December, 2009

How Great Companies Manage Change To Win:                     A Brief Tutorial

Gifts from the Recession

I was reflecting the other day with a couple of business leaders on the good, bad and ugly of the recession. Being a glass half-full kind of guy, I think despite the horrendous pain and suffering that has been and still is going on, there are some bright spots for businesses, leaders and the people inside those businesses.  I also believe some of the things we've learned will have some legs, as they say.

The Pressure for Value

I know, I know, my old refrain, but awareness of the need to push for value has never been greater.  If you want to win, if you want to survive you simply have got to prove that you bring real value to the enterprise. Sentimentality is out.  Value comes in lots of forms.  Hard forms such as detailed engineering drawings that when followed build great products at ITT Corporation. Soft forms such as the passion and creativity that's fundamental to a new release from Pixar Studios.

Running on All Cylinders

Leaders now realize they have an option: "Let’s see, shall we run our business on three cylinders or all eight?"  Before the recession many were running at something less than full capacity. Then they discovered that by tuning here and tweaking there they could exponentially increase the willing contributions of their people.. Voila!  "I have a choice.  Get some of our people turned on, excited and pushing with us. Or get all of them working toward the same goals."  What a concept.

And because most things that are good are easy to get used to, many smart business leaders see no choice but to continue to generate higher levels of people performance as we move into 2010 and beyond.

Fueling this performance tune-up is a renewed interest in open book management. I've written here about this before. For those new to the concept, open book management focuses on creating businesses of business people where all employees have access to huge amounts of financial information and are expected to use it to drive up performance.  Two of our clients right now are pursuing open book.  I have a meeting this week with the heads of finance and communication for a Fortune 300 operation to create a plan to get more people working daily on improving operating income. 

It's another rational notion. Why have only five people in the so-called C-Suite working on improving operating income, which in this case is what the leaders are getting paid to do, when you can every person in every function of the operation with a stake in improving operating income?  A CEO might say: "Let's see, I can have 10 members of management help me make more money or I can have 750 people whose daily work can affect the business help me make more money."

It's not a tough choice for smart people.

Activity Doesn’t Equal Communication

A client was telling me recently about all the ways her company communicates with employees. She was breathless. “We do emails and webinars and town halls and coffees with the CEO and teleconferences and videos and…” she gasped for breath when I sort of interrupted and asked her if all the activity actually communicated.

Short pause and then: “Well, exactly.  You’re right. We have no idea whether all the activity is communicating anything, do we?   

No, we don’t.

What we do know is that there’s a lot of activity.  The activity--checking the activity off our checklist--feels oh so good and the leaders smile knowing smiles and declare all the activity oh so good.  But, was it?

Wait a minute!  There was a cost in terms of time, energy or money associated with creating all the activity.  If the communication activity caused people to take actions that added more value than they had been adding before, then it was good.  Maybe!  But, value was added only if the cost associated with the activity was less than the gain created by it, right?  It’s not value-neutral if there’s any cost associated with the activity. It’s a drain anyway you cut it. In lean, it’s called waste.

Poor performers tend to take the easy way when managing communication; do a lot of stuff and hope something sticks. Actually the really poor performers do a lot of stuff and don't really care if anything sticks.  They get their kicks out managing output rather than outcomes. These are the world's bureaucrats at work.

Great companies and those that become great take a different approach.  They focus on doing a small number of things very, very well. And those few things are often downright mundane. (Oh, the number of times I've been asked to make communication sexy!) But because they have a high impact when they’re executed well, those small, mundane things give predictable performance lifts where they matter.

So, the next time you’re tempted to do a video, a webinar, a town hall or anything else that consumes resources, ask yourself what the great companies ask--the “so what?” questions. After the activity has occurred, so what?  What will be better? And will what’s better be sustainable or will it represent another sugar-buzz in a long line of sugar buzzes?  What will the activity cost?  What’s the size of the gain?  Will value be drained or added? 

Funny Business on the Web

I’ve been working on getting a new, improved website for Jim Shaffer Group up and running, which will include a blog I’m calling Funny Business, because when you get under all the grease paint, business is often pretty funny. Or at least it is for some of us who try to maintain a sense of humor and perspective.

Funny Business isn't a narcissistic exercise. It's a way to get more of you involved in the discussion. I get a lot of responses from this Report and I often regret that more people reading it don't get the benefit of the conversation. 

Rather than focusing on a couple of thematic subjects as I have in the Report, Funny Business will address a wide range of topics connected to my world of corporate cultures, leaders good and bad, as well as the world of a road warrior.  I’ll cover a broad landscape, but I hope we’ll all learn more when we share our experience, toss ideas back and forth and use them to make things better.   

Although you'll still continue to receive the regular Leadership Report, on Monday, December 28, you'll be able to contribute to the conversation at www.jimshaffergroup.com.  I look forward to hearing from you then and in the days to come.

Happy Holidays and Best Wishes for Continuing Improvement in 2010!

Jim