6 ways leaders disrupt the ‘Lemming Effect’

 

It is a confusing world.

On one hand, change is everywhere, and the pace of change is increasing as we watch. On the other, generating change in an organisation is really hard; we humans do not   like change, despite what we sometimes say. We are hard wired to resist it in the absence of a compelling reason, some set of circumstances that leaves us absolutely no option.

In the 50’s, psychologist Solomon Asch ran a series of ground-breaking experiments where he showed the power of conformity.

He shows a group of subjects two cards, one with three lines in it of different lengths, the second with a single line.  The question was, which of the three lines on card A was the same length as the line on card B?

He would go around the room, asking the question, and each person successively deliberately gave the wrong answer, until he got to the last person, the only real subject in the room. In an overwhelming majority of cases, the last person agreed with everyone else to the obviously wrong answer.

We are hard wired to conform, to agree with the group, to avoid being an outlier, even when the group is wrong; we still find it hard to do anything other than conform.

Evolutionary psychology at work.

Being outside the safety of the group, where cooperation added to the odds of survival, you conformed or you were expelled from the group, which meant you quickly ended up as sabre toothed tiger shit.

Not an attractive prospect.

There are not too many sabre toothed tigers left around, but the safety of the group is still a driving force in our behaviour, so we have to change the mind of the group.

  • Create a catalytic event. When confronted by a crisis, where the status quo has clearly failed to deliver, change is suddenly made easier to implement.
  • Identify the opinion leaders in the group; convince them, let them do your persuasion work for you. ‘Local’ networks and opinion leaders are very powerful as change agents. Conversely, they are in a position to block any change they do not like.
  • Identify a ‘keystone’ change, one that forces other changes, that that clearly demonstrates the value of wider improvements that can be achieved. Managing a manufacturing business as a contractor, we had an assumed  capacity problem, that necessitated long runs to inventory to service demand. The result was slow inventory turn, redundant stock that could not be sold, and excessive working capital, all problems stemming from the capacity limit. On analysis, the real problem was in the scheduling of the production process, which created a bottleneck at a key piece of machinery. This was solved by rejigging the timing and order of activities, changes that were strongly resisted by staff until a mandated trial clearly demonstrated the substantial productivity benefits that accrued.  This one  change led to significant improvement in almost all other productivity and financial KPI’s.
  • Create stories that the group members can relate to, that demonstrate the costs of no change are greater than the risk of change. The story related above took on a life of its own, as the staff involved rewrote history, by assuming the responsibility for suggesting and driving the ‘keystone’ change.
  • Have great clarity about the benefits of the outcome after the change, how it will be achieved, and the benefits it will deliver. Again, the story above had a knock-on effect through the business, as the results of the improvements were made very public, and credit given to the staff involved.
  • Embed the changes into the operating psyche of the organisation. Culture is elastic, and unless the binds of the past are comprehensively broken, they will spring back once the pressure is released.

Lemmings are persistent creatures, if not too bright. Put a barrier in place in front of the cliff, and they will climb it, unless there is an alternative path that is made to be more attractive in some way leads them in a different direction.

How are you disrupting the Lemming Effect in your enterprise?

 

Cartoon credit: Mike Keefe Denver Post.

 

 

Are SMART goals redundant?

 

Goal setting and the subsequent resource allocation decisions taken to address the goals are an integral part of every management job, no matter where on the organisational totem that job stands.

Setting goals appropriate to the level at which they are being implemented is a function of being appropriate for the level, as well as ensuring they are consistent and aligned with the overall goals of the organisation.

The greater the degree of alignment, in conjunction with the greater the degree of relevance of the goals to those at every level to which they are being applied, the more effective they will be.

‘If it cannot be measured, it does not matter’. I subscribe to this idea, first articulated by Peter Drucker,  with the simple caveat that it is not always right. As Einstein said, ‘not everything that matters can be measured‘. For example, How do you measure the value of good parenting? We all know it is good for the individuals, and the community, but what are the objective measures of good  parenting?

 It is also important to make the distinction between goals and KPI’s, which are simply the signposts along the way towards goals by which  you measure progress. Confusion of the meaning of these two terms is common, and destructive.

The acronym SMART was used a lot in the past to set the goals of an enterprise, function, teams, and even individuals. It seems, unfortunately, to have gone out of fashion. Perhaps because managing objectives in such a way increases accountability, which might just be a good idea!

