Category Archives: Change Management

WHY ENTREPRENEURS NEED TO BATH

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Entrepreneurship – the act and art of being an entrepreneur  (Source:Wikipedia).

When I was growing up my dad told me a lot of things. Most of it passed me by as I already ‘knew’ everything there was to know on the subject or because it was father telling me. There were however, two messages that stuck and have remained front of mind throughout my professional life.

The first was the story of how he came to run his own business. Basically it went like this….

“I used to come home at night and lie in the bath and think about the problems I was dealing with at work. One day I  realised that it was my bath and if I was to worry about anyone’s problems while I was in my own bath, then they should be mine. While I am worrying about my company’s problems I am not worrying about my own”.

Based on this realisation he quit his job.

He went on to say

“Nothing gets you focused on your own problems like having two young kids and no income. Now when I lie in my bath at night I worry about my problems and how I am building a life for my family”

He tried real estate sales and a couple of other ventures. Then he met a chap who had some great software but no sales. Together they built a successful software services business and he retired with peace of mind that he had looked after his family.

Over the years, there were a few variations of the story and each time he would conclude with the assertion – when you lie in your bath at night, make sure you know whose problems you are thinking of.

The second message he left me with was that the word “creative” lacked a second “C”. That it really should be called creaCtive – a mix between the words ‘active’ and creative. There is no point in being creative if you do not act on your thoughts.

I consider these two bits of wisdom to be some of the best I have ever received.

The message is simple for would be self employed entrepreneurs – worry about your own problems and do something about them.

For the internal entrepreneur it gets a bit more complex. Bath time becomes the time when the manager steps back from the desk and actively considers how the function they are managing contributes to the overall business. Bath time is the time needed to reflect and look for the insights that other people are not seeing.  Looking at problems from different angles.

It is very easy and somewhat lazy to let the routine of day to day business suck you in and to allow yourself to be controlled by your diary. When I ask managers to show me the documents they use to manage their business process, they frequently refer me to their dairy. A dairy manages time, not the business. How often do you say or hear – “I don’t have time to think”. Does this mean that you don’t have time to actively evaluate your contribution to the business?

Without making time to work on the business a manager can find themselves moving from meeting to meeting, having significant discussions but not necessarily achieving much. This is where creactivity must meet entrepreneurialism. You cannot be entrepreneurial without action. You cannot be entrepreneurial and stay in the crowd.

 As an employee, acting on your ideas is difficult.  It is likely that a manager does not have the mandate to implement big ideas (as opposed to incremental change) and ‘making it happen’ will require an enormous amount of creactivity. Change management becomes vital for success. In this instance I define change management as the internal socialisation and lobbying of the idea. As a self-employed manager, you are entitled to implement whatever decision you choose. As an employed manager, you need the support of the senior executives or directors.

To be successful as an internal entrepreneur requires that the manager is very clear on the answer to the question – ‘am I addressing a symptom or a primary issue’?

But how do you know. If you are not part of the senior leadership team you may not be privy to the more fundamental issues facing the company.  In this case you need to be equally clear on the following change management questions:

  • who will support the idea for implementation
  • will take responsibility for the activity
  • what does success look like
  • who will gain from the experience
  • who will own the risk?

Being clear on the answers to these questions will significantly improve the way you communicate and market the idea within the company. You may ask yourself – why should I bother; I have a good idea and if the company is not interested then that’s the company’s problem, not mine.

Being and entrepreneur is not easy. If you are happy being a good employee, then turn up every day and do a professional job. Write your ideas down on an email and move on. If you want more, if you want to make a big contribution to the growth of the company,  then you need to look at the business as if it were your own and take time to think about the big picture. Bath time is a good time to do this. So is mowing lawn or any other time when you can be alone with your thoughts.

How do you start – draw a picture, write up a mock marketing brochure. Not a PowerPoint slide pack, but a proper A4 brochure that describes your idea. Keep it to one page. It is not a technical document. It’s a marketing document. If you can express your idea on one page and include a picture, then you are well on your way to making a great start to commercialising your idea.

SHOW ME THE MONEY

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Recently I spent a morning with a colleague discussing ideas for a new business. He is working on a number of excellent business models and if he can commercialise them, he should do very well.

He asked if I could assist him to “clear his head.” He was too close to the detail and the ideas and concepts were beginning to blur.

My immediate suggestions were:

1.   Draw the business.

2.   Follow the money.

We spent the next two hours on  exactly these two points. What  he initially thought  was a simple question, and one that  he already had straight in his head, proved to be quite complex. It is amazing how a person can jump large chasms in a single bound in his/her head.

