Archive for February 24th, 2009

Abandon Yesterday

Great little Change Leadership conversation starter by Peter Drucker over at Branding Strategy Insider:

We do not hear much anymore about overcoming resistance to change, which 10 or 15 years ago was one of the most popular topics of management books and management seminars. Everybody has accepted by now that change is unavoidable. But that still implies that change is like death and taxes–it should be postponed as long as possible, and no change would be vastly preferable.

But in a period of upheaval, such as the one we are living in, change is the norm. To be sure, it is painful and risky, and above all, it requires a great deal of very hard work. But unless an organization sees that its task is to lead change, that organization–whether a business, a university, or a hospital–will not survive. In a period of rapid structural change the only organizations that survive are the “change leaders.” It is therefore a central 21st-century challenge for management that its organization become a change leader.

In most cases, yep. Sadly, most business managers are too busy dealing with every-day business issues to help lead their companies towards their next evolution. Many organizations (especially manufacturing operations) tend to be culturally adverse to change. These types of organizations rarely create environments that are likely to produce or retain business leaders for whom change management is a normal day-to-day process. More importantly, these companies tend to get drawn into the death-by-pricepoint mentality: Rather than changing their ways, rather than investing in new designs, new technologies and new methodologies, they opt to seek out cheaper raw materials, cheaper manufacturing operations, cheaper packaging, and cheaper customer service/support, for example.

Unfortunately, there comes a point where the quality of a product drops below standard – whether that product is a pair of jeans, a computer, a car, a pair of running shoes, or plain old customer service. Cheaper begets cheaper. The equation never changes: What you put in is what you get out. Don’t ever expect to take significant cost out of your model and somehow increase the quality and value of your product – at least not without real change being added to the mix.

The saddest kind of company is the one which has an underlying culture of innovation – one where middle-managers have great ideas and their teams are enormously talented – but where the leaders (at the top) are adverse to change: “We’ve been doing it this way for fifty years. Why change anything now?” That’s a great way to force the great ideas out of an organization and foster an insipid yes-man culture.

Unless you happen to be an incredibly great restaurant or an opera house or an artisan of some sort.

Change leadership is not about digging up the next mucky layer of lowest bidders. It isn’t about finding even cheaper labor. It is not about cutting yet another corner. It is about improving processes. It is about improving designs. It is about doing things better and smarter. It is about instilling a culture of improvement and clever ideas and innovation within a company. It is about creating ecosystems in which great ideas can flourish – the kinds of ideas that give companies a competitive edge. Some may be ways to improve a product’s quality and utility while making it cheaper to produce. Some of it may be cost-neutral design improvements. Some of it may be understanding where resources are being wasted, and where they could be retasked.

Abandon yesterday: The first step for a change leader is to free up resources that are committed to maintaining things that no longer contribute to performance and no longer produce results. Maintaining yesterday is always difficult and extremely time-consuming. Maintaining yesterday always commits the institution’s scarcest and most valuable resources–and above all, its ablest people–to nonresults. Yet doing anything differently–let alone innovating–always creates unexpected difficulties. It demands leadership by people of high and proven ability. And if those people are committed to maintaining yesterday, they are simply not available to create tomorrow.

The first change policy, therefore, has to be organized abandonment. The change leader puts every product, every service, every process, every market, every distribution channel, every customer, and every end use on trial for its life. And the change leader does so on a regular schedule.

The question it has to ask–and ask seriously–is “If we did not do this already, would we, knowing what we now know, go into it?” If the answer is no, the reaction must not be “Let’s make another study.” The reaction must be “What do we do now?”

Read the entire post here. Good stuff. Have a great weekend, everyone. 😉

Photo by Chris Wray McCann.

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