Monday, December 17, 2012

What Change Management has to offer Newtown and Aurora

Change Is Possible
I’m a change management professional, not a politician or lobbyist.  For me gun violence is a reality to be changed, and it can be changed.  It is not an element in the periodic table.

In the spirit of full disclosure, I was born Canadian and am naturalized as a US citizen.   That means that my core value set is often different from many of my American friends.  I don't need to be armed to protect myself from my government or fellow citizens.

In addition, earlier this year – before the Aurora shooting – I witnessed a shooting incident.  It was in a restaurant facility where a crazed husband stalked his wife injuring her and a friend before turning the gun on himself.  The emotions of the patrons ran from: being perplexed to being catatonic to be being terrorized to being thankful.  If any of the Texas diners were packing concealed heat that night they were using a table to protect themselves, not a glock.

So I have a bias.  I believe the level of gun violence in the US can be reduced; not eliminated, but reduced.  I believe there is more to be done than mourn the victims and pray for the families.

What can we learn for Change Management?

1. Recognize the Issue:

Rationalizing the status quo will get us nowhere.  We need to accept that we are not doing enough to protect the innocent – particularly children.

2. Paint a Monet:

There is no detailed answer.  We need to paint a Monet where we can kind of see a pond, a bridge, and a tree.  We can fill in the details as we travel toward our aspirational vision.

3. Create Pressure Through Dialogue:

We need to talk.  We need to create grass roots awareness and pressure.  We need to castigate assailants and memorialize victims.  We need everyone in the gun violence supply chain to feel the pressure and modify their behavior.

Be clear, I’m not talking about big government passing intrusive laws.  I’m talking about a government that leads by facilitating and following.  A government that funds research and creates opportunities for fact based debate.

I believe that we can create a culture that responsibly questions the national attitude toward: gun ownership; the power of firearms on our streets; and even the open worship of gun violence in our entertainment.

We can renew ourselves.  We don’t need a big change in laws to control guns or their aggrandizement in our society.  Prohibition and censorship are not answers.  Responsibility is.

We’ve Done This Before!
Pollyanna, you say!  No, historian.  Look at big tobacco.  Fifty years ago it was out of control.  Big money in big tobacco was enticing vulnerable youth into a life of bad health and likely early death.  Bogie and Bacall gave rise to the Marlboro Man and Camel’s Joe Cool as icons of our culture.

I’m not an apologist for the tobacco industry, and yes I recognize that many laws and regulations have been passed to define where big tobacco can play.  However, I also recognize that public outrage – usually in the name of our children – created limitations that were inconceivable only a few decades ago.  Sure, maybe it was a bad idea to let everyone smoke in packed movie houses, but now you can’t smoke on a restaurant’s outdoor patio.

We didn’t outlaw tobacco and there is no need to outlaw guns.  What we did was classic change management: we recognized the issue; we envisioned an ideal future state; and we created a public dialogue that pressured big tobacco to become a responsible corporate citizen.

We know how to reduce gun violence in the US.  We know how to protect our citizen’s right to “life, liberty, and the pursuit of happiness.”  There is no “paint by numbers” answer, but there is a reward.  

The reward is the hard work of moving forward.

Monday, December 10, 2012

Innovation – The Link in the Virtuous Value Chain

Innovation Links Employees & Customers
I get tired of hearing that “70% of change initiatives fail.”  Firstly, I’m not sure of the context and accuracy of this urban myth.  Secondly, to the extent that it is true I don’t hear of many solutions other than the tautological: “we need better management of change.”

Since this 70% mantra has been around for more than a decade maybe its time to question why we haven’t solved the problem.  Let’s step back and look for other correlations and trends.  I see two:

  • Employee Disengagement:  It’s astounding.  We’ve worked for decades to disconnect employees from their employers.  Now that we’ve hit all time lows in employee engagement we seem surprised.
  • Customer Dissatisfaction:  No matter how hard we work at the customer experience we find that levels of customer loyalty keep dropping in this world of mobile “show-rooming” and social media.  Customers are now in charge of brands; not company’s.

