The Strategy-Innovation-Knowledge Forum

‘One-Size-Fits-All’ Programs Require ‘Lean’ Pixie Dust (or equivalent)

As leaders demand evidence of effectiveness, consulting firms respond with pre-packaged methods. While it’s good to seek proven results, we must also demand real customization. Methods from organizations with different cultures, constraints, and business situations must be re-designed to complement what’s already positive to ensure adoption. Even a proven approach, if not shaped to fit your organization, can hinder progress in the following ways:

 

Resources Wasted

Without an operational review as a guide, the ‘approach’ often replaces well-functioning, familiar methods with less-effective, complex activities. Precious employee energy is then wasted on needless change.

 

Progress Slowed

Responsiveness suffers as routine tasks become bureaucratic, facilitated sessions and work effort is split between ‘approach’ and ‘normal’ requirements.

 

Culture Weakened

The consultants describe current practice flaws in detail and praise ‘approach’ advantages. Employees see little respect or appreciation for current practice nor the effort (passion, imagination) that went into creating it. They perceive our message to be, “success requires ‘us’ to become less like ‘us’ and ‘more like some other organization’”.

 

Authority Weakened

Many ‘approach’ activities disappear quickly because the consultants did not seek to understand the reasons behind current activities. Management’s authority diminishes with the failure of each proposed activity.

 

[Authority is the cumulative impact of followed directives. Leaders use authority to convert employee energy into action. Abandoned directives weaken influence.]

Future Diminished

Our actions tell the next generation of leaders that management is more about setting targets and installing tactics (pre-packaged ‘approaches’) and less about understanding how things really work, respecting people, and appreciating the personal investments that created the current state.

 

Successful organizations build up their own culture at every opportunity and filter any new ideas through their culture’s protective lens to safeguard employee engagement and what already works well.

 

I imagine Disney taking what’s advantageous from popular approaches like six-sigma, then bringing core concepts to life within their effective and rich culture. I struggle picturing Snow White as a part-time Black Belt – though I could visualize Tinker Bell spreading ‘Lean’ pixie dust to approve an effective customer service process.  

 

Ensure any new program starts with a real understanding of the operational and cultural aspects of your present situation and then tailor the program to reinforce what’s already good and target only what’s necessary to produce the performance improvement. The result will be a significant step forward that will forever lift your organization’s capability and capacity.

Rapid Performance Improvement? – Conserve Energy for Value Creation

Background – Survival

We returned to help a long-time client whose industry has been battered by the economic downturn. Survival hinges on their next 12 months’ performance and they need to deliver greater value with an already depleted team. Cost cutting alone will not suffice.

 

Need – Enhance Value

This organization is already so ‘lean’ its bones show through. Senior managers wear multiple hats and run a disciplined, well-run, and well-measured operation. Employees continue to find ways to trim and improve effectiveness. New products and services are needed to attract new accounts and increase revenue from existing accounts. To meet this challenge the organization needed a quick lift in innovation and collaboration, and a greater responsiveness to sales opportunities.

 

Process – Build Out From Current Practice

The analysis showed a few things each department could do to immediately move the organization ahead. Even with a team stretched to the limit many things were done well. We limited our focus to identifying what changes would be absolutely necessary to accomplish the needed ‘lift’.

 

We studied their operation and created accountability for new activities molded around their current set of routine meetings, departmental hand-offs, and transition points.

 

Effective operating routines received only minor adjustments in spite of seeing other organizations heavily modify daily practices when implementing similar concepts.

 

The goal was to preserve employee energy for value creation rather than expend it on unnecessary organizational change.

 

The ‘lift’ was communicated as a necessary step-up rather than as a major overhaul. One could argue a crisis-style approach might better stimulate short-term compliance, but defensiveness and decision-uncertainty slow an organization’s reaction time – something they could ill afford. We highlighted examples of what they did well. Employees were given sets of realistic activities depicting what each person and department could do differently each day to propel the organization forward – as adjustments to current practice.

