Clark: I'm Clark Waterfall, Managing
Director of BSG and Talent Sequencing.

Welcome to Talent by Design.

This year marks thirty years in
business for us, and this podcast

is part of how we're marking it.

Three decades of work on strategic
change, the leadership supply chain in

the age of AI, and the other big talent
questions of today, now in a new format.

One quick note, you're about to hear
Hugh and Elle, our two AI-generated

hosts, produced using NotebookLM.

Their voices are synthetic,
but the thinking isn't.

This is BSG and Talent Sequencing's
own research and experience,

just delivered in a new format.

Once a month, I'll also
join real guests live.

Look for Leadership Lessons
Learned, still part of this series.

Here's the show.

Hugh: Imagine spending like
ten million dollars on this

state-of-the-art software system.

Elle: Oh, wow.

Hugh: You know the one, right?

Elle: Yeah.

Hugh: It is perfectly designed
to save your company thousands

of hours and just, um, completely
revolutionize how you go to market.

Elle: Right.

It's the absolute dream scenario.

Hugh: Exactly.

So you roll it out You hold all the
mandatory training sessions, and

you consider this massive success.

Elle: Until you don't.

Hugh: Right.

Until you find out like six months
later that your entire team is

secretly still running the business
on local Excel spreadsheets.

Elle: It is so funny, but, I mean,
it happens far more often than

anyone actually wants to admit.

Hugh: I bet.

Elle: Yeah.

The corporate graveyard is just
full of these brilliant visionary

strategies that completely fell apart
the moment they, you know, collided

with the reality of human habits.

Hugh: Because wh- a leader can mandate
a new direction from the top, right?

But a mandate doesn't rewrite
the underlying operations.

Elle: Exactly.

And it definitely doesn't rewire
the people who actually have to

execute it on Tuesday morning.

Hugh: Which is… I mean,
that's exactly the core of our

mission for today's deep dive.

Elle: Yeah.

We are unpacking exactly how senior
leaders can successfully navigate

organizational transformation.

Hugh: Right.

Without ending up with those
secret spreadsheets everywhere.

Elle: Yes.

So for everyone listening, we are
looking at this master compilation of

the most established, well-known industry
frameworks for change management.

Hugh: And we are really treating these
frameworks not as like abstract theories,

but as highly practical operational tools
that you can apply immediately to whatever

transition you are facing right now.

Elle: Because honestly, when you are
in the middle of a massive pivot,

abstract philosophy is totally useless.

Hugh: Right.

You don't have time for that.

Elle: No.

You need diagnostic tools
to tell you exactly what is

broken and a roadmap to fix it.

I mean, if you are going to change the
trajectory of an organization, you first

need this incredibly accurate map of
the machinery you are trying to alter.

Hugh: So let's actually use a
tangible example to anchor this.

Let's say, um, a legacy tech company
has decided to abandon their traditional

one-off sales model and pivot entirely
to a subscription software model.

Elle: Okay, that is a huge shift.

Hugh: It's massive.

So if a leader uses the McKinsey
7S framework as their diagnostic

blueprint here, they quickly
realize they cannot just alter

one single piece of the machine.

Elle: Right.

Because the framework breaks
an organization down into

seven interdependent elements.

Hugh: Yeah.

They operate kinda like
a mechanical watch.

You turn one gear and, you
know, the others must move.

Elle: Exactly.

And the McKinsey model actually
divides those gears into hard

elements and soft elements.

Hugh: Okay.

Break that down for me.

Elle: Sure.

So the hard elements are
strategy, structure, and systems.

In your subscription software
scenario, the strategy shift

is pretty obvious, right?

Hugh: Yeah.

Moving from one-time purchases
to recurring revenue.

Elle: Right.

But you can't just shift the strategy
without totally rebuilding the systems.

Hugh: Oh, I see.

Meaning you need entirely new billing
platforms, uh, new customer data tracking

and, like, automated renewal triggers.

Elle: Exactly.

And if you change the systems, well, you
immediately run into the soft elements.

Hugh: Which are?

Elle: Staff, skills, and style.

And style here refers to the
leadership and cultural style.

Hugh: Right.

So if your legacy staff only really
possesses the skills for closing

those, like, high-pressure one-off
deals, they are going to fail.

Elle: Completely fail.

Hugh: Because the subscription software
model requires continuous relationship

management and customer success.

Elle: So the entire web
has to move together.

Hugh: It has to.

