Strategy. Innovation. Brand.

managing organizational change

A Joke About Your Mind’s Eye

You should see my internal movies.

You should see my internal movies.

Here’s a cute little joke:

The receptionist at the doctor’s office goes running down the hallway and says, “Doctor, Doctor, there’s an invisible man in the waiting room.” The Doctor considers this information for a moment, pauses, and then says, “Tell him I can’t see him”.

It’s a cute play on a situation we’ve all faced at one time or another. We need to see a doctor but we don’t have an appointment and the doc just has no time to see us. We know how it feels. That’s part of the reason the joke is funny.

Now let’s talk about the movie playing in your head. Whenever we hear or read a story, we create a little movie in our heads to illustrate it. This is one of the reasons I like to read novels — I get to invent the pictures. I “know” what the scene should look like. When I read a line of dialogue, I imagine how the character would “sell” the line. The novel’s descriptions stimulate my internal movie-making machinery. (I often wonder what the interior movies of movie directors look like. Do Tim Burton’s internal movies look like his external movies? Wow.)

We create our internal movies without much thought. They’re good examples of our System 1 at work. The pictures arise based on our experiences and habits. We don’t inspect them for accuracy — that would be a System 2 task. (For more on our two thinking systems, click here). Though we don’t think much about the pictures, we may take action on them. If our pictures are inaccurate, our decisions are likely to be erroneous. Our internal movies could get us in trouble.

Consider the joke … and be honest. In the movie in your head, did you see the receptionist as a woman and the doctor as a man? Now go back and re-read the joke. I was careful not to give any gender clues. If you saw the receptionist as a woman and the doctor as a man (or vice-versa), it’s because of what you believe, not because of what I said. You’re reading into the situation and your interpretation may just be erroneous. Yet again, your System 1 is leading you astray.

What does this have to do with business? I’m convinced that many of our disagreements and misunderstandings in the business world stem from our pictures. Your pictures are different from mine. Diversity in an organization promotes innovation. But it also promotes what we might call “differential picture syndrome”.

So what to do? Simple. Ask people about the pictures in their heads. When you hear the term strategic reorganization, what pictures do you see in your mind’s eye? When you hear team-building exercise, what movie plays in your head? It’s a fairly simple and effective way to understand our conceptual differences and find common definitions for the terms we use. It’s simple. Just go to the movies together.


Strategy: Who’s Number 2?

Can we be part of the strategy?

Can we be part of the strategy?

The CEO is clearly the most important executive when it comes to creating and implementing organizational strategy. Who’s the second most important executive for strategy?

The standard answer is probably the Chief Operation Officer — especially in terms of carrying out the strategy. But I’m starting to think that the COO is only the third or fourth most important strategic officer.  So, who’s number 2? I’m leaning towards the head of Human Resources. Let’s call him or her the Chief Human Resources Officer or CHRO.

I’m leaning toward the CHRO because I’ve always believed that the soft stuff is hard. It’s not easy to get your culture right or to motivate employees for the long haul. It is all too easy to get your strategy crosswise with your culture. As I’ve noted before , when it’s culture versus strategy, culture always wins.

Similarly, I’ve never seen a company falter because they couldn’t find enough “numbers guys”. Our B-schools just keep churning them out. On the other hand, I have seen companies falter because they couldn’t find good communicators and motivators. Understanding human behavior is much more difficult than understanding the numbers. While we can teach people the “soft arts,” it doesn’t seem to be a popular specialty at university.

What’s really pushing me toward the CHRO as strategy leader is Scott Keller and Colin Price’s book, Beyond Performance: How Great Organizations Build Ultimate Competitive Advantage. (Click here for the book or here for a white paper).  Keller and Price argue that too many companies pay close attention to performance (“the numbers”) but not nearly enough attention to organizational health. Their “…central message is that focusing on organizational health — the ability of your organization to align, execute, and renew itself faster than the competition — is just as important as focusing on the traditional drivers of business performance.” This has everything to do with the “people-oriented aspects of leading an organization.” In my mind, that means the CHRO better be intimately involved.

Keller and Price present a lot of statistical evidence to buttress their case. (They are McKinsey guys, after all). There is a distinct correlation between organizational health and organizational performance. They also present five “frames” for viewing both health and performance during transformation change: 1) Aspire; 2) Assess; 3) Architect; 4) Act; 5) Advance. I’ll write more about these in the future but the bottom line is that you need to use these frames to view both performance and health to develop a sustainable, high performance organization.

While I think the CRHO could and should be a strategy leader, in my experience, it doesn’t happen very often. I’ve seen HR organizations launch very interesting programs but, too often, the programs exist in their own right rather than as strategic enablers. They don’t impede the strategy but they don’t help it either.  I also see the numbers guys set the strategy and then turn to the CHRO and say, in effect, “OK, here’s the strategy, now get us the people we need.” (In technology, this happens to CIOs all the time). To be effective, the CHRO really needs to be at the strategy table.

Why wouldn’t the CHRO be invited to the strategy table? Perhaps because they understand the soft stuff but not the business. I’ve seen CHROs (and CIOs) make naive comments in strategy meetings, showing that they clearly don’t understand the business. The result is a bunch of numbers guys rolling their eyeballs and looking vaguely embarrassed. Numbers guys need to learn more about the soft stuff. By the same token, CHROs (and their staffs) need to learn more about the performance side of the business. Perhaps then, they can truly become strategy leaders.



Three Myths of Change Management

My attention span is less than 12 minutes.