 

We invited suggestions to improve the activity sets’ reflection of departmental roles and practices. Accountability came by a link from the annual performance review (and compensation consideration) to each employee’s contribution as pictured within the ‘activity set’.

 

Reaction – Immediate

A concern was quickly alleviated that some may miss the seriousness and need for immediate improvement unless we disrupted the operation with a proliferation of improvement meetings. After the presentation a new employee commented to everyone present,“This flies in the face of what has been done in all the big companies I’ve worked for. It seems so common sense to start from where we are now and move ahead. You’ve left alone what we are already doing well and have adjusted what’s necessary to accomplish the performance change. This is so forward thinking.”

 

Current Results – Visible and Growing

It’s been a few weeks and the senior manager is encouraged with the ‘lift’ in focus and responsiveness to opportunities. Each department is looking for ways to bring more value to customers.

 

Previous Results – Double Digit Growth

The general manager is a believer. This is actually the third time the client has asked us to employ this approach. Two earlier projects (five years and ten years ago) focused efforts on responsiveness and cost reduction. Comparing the three years prior to the first project to the three years that followed, annual sales growth increased by 12%.

 

Recommendation – Conserve Energy for Value Creation

Rapid performance improvement doesn’t have to mean a disruption to value creation activities. Describe (with accountability) what each individual and department could do differently each day to move the organization ahead. This technique works quickly because it generates almost no resistance to change. Employees tell us they have been waiting for years for their leaders to tell them specifically what they should do differently to really contribute. The most common response we hear is, “Finally!”

 

Downturn Rx: Fix Leaks - Frame Leaps

SMG’s powerful but less-obvious suggestions to help your business through this downturn.

1 - Fix Leaks

You've probably already stepped in to fix your company’s cash leaks. You’ve cut spending, reduced staff, and redoubled efforts on winning more business. Here are three additional ideas to conserve cash and customers:

Remove Process Inconsistencies and Assumptions

Most businesses fulfill customer needs using a core ‘relay race’-style process. A complete package of information must pass without contamination from sales/inside sales to customer service to operations to fulfillment to invoicing. If steps or handoffs are ill-defined, open to interpretation or require individuals to make assumptions then the company is wasting resources and producing service errors which negatively influence customers. Perform a start-to-finish process audit to make sure information is complete and passes quickly and clearly between steps. Note: a single error-at-a-time, corrective action approach can not deliver process-wide consistency. You must bring all the steps together and define what information is required at each handoff and ensure people know precisely what’s expected. Also forget about a complicated process analysis -- you're looking for a few meetings over a few weeks otherwise the audit itself becomes a waste of resources.

Revise Structures to Support New Strategy

Make sure the organizational structures which motivate employees support your downturn-strategy directives. For example, if your company is pursuing out of the ordinary sales opportunities, look carefully at your sales incentives (and other mechanisms) to make sure they reinforce the revised sales actions. Most organizations fail to revisit their incentives and give salespeople a rousing speech about a new sales emphasis while at the same time driving the old behaviors with the old incentives. The result: frustrated, less-engaged salespeople and precious little change in sales. Adjust your incentives and other structures before giving the ‘expand your horizons’ speech. Then you can send them out to execute the revised approach knowing the new, required activities are supported.

Strategic Customer Review for Additional Sales

List your top customers and quickly describe what each company must do to manage in this downturn -- put yourself in their management’s shoes. Take your list and for each customer identify which products or services you provide or could provide that would help them achieve their short-term goals. Forget long-term -- we're fixing cash leaks in the tyranny of the urgent. Done correctly this requires four to five hours, but no more. Involve your salespeople in the discussion, but this is a strategic analysis and occasionally sales staff need help thinking at this higher strategic level. This is a great opportunity for senior management to come alongside sales and provide quality assistance to help them revitalize sales.

