Category Archives: Change

Alignment, Change, Reorganization, Structure

Make Your Customer’s Business Simple

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Sometimes it is hard to think of business as simple. Perhaps as we have evolved from a production oriented society to more of a consumer and service oriented society we have evolved the notion that business is complex. Maybe it is because of our dependency on the tools and technology now required to conduct business has evolved as has the perceived complexity of the infrastructures that we must have to support them. Think about the power that we now have on our desk tops and in the palms of our hands. Despite all of this, I think that business is only complex if we decide to allow it to be complex, or worse yet, make it complex of our own accord.

Technology has effectively removed time and distance from the business equation. Anyone, anywhere at any time can access a global marketplace where they can “do business” with just about anyone else that they wish. It has also made everyone smarter, in that the only reason for anyone to make an uninformed purchase decision is because they chose not to get informed by using their aforementioned powerful desk top or hand held tools.

But if business is really not all that different why do companies continue to insist on changing and continue to invest in developing and creating new and better products? Why do companies still have sales teams and operations groups and all the other corporate functions that have been the mainstays of business organizations for hundreds of years? If business is really changing then why are so many things about it still remaining the same? When business’s reorganize, they invariably “shuffle the cards” associated with their organizations, but they are still the same cards.

I think it may be in that in its simplest form business is about delivering value. The value can be in the form of a product that can be as simple as a clay pot or as technically complex as a cloud based data storage system, or in the form of a service such as simple as a freshly mowed yard or the complex capability to operate and maintain that cloud based data storage system. The quantification of the value provided is determined by the amount of currency that will be exchanged for the clay pot, mowed yard or cloud based storage system.

There you have it. This is still pretty simple. Business is about exchanging money for something of value. I guess that is actually the definition of commerce, but in this case it is also business.

com•merce/ˈkämərs/ The activity of buying and selling, especially on a large scale.

It seems that it is from this point that we have decided to add complexity to the business formula.

Since business cannot fundamentally change the simplicity of exchanging money for something of value, it tends to change how it goes about pursuing this exchange. It organizes itself to simplify the pursuit. Then it reorganizes. It changes in response to a perceived competitive threat. It centralizes. It decentralizes, distributes and diversifies.

In short organizations drift into an internally focused approach to commerce and business. Since it is so difficult to change a customer, organizations tend to focus on changing themselves. It seems as though that there is a belief that if an organization can convince itself that it is changing in order to make itself easier to do business with, an organization can become that much better at doing business. This is an almost purely internally focused concept. Unfortunately business and commerce must usually be done with the external world.

This is an approach that invariable runs out of momentum. Organizations seem to believe that by endlessly trying to make themselves easier to business with, it makes it easier for the customer to do business. This is a key point. Just because an organization has tried to make itself easier to do business with does not mean that the organization has made it easier for the customer to do business. I guess a good example of this would be making it easier for the horse and buggy driver to buy buggy whips does not necessarily help him sell more buggy rides around Central Park.

It is a debatable trade-off of how much value is associated with the complexity a company can introduce into their systems and processes in an effort to reduce a customer’s complexity in dealing with them. Increased complexity comes at a cost or in this instance a price to the customer. An internally focused business confuses the value of removing customer complexity in dealing with a vendor, with the actual removal of complexity from a customer’s business.

This is a rather circuitous way of saying that the focus should not be on making it easy for a customer to do business with you. That must be a given. The focus should be on how you make it easier for your customer to do business with their customers. That is where the true value of commerce is.

There is a certain amount of value that a customer will recognize in an organization that makes itself easy to do business with. There is far more value that a customer with recognize in an organization that makes it easy for the customer to do their business.

This is where we get back to concept of “simple” in business. How do you make it easier for your customer to do business? How do you help them remove the complexity associated with their customer commerce? How do you reduce their risk? How do you help them increase the perceived value of the good or service that they are offering to their market?

It is no longer good enough to just make it easier for your customer to buy your good or service. Everybody has just about mined out this opportunity with the law of decreasing returns starting to take greater and greater affect versus the input required to affect the change. The better approach now needs to be how do you make it easier for your customer to sell their good or service. What expertise can you contribute to their success? Remember it seems to be the tools and technology that is complex, not the business.