Elle: And anchoring all six of those
elements right at the very center

of the 7S framework is the seventh
S, which is superordinate goals.

Hugh: Superordinate goals.

Elle: Mm-hmm.

Hugh: So that's like the fundamental
mission or the core values of the company.

Elle: Exactly.

Hugh: Okay.

Elle: If the overarching mission doesn't
align with the new strategy and those

required new skills, the transformation
will basically reject itself.

Hugh: Like a bad organ transplant.

Elle: Yes, precisely like that.

Hugh: But, you know, diagnosing
what to change with the McKinsey

7S framework is crucial.

But it introduces this
massive risk, right?

Elle: Oh, huge risk.

Hugh: Because while a leader is busy
ripping out the old billing systems

and trying to retrain the sales staff,
the company still has to make payroll.

Elle: Right.

They still have to function day to day.

Hugh: So this is where Noria's research
on management practices provides this,

like, really necessary guardrail.

Elle: Yeah.

Noria's model looks at what actually
makes companies high-performing

over the long haul, specifically
when they are under a lot of stress.

Hugh: And what did he find?

Elle: Well, he identified four
non-negotiable primary practices.

Those are culture, structure,
execution, and strategy.

Hugh: Okay.

Elle: The key insight here is that a
high-performing company has to excel

at all four of those simultaneously.

Hugh: Wait, so which means if you
are overly focused on redesigning the

strategy for that new subscription
software and you let execution slip…

Elle: Yep, the whole
company underperforms.

Hugh: Wow.

Meaning if your day-to-day bug fixes
and customer service response time

suddenly drop, you are in trouble.

Elle: Exactly.

You don't get a pass on basic
execution just because you are in

the middle of a strategic pivot.

Hugh: That makes a lot of sense.

Elle: And then Noria couples
those four primary practices

with four secondary practices.

Hugh: Which are what?

Elle: Talent, innovation, leadership,
and mergers and partnerships.

Hugh: Okay, so a bit more variety there.

Elle: Yeah.

Companies actually have a
little more flexibility here.

To differentiate in the market,
they really only need to excel at

two of these secondary practices.

Hugh: But they must maintain
absolute operational discipline

on those primary four.

Elle: Right.

So synthesizing Noria with
the McKinsey 7S really gives

a leader a complete dashboard.

Hugh: You use 7S to map out which
organizational gears you need to

replace, and you use Noria to ensure
the engine doesn't just, like, stall

out while you are making the repairs.

Elle: Exactly.

So we have the mechanical blueprint.

But there is a fundamental truth we have
to confront about all this machinery.

Hugh: Right.

Organizations don't actually change.

Elle: Nope.

Hugh: Only people do.

Elle: Yeah.

Hugh: I mean, a company is just
a legal fiction wrapped around

a collection of human beings.

Elle: I love that phrasing.

And transitioning from the
what to the who requires a

completely different set of tools.

Hugh: Right, which brings
us to William Bridges.

Elle: Yes, William
Bridges' transition model.

It makes a really strict and vital
distinction between change and transition.

Hugh: Okay, how so?

Elle: Well, change is situational.

It is the new policy, the new
subscription software platform,

the new organizational chart.

Change happens on a specific date.

Hugh: Right, like launch day.

Elle: Exactly.

Transition, on the other hand, is
the psychological process people

go through to actually come to
terms with that new situation.

Hugh: And Bridges breaks that
psychological process into

three distinct phases, right?

Starting with, and this is kind
of counterintuitive, an ending.

Elle: Yes.

Every transition begins with an
ending because people have to let go

of the old reality before they can
even begin to embrace the new one.

Hugh: Right.

Elle: In that initial reaction
phase, employees are losing

the way things used to be.

They might be losing a sense of
competence, a familiar routine, or

even just their perceived status.

Hugh: So the immediate reaction
is often, like, denial, shock,

or just outright resistance.

Elle: Totally.

And from there, they move into what
Bridges calls the neutral zone.

Hugh: The neutral zone, which
sounds okay, but it's not, is it?

Elle: Not at all.

It means the old way is gone,
but the new way isn't fully

functional or familiar to them yet.

It is incredibly uncomfortable.

Hugh: Oh, I can imagine.

It is characterized by high
uncertainty, anxiety, and

just this deep disorientation.

Elle: Right.

People feel incompetent because the
skills that used to make them so

successful are just no longer applicable.

Hugh: And they haven't mastered
the new system yet either.

Elle: Exactly.

Only after navigating that difficult
middle can they actually reach the

third phase, which is the new beginning.

