Rules for the revolution

clock with change

(Courtesy of Guest Blogger Alex Pendleton, Big Ideas for Small Companies powered by the MPI Group)

Alec Pendleton

In my last blog in March — “Time For A Revolution” — I described experiences I’ve had with organizations in need of major change. Now I’d like to look at principles I’ve found helpful in starting down the turbulent path ahead. Revolution is possible without them, but it runs a lot more smoothly when they are followed. I’ll focus on manufacturing, because that’s where I’ve had most of my experience, but the principles apply in any situation.

First, you’ve got to have a vision — and in the more detail, the better. Every factory runs on a variety of systems: to initiate orders, to schedule workstations, to store inventory, to measure efficiency, to assure quality, and many more. Some of these are clean applications of specific theories (Just-in-Time, Theory of Constraints, etc.), while others may have started clean, but have degenerated over time. Others were simply made up as the company went along. Typically, whatever symptom has triggered your need for revolution – bad delivery, quality problems, inventory issues – is the result of a breakdown of one or more of these systems.

It’s always tempting at this point to look for a silver bullet. You read an article (or a blog!), or go to a seminar, and you have an “Aha!” moment. “That’s it! Lean manufacturing [or whatever has caught your fancy] is the answer! All we have to do is install that, and our problems will vanish!” But “all we have to do …” is a dangerous statement.  If you leap into major change without fully understanding the implications —and potential unintended consequences — you’re likely to trade the old problem for a new one.

So: Think it through! Envision every step of the way, and how each step will affect everything around it. Imagine what might go wrong, and have a plan to fix everything. Obviously, you can’t do this to perfection, but the more thinking and planning you do before you go live, the better chance you’ll have of a smooth launch.

Next, clear the decks! STOP doing things that aren’t working. Early in my career, I struggled with a small company with three unrelated divisions. The largest was a perpetual headache, consuming most of management’s attention in exchange for occasional small profits. A second division was tiny, and an also-ran in its market, overshadowed by larger and more professional competitors. The third was starved for resources, but had potential — and was central to my vision of what the company could become. But before I could work on that vision, I had to get rid of the other two divisions. I sold the larger one, to a yet-larger and more professional competitor, and I closed the tiny one. Rid of those distractions, I was then able to concentrate on my vision. Sales quadrupled in seven years, and we turned a chronic loss into a perpetual profit.

Similarly, in another plant later in my career, there was a peripheral product line that we struggled to produce. Quality and efficiency were inadequate, and we invested enormous effort into trying to fix it. Our sales team felt that the product was important to our overall offering, so I arranged to simply buy the stuff, marked with our label, from a competitor. Profitability improved, but even more important, we removed a distraction — allowing us to focus on our primary business.

Before you start your revolution, ask yourself two questions:

  1. Do you have a detailed vision?
  2. Even more important, can you rid yourself of distractions so that you can focus on the vision?

I’ll have more rules for revolution in my next blog!

Time for a revolution

clock with change

(Courtesy of Guest Blogger Alex Pendleton, Big Ideas for Small Companies powered by the MPI Group)

How’s your Change Initiative going? Are you having fun yet?

I’m guessing you answered, “No!”

Why? Because bringing major change to any organization is a tough assignment. Entrenched people, and ideas and habits favor the status quo, and even when that status quo is no longer working, the response of the organization is typically to just give the problem more time. “This too shall pass,” everyone says. “We’ve been through rough times before, and this is no different. What worked then will work now.”

But sometimes it IS different. Sometimes, the organization has quietly aged in place while the world around it has changed to the point that what worked before will NOT work now. Sometimes, what’s needed is a revolution.

For some time, I’ve been involved with two organizations – a manufacturing company and a non-profit – both of which have faced this dilemma, and it fascinates me how much these very different organizations have in common

The manufacturing company was living in the past. It had a dominant position in a niche market, but that market had been slowly shrinking for decades, to the point that the 70-year-old factory was badly underutilized and the fixed overhead was being carried by a smaller and smaller base of business. The aging workforce was resistant to change (there was a sign in the foreman’s office reading “When pigs fly,” evidence of his disdain for any new ideas), and rejection of modern manufacturing methods made it impossible to find customers for new work. The necessary changes all required various certifications, but that was regarded as nonsense, a waste of time and money. An attitude of “we’ve always done it this way” prevailed. Once, they cleaned up the place for a customer visit, and were proud of the result. “The place looks great,” they told themselves — but it didn’t. It looked RELATIVELY good, better than it had in years, but of course the customer saw it in the context of a wider world, and to him it looked ABSOLUTELY awful.

The non-profit organization was also well-established and had been in the same location for most of its life. Decades before, they had made a major investment in upgrading their facility, but by now it was obsolete, and the city had grown away from it, leaving it isolated. However, entrenched board members had fond memories of past greatness, and they were determined that the drop-off in interest and financial support was only temporary. It wasn’t. Before long, they faced an existential crisis.

The solutions to these two problems were similar. In both cases, new leadership was brought in and changes were basically forced upon the organizations.

In the manufacturing company, the factory was substantially overhauled and modernized, quality certifications were obtained, and new markets opened up. A lot of people left (mostly by retirement – over a few years the average tenure dropped from 35 years to eight!), and those who stayed were given extensive training.

In the non-profit organization, a new leader was brought in. He had an abrasive personality and seemed hell-bent on offending all of the existing supporters, starting with the largest donors. But by the time the crisis arrived, he had succeeded in persuading a majority of the board that major change was necessary. Ultimately, they sold their building, collaborated with a couple of other organizations, raised millions of dollars, and moved to the city’s thriving downtown.

Looking back on these two sagas, it’s striking how different the picture looks than it did when we were living in daily crisis. In both cases, the consuming issues dealt with people — in one case, trying to get established employees to accept change; in the other, trying to temper the new leader’s troubling management style.

In the manufacturing company, the change was generational. A new, young leader had the vision and the skills needed to move the company forward, but members of the executive team – even new hires – struggled to perform. Operations went through five leaders in as many years before finding the right person, and the sales department went through two. Looking back on board meetings in those transitional years, it’s amazing how much effort went into trying to salvage the wrong person in the job and how quickly things improved when the right person finally arrived. There’s an important lesson there about insisting on top quality in people and not settling for anything less. Peter Schutz, a former leader of Porsche, always advised people to hire slowly and fire quickly. That’s good advice, albeit easier said than done. Once you’ve filled a critical position, it’s difficult to believe that backing up and starting over will be easier than trying to fix what you’ve got — but in retrospect it’s usually a good idea.

In the non-profit organization, the resolution was simpler, though no less painful. We ultimately realized that we had gotten from our exasperating leader all that we could — his revolution was already in motion — and all he had left to offer was his difficult personality. It was time to end the constant conflict and move forward. The new executive is an extraordinary leader and has the enthusiastic support of the entire staff and board. There still are problems, of course – non-profit organizations always face challenges — but the replacement of conflict with collaboration has resulted in a great place to do great work, and exciting innovation has ensued.

In both cases, I wonder if the rosy present would have been possible without the turbulent past. Revolution is frequently necessary, and almost always difficult and unpleasant; but I think it’s important to recognize that difficulty and unpleasantness don’t have to be new long-term realities, but can instead be short-term growth phases. So if your situation needs a revolution – and sooner or later it probably will – realize that it’s likely to be difficult and unpleasant, and that it’s possible that the right team to start a revolution may not be the right team to finish it. What is certain, though, is that once your revolution has succeeded, you’ll have a vast improvement over the status quo.

At least until the next revolution.