Swinging the Pendulum of Change

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I am listening to Lou Gerstner’s book – “Who Says Elephants Can’t Dance” and am struck by the similarity between his account of his leadership and IBM, and that of every other CEO-turns-around-company book I have ever read.

This is not to say that the recording is boring, which it is not. It’s just that there is a common plot behind each of his stories.

In the same way that all operas have 3 parts (I think) and all cricket matches revolve around batting and bowling, I have come to believe all successful turnaround CEOs basically have the same story to tell.

In essence, all companies that are unsuccessful fail because a gap develops between them and their customers. Often, the gap is created when what they have always done successfully stops working.

At a very basic level, the company could just “stop doing it.” With simple changes, this is easy enough to do.

However, for complex changes involving hundreds or thousands of people who are entrenched in decade-long practices, the insight that change needs to happen is only the first step. What is much harder to bring about is the large-scale change in thinking that each individual must undergo – a change that cannot be forced into happen with carrots and sticks.

Instead, it must be articulated repeatedly until people are able to convince themselves.

To perform this kind of miracle, CEOs need to be able to identify the frameworks that underly the weak positions that companies fall into.

Imagine that the culture of a company as a huge collection of pendulums. Each swings very slowly from one extreme position to another. Each pathway is distinct from the other. Only a subset can be seen clearly at any given time.

What do the pendulums represent?

Each pendulum describes a particular dimension of awareness.

For example, some companies are market-driven while others are driven by innovation. Neither position is absolutely better, but it IS possible for a company to get stuck in one extreme or the other without knowing it.
Some of the other extremes include :

  • ethnically monolithic vs. diverse
  • revenue vs. expense driven
  • centralized vs. decentralized
  • diversification of products vs. consolidation
  • faster processes vs. quality processes
  • incentive pay vs. base pay
  • individual vs. group measurements
  • reengineering vs. process improvement
  • job security vs. talent turnover
  • focus on strengths vs. focus on weaknesses
  • strategy vs. tactics
  • vision vs. execution

In his book, Gerstner mentions that the quote most attributed to him is the one in which he said “The last thing IBM needs right now is a vision.”

Basically, he was saying that the company had gone too far in the direction of visioning, and that, for the time being, it needed to swing the pendulum back to the more practical matters of doing business on a day to day basis.

It is the job of every CEO (and every manager) to swing pendulums.

However, based on experience and training, no 2 managers are the same – they “see” different pendulums. There is, after all, some truth to the notion that if you give a man a hammer, he is likely to see every problem as a collection of nails.

A manager will always attempt to solve a business problem by looking at the pendulums that he can see most clearly. Indeed, he must.

It is also the job of CEOs to point out, and distinguish new pendulums for the executives and employees in a company, so that they can see what he/she sees. Without this ability, a CEO is stuck trying to change a company on their own, and are unlikely to be successful.

Ultimate Consulting

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I recently read a book whose protagonist was what I might call the ultimate consultant.

Her role was essentially to perform a single act, which was to say Yes or No.

Essentially, she would look at a design of something like a logo, and decide in a split second whether or not it would work, according to her intuitive understanding or marketplace trends. Written into her contract was the fact that she would give no explanations, no advice and no further comment on the matter.

For this she was flown around the world, and paid very well, which was testimony to her instinctive and unique ability.

She is the ultimate consultant in my eyes, providing maximum value in the few seconds it took her to do what she did. At the same time, the many hours that she spent studying fashion trends around the world were done at her own expense, which hopefully is something that her clients understood!

An Opposable Mind

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Reading an article today reminds me of why I love new ideas.

Usually, it’s not because the notion is absolutely foreign to me. Instead, the best feeling is when I am able to recognize some piece of thinking I have already done, taken to an entirely new level by someone obviously much smarter than I am.

In the July 2007 Harvard Business Review, an article entitled “How Successful Leaders Think” stopped me in my tracks. I realized upon reading it that the author had articulated for the first time in my understanding the way I try to think, when I do my very best thinking, or designing.

Roger Martin, the author, starts by quoting F. Scott Fitzgerald, who said that “the ability to hold two opposing ideas in the mind at the same time and still retain the ability to function” is the sign of a truly intelligent individual.

His modern day research of successful corporate leaders backs this up.

