Reinvention Reply

Daniel Burrus, best selling author, says rapid change in business and technology is the “new normal.” However, in the 21st Century, “change” is actually too weak a descriptor.

Today, it’s all about transformation. This means you can’t go backward, and you can’t stand still. You can’t sit still and you can’t keep doing what you’ve always done — even if you do your best to keep doing it better.

The only way for your company to survive, let alone thrive, is to continuously reinvent and redefine.

Reinvent and redefine what? Everything.

Harvard Business Review wrote about this back in January 2011 – Sooner or later, all businesses, even the most successful, run out of room to grow. Faced with this unpleasant reality, they are compelled to reinvent themselves periodically. The ability to pull off this difficult feat—to jump from the maturity stage of one business to the growth stage of the next—is what separates high performers from those whose time at the top is all too brief.

As Matthew S. Olson and Derek van Bever demonstrate in their book Stall Points, once a company runs up against a major stall in its growth, it has less than a 10% chance of ever fully recovering. Those odds are certainly daunting, and they do much to explain why two-thirds of stalled companies are later acquired, taken private, or forced into bankruptcy.

There’s no shortage of explanations for this stalling—from failure to stick with the core (or sticking with it for too long) to problems with execution, misreading of consumer tastes, or an unhealthy focus on scale for scale’s sake. What those theories have in common is the notion that stalling results from a failure to fix what is clearly broken in a company.

Companies that have set the standard for reinvention over the last while are:

IBM – before the 1980’s only the most gadget geared person had a computer. The IBM PC brought this machine to the masses.

Ford – With just some bucket seats, a floor shift and cosmetic tweaks, the lowly Ford Falcon “magically” transformed into the wildly popular Ford Mustang.

Accenture – splitting off from the accounting firm Arthur Anderson, Accenture is one the of the world’s largest consulting firms today.

Starbucks – Before, you picked up a cup of java at a convenience store. With upscale interiors and gourmet edibles, Starbucks created a “coffee experience.”

Nike – Transformed itself from making sneakers from waffle irons to producing Nike+, which monitors a runner’s performance via a shoe radio device that’s linked to an iPod.

Allegheny Technologies – With a history going back to the Revolutionary War, Alleghany now boasts some of the world’s most advanced production capability for specialty metals.

Red Hat – It started as a catalog business for Linux and Unix software and accessories. Now an open-source company, it makes money by selling subscriptions for support, training and integration.

Apple – The reinvention king began as a desktop computer business. It now sets the bar for mass consumption of tech products such as the iPod, iPhone and iPad.

Blockbuster – You may recall Blockbuster Video — it rented out DVDs and VCRs at retail stores. Then Netflix NFLX +1.88% came along with DVD-By-Mail — and that made it cheaper and more convenient for consumers to get the movies they wanted. Blockbuster was unable to adapt and perished.

There are many different stories and paths to successful reinventions.  Great leadership is always needed.  Xerox and IBM would either be gone or be like Eastman Kodak today if Anne Mulcahy and Lew Gerstner had not come at the right time and begun to lead them down new paths. 

Some common themes of successful reinventions:

Although the execution phase of a reinvention takes many years, the decision process has to be clear and efficient.  Many companies disappear before they can reinvent themselves.  When it becomes clear that reinvention is needed, waiting until the perfect path becomes available can be suicidal.

 The CEO and the Board have to be aligned on the reinvention path, and, then, they have to communicate clearly and frequently to all stakeholders: employees, customers, shareholders and other investors, the media, and the broader community. 

The process has to be as transparent as possible, so that stakeholders with useful feedback can contribute insights as the process unfolds. 

 Hewlett-Packard is an example of a company that, during Carly Fiorina’s tenure, could not get agreement within its board about its reinvention path.  For example, the board had a public dispute about the Compaq acquisition.  The company has struggled ever since, through a variety of governance crises.

 Successful reinventions are much harder to achieve with big, transformative acquisitions or mergers, than with a combination of organic changes, combined with many small, focused acquisitions.  Large acquisitions may add assets and businesses needed for reinvention, but, unfortunately, they also add legacy assets that need to be sold or shut down.  The process of sorting out the wanted from the unwanted pieces of a large acquisition is time-consuming and distracting, and it often causes the acquisition to fail.

 The idea of moving from one business in which the company is an expert to a completely different business in a completely different industry in which it has no prior experience has about as much chance of success as going into an unrelated start-up business, which is very low.

 The company going through a reinvention has to accept the fact that it may lose shareholders who depend on the cash flow from the existing business for dividends or share repurchases, since capital has to be redeployed for growth and development in the new business space. 

 Reinvention is easier to do in a situation in which the company’s survival is at stake, like the situation faced by Xerox or IBM, when there is a “burning platform,” than it is when decline is gradual, and the conditions that precipitate the significant decline have not yet happened and are not yet visible.

 Finally, as a conclusion, reinvention is extremely difficult.  Many, if not most, companies fail at it, either because they make the wrong decisions, like Eastman Kodak did, or wait too long to make the right ones.  The reason we closely study stories like Intel and the Thomson Corporation is that successes like theirs are highly unusual. 

Sustained or transformational success is very difficult to achieve.

What is leadership? Reply

You can find leadership in every sort of work and play, and in every sort of project, regardless of scale, and regardless of financial or official authority.
There are many different aspects of leadership. The following are some perspectives:

In my opinion – motivating others to achieve an aim is a large part of leadership. But why should people follow your direction? I believe that people are inspired by leaders that demonstrate value based leadership behaviors. These leaders follow principles and lead by example.