We have produced a vicious cycle: 
Employee Disengagement->Customer Defection

My question is: “How can change, or any initiative, be successful within such organizational malaise?”  Shouldn’t we solve the organizational question before we work on the change question?

We haven’t failed at change; 
we’ve failed our employees!

So if we start with employees, how do we re-engage them?  This topic has received myriad attention in the past few years, but a lot less by way of results.  We know the answers, we just can’t figure out the implementation paradigm.  

For example, if we look to Daniel Pink we can find one slice of answers.  His research shows that engaged employees need three things: Purpose, Mastery, and Autonomy.  Ok, that’s a good list, but how do we take action?  Well, I have a few thoughts.  Firstly, let’s look at Purpose.  My observation is that:

Employees don’t work for their employers; 
they work for their customers!

No matter how hard organizations try they just can’t remove the desire of most people to do a good job.  Very few people wake up and say “I want to do a bad job today.”  Yet, the drive for undisciplined profits and imposition of bureaucratic controls thwart the energy of people at work – except when they are directly involved in solving a problem for a customer.  How often have you heard a customer disdain an amorphous company but love the person who solved their problem.

So, customers give employees Purpose.  But what do we do about Mastery and Autonomy.  My answer is that we involve them in Innovation through:
  • Skills.  Humans are creative by nature.  They need to regenerate and they love to bounce their ideas against other ideas.  However, often they just don’t know how to structure idea generation and synthesis.
  • Means.  Employees need “Nike autonomy” – when it’s right for the customer “just do it.”  When the issue is higher than low hanging fruit we need mechanisms to register employee ideas, and get short term funding for experiments.  These tools are not a mystery in this time of technological open innovation.  

Change initiatives will succeed if we connect our employees to their customers.  Innovation is the link in this virtuous value chain:

Employee Engagement->Innovation->Customer Loyalty

Wednesday, December 5, 2012

2013 – The Social Media Generation Joins the Workforce

Connection Obsession
Oh, oh – our workforce is changing, again.

The last decade has been characterized by record low employee disengagement.  In general, employees just don’t care about creating shareholder value.  According to the research they draw paychecks and try to balance the demands of work with the demands of their life style.

Disengaged, yes; but also diligent.  Most of our current workforce comes to work, even virtually, trying to get a job done.  Our workers may have been entitled by their parents but there was an understanding, even if resented, that there was a hierarchy that needed to be appeased.

Social Media Generation
I think this is changing.  I think we’re seeing the beginnings of the “social media generation” hitting the workforce.  What I’ve seen recently is an emerging trend - even though it’s blurry.

The most intimate relationship is with their smartphone  

We’ve spent a lot of time recently in business understanding the technological impact of social media. We can now hit your i-phone with a special drink promotion as you walk past Starbucks.  We’re constantly alone together.  For many this is a “wow” phenomenon; for “kids”, it’s just life.

But what of the human (shall we say “social”) side of social media at work – that is, beyond our obsession with surfing, tweeting, and Facebooking on the job.

Those entering the workforce in 2013 simply don’t think the same as the rest of us. They have a need, and expectation to be connected.  It may be a form of narcissism, but they want to be connected, and known to be connected.

… kids have grown up inside an adult bubble

Many have grown up inside an "adult bubble" where they have been encouraged to connect by saying what they think - to their parent's and adult friends.

What they don't realize is that they were never judged inside the "adult bubble" - but they will be when they enter the workforce.  This "connecting without judgement” often means publishing without a filter or discretion.  Why else do we see endless lewd partying pictures or a frivolous obsession with kittens?