Expertise has been and still is a product. But as I noted earlier, as products that make up our tools, and the infrastructures to support them have evolved and become more complex, it seems that expertise associated with operating these tools and infrastructures continues to be somewhat overlooked.

Organizations continue to try to restructure themselves to make it simpler for their customers to do business with them. They also try to restructure to make themselves more efficient at conducting their business. I think the next logical step in the evolution is to no longer think about how you can restructure yourself to conduct your business, but how you can help your customer restructure themselves to make their business easier to conduct.

I think the question for the future is no longer how can I be easier to business with, but more how can I make you easier for your customers to do business with? What customer complexity can you remove from their organization? It should no longer be what device can you sell them that is more efficient, but what can you do for them to make them more efficient.

In an internally focused, product driven world this sounds complex. It is easy to believe that because it is different than they way organizations have been thinking, but when you think about it, it should be pretty simple.

Accountability, Adversity, Change, Conflict Management

Kung Fu and the Laws of Change

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It seems that I do have a tendency to talk about change in business, a lot. I think one of the main reasons for this is that some of my initial leadership roles involved being charged with either changing and transforming some underperforming organizations, or shutting them down. No one likes or wants to shut an organization down. It doesn’t matter that it was not your leadership that caused the performance issue. Shutting down an organization is an event that will stay with you for a while.

This is what has led me to coin what I humbly position as “Gobeli’s First Law of Change Management”. It goes something like this:

No matter how many businesses you grow, expand and improve in your career, shut down just one business because you could not get it to change in order for it to survive and you will always and forever be known as a “hatchet man”.

A hatchet man is a person who is recognized in the organization as someone who causes people either voluntarily or involuntarily to leave the company. They lay off. They fire. They close. When they walk into a room or meeting, all conversation momentarily stops. Other people keep track of them and never turn their backs on them. Once given the label, it is almost impossible to shake it.

This fact has led me to coin what I humbly position as “Gobeli’s Second Law of Change Management”. It goes something like this:

A “Change Agent” is someone who when faced with the option, will almost always do whatever it takes so as to not be labeled a hatchet man.

When faced with the down side prospect of being labeled a hatchet man as opposed to the upside opportunity of changing a poorly performing business into a more profitable one, I think it is easy to see why I usually chose to be a change agent. It really isn’t so bad once you understand some if the realities associated with being a change agent. You need to understand that even though you are avoiding the down side of shutting down a business there are still many obstacles that will need to be overcome.

This is what has led me to coin what I humbly position as “Gobeli’s Third Law of Change Management”. It goes something like this:

No matter how necessary the change is that you are leading, no matter how much it will improve profitability, efficiency or customer satisfaction, there will be people who will feel that they have something to lose as a result of the change, and they will resist the change at every opportunity.

Everybody understands in some esoteric way that change must occur. They just don’t want it to happen to them. They want someone else to have to change. They may already have plans and strategies that conflict with your change. They may have organizations that are dependent on the change not happening. (I am sure that there were buggy whip product or service or maintenance groups that were not happy with the change in corporate direction when the automobile came about). They in short have a vested interest in the status quo.

The point is that they will take the short sighted approach and fight change. The fact that the alternative would eventually be the emergence of a hatchet man on the situation does not seem to matter. That will be then and this is now.

In my rather arcane way this change resistant conflict has reminded me of an episode of the old television show Kung Fu that I saw as a kid. For those of you unfamiliar with the show, it had David Carradine as a Kung Fu master monk wandering around the old west looking for his brother. That was the extent of the show’s entire plot. There would be a requisite martial arts action sequence and there would also be a requisite eastern philosophy lesson in each episode. As a kid I loved it.

I am sure that it must have had some influence on me and my resulting studies of martial arts and readings of eastern philosophies. Although I have been talking about conflict and resistance to change, I am going to use one of the show’s eastern philosophy lessons here.

The lesson that I am going to refer to dealt with attackers and defenders. The following is a paraphrase of the lesson. Please read it with something of an Asian accent in your mind to get the full value and effect since that is the way the Kung Fu master sounded when he intoned it to the then monk – student David Carradine:

Attackers must win to be considered a success. Defenders need only survive to be considered a success.