Our conversation produced a new and annotated picture of the proposed business depicting how it would work and the flow of money. It was completely different to  the  picture he initially had  in  his head and it  substantially changed the  business case and  intended  architecture. Importantly it resolved a number of the mental blocks he had about the business. The blocks existed as subconsciously he knew there were issues; he just could not articulate where. Following the money is a sure way of resolving this problem.

This same difficulty constantly plays out on a large scale with my clients. As a consultant, I am frequently engaged to  prepare process models, maps and related material. The conversation generally  revolves around the relationship between people, process and technology and is often interlaced with the phrase “shared service.” 

What I battle to understand is this: why, despite engaging consultants to investigate the business, are managers so reluctant to engage with the detail? Businesses are complex, but managers just don’t seem to want to know.

To  further illustrate this point,  the next graphic is an example of a detailed process map. Call it “Process 1.” I do not expect managers to invest significant time at this level of detail. That is, managers other than the process owner.

process flow

Occasionally, an individual process map will include a reference to the next process in the sequence. More often than not, the process just ends with a box that says “post invoice” or “file letter” or “pay supplier.” That’s it. Process over.

This style of process mapping has little bearing on reality. Activity very seldom just stops in a business. Rather there is a handover to the next department or process. Everybody knows this and automatically accepts that this detail is just not included on individual process maps.

But, when that process map is placed in conjunction with other processes on the value chain, it offers limited insight. When the same process is shown inclusive of its relationships to other processes the value of the analysis goes up significantly. Consider the next two graphics.

 SHARED SERVICES NO LINES  SHARED SERVICES LINED

The  first  graphic shows what processes sit where on  the  framework. The  second graphic  shows the relationships between them. The interconnecting lines represent the hand off between processes and the flow of information within the business.

The  top  row of each graphic represents the  functions and  processes that generate revenue. This row answers the question, “How do I make money?” The middle row comprises the processes that support revenue generation. These processes are not  customer facing and  exist only because revenue is flowing. The bottom row comprises the processes that must exist for the company to be in business, in other words, the true back office.

Rows 2 and 3 tend to be the areas where you spend money. In rough terms row 2 goes to gross contribution and row 3 to operating expenses.

The layout is a great way to “show me the money.” It tells you which processes result in revenue and how and where the invoice is generated. It also provides a foundation for determining which processes belong in the shared services group and the basic configuration of that group. By extension it supports the demarcation of service level agreements  and key performance indicators.

A simple critique of the graphic demonstrates that there is possibly a significant gap in the revenue flow.

sHARED SERVICES CRITIQUED

Within the circle there is no output process for the third process. It is a revenue generating process but it is almost 100% independent of all other processes. This can’t be right. Equally getting to its trigger process seems somewhat convoluted.

This insight is enormously valuable, especially  if a company wants to implement or refine a shared services model.

If this reasonably simple diagram produces this type of value, why then are managers reluctant to engage in the detail? Without the detail the above issue would not be exposed. Yet it can easily be consulting suicide to put the graphic up for comment. There is a good chance you will hear, “It’s too complex, and I can’t understand it.” So you “dumb it down” to a point where it fits on a slide and uses large font.

I fully acknowledge there is a time and a place for getting into the detail and presentations should be tailored to the audience.

I  close with  the  comment  that  businesses are  complex places and managers should make the effort and take the time to understand them. At the very minimum they should understand the flow of money. Where is it generated? Where and when it is invoiced? And how is it spent? Not necessarily at the fine detail level, but most certainly at the building block level.

IT’S ONLY KINKY THE FIRST TIME

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Everybody on this planet knows that cutlery goes in the top draw. You can walk into any kitchen anywhere and know that if you need cutlery, then one of the top draws will have it. But not in my house. My wife looked at the dust, crumbs etc that kept falling off the counter into the cutlery draw and watched the family behaviour. She noticed that a person would open the draw, take out an item and frequently not fully close the draw. This meant that anything falling off the counter got caught in the draw.

Her solution was to move the cutlery to the second draw down so it could be closed with the upper leg or hip. The action would be unconscious. Your mind is focussed on what is happening on the counter and with unconscious multitasking you also close the draw. If for no other reason an open draw is in the way.

The solution works brilliantly. The draw is substantially cleaner. The problem is that I have over 40 years of training behind me that says cutlery goes in the top draw. It took me a week to accept that cutlery could live in the second draw. I also realise that despite all my consulting in and experience in change management I was resistant to change. My wife implemented the change, not through consultation and facilitated workshops but through active execution of strategy. On my part while I was not happy for a few days, I soon realised that the roof of my house had not fallen down and the quality of my days did not diminish. If anything my life span has probably extended through having cleaner cutlery.

