Chapter 1
Set a Course for Change
I truly believe that the ultimate success or failure of any change initiative isn't decided along the way, but right at the outset. Unfortunately, most traditional project management methodologies set you up to fail. They almost invariably start with a focus on the problem statement. They teach you how to do the analytical work required to define the problem (a.k.a. opportunity). By analytical, I mean taking a structured approach to gathering the facts and making them as quantifiable as possible.
Of course, defining the problem is necessary, but the purely analytical approach ignores the most important data you'll need up front in order to succeed. Before you can set a course for change—in other words, set your priorities—you first need to understand the existing priorities of the people who you'll ask to change. That's the most important information you need to lead change successfully. Your priorities will never become their priorities without understanding their starting places, which is exactly why most change initiatives fail. Understanding others' priorities upfront—both their daily issues and the underlying cultural impulses of the organization—will help you craft a far more accurate problem statement.
It starts with a shift in perspective, which is the cognitive equivalent of a person taking his glasses off: get in close and rely on others to see. I started practicing this long before I wore a tie to work for the very simple reason that I was born nearsighted. I could only see in the radius of a few feet, and as a result I learned to use what was in focus to maximum advantage. For example, on the basketball court, I became hyperaware of what the other players around me were doing, a skill that made me MVP even though I could barely see beyond my own arm. (I never played in my glasses.) I could learn more about what was going to happen by watching the people than I could by watching the ball. I also realized that getting close to something—like the chalkboard, for example—was the best way to make sense of it.
So it goes with defining any new initiative. When you get started, go into the engagement with the attitude of a learner, not of an expert. Listen more than you talk. You'll get better answers and invest people right from the start. Once you understand what people's current priorities and practices are, you can begin to set a course to changing them.
The Three Questions
A good friend always said to me, “Data is objective; however, the interpretation of that data is subjective.” More specifically, people look at and interpret data through their own lenses, not yours, so your discovery process starts with them. Their version of the data is as important as the numbers or facts themselves. Therefore, the first data I gather when I come into a new situation is via a survey of everyone involved.
I ask the following three questions to my direct leadership team and to the key internal and external stakeholders, in particular customers, to whom we are providing services or products:
- What are the top three things we are doing well?
- What are the top three things we are doing badly?
- What are the top three things we need to do to fix them?
The questions are simple on the surface, but they provide very powerful insight not only into the problem(s), but also into the existing priorities and how well the team is delivering on them. Note that I ask the questions in person instead of sending out a survey for people to complete. I center the discussion around a meal, and I go to them instead of having them come to me. This helps me get the best answers and starts building engagement early.
Often you'll find that by the team's own metrics, they're doing great. “Our success rate is 80 percent,” they'll tell you. “We have a track record of finishing projects on time and on budget.” But that's just part of the story. You get the other part by interviewing the clients or end users—enough of them so that you can spot outliers and see the pattern. Often, at that point, an entirely different story emerges. While a project may have been finished on time, it didn't meet the end user's needs. In the course of these surveys, you'll find out very quickly where there's alignment and where there isn't.
As you review and interpret answers from the team, you're getting a sense of the people and their individual priorities first. But you're also looking for a guide to the organization's practical problems. Primarily these will be:
- Operational issues. Are we having customer service issues, quality issues, supply chain issues, employee issues, regulatory issues, or ethical issues that are adversely affecting our customer relationships, employee relationships, brand, and so on?
- Lags and shortfalls. Are we behind on meeting the quarterly and annual budgets, behind time- or dollar-wise with key projects, behind on meeting regulatory commitments, and so on?
- Strategic direction. What ideas should we pursue, what impact could they have, what will success look like, and what might be the priorities, politics, and people dynamics involved?
Finally, your interviews will yield one more set of key data: team wins. Keep watch for what the team is truly doing well. You need to know so that you can leverage those strengths and also celebrate them. People feel much more positive about change when they know their value is recognized.