Quo Vadis?
Social media is the great leveler; however, organization life is, well, “organized.”  So, what impact will this new generation have on organization life?   
  • Will the new workforce really understand "confidentiality" and the need to protect "business intelligence?”
  • Will “whistleblower" laws be the least of a corporations confidentiality concern as we see stuff in the media that we never dreamed of? 
  • Will we be working in “open landscape” offices so our recruits can feel connected even when they’re not on the phone?
  • Will communications with the boss be only through curt text messages?
  • Will employees only commit to a one year horizon as they check their phone for more interesting opportunities in the ether?
I don’t know the answer to these questions, but I do know that managers and Human Resource departments aren’t ready.

This is going to be fun!

Friday, November 30, 2012

Converging The 3 Biggest Management Issues of 2013

The 2013 economic indicators don’t look great!  We’re heading over a “fiscal cliff” in the US while we wait for “European contagion” as the economic engines in BRIC slow down.  

What’s a business to do?  Is this a perfect storm, or a perfect opportunity?  Will businesses sit on the sidelines and hoard cash or will they get back in the game and take risks?  We’ll know the answer in a year.

In the interim whether organizations decide to sit this one out or move forward they cannot protect themselves from three major issues:

Employee Engagement
You pick the number, but employee engagement is at all time lows and there is no reason to reverse the trend. 

Customer Loyalty
This is on the same path as employee engagement. Technology has put customers in charge of brands. 

Ideas are the lifeblood of an organization’s health and relevance, but “survival management” has stifled the free flow of new ideas.

These three issues are not separate; they cannot be addressed individually; they must be addressed as one.

In my consulting over recent years I have learned that: 
... employees don’t work for their organizations anymore; they work for their customers.  
It is folly to admonish employees with pleas of profitability, bonuses, and shareholder value.  It is equal folly to believe that cosmetic changes and better communication will overcome the engagement malaise.  We have demonstrated to employees that the business doesn’t want to make a commitment to them.  Employees are now reciprocating. 

When I talk with employees they show their passion and energy when they talk about “their” customers.  When left alone (I’m avoiding the overused, yet appropriate word “empowerment”) employees will work diligently to provide the best experience for their customers.  Similarly, when I talk with customers they often harbor dislike for the amorphous organizational entity but lasting admiration for the employee who made things right.

Innovation is the nexus of employee engagement and customer loyalty; however, 
we don’t build organizations for innovation, we build them for efficiency and consistency of delivery.  
In effect organizations work hard to prevent the natural alliance between employees and customers.  

Now I’m not na├»ve, I recognize that some times employees are bad (and should be dismissed) and sometimes we don’t want employees to think (for example when they must comply with laws and regulations).  Employees understand this.  What they don’t understand is the organization’s orthodoxies and internal controls that prevent the application of common sense in a customer situation.  

Equally, when I talk with CEO’s they want the same thing.  They want employees to act reasonably in serving their customers.  They want employees to offer up ideas that will change orthodoxies and bend internal controls in the service of customers.

So why don’t CEO’s and employees get their way?  Well because there are well meaning layers of management, systems, and procedures that get in the way.  No one is malicious, but the result is disastrous.  The opportunity for a virtuous cycle of: employee->innovation->customer turns into a death spiral of: employee disengagement -> customer defection.

It doesn’t need to be like this.  Human Resources, Customer Experience, and Innovation functions need to look at this problem from the customer point of view.  They need to ask the question:

... how do we unleash ideas from all employees so we can provide our best customer experience?

In 2013 organizations need to build hope into their workforce and “wow” into their customers.  

Wednesday, November 21, 2012

Hostess: Management Duplicity On A Twinkie

Are you kidding me?  Has management in the US come to this?  

Seriously.  I thought the strength of America was ingenuity.  Innovation.  Being the best.  

Have you been following the Hostess-Twinkie debacle?  As the media reports it, you’d think that the 18,000 unionized employees are reveling in some form of sadomasochism as they bring down the house of Hostess.  Apparently these employees believe that losing their jobs is a small price if they succeed in punishing management.

Let’s take a brief look at the context for this story.  Yes, Hostess is in Chapter 11 and wants to liquidate if the courts allow it; however, this isn’t their first bankruptcy.  Oh no, this is becoming a core competence for Hostess.  Their first experience was in 2004 and when they surfaced in 2009 – are you ready for this – they had lower sales and higher debt.  