 

 

2 - Frame Leaps

This is a perfect time to take a fresh look at your industry, where your business is positioned, and create opportunities to leap ahead of competitors. The current economic situation will encourage your people keep an open mind, even to revolutionary ideas.

Picture, Test, Move:

Picture

Picture your business upside down. Picture disadvantages as advantages.

If your IT infrastructure is more expensive to run but is superior to those of your competitors – could you offer administrative or customer related services to your less sophisticated competitors? You could increase market control, prevent competitors from making similar IT investments, and wedge your company between potential customers and your competitors.

Your company may have a higher cost structure with more qualified personnel. You could offer clients a more sophisticated level of service. You might offer skilled expertise to competitors if it were visible to clients that your company was providing essential expertise. Find a small opportunity for cooperation then communicate to customers that competitors seek out your talent.

 

Test

Find a simple, straightforward way to test your hypotheses. Anyone can easily test market ideas with hundreds of thousands of dollars. It is more prudent and more fun to tell everyone to test promising ideas with a limit - say $500 per experiment. No project should be allowed to proceed without validation of its premise, but the cap will unleash your people’s creativity. Just make sure you encourage the practical thinking that arises – it is critical to your company’s future.

Move

Find ways to build toward your leap. Start these projects and shield them from the standard requirements of the more established parts of your business. A promising idea has promise not established market results – that’s the promising part. Commit even limited resources to move ahead. Your employees will see your movement and will be tempted to bring their thinking caps to more typical parts of your business. Your customers will see it and will see your company as worthy of new business when money begins to flow again. Your competitors will see your actions as confirmation of your market leadership and will be more inclined to partner with you in the future.

 

Any way you look at it – your business will be stronger.

Four Elements of High-ROI Change Management

Change management is critical to achieving expected results and engaging talented professionals in any enterprise-level initiative. When delivered with excellence, change management services provide an unparalleled return on investment both in terms of increased performance and enhanced respect for management.

What is Change Management?
It is normally a consulting-style intervention designed to positively alter the prevailing practice and operating philosophy of an organization to allow it to accommodate or exploit a strategic opportunity and achieve the expected return on the initiative or opportunity.

Excellent Change Management = Outstanding Return
A McKinsey study (1) of 40 organizations found the return on investment differed greatly depending on the degree of change management employed for significant change projects such as enterprise software initiatives or mergers and acquisitions. When a comprehensive change management program was integral to the initiative – the return on investment averaged 143%. The return on investment for projects was 35% which employed either no or poor change management.

Apply the McKinsey findings to a million dollar technology deployment and the difference in derived value would be just over $1M ($1,080,000). If the organization spent an additional $200,000 on excellent change management services the ROI would be 440%! - (880,000/200,000*100). A compelling return, but what is involved in comprehensive change management? Here are the four elements (in the center of the graphic):

Culture
As a first step, any large-scale initiative must be actively shaped to reflect and reinforce the beneficial aspects of the existing culture. If not, even a well-intentioned project can be misinterpreted and/or resisted by those whose support will determine its success or failure. This shaping goes beyond merely inserting a slide in the overview presentation and extends to making adjustments to how the project is managed and conducted. As leaders concentrate on the project and implementation tasks, it is easy to forget that the existing team worked with pride to create the present state and can react defensively to descriptions of its limitations, especially by ‘outsiders’. They are aware of the current state’s deficiencies but need to see a respectful depiction covering both the hard-won gains as well as the obvious weaknesses. The entire project should be shaped to respect past efforts, not blame contributors, and invoke continued support. We evaluate six culture dimensions to ensure a new initiative is seen as a logical extension of the organization’s history, values and mission.

Strategy
The change initiative must be framed within the organization’s overall strategy to show how it complements and enables the strategy to be achieved. This ‘business case’ justifies and summarizes the common behaviors required to support the initiative. Most organizations spend the majority of their energy developing a comprehensive strategy presentation and corresponding numeric targets. Comparatively few make the effort to consolidate and describe the common aspects required to support the strategic initiative.

