Already ingrained in organisations are their cultures, values, beliefs, structures, measurements, shareholder expectations and people; executives, managers and employees. All these elements interact, influence and reinforce each other. Chip and Dan Heath, in their book Switch, liken this mass of “how we do things around here” to an elephant. If the elephant doesn’t want to change its direction, there is not much the rider, perched on top, can do to make it. Especially if the change is to move off the well known and trodden path. The Heath’s advice to enable change is to; direct the rider, motivate the elephant and shape the path.
However, before we start, we need to make sure we don’t stop anything. Asking people to pause while we work out the new path or making large declarations of change programs can easily impact the organization’s results. We need to continue to satisfy our customers, employees and shareholders while making these changes in order to buy the time to show the elephant its new path.
The CEO’s Role:
It is a given that the CEO must lead the change and they must have Board buy in. By leading the change, we mean more than sending out the latest business book for everyone to read or sending people on training courses. The CEO must be an active member of the implementation teams making these changes. A main reason for this is because most organizations are structured around vertical silos and the only common escalation point is the CEO. Therefore, the CEO is needed in the meetings to break through the prisoner’s dilemma problem found in vertical siloed organisations, where no single person can make a decision. With the CEO in the meetings, they are able to make decisions on the spot and progress can be made. Later on we can resolve the prisoner’s dilemma problem but at the start this can only be done with the CEO’s participation.
For the CEO themselves their involvement lets them see first hand the issues the organization is tackling and the progress they are making. This provides the results and war stories that they can share with the Board, shareholders, customers and importantly the employees. This reinforces to everyone why we are making the changes and that it is not just another fad.
The first thing for the executive team to work on is the organization’s mission statement. This needs to reflect the outcomes the organization is delivering for its customers. That is the right hand side of the Alignment Diagram. It needs to be at a high enough level so that changes in customer requirements, technology, markets, competitors, are seen as new opportunities to deliver the mission statement. More information on mission statements can be found at, “Why are mission statements critically important?”. The mission statement needs to be embedded into the consciousness of the organization, this is done through nested mission statements as explained in Vertical Leverage. With the mission statement front and center, decision criteria are based on improving the delivery of outcomes.
As explained by Alistair Mant in Intelligent Leadership the mission statement provides a ternary goal as opposed to a binary goal.
“Binary meant: if I win, you lose; or if we scratch each other backs, we can screw the rest… The opposite mindset to the binary I dubbed ‘ternary’… The idea of the ternary relationship was that it was governed by the purpose or object of the relationship… rather than interpersonal power… Mercedes was a ternary organization because all its human relationships were governed by the ambition to make perfect motor cars.”
We can further embed the mission statement into the organization with the next step, measurements. As per "Do we have the right measurements?" what was described by Deming as unknown and unknowable, but highly important, in this digital age is now already collected or collectable. With the Internet, web traffic, smart devices, an app for everything and the Internet of Things it is now possible to measure either directly or through proxies our status and progress in achieving our mission statement. This is important because it creates a local feedback loop on our decisions, processes and systems. The local feedback loop, measuring outcomes, challenges the previously entrenched internal measurements. As described in “Do we have the right measurements?” most measurements are internally focused and may tell us how many times we jumped up and down but not if we moved forward. It is easy to measure activity; it is harder to measure progress.
When the measurements are used with the mission statement the discussion is not about who is right or wrong but what is the best way to make forward progress. The turf wars and political infighting is set aside as we all focus on achieving our agreed outcomes. This is what Mant is explaining with his concept of the ternary goal.
Shaping the Path:
The combination of a high level, outcome focused, mission statement with progress measurements creates a gap between the current state and the desired future state. This is used to create John P Kotter's step 1 of change, a sense of urgency, from his book, The Heart of Change.
This becomes the motivation to move the elephant. As the old saying goes, “if you don’t change direction, you will end up where you are heading”. It is time for the rider to hop down and work side by side with the elephant to shape the new path.
One of the biggest issues organizations face is a lack of collaboration and coordination across the vertical functional departments. A way to uncover what is actually going on is to use the Lean thinking technique of value stream mapping. Value stream mapping maps the path of the customer offering horizontally through the organization as it is created, sold, shipped and supported. This can be a very enlightening piece of work. Often it highlights multiple disconnects between departments, interrupted flow of work, conflicting performance measurements (internal versus internal versus outcome based) and especially waste. Sometimes it is the first time that the executive team is aware of the extent of these issues with the employees shaking their heads, saying “about time”.
This is the start of the journey. The combination of the mission statement, outcome based measurements and the value stream mapping, uncovering the workflow issues, creates the burning platform or compelling event for change. From here the real work of change can start. An example of the fundamental change that can occur was captured by Bob Chapman, CEO of Barry-Wehmiller;
“I have no idea where this came from but I asked the presenter, “Steve, how did this change your life?” I had no idea what Steve was going to tell me. There was a long silence, and then Steve said, “My wife is talking to me more”.
Here we were with all this Lean data and I was stunned. “I don’t understand Steve. Help me”.
Then Steve proceeded to tell me one of the most profound stories I have ever heard. “Do you know what it’s like to go to work for a place where you are just a number?” he said. “You punch your time card, you go to your workstation, and you’re told what to do. You’re not given the tools you need to do it. You get ten things right that day, and nobody says a word, but you get one thing wrong and you get your ass chewed out. Your manager complains about your salary and your benefits, and by the time you go home at night, do you know what? You don’t feel very good about yourself. When I went home and encountered my family, I realized I wore that feeling. It affected my relationship with my wife.”
Steve went on: “Now I’ve got a chance to contribute my skills with my team members, see those ideas translated into improved results. When we ask questions, we get answers. In this environment, I feel better about myself when I leave this place. I feel I’ve been heard and I’ve contributed. When I go home, I feel better about myself and I’m nicer to my wife. When I’m nicer to her, she talks to me.”