Hugh: Where the change is finally
internalized, new habits form, and

genuine commitment actually takes root.

Elle: Yes.

And we can actually overlay Bridges'
psychological phases directly

onto FranklinCovey's change curve.

Hugh: Oh, right, because that charts
this entire human experience by tracking

performance and morale over time.

Elle: Exactly.

The Covey curve gives
us four distinct stages.

It starts with denial.

Hugh: Right.

So people might just quietly
ignore the announcement of the new

subscription software, assuming
it's just, you know, another

leadership fad that will blow over.

Elle: Yeah.

And performance might actually stay
pretty stable here simply because they are

literally still doing things the old way.

Hugh: Right.

But then reality sets in, and
they drop into resistance.

Elle: And this is the most
dangerous part of the curve.

Hugh: Yeah.

Elle: Frustration and anger
spike, and you see a very real

measurable dip in productivity.

People are actively fighting the new
reality, or they are just struggling

through the friction of the new systems.

Hugh: Wait, so this is huge.

The natural instinct for a
leader watching their previously

high-performing sales team suddenly
miss quotas and complain about the

new software is to just panic, right?

Elle: Oh, absolutely.

Hugh: They panic.

It looks like the strategy
is a complete disaster.

But if we follow the logic of
the change curve, a massive

dip in productivity during that
resistance phase isn't necessarily

a sign that the change is failing.

Clark: Right.

Hugh: It's just like a required
psychological tollbooth on

the highway to commitment.

Clark: That is exactly it.

Elle: A lot of change initiatives are
abandoned right at the bottom of that dip.

Right.

Leaders assume the new system is
failing, and they pull the plug, and

that only teaches the organization
that if they complain loudly enough,

they won't actually have to change.

Hugh: So they just
reinforce the resistance.

Elle: Exactly.

The crucial insight from these
models is that you cannot magically

skip the resistance phase.

Hugh: Effective leadership
isn't about avoiding the dip.

Elle: No.

It is about compressing that difficult
middle and guiding the team safely

through it because if they keep
pushing, the anger eventually burns

out, and the team crosses into the
third stage, which is exploration.

Hugh: Right, where the uncertainty
shifts into a kind of cautious curiosity.

Elle: Yes.

They start experimenting with
the new way of doing things.

They figure out a few
shortcuts in the new software.

Hugh: And that momentum leads to
the fourth and final stage, right?

Commitment.

Elle: Exactly.

The new behaviors are embedded,
and because the new systems are

fundamentally better, performance
actually rises higher than where

it started before the transition.

Hugh: Okay, so knowing that this
painful dip in productivity is

literally inevitable The challenge
then becomes sequencing the rollout

so people don't get permanently
stuck in that resistance phase.

Elle: Right.

If we know the psychology, we really
need an operational roadmap to manage it.

Hugh: And that is where John Kotter's
eight stages of change comes in.

It provides that exact sequence.

Elle: Yeah.

It is designed to engineer the momentum
necessary to pull an organization

completely through that change curve.

Hugh: So stage one is establish urgency.

Elle: Yes.

You have to give people a compelling,
visceral reason why the status quo is

honestly more dangerous than the unknown.

Hugh: Like if the legacy tech company's
bleeding market share to younger

startups, the entire organization needs
to feel that reality before a single

piece of software is even changed.

Elle: Absolutely.

Then stage two is building
a guiding coalition.

Hugh: Because a CEO cannot drag a company
through a massive pivot completely alone.

Elle: No way.

Hugh: They need a powerful
cross-functional group of leaders

championing the effort, people with
positional power, deep expertise, and

really high credibility among the staff.

Elle: Right.

Hugh: Which leads perfectly to stage
three, developing a vision and strategy.

The coalition has to
define a clear destination.

Elle: And then stage four is
communicating the vision relentlessly.

Hugh: Relentlessly.

Elle: Like it cannot just
be a single email from HR.

Hugh: No, it has to be woven into
every single interaction and decision.

Then we get to stage five, which
is empowering broad action.

Elle: This is huge.

This is where leaders have to actively
remove the roadblocks that prevent people

from actually executing the vision.

Hugh: Oh, I see.

So if you are asking the sales
team to pivot to subscription

software, but their bonus structure
still only rewards one-off sales-

Elle: You have an empowered action at all.

Hugh: You have just created a trap.

Elle: Exactly.

Then stage six is
generating short-term wins.