I think leaders need to “be out there” for their employees. They should continually demonstrate to them why and how they earned the position they now hold. They need to communicate with them using any of a variety of methods that show them they are worthy of being followed. I believe that if that process is inspiring and positive you can almost guarantee that your results will be consistent with your efforts.

Building a sense of trust and credibility is also key for leaders of today operating in a transparent world. They need to build the team around them, to listen with humility, act with courage and earn their rewards through building trust. Trust is achieved through the sincere demonstration of values and principles in daily conduct and by treating people with dignity and respect.

Values-based leaders are not defined by a position. Rather, they cultivate change, and are guided by healthy values and wise actions. They transform traditional organizations because they don’t surrender their values. Instead, they practice them.

Leadership is ‘Development of a clear and complete system of expectations in order to identify, evoke and use the strengths of all resources in the organization – the most important of which is people’ (Batten, 1991)

They focus primarily on healthy, timeless human values as ends in themselves.

They help others to lead themselves so that they can make key decisions. They encourage individual and group intelligence by giving the power to provide input and feedback on organizational decisions.

They demonstrate values and harness differences and diversity for innovation, creativity and a common vision. They are an agent of change and are leaders who help to bring about almost a revolution to fulfill values while leading their organization.

Leaders, by choice, have the ability to cultivate potential in others. The work begins with the leader who lives, works and leads in alignment with their core values, principles and beliefs to in turn ignite the potential in those around them.

There are many aspects to modern leadership. Future leaders need to be encouraged to be responsible and create an efficient, dynamic, and humane environment, while achieving ambitious goals with regards to both individual and organizational success, global co-operations, human values, human resource issues such as motivation, implementation of changes, personal ambitions, etc.

In my opinion, today’s leaders need to be able to gain trust and inspire employees to ultimately reassure and advance change in the unpredictable business environment of today. Today’s leaders must first have the natural desire to be a servant first, to serve others, which will then lead to their conscious effort to develop themselves into an effective leadership position (Hein, 2003). Being able to establish and achieve a sustainable strategic vision for their organization or community is the central role of a servant leader (Banutu-Gomez, 2004), rather than establishing and achieving their personally beneficial goals (Dubrin, Dalglish & Miller, 2006).

Dubrin et al suggest that the following leadership roles are adopted for success:

– Place service before self interest
– Listen first to express confidence in others
– Inspire trust by being trustworthy
– Focus on what is feasible to accomplish
– Lend a hand
– Provide tools

These are age-old principles that need to be fostered and grown in organizations today.

Leadership and Change Reply

Our ability to understand and manage organizational change increasingly depends on our ability to understand and manage the most important drivers for employees

These can vary considerably from situation to situation. We need therefore to be able to identify and interpret the nature of change, and other factors impacting employees, rather than merely referring to a checklist. People’s needs, and their perceptions of their needs, can change quickly, and tend to do so more when they are unhappy.

Organizational leaders naturally see change from their own standpoint. Crucially, to manage change more effectively leaders must now see change in terms of its effects on employees, and must understand how employees feel about it.

Managing change is often seen as merely a process – as in project management for example – but effective leadership style and behavior are also vital for successful change management.

Where a leader’s behavior is sensitive to people’s feelings, change happens much easier. Where a leader forces change on people insensitively, and without proper consideration then problems usually arise.

Great leaders know and understand that human beings are complex, and that change will come with time. There are a few things great leaders know, that enable them to lead their employees successfully through change.

People are not resistant to change just to be difficult. The more that leaders can help their employees notice and identify what might be holding them back, and then coach them to navigate forward, the better and sooner they will reach the desired state.

People want to feel confident and competent.

It is only natural to not want to be viewed as fumbling around.  It is easy to psyche oneself out by thinking everyone but you gets whatever this new strategy/ procedure/ thing is.

Leaders need to engage their employees in discussions, and ask good questions to help them begin to envision how things would work specifically for them, including where they would start, what obstacles they can anticipate, what success would look like.

They should not let mistakes be viewed as failure and encourage every sign of progress.

Another thing – the more people articulate the vision of the change, the more they own it. It’s hard for people to disagree with something they already said, especially when you have repeated it to them and made it a point to let them know they “got it.”

Leaders need to get people talking about how they understand the new vision, their role, expectations of them and their objectives.

Once they have received the message of change, we need to ensure they have a chance to digest it with every communication.

Designing activities and questions that help them verbalize how they understand things helps to digest and manage change.  Help people think out loud.  Listen.  Be responsive when they point out how to improve the process.  Reinforce when they are going the right direction. If we work closely enough with our people, after awhile, they will begin to act as if the changes were their idea all along.

Successful change management requires a large commitment and a great deal of skill from executives and senior managers, whether the change is occurring in a department or in a complete organization.

As leaders we need to recognize the human element in the change. People have different needs and different ways of reacting to change. They need time to deal with and adjust to change.

Leaders need to understand, engage and work with their employees. Their success will always be a reflection of leadership skills.

Leaders need to be honest and worthy of trust.  If we treat people with the same respect we expect from them, employees’ hearts and minds will be open to working with us to move the organization forward.

Therefore, better identification and selection of leaders would also help staff the top ranks of organizations with those who are better emotionally suited to produce change.

Successful change management leadership require not only an awareness of human behavior, but also workplace evolutionary trends.