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Why company change programs fail—and why they don’t have to

David PottruckDavid Pottruck
David PottruckPhoto courtesy of The Wharton School/Flickr

Change is good. It’s also inevitable, terrifying, and fraught—particularly “breakthrough change,” otherwise known as the kind of change that will make everyone very uncomfortable and some of them unemployed.

We’ve all come across the many business books that attempt to tell us how to become a change agent. But what we haven’t read much about is how, exactly, we should lead change within an organization. There’s been tons of blue sky, and not so much boots on the ground.

Which is why I liked David Pottruck’s new book, Stacking the Deck: How to Lead Breakthrough Change Against Any Odds, so much. First, a disclaimer: I have known David since 2005, when I spent several months trying to convince him to talk about what it felt like to be publicly fired (he was co-CEO of Charles Schwab), and how he recovered his personal and professional balance afterwards. Incredibly, he agreed, and the resulting piece showcases a rarity—a humbled, vulnerable executive.

The good news is that Pottruck recovered, and he has since founded and invested in several companies. All the while, he continued to teach an executive education class at Wharton on breakthrough change—something he had done successfully at Schwab and elsewhere. The book comes out of his teaching, but is supplemented by extensive interviews he conducted with current top executives such as Intel President Renee James, Starbucks CEO Howard Schultz, JetBlue CEO Dave Barger, and others.

The book is broken down into two parts; one the “Stacking the Deck process,” in which Pottruck offers nine specific steps to create and lead the change process in your organization; and the second, a higher level look at the kinds of skills needed to motivate and inspire your team. The key point, he says, is a simple one, but it bears repeating: “Leading change requires leading people. Any transformation you propose, small or large, will ultimately not succeed if you don’t have the leadership skills to drive the process forward.”

Pottruck is very specific in his how-to (each chapter ends with a one-page action plan to help bring each step to life), but he also brings much of the responsibility back to the leader. It is the leader’s job to understand just how stressful this process is, to celebrate victories when they occur, to develop an overarching vision that allows people to foresee the endgame, and—perhaps most important—how to determine which kinds of people should be on the change team. Metrics are important, but they can be overused, Pottruck says. “Remember that leading a breakthrough change is fundamentally about creating and managing both the actual momentum and the perception of momentum.”

What I enjoyed most about Stacking the Deck was Pottruck’s discussion about how a leader can communicate to inspire—and how, more than anything, authenticity is what matters. He uses a touching example of a speech from Howard Schultz, who, in his first week back at CEO of Starbucks, with sales collapsing, burst into tears while apologizing for the company’s performance. “I hadn’t gone in there planning to cry, but I was apologizing that we as leaders had let them, the workers and their families, down.”

Had Schultz faked that emotion, the company might never have made it to the turnaround. But he didn’t—and then, once having established the connection, he was able to rally his store managers to be accountable for their stores’ performance. Writes Pottruck: “Communicating about change is less about motivation (the exchange of behaviors for rewards) and more about inspiration (appealing to an innate desire to be a part of and contribute to something really important).” It’s a great lesson—and goes a long way toward explaining why so many change programs ultimately fail.