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Lead Change by Creating It

 

We’ve been at this recession thing for over 18 months now and it appears that most business executives have found their profitable operating levels.  Some organizations have continuing plans to trim and right size but to all indications the chaos has subsided.

Organizational transformations that a few months ago were primarily slash and burn tactics have become implementations for a 2010 path of stability.  The primary indicator of this, from my perspective, is that many of the projects my clients and I discussed in late 2009 are resurfacing 12 months today.  This interesting development tells me that over the last year not a great deal of effort has been placed on business improvement.  Much of the activity in 2009 focused on survival.

As a former fighter pilot I often use the world of flying as a metaphor for dealing with change. When a fast moving aircraft occupied by one person runs into an unknown challenge (on-board fire, loss of engine or any other important piece of the aircraft required for sustained flight) the rules of action are simple:

Aviate, Navigate, Communicate

Businesses were beset by some major problems in 2009, hence the pilot of those businesses focused on Aviate – keeping the aircraft/business flying.  The most critical action of the triad – stay aloft and away from things that will destroy the business.  Cut costs, divest drag inducing business units and keep the wings as level as possible.  Aviators, like executives, tend to focus on the whole aviate process pretty intently keeping any other distractions in the background.

Executives are ready to Navigate.  Determine where they are and quickly decide the best direction to head that will offer the highest chance of success.  Plans are being developed, orchestrated changes being planned and goals being established.  Outstanding news for Wall Street and Main Street.  The business is under control and going somewhere.  My experience tells me that we will see many businesses with an achievable set of goals and plans for 2010. 

Aircraft under control, direction established.  Now we must Communicate.  Executives must begin to bring the organization into the conversation, just as pilots talk to controllers about their plans, so that appropriate support can be rendered.  Here’s the challenge for 2010, aligning associates thoughts and actions with the plan.  Not as easy as it sounds.  Most organizations aren’t the point and shoot places they were 18 months ago.  Staffs are reduced to minimal operating levels, everyone has multiple roles serving multiple goal sets.  Trust in leadership is weak and the economy as a whole even weaker. 

Communicating the new direction and programs that are needed to keep the business flying will fall short unless a concerted effort is put in place to bring the “crew” back together.

Change Leadership skills are mandatory for every executive.

One cannot manage change. One can only be ahead of it.  In a period of upheavals, such as the one we are living in, change is the norm.  To be sure, it is painful and risky, and above all it requires a great deal of very hard work.  But unless it is seen as the task of the organization to lead change, the organization will not survive.  In a period of rapid structural change, the only ones who survive are the change leaders.

Peter Drucker,Management Challenges for the 21st Century:

November 2, 2009 Posted by | Thinking About Associates, Thinking About Change | Leave a comment

2010 Outlook – Creation or Destruction?

 

The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers, goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates.

Joseph Schumpeter, in his key work Capitalism, Socialism and Democracy, originally published in 1942 argues that for capitalistic business to survive a continuing cycle of Creative Destruction must take place.  Certainly the last 12 months have provided the business community with a wealth of destruction.  The outstanding question is: Will 2010 offer an even greater abundance of creation?

I often describe the necessity for organization renewal to occur routinely in business to build the drive within employees to innovate and customers to advocate.  2010 demands Uber-renewal strategies.  I’ve seen some of the lowest employee engagement scores since the days of Roman slavery over the past few months.  Some scores well below 20% engagement.  Most are hanging on to their existing jobs just long enough to move on to other opportunities.

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Low engagement of associates is even driven deeper as they have great concern over the organization’s commitment to its customers.  Organizations that pride themselves on the highest quality products and world class customer care worry that both these areas may be impacted.

What are your renewal strategies and plans for 2010?

Human Resource groups have experienced phenomenal levels of stress dealing with layoffs, the incumbent severance servicing and flagging morale of survivors.  As we enter the next phase of this economic cycle every organization needs to develop a clear path for 2010.

When planning for 2010, it is budget time for most organizations, take the offensive and build an environment where creativity and innovation can flourish. 

Top 5 Renewal Focus Areas:

1. Visible, interactive leadership.  Get out of the office and lead your organizations.  I can not overemphasize the importance of leaders to be seen and felt by every member of the organization.  This is not a time for “leadership via email”.  Be present as leaders and transparent with the vision of the future. 

2. Emphasize personal development.  Associates need to see and experience opportunities for growth and development.  Be creative in developing these opportunities across the organization.  Formal training programs aren’t the only way to develop skills.  Look to cross-functional “intern” programs where associates can experience work in areas of the company where their interest lies. 

3. Rebuild the community. We all need a sense of place and connection to our workplace.  Many of the nodal communities that were built over many years have been disrupted.  Put a special focus on developing ways for new nodes to form.  Bring social events back to the workplace and celebrate success, both individual and group.

4. Animate the Customer’s Voice.  Bring customers front and center to the organization.  Widely publicize and share customer comments, survey results, and recovery events.  Put a level of excitement into the associates around the value your product of service brings into the lives of every customer.