Numeric targets garner executive attention and create clear pressure to deliver but if there are too many, they can conflict with each other and foster behavior counter to the organization’s overall goals (e.g. discouraging inter-business unit cooperation on critical projects as units shield resources for their own initiatives).
Even a well thought out set of numeric targets aren’t today’s complete answer as less-measurable and more-observable support behaviors are unaffected by targets (e.g. interactions between a manager and a direct report). These observable actions must also be guided.
In addition, here are two overlooked reasons why the strategy-initiative presentation often fails to produce the desired change in professional behavior:

1. Talented employees lack freedom not understanding. Most professional behavior arises out of the organization’s prevailing policies, procedures, and perspectives which influence what people do and how they do it. Professionals hear a ‘rational’ argument for change, understand, but are not really free to alter their behavior. Nothing has really changed for them since everything in the organization continues to reinforce the current activity set.
2. Talented employees need us to communicate in their time-frame. One manager complained the organization’s strategy dealt with issues out three to five years, while their department struggled without any practical guidance to sort out what should happen in the next three to five months.

To effectively portray the change initiative requires a consolidated view of what’s required to support the initiative expressed through a presentation as well as Practice and Tactics.

Practice
Many organizations mistake process for practice. While describing the necessary revisions to operating processes is definitely an important component of practice, more is involved. Practice also involves understanding and adjusting the policies, procedures, and preferences which influence professionals’ operating decisions.
Most organizations do an adequate job describing the required process changes but stop there assuming the setting of numeric targets alone will be sufficient to motivate people to change their operating decisions. This assumption is only partly true. Numeric targets and milestones are important but don’t alter the existing mechanisms which reinforce ongoing tactical decisions.
Managers and professionals often voice frustration over their inability to resolve opposing targets and policies. Talented professionals lose respect for management when these no-win scenarios are created then ignored.

I’ll never forget a conversation with two VP’s from the same organization. A VP-level incentive had been naively created to improve a specific outcome. They each complained, “When I make decisions to maximize my bonus, I reduce my colleague's bonus and vice versa.” They personally struck a compromise while both looked for new positions outside the company.

Practice involves evaluating and adjusting the relevant processes and the influential policies, procedures, and preferences to give people the information and freedom to support the initiative.

Tactics
Use tactics to communicate the strategic initiative. This change management element represents the highest return in terms of delivering concrete support for an initiative. Professionals expect management to describe strategy as actions. In the words of one incredibly talented manager, “Until [actions are suggested] the strategy isn’t real, it’s just a slide deck.”

Think about the last strategic presentation you gave to your team. Isn’t one of the first reactions from your managers, “I heard what you said, but what do you want me to do [differently]?”
Convert the ‘three to five-year’ strategic initiative into sets of actions which model initiative-support and match their decision-horizon. Professionals do not expect nor want every aspect of their role to be scripted, but they do want us take the time to illustrate initiative support using practical suggestions.
Some might say that line managers could (should) provide this translation. In most cases, they cannot. Managers, by virtue of their position, are subjective and focused on departmental and shorter-term issues. Strategic initiatives span the entire enterprise and require objective implementation (e.g. would a manager eliminate his/her department?).

Greater ROI Requires Greater Experience
A practice review is required to allow the generation of role-suitable actions. Conducting the practice review and generating actions requires extensive operational experience over and above the communications expertise held by a typical change manager. Due to the additional expertise and review effort required, this element is not included in typical change management programs. It also helps to explain why typical programs often fail to deliver expected results.

Benefits In Addition To Increased Execution
Taking the time and effort to suggest tactics (within a change management program) conveys respect for professionals and their contribution – increasing engagement. Also, by presenting suggested actions, professionals also learn to think strategically improving the cognitive capacity of the organization.

1- "Change Management That Pays," McKinsey Quarterly, 2002.