The question that must first be answered when making sense of this quote is to understand if you are the attacker or the defender. The answer is that as a change agent you are a little of both. You are attacking the current status quo that you are wanting to change, and defending your proposed change plan. However when you look at the bigger picture, change agents are attacking and those that are resisting the change are defending.

With this in mind, and knowing that you must “win” the change related contention points in order to implement change, I will now coin what I humbly position as “Gobeli’s Fourth Law of Change Management”. It goes something like this:

Before engaging in a change management battle, get the data. Get all the data. The data will be your friend. It is much more difficult for people to argue with and resist numbers than it is to argue with and resist opinion.

Now a certain amount of attribution for this law needs to be given to Robert McNamara. He was one of the first automotive industry “whiz kids” and a member of President John F. Kennedy’s cabinet in the 1960’s. He was a great proponent of data acquisition and analysis. He was called a “whiz kid” because he seemed to be right quite often. This is probably because he had acquired the data and analyzed it better than everyone else at the time. Go figure.

Now if you have acquired the data and properly analyzed it, this will force those that are resisting your change to rely on something other than data for their resistance. They will call in other topics and non sequiturs as reasons for their resistance and defenses for their positions. These reasons and defenses can be quite vociferous and colorful, but data usually wins. They will resist the change with an appeal to the “greater good” argument for the company. They will counter with their own incremental improvement. They will talk about the non-monetary effects of the change.

In general there will be great keening, rending of clothes and gnashing of teeth.

As an aside, I once had a group try to argue that there were more hours in a man year in one country as opposed to another as one of the reasons to resist the pending change. Desperation when it comes to resisting change knows no limits.

In the final analysis, if you have followed these simple laws for effecting change you should be successful. The one note of caution to post here is to understand when you are dealing with a business that does not want to change. Sometimes despite what may be some of your best work, the decision to change will just not get made.

We all need to understand that we may not be acting with all the data that those who must make the final change decisions have. There can be other plans. There can be other strategies that you may not be party to. On the other hand, they may just like the way things are done now.

You need to takes these pieces of information into account when trying to be a change agent as opposed to a hatchet man. It is also a good idea to remember that doing nothing can eventually be an invitation for a visit by those that swing not a hatchet but an ax.

Change, Differentiators, Leadership, Management

Lead, Change or Get Run Over

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Normally when I start off on an article I have a pretty good idea of the topic that I want to cover. Call me old school but this antiquated idea of writing coherently about a single topic appeals to me. That will not be the case this time. I have been thinking about change lately and I decided that I need to step outside of my comfort zone and practice a little of what I have here to fore been preaching. Hang on; it could be something of a bumpy ride, at least for me.

Since I have just mentioned change, I think we will go there first. I am going to propose what I humbly call “Gobeli’s Axiom of Change”. It goes something along the lines of the following:

In order to change, you must do something different.

There are so many wonderful quotes about change that are available. I have used many of them in the past. I am particularly fond of the quotes attributed to Albert Einstein regarding change. He seemed like a pretty smart guy to me but I won’t use any of his quotes again here. If you want to read them, go Google “Einstein quotes change” and see what you get. There are not only a bunch of quotes from Einstein; there are a bunch of sites that have a bunch of quotes from Einstein.

However it has been my experience in business that change is not about quotes. It appears to actually be some sort of arcane concept that business people pay little more than lip service to. They are more apt to put up posters encouraging change and quote Einstein when it comes to change, than actually changing anything.

The idea of change and the quotes surrounding change make it seem like a lustrous concept that is neat and clean and simple. It’s positioned as if it is your patriotic duty in business to change. Change however is not clean and simple. It takes effort. It involves risk. It is invariably messy. That is just the way change works. This is because you are usually changing from something you know, to something you don’t know, yet.

It is precisely for these reasons that many managers will talk glowingly about the need for change, but will never ever do anything different. Doing something different would mean that there would have to actually be some change involved and that would subject them to the effort, mess and risks noted above. Therefore there is usually a significant amount of discussion regarding change and the need for change, but due to the inherent reluctance to change anything, very few things are ever done any different.

