Wednesday, November 5, 2008

Managing Through the Meltdown

With financial turmoil continuing and strong indicators of a worldwide recession, the challenge of deciding how best to respond is pressing on nearly every business. While taking rapid action can be critical, the risks of hurting your company’s ability to take advantage of opportunities, or to position itself for the eventual upswing, are high. Across-the-board hiring freezes or X% staff or budget cuts work quickly, but don’t discriminate between “fat” and “muscle.” Hasty decisions can discourage people even more than the business conditions themselves—if they see the actions taken with little clear rationale. Even though many leaders recognize these “unintended consequences,” they are at a loss for an alternative.

The good news is, times of crisis offer an opportunity to sharpen people’s commitment to change and to challenge assumptions that stand firm when things are “fine.” With the right leadership and focus, fear can be channeled into action that makes your business leaner and meaner, and even better at delivering what your customers really want. (They’ll be relying on you, or your competitors, to help them when times are tight!)

Here are some “tips” to consider, which some of our clients are using to help, and not hurt, their operations:

• Look for Untapped “Synergies” - Many companies have longstanding duplicate functions, often the legacy of a past merger that was never fully integrated. Now may be the time look harder at those redundant efforts and really finish the merger process. [See related article, below]
• Rethink How You “Delight the Customer” - Believe it or not, some of the “special things” you do for customers may not be all that important to them. You can cut costs, and refocus on really value-adding activities, by scrutinizing and even eliminating some unappreciated extras.
• Focus on “Manual” Versus “Automated” Solutions - The notion that automating an activity will make it more efficient sounds good in theory. But in practice the up front investment to achieve those savings, not to mention the lead-time and effort required, can be huge. Now may be the time to look for ways to work smarter by having people do things better and differently (or not doing things that aren’t important) and put off that big IT push.
• Take on the Big Opportunities Now - Beyond, or in addition to, the “quick hit” opportunities, slower business volume (which hopefully will be short-lived!) can give you the time and resources to launch more aggressive business transformations. Somewhat like a butterfly, you may use the tough times like a chrysalis, reforming in key areas so you emerge in a totally new form.

Easier said than done? Of course! Depending on your circumstances, the best response might be go into survival mode and wait for better times. On the other hand, it may be your competitors who are making the best of a challenging situation, or your customers who are rethinking their future needs. So, simply laying low can have its risks, too.

Pivotal offers a variety of services, as well as experienced change and improvement consultants, that can help you make the right moves in uncertain times. These include:
• Facilitated Working Sessions to define opportunities and set priorities for quick efficiency improvements.
• Operational Diagnostics to pinpoint non-value-adding activities in the business and problems that are consuming time and resources.
• Kaizen/Workout Events that drive short-term action and results.
• Leadership Assessment and Development services that help your managers and executives make smarter choices, adapt to new challenges, and lead change.
No matter how you respond, or how long the crisis impacts you and your organization, responding effectively to challenges is now a fundamental business competency. Today’s turmoil may actually present a valuable opportunity to test and build your ability to adapt and thrive amidst adversity.
For details and questions on Pivotal’s change services, contact us.

Wednesday, February 13, 2008

Thoughts on Habits – Both Good and Bad

Anyone scanning the entry dates in this Blog will note that the postings have not exactly been fast and furious. That’s annoying to me because the intention has been and still is to offer some regular comments and insights on topics of leadership, change and business improvement. The trouble is: I just have not gotten into the habit or routine of making entries, which is obviously essential to meeting that goal. (For some reason, the voice of Captain Kirk —— “Captain’s log, Star date …” comes to me.)

Habits are an interesting thing. Even though the topic seems to have been swamped by “7 Habits” mania, there still seems to be a lot of room to explore how they affect our behavior and effectiveness in our jobs and the success of any organization.

For some reason, most of what we’d call “good habits” require, at least to begin with, a meaningful dose of discipline. Even something as simple as saying “Please” and “Thank You” for most of us began with a lot of prompting (and annoying blank looks) from parents and other adults. The “habit” of posting to a Blog requires the discipline to do it on a regular basis—not something I’ve yet shown—and then convert that into something that comes naturally.

Many of the most important business or management habits are just the same. Establishing clear goals, for example, or communicating effectively require effort to get right and usually only become routine and “easy” after time and practice.

But the scary news is that the dark side of bad habits demands very little effort or practice at all. In English, the phrase “fall into bad habits” makes clear that all you need to do is let go, and down you tumble.… I’m not sure why the good is hard and the bad is easy, but it poses one of the most fundamental reasons why having a successful organization stay successful is so difficult.

So … Since I clearly need to work on my Blog-posting habit and since the concept of how habits, good and bad, provide a key to leading organizations in a fast-changing environment, I’m going to stick with this theme for a little while and connect it to some of the big issues we’re confronting today. My sense is it will be interesting and hopefully thought provoking.

But I’ll leave that to the next post – coming soon!

Tuesday, September 18, 2007

Chinese Toy Quality – An Opportunity for Global Leadership

The alarm and reaction to the discovery of lead-based paint in toys manufactured in China and sold in the United States illustrates in stark terms why new standards of leadership are needed as the economy becomes increasingly globalized and interdependent.