He compares the importance of this kind of intelligence with the evolution of the opposable thumb. Human beings have the most developed opposable thumbs in the animal kingdom, and have been able to create magnificently simply because of their ability to maintain a sustained and precise tension between the fingers. Without it, there would be no ability to write, build, paint and use tools.

This mechanical tension is likened to a certain mental tension – the ability to hold competing ideas in mind at the same time, without discarding one or the other prematurely. In other words, an “opposable mind,” according to Martin.

With an opposable mind all sorts of magic can be created, and the good news that he delivers at the end of the article is that it can be learned, grown and deepened through practice, just like any other skill.

We are born with this kind of mind, he says, but often become anxious because we prefer simplicity and clarity to ambiguity and complexity. This leads us to develop simplistic answers, and to cling to them as if they were gospel truth.

My grandfather did not believe that man really landed on the moon. It was just simpler to believe that it was all a hoax.

Many believe that the earth was created in 7 days, that Eve ate an apple in a garden, that Noah built a boat that saved all creatures from a flood and that Jonah was literally swallowed by a whale which somehow happened to be a fish.

Over time, mankind has progressed in many ways, but not without a fight.

Our tendency is to seek the right answer and discard the wrong – quickly and permanently. Education systems that encourage this kind of thinking even into the college years don’t help the situation.

Martin notes that what he calls “integrative thinkers” welcome complexity, and are therefore able to see the entire problem at once, without trying to break it into small pieces. They also question cause-and-effect relationships that are over-simplified e.g. “if we pay people more money then they will be more productive.”

He gives the example of Red Hat, the software manufacturer, whose CEO was able to abandon the conventional thinking of his industry to create a new revenue model for itself, allowing it to stay ahead of its competitors.

If there is one thing that I aspire to bring to my clients, it is solutions that are based on opposable thinking. At the times when we have been able to achieve these kinds of breakthroughs, it truly has been a collaborative effort that pulls the best from their direct experience, and a fresh look at their issues that I sometimes bring.

While it’s not the easiest path to take, it usually is the most fruitful.

The Difference an Engaged Employee Makes

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In a recent Trinidad Newsday article, a colleague of mine, Kwame Charles, makes the following observations:

Research findings:

The SHRM article highlights several research findings on employee engagement that demonstrate its link to competitiveness. Some of these findings are as follows:

  • Highly engaged employees perform 20% better than disengaged employees and are 87% less likely to leave their organisation.
  • Engaged employees work harder, are more loyal and are more likely to “go the extra mile” than disengagement employees.
  • Engaged employees have been found to be five times less likely to have a safety incident and seven times less likely to have a lost-time accident than disengaged employees. In one study, the average cost of a safety accident for engaged employees was US$63, while the average cost for disengaged employees was US$392. This company was able to save over a million US dollars by increasing employee engagement.

Interesting, especially given my estimate that some 60-80% of Caribbean employees are disengaged.

The 60-80% that are Resigned

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I want to make a crazy estimate.

I am guessing that some 60-80% of Jamaicans are in jobs that they dislike.

I have no idea if this is a true estimate, but I think it might just be in the ball-park.

The reasons?

  • An impossible education system that forced decisions at 16 about which 3-4 courses to take at CAPE/A’ levels.
  • The narrow range of options available at UWI.
  • The way jobs are structured
  • Our moribund economy
  • The lack of information about opportunities

They all combine to create a mindset of scarcity in which a job becomes something to hold onto at all costs. People get stuck in careers and in positions for which they are ill-suited, by virtue of their lack of motivation or skill.

The effect on a company’s productivity is cumulatively disastrous, as is the effect on our economy.

I’d be interested in hearing what other opinions are on this topic, and what might be done about it.

I’m not sure how this fits in with books such as Kenneth Carter’s “Why Workers Won’t Work,” except to say that I think he was focused on studying rank and file workers.

(A copy of Framework’s 2-page summary of the book can be obtained by sending email to fwc-whyworkers@aweber.com or by visiting our website under the Ideas section.)

Why Aren’t They Working on My Strategy?

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This Framework white paper from 2004 illustrates the reason why employees in Caribbean companies find themselves so divorced from the strategic thinking that occupies most executives’ time.

To obtain a copy, send email to fwc-exstrategy@aweber.com.

For a full list of our white papers, visit our website www.fwconsulting.com, under the item: Ideas.