When it comes to change, remember what Einstein said:

“Insanity is doing the same thing, over and over again, but expecting different results.”

Based on this and other topics that I have covered in the past, one could infer that leading change, or leading anything in business for that matter involves more effort, and more risks than following someone else who may be doing the leading. I think it is pretty safe to say that is the case. In the past managing has been much easier and less stressful than leading.

The shuffling of papers and paying lip service to all the change initiatives used to be a safer, lower profile approach to business. There are many people who have happily gone through their careers on this path.

If that is truly the case, it brings up the question:

Why would anyone want to lead?

The simple answer to this question is:

Because things have changed.

It used to be that people who took jobs and worked reasonably hard were pretty much assured that they probably had a job for the rest of their lives. They had reasonable job security and could look forward to a pension when they retired.

As Dorothy said to Toto in the Wizard of Oz:

“I don’t think we’re in Kansas anymore.”

When was the last time you heard of someone having job security? How about staying at the same company for an extended period of time? Lastly, when was the last time you heard of anyone talking about a pension when not referring to a corporate or municipal bankruptcy?
I don’t think this is a case of Dorothy and Toto leaving Kansas. It is more like Kansas slipping away out from under them when they weren’t paying full attention to the landscape.

With all that being said, it still doesn’t fully answer the question of why anyone would want to lead. This reminds me of a college survey that I once read a long, long time ago in a galaxy far, far away. The survey asked the question:

Which is a bigger threat to society: Ignorance or apathy?

The general consensus at that time was that no one knew, and no one cared.

I think the parallel here is that leaders do know and do care about what the threats to business are, and what needs to be done to avoid them. We have all heard the more than trite saying that the only constant in business today is change. I do not necessarily think that is true, or we would all be experiencing more change and it would be much easier to change than it apparently is. If change is truly a constant we seem to have far too many people constantly fighting against change.

I would not focus on the change function as a topic unto itself, but rather as a result of instability. When business seemed to be stable (and pensions were available) there was not much in the way of change. Now even this was not entirely true. Technology continued to change, but the way business and businesses worked remained reasonably constant. Hence the ability for the risk adverse follower to still make out a reasonable career existed.

The only thing stable about today’s business paradigm (I actually hate that word, but it does seem to fit well in this context) is the instability of business. I worked for a company that was once recognized as a world leader in their market with more than thirty billion dollars in annual revenues, and less than seven years later the company was bankrupt and gone from the market landscape.

In a business world where apparently so many do not know what to do, or are unwilling to venture forth with a plan, it would seem to me that the best way to go now is to lead. When it turns out that everyone is taking the safe route and everyone is following everyone else, then everyone ends up at risk. Inactivity or failure to act now presents a bigger risk than taking action, even the wrong action.

Leaders understand the risks involved with taking a stand or implementing change, and do it anyway. They don’t take unnecessary risks. They understand that the risks associated with today’s business environment are multiplied if they do not take action. They see that what was once a stable landscape is no longer stable. They understand that waiting for someone to tell them to take action is riskier than identifying the action that needs to be taken and then taking it.

Despite my affinity for quotes from Albert Einstein, I’ll close with a quote from someone else. John Cage was a renowned musician and composer. He said:

“I can’t understand why people are frightened of new ideas. I’m frightened of the old ones.”

In an ever more unstable business environment leave it to a musician to capture the essence of the new structure. Go figure.

Challenge, Change, Change Management, Culture

Don’t Produce…..Create

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Happy New year to all. Here is to working toward a great 2011.

We have all heard the statements regarding the need to “produce” results. In these days of ever tighter budgets and greater demands for profits and performance, the phrase “produce, or perish” might never be more accurate. It is possible that after so much time trying to improve and refine our production that it might be time for a new approach.

“Producing” results had normally come from finding a way to do an existing job or process incrementally better than it had been done in the past. This incremental approach to producing and improving results has a tendency to run out of momentum due to the law of decreasing returns. It eventually requires more and more incremental process refinements to produce less and less incremental results improvements. After several years in the current economic environment, it may be possible to say that we are in fact in the region of decreasing returns when it comes to incrementally improving, and producing results.