Assessing the Culture
As you collect answers to the three questions, you'll begin to get a sense of the cultural impulses that are driving people's priorities. To change priorities, you have to change the culture. As the saying goes, “Culture eats strategy for lunch and new ideas are the appetizers.” Organizational culture—the shared beliefs and behaviors—often cascades from the top down, so changing priorities usually starts at the leadership level.
Over the years, I have seen three typical cultures of dysfunction again and again when companies or teams within them are in trouble. Figure out which you're dealing with, and tailor action accordingly.
The PowerPoint Mafia
In a PowerPoint mafia, executives and managers focus their time and attention on studies and assessments rather than concrete action. They aren't interested in changing because they think they're already the best. These folks love to hold meetings and prepare detailed slide presentations that lead nowhere. Indeed, their presentations are the best looking and best delivered you will ever see—in fact, that's often how they measure success. The top priorities here are short-term profitability and margins, even at the expense of growth. They are largely ignorant of (or closing their eyes to) changing market dynamics and customer needs.
The reason why I call them a mafia is that they are very skilled at taking anyone out who dares to question their way of life. Indeed, many a change leader has gone the way of Jimmy Hoffa, never to be seen again, because he suggested changing priorities and doing things differently. Even worse, sometimes these organizations see their customers as the enemy. Executives at one company I observed suggested they should stop doing business with their biggest customer, an account worth nearly a billion dollars, because the customer was demanding (and honestly deserved) better value.
PowerPoint mafias tend to be large, previously successful organizations that are now stagnating or adrift. They are riding the wave of a previous innovation that has given the organization a dominant market position; however, growth has started to slow. When you survey people within the organization, you're likely to hear about how they are the industry leader, how profitable they are, and how good their products are. They are oblivious to or dismissive of their competition. They may have things to complain about internally, but when it comes to how to fix those things, they don't have much to say. They're also good at telling you why any given solution you might offer is bound to fail.
Customers of a PowerPoint mafia say things like, “hard to do business with,” “slow to respond,” or “provides solutions without understanding our problems.” They're likely to be searching for alternatives, which can actually be a blessing because it can provide a needed wake-up call. This is true whether you're talking about a company or a specific service group within a company. For example, working with one corporate IT department, we thought we had standardized the company on a leading customer relationship management (CRM) package. In interviewing the internal clients, we found that we had over 30 instances of people “going rogue” and using another CRM program. Who could blame them? They told us they could install it more quickly and run it cheaper than we could at corporate. Overall, it was a better solution, and the CRM company was much more responsive to their needs than we were. That wake-up call was better than any speech I could make to convince people that we had work to do.
When dealing with this kind of culture, change agents need an external fire to light an internal one. Move too early and you'll find yourself in a bag in the river. Wait for those fires—loss of market share to competitors, clients jumping ship—and use them to shift the attitude of leadership. Only at that point will you have their full support and protection in changing priorities and processes.
This culture is in contrast to the next one, in which it takes a big internal fire to change the priorities.
The Firehouse
Within this culture, employees know things are broken and that they are in trouble; however, everyone thinks it's someone else's fault. The top guys aren't leaders, they're firefighters. They don't even want to take the time to meet with you to answer the three questions. They're too busy firefighting—as they see it, heroically saving the organization again and again from the failures of others. You normally find this culture in mature industries or in departments that aren't high on the executive team's list of strategic priorities.
The top priority within this culture is—no surprise—putting out fires. They will recall with fondness the fires they have put out and how hard they worked to do so. They are proud that they are always ready to answer the call. Leaders in this culture can tell you things that need fixing, but the fixes are all tactical and generally related to the latest fire. Unlike the PowerPoint Mafia, they won't have any presentations or other analyses to show you because they don't have time to do studies. They don't want you to do studies, either—they want you to either put on your firefighter hat or cheer them on.
Customers usually have good things to say about a firefighter company because its leaders are very good at stopping flames before they reach customers. Actually, this culture is customer-focused to a fault. They have so customized their approach that they have fragmented, one-off processes, systems, and people (hence the fires).