You really have to engineer visible,
undeniable successes early in the

process to prove that the pain of
the transition is actually worth it.

Hugh: Okay.

And stage seven is consolidating
gains and producing even more change,

basically using the credibility from
those short-term wins to tackle the

bigger, more entrenched systems.

Elle: Right.

And finally, stage eight is
anchoring new approaches in the

culture, ensuring the new way
truly becomes the default standard.

Hugh: Okay.

So our sources highlight five common
failure modes of change efforts.

And when we map them against Kotter's
roadmap, the causality is just undeniable.

Elle: Oh, absolutely.

Hugh: First, insufficient urgency.

Second, weak coalitions.

Third, a vague vision.

Fourth, poor communication.

And fifth, declaring victory too soon.

Elle: Yeah.

Skipping any of Kotter's stages is the
direct trigger for these failure modes.

They are basically just the symptoms
of ignoring the operational sequence.

Hugh: Like, if you skip stage one,
people just don't feel the need to

act, resulting in insufficient urgency.

Elle: Exactly.

Yeah.

And if you skip stage four, the
rumor mill just fills the void,

resulting in poor communication
and way heightened resistance.

Hugh: Wait.

There is a fascinating tension in
Kotter's sequence, though, that seems

really difficult to resolve in practice.

Elle: Oh, what is that?

Hugh: So stage six explicitly
dictates that leaders must generate

short-term wins to keep morale up.

Right.

But the fifth fatal failure mode
is declaring victory too soon.

Elle: Ah,

Hugh: yeah.

So how on earth does a leader
celebrate a milestone in front of

the whole company without making the
team think the hard work is over?

Elle: That is such a good question.

Hugh: It is a good question.

Elle: It really requires a very
deliberate communication strategy.

You have to distinguish between validating
progress and abandoning the effort.

Hugh: Okay, what does that look like?

Elle: Well, generating a short-term win
means a leader stands up and says, "We

fully migrated our top fifty enterprise
clients to the new subscription platform

this quarter, and we reduced processing
time by twenty percent. The sacrifices

we are making are yielding real results."

Hugh: Okay.

So that validates the strategy and gives
the team a much-needed morale boost.

Elle: Exactly.

But declaring victory too soon
would be saying, "The enterprise

migration was a success. The new
platform works. Great job, everyone."

Hugh: Oh, and then the leadership team
immediately shifts their attention to some

completely different corporate initiative.

Elle: Right.

Leaving the rest of the staff
to just figure out the remaining

migration totally on their own.

A short-term win is just a
mile marker on a marathon.

Hugh: You celebrate the pace, you
hand out water, but you remind

everyone there are still miles to run.

Elle: Yes.

Declaring victory is pretending
you've reached the finish line just

because you finished the first mile.

Hugh: That makes total sense.

So all of this macro planning, like
the seven S blueprint, the Kotter

sequence, the transition models, it
eventually collides with Tuesday morning.

Elle: Oh, inevitably.

Hugh: The day-to-day reality of
managing a team through a transition.

When you are deep in the difficult
middle of the change curve, tempers

flare, people are exhausted,
the friction is just constant.

Elle: And this is exactly where Kim
Scott's concept of radical candor serves

as a vital interpersonal diagnostic.

Hugh: Right.

Elle: Because during the chaos of
transformation, communication usually

breaks down in one of two ways.

Hugh: Okay.

Elle: Leaders either become overly
aggressive because they are super stressed

about the timeline, or they become
overly passive because they just don't

wanna upset an already fragile team.

Hugh: Right.

So radical candor requires leaders
to do two things simultaneously: care

personally and challenge directly.

Elle: Exactly.

Clark: Let's

Elle: look at a practical example.

Say a leader is managing a top-performing
sales rep who is flat out refusing

to log their activities in the new
subscription software platform.

Hugh: Okay.

Common scenario.

Elle: Very.

If the leader challenges directly
without caring personally, it just

turns into obnoxious aggression.

The leader dictates compliance, the
rep feels completely undervalued,

and the resistance just hardens.

Hugh: Right.

But on the flip side If the leader cares
personally but refuses to challenge

the behavior because they want to avoid
conflict, they fall into ruinous empathy.

Elle: Exactly.

They let the rep continue
using the old system.

Hugh: Which undermines the entire
change effort and signals to the

rest of the team that the new
strategy is basically optional.

Elle: Yes.

So radical candor means actually
sitting down with that rep and

communicating with absolute directness
about the non-negotiable reality of

the new platform while maintaining
deep empathy for how frustrating it

is to feel like a beginner again.