What is required today in the business environment is a quality that seems to be in short supply during tough economic times: Creativity. In down economic times the “Risk / Return” relationship in business seems to invert. That is to say that the “Risk” part of the equation takes on a greater and greater importance vs. the potential for the improvement of the return. In down times it assumed that the “Return” will be more and more difficult to attain, so the process focuses more and more on reducing the risk and in many instance the cost of the change. This process plays more and more into the “Incremental” approach to improving and producing results.

The time has come for businesses at all levels to start looking at the data differently; to rethink the processes and to “Create” new business and new ways of doing things, not incrementally producing and improving the current results. This is obviously much more easily said than done. You cannot command the team to just create new ways of doing things, but as the leader of the team you can become adept at recognizing what is incremental improvement and what is the creation of new ways of doing business.

Again it is usually easier to accept the incremental improvement proposals. Some may be valuable and can be implemented; however as they say “Necessity is the mother of invention”. If you can show the unwillingness to increment, and the willingness to implement and reward the creation of the new, you can start to change the way business gets done. The responsibility to recognize and foster the creation of new processes and business needs to be vested with those that have the authority to accept and make those changes.

The time has come for businesses and business leaders to stop producing results, and start creating them.

Change, Management, Performance

The Black Swan

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Have you ever seen a Black Swan? I had to go out and Google it to see if they really exist. They do. All the other swans that I have seen were white. When someone mentions swans I think of white ones. It was a common expression in the early U.K. as a statement that describes an impossibility, from the old world presumption that “all swans must be white”, because all historical records of swans reported that they had white feathers. The Idea of a Black swan was outside my initial perception set. I guess it shouldn’t have been. If we can have white (albino) tigers, why can’t we have Black Swans?


 


So what?


 


A gentleman by the name of Nassim Nicholas Taleb wrote a book in 2007, by the name of The Black Swan. Taleb asserted, “What we call here a Black Swan (and capitalize it) is an event with the following three attributes. First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable. I stop and summarize the triplet: rarity, extreme impact, and retrospective (though not prospective) predictability.” He goes further to state “A small number of Black Swans explain almost everything in our world, from the success of ideas and religions, to the dynamics of historical events, to elements of our own personal lives.”


 


I think we need to apply this theory to business. In looking at the various corporate cultures and methods of business conduct that I have been associated with, I see many, many white swans. When I look back at the various roles I have had throughout my career, I find that I was my most successful when I decided to operate outside what was then the expected norm and go my own new/different way. I had my highest impact on the organization, and I was my most successful.


 

In today’s unpredictable business market it may seem risky to operate outside of the expected norm. After all, the Chinese proverb is “The nail that sticks its head up gets pounded down.” On the other hand, as businesses today strive for cost reduction and profitability improvement they are finding that they don’t need as many white swans in the labor flock. In this day and age I think I would rather be regarded as “High – Impact” and “Rare” than be regarded as just another member of a flock that is being reduced.

Change, Leadership

Don’t Get Comfortable

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We are all aware that the business environment is changing. We should all know that it is constantly changing. What we may not be aware of is that the rate of change in the business environment is increasing. Things are changing at an increasingly faster rate. These facts have led me to the following rule:


If you are comfortable doing what you are doing, you are probably doing it wrong.


Change does not breed comfort.  As you spend more time in your new leadership role, you learn its requirements and you get more comfortable. It is this “comfort level” that we all strive for that we should also be prepared to avoid. As the leader we can either react to change or we can lead it, but either way change is bound to occur.


Change requires effort. Those businesses that lead change force other businesses to react to it. As I have said, change causes discomfort. You have to learn a whole new set of requirements. However, I have found that it is almost always more preferable (and less stressful) to go through the change and learning process on your own terms instead of reacting to someone else’s.


As the leader you can either act on your own changes (new plans, processes, programs, organizations, etc.) in order to improve your business, or you can react to someone else’s changes as they try to improve theirs. In many cases you will need to change for both purposes. This may seem like a pretty simple view of things, but it is probably a pretty accurate description of the current business environment.


The point is that if you are too comfortable in your job, there is a good chance that you are not changing as either an action or reaction to the environment, and that will be a cause of even greater stress and discomfort in the future.