What Did Management Do While In Chapter 11?  
Well, employees took $110 million in annual cuts, but prior to the current filing in January there still were 372 separate collective bargaining agreements; 80 health plans; pensions; and some heavy work rules.  So how much restructuring did management actually do the first time?

Now the clock has turned and employees are told that to save their jobs they need to take an 8% cut in pay and 17% in health benefits.  About 2/3rds of the employees agreed; however, 1/3rd went on strike claiming, “it’s not our fault!”  

I don’t know where all of this will end up.  Certainly the unions have some culpability, but what about management?  What has management been doing for the last decade?  Certainly not managing.

A Benchmark - Innovation
I want to throw out one benchmark - the benchmark of innovation.  You know that quality that is naturally imbued in all Americans with the title of “manager;” that quality that built America and separates it from the rest of the world.

Here’s a startling assertion that was reported in a national newspaper: since 2009 Hostess introduced one innovation in its product line: Nature’s Pride bread.  One of its competitors, Grupo Bimbo introduced 1300; everything from flatbreads to health foods.  That’s right the innovation ratio is 1:1300.  Oh yeah, Bimbo’s employees are also unionized, but paid about $6,000/year more than comparable employees at Hostess.

So let me ask that question again: “What has management been doing at Hostess?”

Success Was Not A Mystery
Like most companies, the business conditions at Hostess were not a mystery.  The needs of Hostess customer’s shifted as the market became more “health and additive” conscious.  People still wanted Twinkies, but they wanted nutritious snacks too!  

How did Hostess miss this?  Yes, it took on new debt while in bankruptcy, but the company was expected to grow into the debt – not lose $1 billion in revenue.  Apparently management had no vision.  Apparently it had its hands firmly on the controls of internal financial management while it lost its grip on the external market, competition, and customers.

Whatever management was doing, it clearly wasn’t managing.  Now a lot of people could be hurt: owners, creditors, and employees.

Management Must Own It's Actions
It's time that Hostess management stands up and says “mea culpa.”  It's time they admit that they missed the winds of change.  It's time they recognize that lack of Innovation caused their demise.

Monday, November 12, 2012

Change Management & the US Election

Does He Have The Answer?
Well, I'm glad that’s over.  After several years and over $2 billion dollars Americans finally elected the President of Ohio.   

Will the post 2012 election finally address issues in the US electoral process, such as:

  • Disenfranchisement
  • Administration
  • Outcome
I think the answers are: no; yes; and maybe.  Let me explain.

Disenfranchisement – the anachronism of the Electoral College
The unsustainability of this relic is now obvious.  The two parties spent about a billion dollars each trying to sway a very few electors in about half a dozen swing states. 

The spending sweep stakes winner this year seemed to be Ohio and its 18 electoral votes.  I live in Texas.  It has 38 electoral votes.  If it wasn’t for the evening news citizens of Texas wouldn’t have known this to be an election year.  Texas, for the moment, is bright red Republican.  Why waste campaign effort when you know the answer?

The Electoral College not only ignores vast numbers of voters, it also treats then differently.  Because it is based in proportional representation rather than per capita, each vote in Wyoming is more than twice as powerful as those in California.

Isn’t it time to get past “states-rights” in a national election for President?  I think so, but I don’t see it happening any time soon.  Who has the political will to take on this monster?

Administration – joining the world of Developed Nations
Administration of federal elections is a third world business in the US.  I’m astounded when I hear that American delegates participate in election oversight in developing nations.  This is America at the height of arrogance.

As I understand it, “elections” are the right of the states – through their partisan Attorney General down to each county – it is not an exaggeration to say that each of America’s 13,000 counties runs its own election.  Yet, “voting” in US federal elections is within the purview of the federal government.

The current state control of “elections” makes the system wide open to partisan abuse that starts with gerrymandering and runs through any manner of voting restrictions from when, where, and how you can vote.  In highly contested counties there is a lot of formal and even informal pressure that can be put on blocks of voters. 