5. Money matters, pay attention.  Promotions, salary increases, bonus payments all play an important part in the emotional health of associates.  When the balance sheet allows pay attention to sharing the renewal with everyone.  Pay particular attention to those most negatively impacted in 2009.

Destruction is behind us…. give creation precedence.

October 21, 2009 Posted by | Thinking About Associates, Thinking About Customers | Leave a comment

Physiology of Trust

Trust is what allows our economy to work smoothly and efficiently providing opportunities for growth and fulfillment.  Our common challenge in bringing business relationships out of the proverbial tank and back into the light is renewing a level of trust with our customers, employees and shareholders.

The more I thought about this idea of organization renewal the more I sought research to guide me.  In addition to the valuable experience I’ve accumulated over my years in consulting a question remained about just how this trust thing works in humans.  Through the search for an answer, or at least some semblance of an idea,  I came upon the relatively new science of neuroeconomics. 

Neuroeconomics combines neuroscience, economics, and psychology to study how people make decisions. It looks at the role of the brain when we evaluate decisions, categorize risks and rewards, and interact with each other.  From my study of the research conducted in this area my undergrad degree in Biology came in very handy.

Here’s the crux of the research, trust begets trust.  OK, big enlightening finding right.  Actually, yes.  The result of some incredible research done by Paul Zak at the Center for Neuroeconomic Studies in Claremont, California has found that their is a physiological reason we tend to hang out with people we trust.  It makes us feel better.  It makes us feel good and bond because when a behavior of trust occurs between people the peptide oxytocin is released giving us an emotional lift.  That emotional lift causes us to be more open and relaxed mediating trust behavior when a decision is being made.

Ah ha!  Ever wonder why we get so angry when things appear unfair? Or why we feel so good when a complete stranger offers their hand to help.  Voila – oxytocin. 

So how does an business organization take this really cool data and do something with it?  At the core it’s about making offers that build trust.  Offers of stress free service that is really stress free.  Offers of discounts that are actually discounts.  Offers of personal growth to employees that are made good.  Each time we in the business world “make good” on a promise trust is enhanced and deeper bonding occurs, for real, through the release of oxytocin. 

Unfortunately, this has not been a banner year for oxytocin release.  But there is a silver lining.  With all the chaos and unrest in the economy today a little bit of trust building may go a very long way. 

The Change Dude’s 3 step approach to enhancing trust:

  1. Offer customers/employees something unexpected
  2. Deliver on the offer quickly without conditions a.k.a. fine print
  3. Repeat as often as you can

Case in point, a few years ago Bell South implements a “just ask” program requiring every customer facing employee to ask customers a simple question at the conclusion of every interaction “Was there anything else I can do for you?” 

The result was a rise in overall customer satisfaction because a little offer goes a long way and sales increased based on that little question adding  $100M add in first yea.  Additionally,  reward points were given to service people to be used to choose from catalog of goods enhancing the quality of work because they had to qualify for the opportunity and follow up with the sale.

All this good stuff happened because of a little trust, with some help, probably, from our friend oxytocin.

July 15, 2009 Posted by | Thinking About Associates, Thinking About Customers | 1 Comment

Renew Morale Now

 

“The floggings will continue until moral improves” has been a sarcastic phase used in the business community for as many years as I can remember.  In a recent survey conducted by McKinsey it appears the economy has the whip. 

It’s really interesting how the global economy is driving a morale reduction.  Could it also be that organizations have reduced staffing by nearly 5 million in the past 6 months?  Yes, the global economy is the root cause of the never ending stream of redundancies in the marketplace but might there be some action leadership can take to reduce the impact on survivors?

The Effect of Global Economic Turmoil on Companies

Source: Economic Conditions Snapshot, June 2009: McKinsey Global Survey Results

Absolutely ! There are steps to be taken to give morale a booster shot.  As I’ve mentioned in earlier posts the recent economic adjustments are staggering yet offer an incredible opportunity to renew the business, employees and relationships with customers.  Think about the customers of  the 37% of respondents that have seen a significant reduction in morale.  Can they feel that reduction in their dealings with those organizations?  You bet they can. 

It’s incredibly easy to recognize and reward associates when things are great, it takes a strong leadership team to pull the organization through in tough teams. 

Morale is the product of leadership not the global economy.  It is your responsibility as a leader to buoy the associates in your charge during these difficult times. 

Try these simple techniques:

  • Smile…like you mean it – associates will mirror your facial expressions and positive outlook
  • Maintain reward and recognition programs – survivors should be constantly and continually reminded of their inestimable value to the business.  Don’t let the little reminders slip away during cost cutting.
  • Get out of your office…NOW!  – be seen, be open, be honest about the future.  Sitting in your office brooding doesn’t inspire confidence.
  • Schedule listening periods – take the time to listen to your associates and hear what’s on their mind.  It’s a sure bet that most folks just want to bend leadership’s ear and know they’ve been heard.
  • Renew values, goals and priorities – break out this mission, vision, values gathering dust in your drawer and deliver a conscious and visible renewal to those promises.  That’s what those are, promises to your associates, your shareholders and the communities you serve.