If you can’t cope with change at home how do you cope with it at work. A quick scan of the job boards indicates multiple vacancies for change managers with job descriptions that variously include everything from process mapping and training to communications and stakeholder management depending on the definition being used. This got me thinking.

What needs to change for things to be different in an organisation?

I now take my cutlery out of the second draw at home, but I remain convinced that if I ever find myself living on my own, my cutlery will be in the top draw.

So my behaviour has changed but my mind hasn’t. My ‘boss’ told me to do things differently so I did. But given I am never the one to actually clean the cutlery draw I have not actively enjoyed the benefit.

To truly effect change in a business it is mandatory to engage the hearts and minds of the ‘changees’. Training staff to use a tool such as a newly implemented ERP solution gives them new skills, but does that not make them embrace change.

Popular literature often refers to the WIIFM – “what’s in it for me”. This is an important question. People change for two reasons; 1. The pain of maintaining the status quo is too high and 2. The pleasure foregone by not changing is too irresistible to forego. Any other point in this spectrum is unlikely to cause a person to want to change. The key word is ‘want’. They may have to change to keep their job, but that does not mean they want to. For change to be sustainable, people have to want to change. The old joke of – ‘how many consultants does it take to change a light bulb; Just one, but the light bulb has to want to change’ – is particularly relevant.

For most projects the pain and pleasure points are understood by the project sponsor and the senior managers. They have commissioned the project and understand the ROI. In the majority of cases, these managers are not directly impacted by the project. They receive the benefits but do not actively work in the business functions and processes that produce the benefits. Obviously it is not black and white, but in broad terms they consume benefit and do not generate benefit. For these managers it is very easy to embrace change. Quite possibly they don’t even have to change their behaviour at all.

For the staff who work in the business, it is a completely different story. They have to change and change means learning a brand new routine – learning a brand new set of habits. But the benefit of change to these staff is diluted. They sit towards the middle of the pleasure/pain spectrum and are unlikely to receive any tangible benefit from change so why bother changing. This brings us to the WIIFM question. An answer frequently heard is that you get to keep your job. Sure this is a nice outcome, but it is not one that is going to capture the hearts and minds of the staff.

To capture the hearts and minds you need to enlist the staff. Enlisting staff means creating an environment where they are willing to proactively break their comfort zone, to challenge their entrenched views and truly believe that things will be better as a result of the change. This may mean pushing them kicking and screaming over the edge so they realise that change was safe. Show them that it is only kinky the first time. The next time it is familiar – I have done it before and survived. Once you have done something once, you are more willing to do it again.

How do you enlist staff. The most important thing is to realise there is no such thing as ‘staff’ in the sense that ‘staff’ is a collective noun. There are people, individuals. Each person is different, with different agendas, hopes and fears and personal pressures. To treat them as a collective is to short cut the enlistment process. There really is no substitute for open communication, consultation and active engagement of the individuals.

I readily accept that it is frequently impossible to engage each person in a one on one environment. This does not defeat the point. Rather treat one on one as the benchmark and the process of getting there as a process of continuous improvement. Where you have a choice, err on the side of engaging with small groups.

I also readily accept that there will always be individuals who will not accept change under any circumstances. In this case, acknowledge it, move on and let the normal course of events for employee lifecycle management play out. As my mentor used to say; if you can’t change the people, change the people.

WHY CHANGE NEEDS POLITICALLY INCORRECT MANAGERS

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Leadership of transformational change has to be one of the most difficult disciplines a manager can master. For mine, the biggest hurdle is the capacity of managers to be unreasonable for a sustained amount of time.

“If you argue with a fool, they will drag you down to their level and beat you with experience” – anon

Having worked in the discipline of change for over twenty years I have learnt a couple of things.

  1. 80% is frequently considered good enough
  2. Consultants need to forced out of their comfort zones
  3. Sponsorship is a misunderstood role
  4. A project is always stronger when there is a person who is willing to be politically incorrect.

As a consultant it is not difficult to lead the thinking at a client site. This is almost what you get paid for. But despite all the intellectual property a consulting firm has in the ‘cupboard’, the thought leadership provided by a consultant is frequently no better than the sum of their experiences. And because the client does not really know better, this leadership is treated as appropriate for the project at hand.

The frequently used consulting approach is to rely on experience and the deliverables previously prepared for somebody else on a different project. This material gets reworked, refreshed, re-presented and re-invoiced. Nothing fundamentally wrong with this as it is part of the value that consultants offer.