The majority of the response has been narrowly focused and largely concerned with fixing blame or claiming innocence. Politicians attack the US Consumer Product Safety Commission, toy makers blame Chinese contract manufacturers, Chinese government officials complain that US officials are not aligning with efforts in China to certify suppliers, and everyone claims to be doing their best to safeguard children.

Almost all the attention is being placed on “inspection”—that is, on catching bad products before they reach store shelves. Probably the most extreme example of this “cows have left the barn” approach has been the Walt Disney Company’s announcement that it would pay independent firms to test products bought at US stores for lead paint and other hazards.

Challenging situations like these are complex and defy identifying one sole party as the villain—or the hero. What no participant seems to be concerned with, however, are the causes of lead-based paint being used in toy production. Doing so would take courage, and would demand an examination of the entire “cycle” of toy design, production, distribution and sale. Every player in the supply chain—including consumers—might have to make “sacrifices.” But there are plenty of opportunities for “win-win” outcomes.

As an example: Many of the decisions that drive toy production are undoubtedly made to squeeze profits out of the supply chain and still offer toys at a competitive price. Yet to avoid dangerous products getting to the shelves, millions of dollars and renminbi are being spent to weed out the bad stuff. Since that has not worked thus far, the preferred answer—more inspection—will just add more costs.

One small example of a “shared benefit” approach came from the US Toy Industry Association, which has included ensuring safety of toys sold in China as one of its key objectives. Finding ways to engage various players though mutual wins is a key to getting past enforcement-only solutions to toy safety problems.

The “toy crisis” serves as a focal point for many similar challenges in a global economy where the costs are allocated very unevenly and where the totality of benefits and consequences is ignored. The sustained health and stability of the world economy may rest on finding more holistic approaches that have short-term costs but longer-term benefits to many many people and businesses.

In future posts, we’ll look at specific ideas on how Change Leadership principles can support a broader view toward solutions. In the meantime, we welcome and encourage comments and ideas on this critical issue.

Wednesday, September 5, 2007

Starwood Hotels: Change Leadership Success Story

Well, we’d promised some “success stories” and now BusinessWeek has helped by profiling one of our favorite clients — Starwood Hotels — and the benefits they’ve achieved through their Six Sigma initiative. (See: )

Starwood’s success is a great example of going beyond the boundaries of a program — which is what Six Sigma is at the large majority of companies who use it. Instead, Starwood has integrated principles like customer focus, testing assumptions, use of data and analysis, creative thinking and teamwork into a process for Change Leadership. They have kept the concepts clear and meaningful to regular people in the business, too, rather than overcomplicating them or trying to bury people in lots of analytical tools.

Obviously, Starwood’s approach can’t be copied “as-is,” but some of their keys to success are worth highlighting:
1- They’ve tied their efforts to the core needs of the business, involving a mix of efficiency improvement, customer satisfaction, revenue generation and innovation
2- There’s been heavy emphasis on sharing and leveraging good ideas across the business. With hundreds of hotels around the world, you don’t want everyone trying to fix the same problem. But any hotel may have a great idea that others can also adopt.
3- Persistence and consistency have been impressive. We conducted the first Executive workshop in Six Sigma for Starwood in January of 2001—less than 9 months before the September 11 attacks. Many companies would have abandoned the effort as the hospitality market nosedived, but Starwood did not. They have learned a lot and evolved their approach since then, but many of the same foundational elements are still in place today.

Starwood Hotels deserves credit as a role model for the many many companies who need to become smarter at change, and who yet get bogged down in programmatic details and tools. They have overcome these challenges and have the results to show for it.
We’ll talk more about some of the downsides, and upsides, in later posts.

Friday, June 22, 2007

Welcome to our Blog!

Welcome! This is the first entry in Pivotal Resources' Blog, devoted to sharing ideas and insights on building organizational capability to continually adapt and improve—what we call "Change Leadership."

From a positive perspective, the accelerating pace of change is one of the most exciting aspects of business and government in the 21st century. Organizations and individuals who can challenge the status quo and take advantage of change are most likely to thrive – and to enjoy the thrill of staying ahead of the curve.

Conversely, a constantly shifting environment puts pressure on leaders, and followers, to decide how best to adapt and then to execute on the right ideas. That makes taking on risks, abandoning the “comfort zone,” and yet avoiding the temptation to change too much.

Change Leadership, as we define it, is a diverse mix of skills and organizational systems that enable you and your business to make the most of accelerating change, and turn potential threats into opportunities. As we see nearly every day, however, executives and organizations are struggling to master Change Leadership. For every success like an Apple or Blackstone, there are many more stories of fading glory and uncertain prospects. The skills that were adequate in the past are no longer enough to keep a company on top.

So in this Blog, we hope to offer a forum to explore these challenges and provide innovative ideas on how we can all learn to become better at leading and executing change. We’ll bring in perspectives from all around the world (globalization being one of the key drivers of change), and hopefully find some fun and inspiration along the way.

We look forward to hearing from you and hope you find this space worth visiting often!

Coming soon: Examples of Change Leadership in action (successes and failures)