It is a time for looking forward while building stronger relationships both internally and externally.  Remove yourself from the rigors of numbers management and renew those leadership skills.  Make it a personal goal to improve the emotional state of your business, put it on paper and track the metric like last month’s cash flow.

Your customers will appreciate it today and remember it as the line slopes to the North.

 

July 6, 2009 Posted by | Thinking About Associates, Uncategorized | Leave a comment

Where, oh where has empowerment gone?

In the late ’80’s and early ’90’s empowerment was all the rage.  Building self directed work teams in your organization was a top priority to improve productivity, innovation and reduce management layers.  During that period I had the pleasure and adventure of developing and deploying over 200 such teams in a variety of clients.  The results were staggeringly positive.  Since that time talk of empowerment has tailed off quite a bit.  Very few clients have undertaken the task of truly empowering their organizations to do great things.  In fact, recent developments have highlighted the bloated management layers that evolved since.  Many of the RIF victims over the past few months have been to thin the management layers.

I’m initiating the “Empower Now” campaign.  Just to remind us all that the magic behind true empowerment comes from this little equation, for the quantitiative among us, from Fisher E=f(A,R,I,A) where empowerment is a function of Authority, Resources, Information and Accountability.  Where any of the variables equate to Zero there is no empowerment.  As layers of managment grow possession of authority and accountability move to a single leader away from the team. It is clear that to justify 8 or 10 layer deep organizations, all the rage these days, many executives have built an environment where team members feel far less empowered to impact.

Today’s renewal environment offers a wonderful opportunity to invigorate through empowerment.  Push innovation and change through the active and overt involvement of every team member.  Remove barriers and allow productivity to flourish.  Arguing that single leader working groups make sense today is short sighted.  Information is readily available, simple to share and act on.  Resources are scarce but exist in the spirit of the team.  Layers are trimmed to open doors for authority and accountability. 

If there’s any doubt of the power that self directed work environments generate just visit the story of Semco Brazil.  Semco Brazil transitioned to a shared leaderhsip, empowerment culture to meet the demands of a near-death economic crisis and never looked back.  Employees make their own schedules, set their own salaries, senior leaders swap top job roles every six months. 

Empower NOW!!!

April 24, 2009 Posted by | Thinking About Associates | Leave a comment

Pulse Your Staff…Now

When was the last time you took the pulse of your employees?  Most businesses accomplish the obligatory annual employee climate survey to get a view of how the organization is meeting the needs of its most valuable assets, people.  If this has happened in your world and it was pre-November 2008 go ahead and throw it in the trash.  Employee’s needs have swung dramatically in the past 6 months from needing a high level of self actualization to needing consistent cash flow and the assurance a job will be there in the next few weeks.

As Q1 financial results hit the street and business leaders begin to reach back into the old cost cutting bag take the time to pulse your employee base before hitting the eject button on more assets.  Ask the right questions and you may find that the cost savings from adding to the unemployment totals may be jeopardizing your future.  Below is an excerpt from a strategic communication that recently emerged at an organization, tell me how you feel after reading the list:

Short-term actions effective immediately

  1. All discretionary travel is suspended.  Travel required by your job obviously should continue.
  2. Out of cycle wage increases are suspended with the exception of those positions that are on an approved, step-wage increase schedule (e.g., actuarial and customer service).
  3. Company provided meals are only approved for on-site meetings that run through lunch or dinner.
  4. Professional services and consulting engagements in excess of $100kmust be preapproved by the EC (process to be determined).

 Long-term actions effective immediately

  1. Replacement of Your Great Cards with non-monetary recognition greetings.  What employees tell us they value is the recognition more so than the $25 gift card.  So, we are retaining the emphasis on thanking each other and dropping the nominal gift amount in this program. (More details to follow.)
  2. Elimination of the Employment Anniversary Gift Program effective May 31.  We continue to believe that employee recognition is important.  We are developing tools for managers to recognize milestone anniversaries and other significant events.
  3. Competitive bidding for all RFPs will be standard (procurement has this underway already).
  4. Paper, color-copy & ink reduction program will be created (procurement to provide details).
  5. Office supply procurement governance program will begin (procurement to provide details).

Notice the justification that providing employees a token $25 gift card really isn’t what they want, it’s the recognition that’s important.  HA!  true but not really true.  People desire to be recognized that’s true, people also enjoy getting a little token, so let’s pull that out and save a few beans.  What’s the true impact of suspending the annivesary gift program?  Clearly a few more beans will be saved.  But what is the exposure this company now has to a reduction in productivity while everyone mocks the executive suite for being foolishly frugal.  How about asking your most valuable assets for feedback on what they’d be willing to do differently to put a few extra coins in the shareholder’s hands?  They probably will come up with ideas that will be both productive and provide savings.

 

Executives often come down with a case of RLD (Reduced Listening Disorder) when financials get a little iffy.  TIme to take a look at what really matters to your future through the eyes of the assets that serve your customers everyday. 

 

If you haven’t taken a quantitative pulse of employees in the last 60 days spend the money being saved on recruiting costs and DO IT… Just DO IT and take action on what you hear.

 

 

April 8, 2009 Posted by | Thinking About Associates | 1 Comment