At this point in the project the client is impressed. They have a concept deliverable they can review and critique. The relationship is working well. But here’s the problem. The clients thinking becomes constrained by the tabled deliverable. They start to critique what’s there. The far more powerful critique of ‘whats not there’ is often missed.

Then the client is faced with a problem. How do they tell the consultant what they have produced is just rubbish. Not only is it rubbish, but they don’t want to pay for it either. Managers tend to be diplomatic and in the intimacy of a consulting engagement they don’t want to fracture the relationship. So they ask the consultant for changes and refinements and so start down the journey of accepting 80% of what they really wanted in the first place.

When the consultant runs up against a client who knows their own mind and who has a clear picture of the deliverable, then the consultant is forced to lift their game. No longer can they provide clever ideas on PowerPoint that could mean more than one thing depending on how the conversation goes.

But to find a client who knows their own mind is rare. Sure, every manager will say – I am my own person. This is true at a private or small group level, but less so in the public forum of meetings and written communications. In these arenas the manager become diplomatic and couches the message. This happens for a few reasons. 1. They are unsure of what the answer should be. They know what the consultant provided is wrong, but cannot easily explain why. 2. Their colleagues seem to be happy, so the manager starts to believe they don’t get it. They must be missing something. 3. If they speak out and cause the project to change and then it turns out they were wrong, it could be embarrassing or career limiting. 4. The project brief was given by more senior managers and the manager does not believe they have the authority or insight required to change the course of the project. If the project was off track, surely the senior manager would have done something about it.

It is unlikely that these 4 points can ever be fully mitigated and a certain diplomacy is needed otherwise the project will never deliver anything. But the primary mitigation is to ensure the sponsor is strong and willing to be unreasonable. As long as they are willing to tell the project team that the deliverables are unacceptable and to minimise any compromise from this position, then the project will remain healthy.

I quite like the advertisement for Nissan. It shows the product development team presenting the latest features to the senior executive. They are excited about what they have produced. He just looks at them and says “more”. No discussion. Just do better. Eventually they produce an output that works for the executive. They present the price. He says “less”.

It’s a great example of being unreasonable. Drive the team to get what you want. Anything less is to accept a deliverable that is “80%” complete.

I once listen to a long presentation by senior manager. At the end he asked if I agree. I said with 98%. His response was excellent. Basically it went – to hell with the 98% – the 2% is the bit of value.

This incident has stuck with me for nearly 20 years. The 2% is the only bit of value. The same applies to projects. It is not hard to get 80% complete, it is very hard to get 100% complete but because 80% looks like a lot, it is accepted and the last 20% – the bit with the real value, the bit that changes the project from adequate to exceptional – is poorly delivered.

The hard reality is that it will take almost the same effort to realise the value in the last 20% as it did producing the first 80%. Finishing anything always takes longer than expected and projects are no different. The sponsor is now also up against change fatigue, boredom and indifference from the project team and the subject matter experts who have been involved in the project. By now these people are ‘over it’ and they just want it to finish. They will have 100 reasons why close enough is good enough.

This is where the sponsor needs to be very strong and uncompromising. Drive the value out from this last 20%.

From the consultants’ point of view, they have spent their time chasing the 80% and the budget is almost fully consumed. They realise that delivering the 20% could lead to free consulting. They need to avoid this so they start to push a narrative that says the 80% was in fact the scope of the project and the 20% is extra. Chances are they even have a scope document that supports this position. The problem is that they articulated the 100% vision to the client but sold the 80% deliverable. They sold the augmented business benefit – the benefit the client could get if they did 5 other things to improve their business over and above buying the consultants solution. It is not an easy game. The client would not have bought the solution if they knew they needed to do the other 5 things as well. The consultant knows that their solution will deliver value to the client and that the client just doesn’t get it yet. They are confident that by the end of the project the client will see the see the value and be glad of the project. So the consultant sells the client what they are willing to buy and figures that they will work out the details later. This is all good until the project budget runs out. This brings us around a full circle – the sponsor needs to be very strong and uncompromising. Hold the consultancy to account. “Give me the value you promised”.

A feature of the last 20% is that it is likely to comprise the intangible deliverables of the project. It represents the answer to the – so what – question. The 80% project delivered an ERP solution – so what. The 80% delivered re-engineered processes – so what. Can the sponsor bank the benefit?

The role of the sponsor is to define the project and accept the deliverables and in my opinion to be absolutely dogmatic on ensuring the deliverables produce the bankable outcomes and benefits described at the start. But if it was easy, everybody would be doing it.

Is this post cynical – absolutely. Does it apply universally to all clients and consultants – absolutely not. But there is a little bit of it in all of us.