Specific. Be very specific about what the objective is, no fluffy words, no ‘get out of gaol’ card.  What is it exactly that you want to achieve?

Measurable.  What are the measures to be employed that will chart progress towards the goal, and most importantly,  tell you when you have achieved it

Achievable. Do you have the capabilities required and the cultural and performance frameworks that will enable the achievement. Is everyone on board? It is hard for employees to strive to achieve an objective  they do not believe in, or think is unachievable. 

Relevant. The goal is consistent with the overall strategy, and contributes to  the delivery of that strategy.

Time-bound. Deadlines drive performance, and highlight activity priorities. The overall goal end point needs to be agreed, as do the key points on the journey

The poster boy for a SMART goal was JFK’s 1961 goal of landing a man on the moon and returning him safely by the end of the decade.

Header photo by NASA. Astonishing to think it was 50 years ago, I remember it like it was yesterday.

 

What is the most challenging goal you could set?

 

 

Simplicity.

We live in an ever more complicated world, and our instinctive response to external complication leads to internal complication in order to be able to manage the external.

Having ‘Simplicity’ as a driving goal, something to be strived for, has the potential to offer rewards from internal savings made by the reduction in ‘friction. It also delivers benefits to customers, making it easier, and more exciting to do business with you than an alternative.

These benefits translate into cost savings and revenue increases for the business, and added value for customers, a virtuous cycle.

It does not matter if you run the corner sandwich shop, or a multinational corporation, the challenge is the same, just the size of it varies.

Apple under Steve Jobs made Simplicity more than just a goal, it was the glue that held the culture together. Simplicity became, as Jobs said, the ultimate sophistication.

Mark Twain in writing a letter to his wife wrote ‘I have written you a long letter, because I did not have the time to write a short one.‘ This captures the essence of simplicity: it is hard, even for experts to achieve.

The power, as well as the challenge, is in the simplicity

 

Header Photo: courtesy Flikr and Jeannie Tseng.

 

 

 

Do you need a Digital Strategy?

 

 

‘Digital Transformation’ and its sibling ‘Digital Strategy’  have become clichés, unfortunately, as it distorts the management and leadership challenges involved.

However you choose to label the evolution from the analogue world of last century, to the digital ecosystems we now see evolving, it is a process, starting with the simplest things, and moving progressively along to the more complicated.

‘Digital’ is no longer a choice,  it simply is!

How many of you have a ‘Telephone Strategy’? Nobody, it is simply a necessary tool, used better by some than others.

The failure of many ‘digital transformations’ I have seen has little to do with the digital tools, and a whole lot to do with the way people are managed, led, and the manner in which the enterprise leadership enables the evolution to digital to occur.

As with any process, in any transformation, including ‘digital’, there are some pretty simple to say, but hard to execute steps to be taken,

  • Define the business outcomes you are seeking.
  • Start with the simple, test, learn, and move progressively to the more complex, building as you go.
  • Recognise and accommodate the wider impacts. In any digital evolution, your business model should evolve in sympathy. As you progressively digitise, the friction  between the old and the new will become more intense, and potentially disruptive to operations if not managed well. This seems to frequently lead to some expensive consultant recommending you devise a ‘Digital Strategy’.
  • Define the new capabilities required. Inevitably new capabilities will replace the ones that made you successful last century. This part of the evolution can be very confronting and painful, but is inevitable. It can also chew up lots of cash, which is often hard to justify using the short term quantitative measures we favour over taking a longer term, but more qualitative view of what the future might look like.

Nothing about a digital transformation is easy, but if it was, anyone could do it successfully, and we know from observation that is not true.

 

Header credit. Another stinging but insightful cartoon by Tom Fishburne at www.marketoonist.com

The 7 principals of business success.

The 7 principals of business success.

 

Over a long career, I have seen many successes, and just as many, if not more, failures. In both cases, there are a small number of common factors. The successes all have most, if not all, of the factors below, and the failures are typified by their absence.

Be constantly learning.

All business skills are learnable, so be constantly learning. Business skills are  not rocket science, business is in principal simple, and the skills are there to be learnt. This is not to say you will be the best in the world at it, but you will be good enough to make a huge difference. How many people do not understand how their accounts work, the basics of marketing, how to be a leader rather than just a manager? All these things are easy in principal, and those skills can be learned, with time and commitment.

New things rarely work first time.

You might try a Facebook add campaign, or different sales pitch, and it does not work, but nothing works entirely as expected first time.  Aim for the top 10% in your field, experiment, be different, and learn as you go. The alternative is to aim low, and you might just get there.