Hugh: That takes a tremendous amount
of emotional endurance from the leader.

Elle: It really does.

Clark: Which brings us to the final

Elle: day-to-day framework, Stephen
Covey's circles of influence.

Hugh: Ah, okay.

Elle: This really addresses the
leadership supply chain problem.

During a massive transition, there
are literally a thousand points

of friction, and Covey's model
separates everything a leader cares

about into two concentric circles.

Hugh: Right.

The outer circle is the circle of concern.

Elle: Yes.

Hugh: The things you care deeply
about, like the overall mood

of the entire sales floor, the
macroeconomic conditions affecting

your customers, or, you know, the fact
that the software vendor's training

materials were just poorly designed.

Elle: But the defining characteristic
of the circle of concern is that you

cannot directly control those elements.

Hugh: Right.

Elle: If a leader focuses their
mental energy there, they just

become paralyzed by frustration.

They spend their days complaining
that human beings just inherently hate

change or that the vendor overpromised.

Hugh: It just drains their energy and
diminishes their actual influence.

Elle: Totally.

To maintain momentum, the leader
has to actively shrink their

focus to the inner circle, which
is their circle of influence.

Hugh: Meaning these are the variables
they can actually impact today.

Elle: Exactly.

They can control their own readiness
and understanding of the new software.

They can control the clarity and
frequency of their communication.

Hugh: They can walk out onto
the floor and use radical candor

with that resisting employee.

Elle: Yes.

Or set up an extra hour
of hands-on coaching.

By focusing strictly on what they can
actually influence, leaders slowly expand

their power over time, rather than just
being consumed by external friction.

Hugh: So all of these invaluable
frameworks, you know, Kotter's stages,

Bridges' transition phases, Nohria's
practices, the Covey models, Kim

Scott, the McKinsey 7S, they were all
actually synthesized and compiled into

the master guide we are drawing from
today by Greg Collins and Kate Lai.

Elle: Right.

Hugh: And having them arranged side by
side like this really reveals the true

anatomy of organizational transformation.

Elle: It does.

It reveals that change isn't just an
abstract corporate buzzword or like a

single memo from the executive team.

Hugh: Right.

Elle: It is a highly predictable sequence.

It is an engineering problem inextricably
linked to a psychological journey.

Hugh: Yeah.

You, you diagnose the organizational
machine with the McKinsey 7S framework,

ensuring you have the operational
practices of Nitin Nohria in place

so the company doesn't stall.

Elle: Exactly.

Hugh: You anticipate the inevitable
human dip in productivity and morale

using William Bridge's transition
model and FranklinCovey's change curve.

Elle: You execute the rollout meticulously
with Kotter's eight stages to avoid

those preventable failure modes.

Hugh: And you manage the exhausting
day-to-day interpersonal friction

using Kim Scott's radical candor and
Stephen Covey's circles of influence.

Elle: Approaching transformation with that
level of rigor just removes the guesswork.

Yeah.

You are no longer just crossing your
fingers and hoping the team adapts.

You are systematically designing
the environment for them to succeed.

Hugh: And that actually leads
me to a final provocative

thought for you listening today.

Elle: Oh, let's hear it.

Hugh: Something to just mull over as
you look at your own projects and teams.

We have established that
organizations don't change.

Only people do.

Elle: Right.

Hugh: So if a massive pivot requires
everyone to navigate that difficult

psychological transition, you know, to let
go of their old competence and struggle

through the messy, uncertain middle.

Elle: Yeah.

Hugh: What happens when a senior
leader tries to push an entire

organization through that change
curve without first being willing

to go through the uncomfortable
psychological transition themselves?

Elle: Oh, wow.

I mean, a transformation effort will
never outpace the leadership's own

willingness to be vulnerable and adapt.

Hugh: Right.

Elle: The organization can only really
evolve as far as the leader has evolved.

Hugh: That is so true.

The murky waters of human psychology are
just the reality of any major initiative.

But with the right diagnostic
tools and a clear roadmap, you

can absolutely navigate them.

Elle: Definitely.

Hugh: Thank you so much for
joining us for this deep dive.

We will catch you next time.

Clark: That's this episode
of Talent by Design.

If any of this was useful, the best thing
you can do is pass it along to someone

wrestling with some of the same questions.

We'll be back soon, and keep an
eye out for this month's Leadership

Lessons Learned conversation.

Thanks for listening.