The main problem with this culture is that growth stops because the underlying infrastructure, processes, and systems can't scale. Leaders resist “wasting” time on strategic planning and organizational alignment. Meanwhile, the front-line and middle management are desperately supporting broken systems and are on the defensive. They blame leadership and external factors and are worried that any change to the legacy system and processes will threaten their jobs and, more importantly, their hero status within the culture. They are firefighters, too.
Scratch the surface and what you often find is that strategic planning hasn't been a priority because leadership is lacking the skill set. Your first task is to join in the firefighting while you're figuring out who has the ability to help develop strategy and who doesn't. Your opportunity to shift priorities will come when a fire occurs that the team can't put out before it affects customers. At that point, the leadership will support you. Bring together the potential strategists you've already identified to develop a plan for change.
The saving grace of both the firehouse and the PowerPoint mafia is that leaders will respond to wake-up calls. Unfortunately, with the third and last culture, they just keep hitting the snooze button.
The Thumb-Suckers
This is the worst-case organization for any agent of change. The thumb-suckers are disengaged and complacent. Problems exist and everyone knows it, but no one is looking to troubleshoot or improve things, though they'll tell you they're “working on it.” If there's change, it's incremental and rarely focused where it's most needed. Business units in such an organization are typically siloed, failing to collaborate, and therefore oblivious to opportunities to improve and innovate. Their top priority is to stay under the radar screen of executive leadership. They resist direction and reject assistance. The front-line and middle management have given up because they feel their leadership has failed them and that they're powerless.
When asked about their company's decline, thumb-suckers show a victim mentality: Competitors aren't playing fair. Regulators have them hamstrung. Internally, they've been cast unfairly. They are helpless to improve, if they even admit there is room for improvement. Unlike the PowerPoint mafia, they are not at war with their customers or anyone because they don't have any fight left in them. They are beyond fighting fires because everything is burning. They're playing the waiting game, but they are on the defensive and therefore trust no one. That's why they only listen to each other.
Motivating thumb-suckers to change their priorities and to do the hard work of change is impossible. Don't even waste your time here; no amount of messaging will be heard. Your efforts will fall flat unless there's a complete change in leadership. Move on to an organization or division where you have some hope of progress.
The one good thing about this culture is that change in senior leadership has a major impact on front-line personnel and middle management. Suddenly, there's hope, and people are willing to roll up their sleeves and make the changes happen. However, until that point, change leaders need to focus their time somewhere else.
Ghosts, Hubs, and Mavericks
Once you've compiled all of the answers to the three questions and have a feel for what the current priorities and culture are, look for congruence in the various players' assessments of the problems. You may already have all the information you need to start working on a plan. But if things don't add up, the data-gathering process continues. It's time to move on to a second round of informal data collection focused on three sources.
Ghosts
Ghosts are the previous studies and assessments of the problem that almost inevitably exist and can help direct your efforts. It used to be that the studies were easily found on the bookshelves or in the file cabinet of your predecessor. Now, you have to hunt down the digital files. I call these studies ghosts because the people who did them are normally gone from the organization; however, their spirits lurk in the reports they left behind. For example, when I first went to Medtronic, I found a study to consolidate data centers that had been done at least a year or two before I got there. The study's recommendation made sense; however, nothing had been done, and no one had mentioned it to me. I immediately put it on the short list of potential initiatives.
Mavericks
Every organization has frustrated loners. Earl Bakken, the founder of Medtronic, introduced me to a certain category of frustrated loners that he called mavericks. These guys are super smart and see opportunities and problems before anyone else does. The problem is, mavericks don't communicate well and they often have abrasive personalities. They quickly get frustrated because they can't get anyone to see what they see. As a result, they think they're surrounded by idiots. In turn, the “idiots” reject or even ostracize them.
Unlike ghosts, which you have to seek out, mavericks will seek you out. Make sure that your gatekeeper doesn't “protect” you from them. I always meet with anyone who says, “I've got an idea I want to run by you,” and the time is almost always well spent. Nevertheless, prepare yourself for some amount of ranting with those in the group, which will be repeated constantly if they don't see swift action. Your first instinct will be to dismiss them just as everyone else has. Instead, listen carefully. Between the expletives and the anger, you'll often find some good solid ideas about what needs improvement.
