Mastering the Art of Corporate Reinvention

Engineering changes within an organization is a complex task with many moving parts. There are technological advancements, faster methods for decision making, and changes in global markets that all contribute to making the right choices for change. None of these factors come without their fair share of risk, and the risk centers around doing things differently than they were done before. In other words, continuous change requires an understanding of the continuous risk involved with change. It is not a simple matter of making a decision to move in a new direction, but gaining the support of everyone involved to get you there.

Michael Bonsignore, CEO of Honeywell, and Gordon Bethune, CEO of Continental Airlines, spoke with MBA students of the Fuqua School of Business at Duke about how they both dealt with major changes in their companies, markets, and mergers (in the case of Honeywell and Allied Signal). Both leaders in their respective industries, Bonsignore and Bethune touched on how they handled major changes to move their companies forward through tough times and financial uncertainty. Throughout this interview there was a common interest in how these leaders lead their companies forward while implementing huge changes in the structures of their companies. This common interest was focused on changing the culture of their company identities.

In the case of Honeywell/Allied signal there was a clash of cultures merging together in the hopeful efforts of increasing productivity, making better products, and reinventing long term cultures into a new blended mission, a huge task considering the size and scope of both Honeywell and Allied Signal. Bonsignore made a very clear statement that those who help this new culture vision prosper will be rewarded and those who work against it will suffer. This decision and strategy defines the company's seriousness on moving forward as a new entity with new goals, vision, and direction. In my opinion, this is the paramount effort of a leader who says to his/her people, "You are either with us or against us. Get on the bus, or we will leave you behind". This puts the choice of change in the employees court. Work together to create something new and better, or get out of the way.

Both Honeywell and Continental have their barriers to their respective visions and goals. Rapid market shifts, economical fluctuation, technological advancements, and a whole bunch of employees to buy in to the changes being implemented. Both CEOs shared similar view points on how they over came these barriers. They got their people on board and helped them believe change was possible. Neither were afraid of making mistakes, and both of them emphasized the importance of learning through making them. Both CEOs credited their employees with the successes of their businesses. The focus on customer satisfaction also resonated with both of these leaders. Taking care of the people they serve, both internal and external, was Bonsignore's and Bethune's main focus, and this is the essence of their effective leadership styles.

Change hardly ever comes easy and without a price. Technology is expensive, restructuring an organization costs jobs, and creating a new culture or identity within an organization takes time and leadership. The examples Bonsignore and Bethune offer their companies are centered around a strong confidence that the vision and direction of change is important and good for the company. They live what they believe, and they both set the example for their organization to follow. This example is how I will focus on leading my small business forward. Whatever direction or vision I feel is going to be the best decision for the company, our customers, and our employees will be my personal driving force and dictate how I conduct myself as their leader. Changing the culture of an organization, large or small, starts with the leadership. Every decision I make, every change I implement, and every action made must reflect the overall vision and goal of the company. Change is a good thing, and getting your people behind it is the only way to make change work effectively.

50 Reasons Not to Change/The Tribes We Lead

There are three types of people in the world. There are the can-do's, the can't-do's and the watchers. The can't-do's are comprised of those who make excuses why things can't be done. For this type of person their excuses are valid, logical, and endless. It is not that don't want things to change, it's more of an internal belief that the changes just won't work. Dr. Daryl Watkins address a list of 50 reasons most commonly used by people who just don't (or won't) accept change in his presentation 50 Reasons not to Change. Unfortunately, there are a lot of can't do's in the world either by a lack of understanding, education, or unwillingness to swim against the current. Maybe it is because risk is a two sided coin, or they like "the way things are".

The second group of people are the can do's. To these folks anything and everything is possible. Obstacles are opportunities in disguise, and hurdles are there to make accomplishment that much more rewarding. These are the people who have established democracy, sent men to the moon, and fought for human rights. They will find a way to make things work. To these types of people there is always a way, they just have to find it. Fortunately, there very few of these types of people because the efforts of the few have always effected the greatest change.

And then there are the watchers. These are the undecided ones. The "maybe" people. They can be swayed towards the can't-do's through hesitation, or towards the can-do's by inspiration. "What if" is the deciding question the watchers ask themselves. This is the fence they sit on, and they are susceptible to influence.