A majority of change management efforts in organizations fail. Indeed, the failure rate may be as high as 70%. As we’ve discussed before (click here), strategy and culture are intertwined. Before you change your strategy, you’ll probably need to change your culture. But, if the failure rate is 70%, is it even worth trying? Not if you believe in myths.

According to Bain & Company, there are three great myths that inhibit the success of change management efforts. Let’s look at each of these today. (For the complete article, click here).

Myth #1: As long as the effect on people is minimized, change will succeed. To change successfully, we all know that the whole organization needs to coalesce around a common vision. That’s easy to say but hard to do. If you’re being disrupted, you may not want to align around somebody else’s vision. So smart change managers identify those employees that are likely to be most disrupted and invite them to co-create the vision. This often takes the form of workshops “that help the leadership team paint a clear picture of what the change will look like when it’s finished.”

Myth #2: So much about change is irrational and hard to predict. Bain & Company has developed a list of 30 specific risks that can disrupt change. The list is not surprising; in fact, it’s very predictable. You can organize the risks into five major categories: 1) Balance ambition; 2) Mobilize leaders; 3) Change behaviors; 4) Shape execution; 5) Extend success. The 30 risk factors occur in “predictable patterns” and only a handful will be disruptive at any given time. By studying the predictable patterns and applying them to your organization, you can create heat maps that help you focus your attention on the right spots at any stage of the change process.

Myth #3: All you need is good leadership and day-to-day management. Once you start a major change process, you put immense stress on your organization. Weird things start to happen. For instance, people in normal business situations may have an attention span of an hour or so. In stressed out organizations, attention spans shrink to about 12 minutes. People may retain only 20% of the information they receive. Stressed employees will tune you out altogether if they think you’re not credible or that you don’t care about them. They’ll decide in roughly 30 seconds whether you’re trustworthy or not. Even the best orators find it difficult to establish trustworthiness in 30 seconds. That’s why it’s so important to deliver high-stress information via sponsors that the audience already trusts. Normal communication doesn’t work in a high stress situation. You need to simplify your message and deliver it through trusted channels. (For more on trusted channels and message cascades, click here).



Change Management: The Sponsorship Cascade

We’re cascading the message to you.

Remember the ice cream theory of communication? (Click here). It’s a cascade of information flowing step-by-step to the target you want to influence. Say that you want to influence the trade press. You know that reporters will want to know what analysts think, so you brief analysts before you talk to reporters. Analysts will want to now what customers think, so you brief customers before analysts. And so on.

The ice cream theory also works with internal communications — especially when big changes are afoot. When an organization needs to launch big changes, it often puts the CEO on a video broadcast to all employees. Everybody hears it at the same time. What’s wrong with that? Well, frankly … nobody trusts the CEO. It’s not that the CEO is a bad person; it’s just that most employees don’t know him or her. Without a personal relationship, it’s hard to know whom to trust. It’s like sending a press release to a reporter without first preparing the rest of the ice cream cone. The reporter needs further confirmation. So do your employees.

Bain & Company develops this concept in two parts: 1) the sponsorship spine; 2) the communication cascade. The sponsorship spine is very similar to the ice cream cone. Ask yourself two questions: Who are we trying to influence? Whom do they trust? Let’s say you’re trying to influence Department Z. Whom do they trust? Well … it’s Mary, a long-term employee who is widely respected for her experience and wisdom. Mary may or may not be Department Z’s manager. Then ask another question: whom does Mary trust? Let’s say it’s Inga. Then, whom does Inga trust? Let’s say it’s Grover. Keep asking the whom-do-they-trust question until you’ve reached the executive suites. You’ve now established the sponsorship spine.

Once you’ve identified the spine, you can start the cascade. The key ideas are to start from the top, speak to people who know you and trust you, speak to them personally in face-to-face settings, and always invite feedback (and listen carefully to it). If you need to make adjustments based on the feedback, then do so. Then ask the people you’ve spoken with to cascade the message down one level. Repeat the process throughout the organization. Ultimately, everybody in the organization hears the message personally from someone they trust.

And what about the CEO? He or she can still play a role. My advice is that the CEO should speak after the cascade is complete. The CEO confirms and reinforces the message, but doesn’t introduce it. People hear the message from a trusted source and then have it verified by someone in authority. That reinforces the sponsor’s trustworthiness and speaks to both our emotional and our logical sides. That, in turn, helps the message sink in and prepares us for action.

You can find the full article from Bain & Company by clicking here.

Better Communication Through Plumbing

Got an idea? We can help.

Want to improve communication in your organization? Reduce the number of bathrooms. Everybody needs to use the bathroom from time to time. With fewer bathrooms to choose from, people are more likely to bump into each other. When they do, they wind up communicating.

One of your goals is to get people to bump into each other (more or less literally) as often as possible. It’s particularly important to get people from different disciplines to mix and mingle. When they do, sparks of creativity start to fly. You can design (or re-design) your space to ensure that this happens. Instead of having a coffee pot in every corner of the building, have only one coffee service centrally located. Coffee is a people magnet. Be sure to have some tables nearby so people will have a place to chat while consuming their caffeine.

You can also randomize your offices. Instead of having engineers sit only with engineers and marketers sit only with marketers, mix them up a bit. Ensure that people from different disciplines get to know each other. It sparks new ideas and reduces the us-versus-them mentality.

What else can you do? Well, maybe you should encourage your employees to take up smoking. Watch the video to find out why.

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