Remember the data center consolidation ghost study? It's not quite true that no one mentioned it—no one I surveyed mentioned it. But a maverick sought me out, and after a long tirade about the ineffectiveness of the previous and even the current leadership, and the need to breakdown the siloes in IT, he told me that I should consolidate the data centers. Not only would it save millions of dollars, he said, but it would also send a powerful message that we were going to start operating as a team. Then he looked me squarely in the eye and said, “Are you going to make a difference or are you just using this job as a stepping stone?”
Between the ghost and the maverick, I knew what needed to be done. Now I just needed to know why it had never happened, and how to approach it to get it done. Otherwise put, what priorities had averted consolidating it so far? For that kind of learning, I look to the hubs.
Hubs
The hubs are the people in the organization that everyone respects and, most importantly, trusts. They are typically low-key, humble, middle managers who have been with the organization for more than 10 years. They usually have some type of technical expertise, which leads people to go to them to troubleshoot problems. Because they don't self-promote or seek out the spotlight, they often get overlooked for leadership positions; however, they lead through influence, not through title. Hubs aren't just sources of information; they're your most important partners in aligning people around new practices.
Hubs won't barge into your office like mavericks. You have to seek them out. Fortunately, they aren't hard to find because people will often say, “You need to talk to…”
That's how I found the hub for the data center project. He was very polite in telling me why it hadn't been realized. The data centers were in several business units within the organization. Within each, people didn't trust the leaders at the corporate level to run a consolidated center in a cost-effective and efficient manner. The hub then told me what would need to change at corporate to make it work. It didn't take me long to find out that he and the people within the divisions were correct: No one within the corporate group was being held accountable for performance and costs. They had gotten very skilled at playing politics and being the “victims.”
With changes made at the top, we were ready to shift priorities and develop a plan to consolidate.
Wisdom from the Front Line
Don't make the mistake of only interviewing the people who think they're important—the executives and managers. As soon as possible, interact with the front line. See how they're doing their jobs and get their thoughts on what could be done better. It could be the source of a true breakthrough.
In the Introduction, I told you about making a recommendation at Georgia-Pacific (GP) that got me thrown off my first major project. I didn't tell you the whole story. That recommendation wasn't just my own; a front-line freight-rating clerk, Joyce, had actively advocated for it. She knew the system we already had could work because other large companies were successfully using it. She just needed my help to get all of the technical bugs out of the system to increase its accuracy and speed. She brought me up to speed quickly, introducing me to the companies that were making it work and to the software company's support team. She even taught me how to enter the rates into the system.
Thanks to Joyce's connections and training, I felt completely confident in my recommendation to work with the existing system. Anyway, as you know, it didn't go over well. I thought my career at GP was over. But after 45 days of doing middling tasks and looking for job opportunities outside of the company, I got a call. It was from the executive who called my recommendation the “worst ever.” It seemed he had had a change of heart. He now wanted to promote me from IT project manager to managing the entire freight-rating process within his division, including all supporting IT. He said he was impressed by how I maintained my composure during the meeting! I was glad to learn that was the case; internally, I had been a wreck.
And so the transformation was on. We were successful in getting the system working for all of the divisions. At the same time, we implemented another small idea with incredible impact—and again, it had come from the front line. We received so many freight bills a day at GP that we had three people dedicated just to opening the bills and distributing them to more than 100 clerks for processing. Each division also had its own freight bill payment system. A payment clerk in our Crossett, Alaska, office had realized that instead of having the carriers bill us after delivery, we could use information already gathered at earlier stages of the shipping process to pay them automatically.
We called it “Autopay.” Once consultants heard about what we were doing, they gave it a more complicated name: “Evaluated Receipts Payments.” It was a great idea that never would have seen the light of day without listening to the front line. We were able to shift from needing 100 people to process payments to needing only 10, saving more than $10 million annually.