When I was clicking through Dr. Watkins' presentation I was thinking to myself, "Yep, I have heard that before". Heck, I've even said them before. I admittedly accept that I was a can-do trapped inside a can't-do for a long time. For me, it took stepping out of my bubble, interacting with people who often failed, but never failed to get the job done. I started to meet a few people who quit on quitting, and was unshackled from my can't-do self. My father used to tell me that if one can do it so can another, they just might have to try harder. Now, I don't even acknowledge the excuses of the can't-do. They are just one more obstacle in my way towards progress. However, when I hear some of the reasons not to change I become more aware of the type of people I am working with, which helps me gauge the amount of effort I will expect to put in to prove them wrong.

The biggest difference between the can't-do's and the can-do's is attitude. If you believe, you can achieve. Our attitudes are directly affected by the changes we encounter on a daily basis. We either focus on the negatives or on the positives. Seth Godin opened his TedTV speech, The Tribes We Lead, by arguing that what we do is try to change everything. We try to focus on what bothers us and either complain about or try to fix it. He talks about Nathan Winograd who effectively changed PETA from an animal destroying agency to one that adopts out abandoned animals. He talks about Henry Ford who changed the way we manufactured automobiles. He talks about the can-do's and how making a positive difference can help reshape the world we live in. In essence Seth Godin is talking about converting the can't-do's and watchers into can-do's through action. He talks about tribes, and how people seek out others with shared interests. This is an important concept that reminds us that we do belong to a society, large or small, and positive changes can occur with just a spark among the tribe. We don't have to change the world, but if we infect our "tribe" with a can-do attitude and make positive changes within our "tribe" those changes could spread to other tribes and possibly effect change on a grand scale.

I chose to be a can-do. It is a choice. I have to listen for the seedlings of the can't-do's and squash them before they take root. There is no way I can convert all the can't-do's, but I can sway a few watchers and surely I can surround myself with can-do's. I do this by being positive, seeking out what bothers me and changing it, and infecting those around me with a can-do attitude. I don't have to change the world, but I can grab a hold of a good idea and give reasons for others to follow me. This is how I will make a stand and change our world... one tribe at a time.

JP

NASA Culture Change

The National Aeronautics and Space Administration is one of the most complex agencies in the US government. They have sent men to the moon, satellites beyond our solar system, peered further into space than ever imagined, and advanced an age of unparalleled discovery. In other words, NASA is the premier pioneer for exploration of our known universe.

What makes NASA so extraordinary? I would say its human resource, innovative thinking, and a willingness to achieve mission success. However, with great exploration comes great risk and failure. January 28, 1986 NASA lost the shuttle Challenger along with her crew, and more recently the shuttle Columbia disintegrated over Texas upon reentry. The loss of life and billions of dollars invested in these programs forced NASA to take a close look at where they could have made better choices, safer operations, and really take a look at their organizational culture. As with any failure NASA needed to know where they went wrong.

NASA employed an external entity to compile data through surveys, interviews, and observation of the entire agency, and what the information showed was a very clear gap in management-employee interaction and a lack of encouragement for upward communication. It wasn't a lack of willingness that was the problem, it was the lack of leadership upholding the core values of NASA that helped contribute to these disasters. NASA's Administrator, Sean O'Keefe, spoke to his organization about this extensive diagnostic effort and delivered an honest account that focused on answering the question of where they went wrong, what they plan to do to fix the issues, and how these changes will ultimately make NASA the organization it has the potential to be.

O'Keefe spoke about the importance of respect for fellow colleagues. He commented on the lack of leadership support and the encouragement of open communications up and down the organizational structure. More importantly, Sean O'Keefe took full responsibility for these pitfalls as the most senior leader at NASA. His message focused on the need for a cultural change throughout the entire NASA family, and I believe he was sincere in his commitment to see these changes through.

NASA core values are safety, people, excellence, and integrity. Every one of these core values involve the human element to achieve. They are not systems that can be established with code or automated with robots and computers. They are "people" values. The diagnoses of the culture within NASA showed that these values were understood thoughout the organization, yet they were not being implemented into action. Basically, the leadership in NASA was not walking the talk, and this is what O'Keefe focused on in his speech. Values without action are nothing more than empty words. Changing this cultural mindset was the answer NASA needed to rebuild their organization into a safer, more innovative, and powerful force in exploration. It starts with the people.

As I was watching O'Keefe deliver his message I kept thinking about my past career as a sales manager for Toyota. While I was not figuring out how to get a rover to mars, I was thinking about how I could be more proactive with my sales team. The only way to know what was going on in the trenches was to venture out from behind my desk and get involved. Sure, I had inventory to manage, numbers to crunch, and bosses to report to every hour, but none of that was more important to me than engaging with our customers and the sales people helping them. I often found myself staying far beyond closing hours to finalize the work I could have done during my shift instead of interacting on the floor, but I never minded that extra effort. It paid dividends with our customers, my sales people, and the dealership. Because of this I was able to find solutions to problems as they developed and not after the fact. I can only imagine how what sorts of results NASA could achieve with that same drive and awareness in its leadership ranks.