Leverage.

Doing more with less. Leverage risks becoming a cliché of the business coaching set, but it is not a new idea, just a recycled one. Organisations of any type have at the core of their existence rarely stated, the recognition that together we get more done than alone, and to work together takes some form of organisation. That organisation offers the benefit of leverage.

Work on, not just in, your business.

Every  business, whatever the size has two dimensions. The first is transactional, the things that have to be done in order to deliver a product or service for which someone is prepared to pay. The second is to determine what I call the ‘which’. Which customer, which product, which capability, which market segment, which advertising channel, you get the idea. It is all about the choices that need to be made that have no direct impact on any individual transaction as it occurs. A disturbingly common factor in small business failure I see is the functional focus of the person who started the business. They may be a great  electrician, architect, retailer, or whatever, and their time is spent in the functional area where they are comfortable, the ‘in your business’ things at the expense of  the wider questions of ‘Which,’ that are all about ‘on your business’ issues.

Have goals.

Short term medium term, long term. All change starts with a change in your mental models, and to grow and prosper, change is essential. Another cliché, if you are not running hard, you are being left behind. See in your mind what things could be like, that leads to a change in actions as a result. If the mindset does not change, it does not matter how many tools and techniques you see and learn, if the mind set does not change, it will be all for nothing.

Why.

Understanding your ‘Why’  your business purpose creates the potential for synergy and alignment of people and resources, that is needed to enable you to jump the hurdles that will emerge.

People. Nothing happens without them. A business is not a business until it engages with people, employees, stakeholders, funders, and customers. Never forget the customer is really king, they are peope too, not numbers on a spreadsheet, and never forget the people who make it all happen.

How many of these factors can you identify in your business? Winning is not an accident, it takes long, hard work, physically, intellectually and emotionally, and you cannot do it alone. Give me a call when you need some independent and experienced input.

Header photo courtesy of Hugh McLeod at gapingvoid.com

The sad and entirely avoidable death of a great old FMCG brand.

The sad and entirely avoidable death of a great old FMCG brand.

Currently in my cupboard almost gone, is a bottle of detergent, a well known and trusted brand, formerly the market leader, been around for ages.

It will not be bought again by anyone in my household.

Here is what I suspect happened.

Sales of the brand were eroding as cheaper, usually house branded product ate into the volumes. Somewhere in the multinational that owns the brand there was a bright young thing charged with resurrecting volumes, a project to ‘test their metal,’ requiring a 20% increase for success to be declared.

He, or more likely these days, she, did the corporate rounds seeking inspiration.

The R&D people believed they could improve the performance of the product by utilising a new emerging technology, but it required an extensive  R&D program to clarify some of the technical issues. No budget available.

The Engineering people reckoned they could speed up the line, reducing costs by updating, at considerable capital cost, the existing machinery, making production cheaper and more flexible. This would  reduce the systemic out of stock problem caused by the long runs required to generate factory efficiencies. These factory KPI’s are completely disconnected to the increasing difficulty of forecasting sales as volumes erode and become more erratic. No capital budget available.

The accountants are arguing for a price increase as well as a reduction in retailer promotional spend, as the gross margins fall below their target rates. Neither tactic seems well suited to the problem at hand.

The advertising agency strongly recommended a multi million dollar integrated TV, Magazine and digital marketing campaign, designed to bring back lapsed users to the brand, while intriguing new users to give it a try. No budget available.

The marketing he/she concerned reckoned it would be easier and cheaper to make the hole in the top bigger, make the product flow faster, encouraging a quicker usage cycle and therefore increasing replacement sales.

On a spreadsheet it looks logical, sensible, and with a great ROI. Everybody was happy, especially the product manager, who could see the trappings of corporate success coming his/her way by Christmas.

Whoops: forgot the value conscious consumer, to whom the integrity of the brand had remained, until now,  an important consideration, and who is not stupid. She is my wife, (who still does the bulk of the shopping) and believe me,  she is absolutely unforgiving.

Being captured by the interaction of functional KPI’s, status quo management processes, and resistance to any change, is a common corporate problem. It is unsolvable by anyone other than the Boss, who is mostly too busy contemplating the forest next door (or their navels) to see the trees in the forest they currently occupy, and take some decisive action.

When your brand, marketing, and innovation processes need a reality check, call me to tap into the ‘experience bank’ in my possession.