If a tenant of democracy is voter participation then the US federal election is not a model.

In future election cycles is it possible that the US Congress will use its “voting” responsibility to make change in how the election is run?  Will the US do what most mature democracies do?  Is it possible that the US will establish an independent federal election commission to prescribe: standard voting days and hours, consistent ballot formats, and a single voting technology. 

Citizen should not feel suppressed.  Making changes is not a mystery.  Best practice models for election administration abound.  All the US needs to do is to look north to my native Canada where Canadians figured this out years ago.

Outcome – does the Vote really Matter?
This is the core question.  Do the mechanics of elections matter.  Is it important whether we have proportional or per capita representation?  Does it matter whether elections are fair?

This question is central to optimism and the defeat of cynicism in the US today.  Does the voice of the people matter; or will powerful vested interests maintain the policy gridlock of polarization?

There is urgency in America today.  It is faced with huge issues, and the world is watching to see how well it does.  The “fiscal cliff” is looming and behind that is a national debt that needs to be pared.  Success correlates with economic revival; failure correlates with depression. 

This is a test for change management.  Everyone knows the game; but can the players get out of their own way.  Is there room for collaboration that leads to resolution?  Was the voice of the electorate strong enough?  Maybe?

For me the final words for this election go to the political philosopher John Stuart Mill:  “In all intellectual debates, both sides tend to be correct in what they affirm, and wrong in what they deny.”

Friday, October 26, 2012

Innovation in Korea: Rules of the Mind

The Power of Innovation
The Asian invasion!  How soon will we face our fate?  Will the west be buried by Innovations from the east?  Will we be left in the dust?  

I think the answer is that we’re ok in the near term if my experience in South Korea is any indicator.

The whole concept of Innovation fascinates me. 
·      How do humans dig into their natural creativity and come up with ideas that move the world in a positive direction? 
·      Once you have an idea, how do you turn it into something useful?

I’ve worked around the world and I sense that some places are better at idea generation and implementation than others.  Why is this?

Well I recently spent more than two years in Korea building Innovation capability within a large company.  This gave me a chance to do first hand observation and research.  I found three things:
1.     The vast majority of employees are not engaged in Innovation.  Hierarchy and deference leave them out.
2.     Innovation in product extensions and “adjacent possible” new products is disciplined, rigorous, and repeatable.  The reverse engineering mantra of “faster, better, cheaper” is deeply ingrained in the rhythm of the business.
3.     Korea is a long way away from seeing a Steve Jobs, Mark Zuckerberg, Eric Schmidt, or Jeff Bezoz.  White space, game changing, blue ocean Innovation is rare in Korea

While I was in Korea I took time to get to know my hosts.  I questioned them about their history, culture, and future.  I visited their museums, landmarks, and festivals.  I studied and listened.  Ultimately I consolidated my learnings into a five page article.  Here is the summary: 

Innovation in Korea is the captive of uniformity of thought and respect for institutions, build on centuries of homogeneity and the teachings of Confucius.  

The entrepreneurial spirit in Korea is swallowed by its large conglomerates.  Seoul is not a hot bed of private equity investors.  Investment capital is generally consumed in the bureaucracy of entitlement.  Capital in Korea belongs to deference.

I respect the achievements of my Korean friends.  It’s impossible to downplay the economic “Miracle on the Han” or the legendary products and services coming out of: Samsung, LG, and Hyundai/Kia.

But is “faster, better, cheaper” the sum total of the Innovation story in Korea.  Will Korean businesses be able to engage the entire workforce and will their Innovators bring new business models to the global stage?

You can look deeper into these questions by reading the whole article: Innovation in Korea: Rules of the Mind

Monday, October 15, 2012

The Decline of Innovation!

Is Innovation a Shooting Star
Never chase a bus or a management technique; there’ll be another one soon!