It was also the idea that put my career on the fast track. Within a couple of years, I became general manager of the Transportation Division. I eventually became CIO and an officer of the company.
Throughout this chapter I've focused on seeking out people and listening to their takes. You might be asking yourself, “How do I know that I'm talking to the right people and that they are giving me the right advice?” Here's my response: Talk to as many people as you can. If you hear the same things from ghosts, mavericks, hubs, the front line, and outside the company—including, if you're like me, from your grandmother—you can bet that you are on to something.
Measure Leaders by Their Front-Line Relationships
Once you realize that the front line is a key partner in making improvements, another fact follows: Quality leaders cultivate good relationships with the front line. So, as you assess the performance of your leadership team and consider personnel changes, watch how they interact with the front line.
While running businesses and global operations within Georgia-Pacific and Medtronic, I always had the plant, distribution center, or functional leader give me a tour through his or her organization. The main reason was so that I could see how the leader interacted with people. If the manager avoided eye contact and didn't take a moment to ask about people's families or their days, I immediately knew we had an ineffective leader.
Once, while I was Medtronic's CIO, I was at a big annual event at one of our largest plants. Before the official program, there was a big “all hands” luncheon. I chose to sit at a table with front-line employees instead of with the executive team. (I always did.) I asked them my usual question: “What's the number one thing I could do to make things better for you?” I was sure they were going to say “more money,” since we had frozen wages that year. What they said floored me:
“Can you get us better chairs to sit in?”
A lot of heads nodded.
“Ours are very worn and get very uncomfortable a couple hours into an eight hour shift.” I immediately had them show me their chairs. The state they were in was appalling. Making matters worse, I knew that the same year, the plant had purchased the most state-of-the-art, ergonomically designed chairs—for the management team.
It was obvious that the plant manager had to go. The new one jumped on replacing the chairs. She was outstanding and responsive, and the plant's performance took a major step forward.
The Importance of Looking Outward
Now, for another perspective shift: In setting a course for change, also look outside of your company, even outside of your industry, to get ideas and new perspectives. Now, expect to have people say, “But we are in a different industry, so what they are doing doesn't relate to us.” I'm a big believer that all companies and industries go through the same cycles, just at different times. As a result, we can learn from each other.
Take, for example, customer care. At both GP and Medtronic, I always spent time with our customer care and service groups. I would put on the headsets and listen to them take calls from both customers and our field sales teams. Those calls and our care representatives' insights always let me know what was really going on with our customers, the quality of our services and the underlying systems and processes used to deliver them, and areas we could improve upon.
In our quest to have world-class customer service at Medtronic, we engaged a consultant who had worked with companies that were recognized globally for their service (e.g., Nordstrom, Amazon). We also visited several of those blue-ribbon companies. Drawing from those visits, our vice president and her team proposed that we develop a customer portal that would make us easier to do business with. Our representatives, field sales personnel, and customers would be able to use it to quickly access information regarding orders, products, complaints, and so on. (It may not sound groundbreaking now, but at the time, it was a huge leap in our industry.) We also took away insights on how to screen to find the best customer service employees—people who were built to go the distance to make a customer happy. We wouldn't have gotten those ideas without looking outward.
Another time we went all the way to Japan. As a company that prided itself on quality above all, we were constantly looking forward to improve. Toyota had just gone from being known for quality to being perceived as the worst automaker around, after a series of very public product recalls. To learn more about what happened, our quality VP, one of her direct reports, and I all went to Japan. We wanted straight talk that we could learn from, not any type of PR spin, so we met with people in middle management rather than the top brass.
They had two explanations for their decline that got us thinking. First, they told us that while their cars had become much more complicated—now more software than hardware—their design processes had not changed much over the years. Then they told us about a crucial step they had taken out of their design process. It used to be that their most expert and trusted designers served as a review team during various phases of the design process. They had taken this step out because they said that it had stopped providing as many recommendations for changes to the design. In retrospect, they found that project leaders, in preparation for the reviews, took a different look at their designs and made changes to them in advance.