Very soon I will be the general manager of a small organization of talented people in Corpus Christi. I was not chosen to make drastic changes in this store, but to improve on the systems in place. Taking what I have learned from NASA and Sean O'Keefe I will focus my efforts not only on the products we sell, or the market we sell to, but on the valuable input and talent of the employees we have. I will continue to be engaged with our staff just as I had been with Toyota. I believe that the lessons learned from NASA's cultural changes supersede industry boundaries, and employing cultural awareness is the foundation for turning a good organization into a great opportunity.

JP

How Companies Can Make Better Decisions

The speed of business in today's fast-paced and connected world can make or break a company. The traditional hierarchical organization chart with the few decision makers on top and the worker bees on the bottom does not fit well with a complex and adaptive nature required to compete in such a fast-paced environment. Why? It takes too long to make decisions.

Marcia Blenko, leader of Bain & Company's Global Organizational Practice, believes that the decision making process comprises the basic unit of an organization. In Marcia's interview with Harvard Business Review she discusses how companies can make better decisions faster. Her company proved their theory that making better decisions effectively increases financial performance across the scope of global corporations. In other words, businesses of all sizes and scope operate at a higher efficiency level when making the right decisions faster.

Marcia defines decision effectiveness by using four key points. These are:

• Quality - are you making good decisions?
• Speed - how fast is your decision making process?
• Yield - how well do you execute the decisions you make?
• Effort - how much effort does it take to implement your decisions?

Using these key points and answering the respective questions can create an idea on how well an organization makes decisions. A company can be great at making good business decisions, but it may take them for ever. Another company might be amazing at making important decisions quickly, but doesn't take the time to ensure they are making the right decisions. According to Marcia, in order to move towards an effective and efficient business model a company must function well in all four of the key points of decision making. Each key point can be dissected into many separate parts that make up the whole. Filtering out the processes that make up a quality decision or the speed of how it is made ultimately will enable an organization to become more effective in making good decisions faster.

The data gathered from Bain & Company's Global Organization Practice shows that organizations that fire on all cylinders in regards to making good decisions faster also have a high employee engagement as a result. A more complex and adaptive organization utilizes its many resources to make its decision making process. Employee involvement in this process rewards the efforts of everyone involved in making a good decision for the company, and keeps people engaged. There is a connection, or ownership, of the decision when employees are encouraged to do the research, make suggestions, and help to implement the decisions they make. 

There are obstacles to the decision making process in a complex organization. When you flatten out the traditional organizational structure it may become difficult to know who actually has the decision making power. Is the right information getting to the right people? Do the people making the decisions have the talent and capability to make the right call? Is the leadership behavior indicative of making good decisions? The answers to these questions could help an organization gain a true idea of how decisions are actually made, or pinpoint where changes would be helpful in the process.

Marcia describes five steps to making good decisions faster. The first step is to know where your organization is at with the decision making process. Taking a hard look at any barriers within the process will enable leadership to assess areas that may need to be changed. Secondly, can the company identify critical decisions? Not all decisions are huge, change-the-world type decisions. Identifying and prioritizing decisions can help speed up the process. Next, identify what the decision is, who has the ability to make it, why the decision should be implemented, and when. Understanding these aspects of making decisions can enable the right people to make the right decisions at the right time. This is followed up with a sound support structure. It is important for the decision makers to know they have the support they need to turn the decisions into action. And finally, how well is the decision executed and being followed. Supervising the outcome is a good way to ensure you are receiving the desired results of a decision.

My understanding from Marcia's research and thoughts is that how well a company makes decisions in an appropriate amount of time is a good benchmark for the operational ability of an organization. Nothing stifles innovation and making sound business decisions more than a bunch of red tape. Reducing the obstacles in the process is a good thing, and organizations that streamline their decision making processes will rise to the top. In my business world it is important for me to gather as much information as I can to make logical suggestions to the owner of the company. The better I become at presenting sound and logical decisions along with a game plan to implement and supervise the results the more freedom I will have to make the decisions for my store. There is a level of risk in making any decision. However, taking what Marcia Blenko describes as the keys to making better decisions faster I am better equipped to the make the right decisions quickly and effectively for my organization.

JP