Is Innovation losing its urgency?  I fear so.  Take a look at the littered landscape of management science over the last half-century.  It’s a history of chasing silver bullets. 

I’m not sure where to draw the starting line but let’s say it’s somewhere in the 60’s: maybe with Douglas McGregor’s “theory X and Y.”  Before that I think we had specific techniques that gave us insights into specifics issues.  I’m thinking of Weber’s ideas on bureaucracy; Taylor’s scientific management; and Mayo with human behavior.

But in the 60’s the notion arose that management was a discipline that could be learned, not just experienced.  Emerging thinkers included: Warren Bennis, Aaron Wildafsky, Peter Drucker, Henry Mintzberg, and W. Edwards Deming.  These scholars saw a slice of success in complex organizations, studied that success, and codified it so others could learn and prosper.  These were great times for management thinking, experimentation, and aspiration.

Out of this nescient thinking came a flood of movements to help managers “get it right”:

  • Quality: six sigma, Kaizen circles, continuous improvement
  • People: performance management, leadership development, empowerment, commitment and engagement
  • Compensation: pay for performance, incentives, recognition
  • Planning: strategy, business plans, projects, budgets, accountabilities
  • Culture: vision, values, core competence, orthodoxies
  • Customers: service, unarticulated needs, satisfaction, loyalty
  • Metrics: the Balanced Scorecard, KPI’s and indices
  • Innovation: idea generation and implementation

It seems to me that these techniques follow a similar pattern:

  • We see a successful business and try to understand the genesis of the success
  • We describe the success factor then define it as a hypothesis for success
  • We test the hypothesis in successful and unsuccessful organizations
  • We form the data and declare victory for our success factor
  • We create a generic silver bullet system that will yield success to all true believers, then finally
  • We create a recipe: “10 steps to business success through xyz”; just follow the steps, rinse and repeat. 

We’ve seen this pattern dozens of times.  We accept the new system with enthusiasm; we generalize it to the whole organization; we “tic and tie” all the linkages in a complex web.  Then the system begins to implode and we study the reasons for failure – which are usually cited as lack of executive support and employee resistance. 

Well I think that Innovation has completed its ascent and is now passing the apex on its way to decline.  Innovation has overextended itself.  Its sharpness has become dull.  It is trying to answer too many questions for too many people.

Innovation doesn’t need to be at the center of organizational life in all organizations.  Sure, all organizations need ideas if they are to renew and stay alive; however, innovation at Apple doesn’t look like innovation at Bank of America.   At its core (no pun) Apple is an innovative culture that encourages ideas from everyone everywhere. 

This is not so for a volume based transaction organization like BoA where consistency and efficiency are paramount.  I suspect that BoA doesn’t want most of its employees to be highly empowered.  They likely want employees to think within tightly controlled guidelines.  Too many people thinking too far outside the box at BoA could put the organization in legal jeopardy with governments and regulators.  What organizations like BoA need is Innovation on the fringe where they can find new businesses in the discontinuities of the market and shifting needs of customers.  This is the lesson to be learned from Apple.

If Innovation is to shine we need to be much clearer about its value.  We need to ratchet back and see Innovation for what it is:

  • Unique:  Innovation has to be sized to meet the needs of the organization.  
  • Passionate: Innovation is an outlet for the creativity held within the human spirit.  
  • Anti-systemic: Yes, idea generation can be learned but game-changing innovation is serendipitous.  Innovation systems limit innovation.  Leave room for chaos that is driven by the emotions of people.
  • Focussed: Let’s stop generalizing and start focusing on the Innovation value proposition.  We’re not about continuous improvement or product extensions – that work is for others.  Innovation is about finding ideas that change the world.  This is difficult, specialized work.  It’s not for everyone but it needs to be supported by everyone.

All management techniques try to do the same thing.  They try to keep organizations alive.  They look for the levers and hot spots that renew an organization within a context at a point in time - management techniques are temporal. 

Innovation is a tool, not a toolbox.  We can either use it wisely or dilute it beyond recognition.