That revelation made me think back to something someone told me about how people really come up with new ideas for problems they are trying to solve. Specifically, he said that people need to find a way to take a step back and look at the situation with a fresh mind. The review process had given them that step back. Needless to say, Toyota reimplemented it. We implemented a version of this review process ourselves, and it improved our process and products tremendously.
In addition to visiting Toyota, our research and development (R&D) people also visited companies within the aerospace, semiconductor, and defense industries to learn about the processes and methodologies they used to improve reliability of their products. Similar to Toyota, our products were becoming much more integrated and complicated. As a result of those visits, a company-wide initiative was launched to take our quality and reliability to the next level.
One of the most innovative projects I've been a part of was conceived by a marketing leader who was plucked from outside the corporate environment. This took place in GP's Packaging Division, which made boxes for other companies ranging from plain brown boxes to customized cereal, juice, and other consumer-products boxes. The leader had come to us from an experiential marketing agency, where he had designed and built the in-store experience for two major Nike outposts at a time when customers didn't have “experiences,” they just went shopping. He had the brilliant idea to try something similar at a technical center in which our engineers had all of their PCs and machinery to develop and test new boxes. I was the CIO at the time, and he asked me to help him transform the technical center into an innovation center that we could open up to customers. The goal was to have a prototype of new boxes within an hour while the customer was still there. The rooms were designed so that the conceptual drawings that were put on the walls were transmitted to the computer-aided design (CAD) machines that were on the second floor.
Another section of the technical center was redesigned to look like a retail store so that the customer could see how the box would look on the shelf. A third section was designed to look like a warehouse so that the customer could see how efficiently the boxes would be packed, shipped, and unloaded. We had sensing technology throughout the three sections so that customers could visually track the product's movement.
The innovation center was a hit. The vast majority of customers who visited it signed contracts with us to make boxes for them. We later took what we learned and implemented an IT innovation that served as an internal showcase for technologies that could improve sales force effectiveness, supply chain efficiency, and manufacturing productivity. It too was a hit—and all thanks to the new perspective that came from a guy whose previous experience was marketing sneakers.
The Value of Conviction
Many times, once you've gathered your data, both formal and informal, you'll be ready to make a recommendation. It'll be smart. It'll be innovative. You'll be on fire to take your company into the future. Then, you'll share that idea with your bosses and get a bucket of cold water on your head. They'll tell you it can never be done, or that it'll be too expensive, or—if you've got a real winner—that it's the “worst idea ever.”
At that point, you'll need the courage to stick to it until you change their minds or can prove you're right. My best lesson in this came from my grandmother. During college, I lived at home and worked during my spring breaks. One morning, Momma Jessie (as we called her) pulled me aside while I was eating breakfast.
“James, take an umbrella to work because it's going to rain,” she told me.
I couldn't recall hearing anything about rain, so I turned on the radio to check the forecast. I went back to my breakfast, and soon heard the click of the radio being turned off. I turned and saw my grandmother.
“James, come here, sit down, damn fool!” she said with emphasis. “Damn fool” is what she always called you when she was mad.
“What are they unlearning you in college? Are they only teaching you to believe what everyone else believes?” she said. “If so, you can bet that by the time you hear or see it, others will have already beat you to it. As a result, you will get, at best, a little of what others are getting.”
She then looked me directly in the eyes and said, “True success comes to those who first feel things in their bones and hearts, and then pursue them with their brains, eyes, ears, arms, and legs.” What a lesson.
I then grabbed an umbrella and went off to work. Everyone looked at me strangely because skies were clear and rain wasn't in the forecast. Well, at about 3:00 p.m., the skies turned black and it started raining cats and dogs. Around 4:00, one of my coworkers came into work soaking wet.
I said, “What happened to you?” He responded, “It wasn't raining when I left home.”
I then said, “Come here, sit down, damn fool!”
Once more: True success comes to those who first feel things in their bones and hearts, and then pursue them with their brains, eyes, ears, arms, and legs.
Coaching Moments
Make any question with a “no” answer your highest priority to complete within the next three months.
| Question | Answer (Yes or No) |
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