measures designed to support the redeployment of those individuals in other employment.  But when the scale of the casualties extends to a whole nation, offering equitable compensation and re-training to millions of individuals is hardly an option.  And that leaves recognition as the only fair consolation those casualties can be offered.

Spot the difference

Obtaining acceptance for a strategy by highlighting the likely outcomes of its alternatives, and demonstrating fairness towards those who will fall victim of that strategy, are two essential conditions for that strategy to be judged favourably when people will look back on it in the future.

This will be a key difference between the only two Prime Ministers of the 20th century whose coffins were taken by a horse-driven gun carriage to a funeral attended by the Queen :

  • Sir Winston Churchill convinced a nation of the need to fight a war.  The population endured very difficult years and suffered terrible losses, but the consequences that would have resulted from not fighting the spread of Nazism were rapidly plain to see and remain clear nowadays.  Many lost their lives or were left with severe permanent injuries: they were the unavoidable casualties for a better cause. The nation reveres them, they have the status of heroes, monuments have been erected to honour their memory and acknowledge their sacrifice.  Sir Winston Churchill goes down in History as a Prime Minister and great leader who saved the nation and large parts of the world.
  • Baroness Thatcher convinced a nation of the need to improve Britain’s competitiveness by deregulating and privatising large sectors of the economy and curbing the power of trade unions.  The nation endured very difficult years, with strikes and riots.  Several industrial sectors collapsed, affecting entire communities.  But whereas Churchill’s Britain was faced with an immediate threat, Thatcherism was addressing the far longer term issue of the gradual demise of the British economy.  Today, a majority would agree that the situation would be far worse nowadays had the nation not addressed its lack of competitiveness in what was evolving to become a global economy.  Those who lost their businesses or jobs and livelihood were the unavoidable casualties of the economy’s reconversion.  But unlike the heroes of World War II, the casualties of the Thatcher era did not receive much consideration and were viewed by many as unproductive resources, the dead wood of the British economy.  Today, those casualties are all but forgotten.  Many of them will never forgive Baroness Thatcher for having ruined their lives, echoed by part of the population who feel some empathy for what was inflicted upon those casualties.  Baroness Thatcher will go down in History as the Prime Minister who split public opinion into two camps, opposed as strongly today as they were during her tenure, of a minority who will remember her as a callous autocrat who inflicted hardship on millions of people, and a majority who acknowledge her as a Prime Minister and great leader who saved the nation and large parts of the world.

There are some interesting lessons to be learnt, not only for future politicians, but for business leaders aspiring to leave a lasting legacy.

 

About Paul Siegenthaler

Paul J Siegenthaler has helped numerous merging or acquired companies to integrate successfully, and has driven major business transformation programmes across Western Europe and North America, ensuring they deliver the business case their shareholders had been promised. Following a Masters degree in Economics from H.E.C. Lausanne and an MBA at London Business School, Paul spent the first 17 years of his career as Managing Director reshaping the companies acquired by an international group, before focusing solely on the business integration of broad scale international mergers and acquisitions, across a number industries.
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