CHANGE MANAGEMENT: Why people’s attitude matters when
turning companies around.
In
a recent assignment I was lucky enough to work for a very interesting and very
“different” company. This company, acquired by an illuminated entrepreneur with
the support of a private equity fond, managed to transform itself from a boring
software database company into one of the most vibrant, dynamic and successful
companies worldwide. According to its CEO, this company ranks among the 3% most
profitable companies in the world.
In
the eyes of the Board, what made this company so successful was the relentless,
consequent, application of three simple principles, which I will address below.
The issue I had on the table was that that portion of the company under my
responsibility had a big potential; however for reasons still unclear was not
addressing the potential and was not living by its corporate
principles. The tasks I was assigned when I joined were to redefine the
unit’s mission, address the potential new business, and
make this unit live “by the corporate principles”.
The
three principles were (paraphrasing) the following:
1. Pareto
principle: focus your work and attention on the most important matters. Just
three matters that will impact most on the output of your work (per day, per
month or for the year)
2. Responsibility
principle: if you see anything wrong in your environment, that can prevent you
or your colleague from achieving your goals, you HAVE to take responsibility
and provide help, information or support. A stunning but true implication of
this principle is that we need also to “own the past” and take responsibility
for it.
3. Efficiency
/effectiveness principle: in our company we have activities that have a return
that is lower than the average generated by other activities. We have the duty
to redirect the resources towards the more efficient, effective use for the
benefit of the company.
These
people meant business, so we went as far as mentioning at least one of them in
every mail; the Principles were the guidance of virtually every
meeting/discussion and decision in the company.
Do
you think the Principles are obvious and therefore there is nothing
special about them? Well, think again! At first glance, as many of you, I
though these principle were self evident. Coming as from the fast-paced
no-frill CFO/ M&A world, either you concentrate on the most important
issues, take responsibility for all matters which are not set and eliminate
time and resource wasting items or you are doomed to fail. After
observing the way the three principles were applied I decided to try myself. I
found that if you apply “The Principles” consequently, you will end up
increasing your and the company’s effectiveness at least by a “felt” 80 %. At
the end of this article I indicate some examples.[i]
Is the application of “Rules” or “Principles” sufficient to
determine the success of a company? What makes the difference between a good
and a bad company (provided that it makes sense at all to distinguish companies
in such archetypes)?
My
CLERCUTCASE personal conclusion, is that what makes the main difference
is people’s attitude.
Why the attitude?
How
did I come to such a conclusion? Everything started in the late 80’s on a sunny
day in southern Italy. A relative of mine happened to own a small plastic toy
factory. That day he wanted to hire someone helping in the production and the
administration. He wanted an “active” person who could take and manage the most
diverse tasks. I happened to be around and watched carefully what happened.
There were plenty of guys waiting outside for their interview (job situation in
southern Italy never improved) and many of them were spending their time
talking to each other, as you would expect in this circumstance.
None
of the candidates seemed to be interested enough or was not convincing for
other reasons. We took a peek out of the window and saw that a young fellow,
waiting for his turn to be interviewed was acting differently from the other
guys. He was in the plain sun on a terribly hot day and yet he was very active.
He was removing stones from the sidewalk, putting pavement tiles back in their
place and removing the weed from the sidewalk and along the road.
The guy was treating
the place as it were his own, and was taking responsibility to fix small things
even if it wasn’t his job or duty to do so.
A few guys were
laughing at him; he did not stop nor care.
How
many times we hear things like “it is not my duty” or “it is not my job” or we
see top managers, managers and employees wasting company’s money or spending
monies they would never spend it this was their company. Not able or willing to
take responsibility or get their hands dirty?
The gentleman got the
job. It turned out he was one of the best hires in years. His attitude
made the difference.
Even
if this story happen back in the days, I never forgot it and consider it when
I need to think about how to put a company back on track, how to organise my
team and what I am looking for when I am hiring people.
It is a CLEARCUTCASE:
”It is the attitude, stupid”
You
may have the best vision mission and strategy for your company but if you do
not have good people your venture is hopeless. Put good people in a bad
performing company, things will change for the better. On the other
side, the wrong choice of people can make a good company go down the drain. I
have seeing it happen many, many times.
Are
a prestigious school degree, an intelligent mind, good emotional intelligence,
a nice cv, and a good track record sufficient or event relevant to identify a
good candidate for your team or your company? For someone perhaps. For me
some of them can play an important role but that is only a part of the story.
Above all I look for the right attitude. I explain the
challenges and then I witness the reaction: if I see a sparkle in their eyes,
if I see that they are hungry to do what the company expects from them
and even more importantly if they start thinking about possible alternatives to
find and execute solutions they are the men or women I am looking for. For me
it is a CLEARCUT CASE, no doubt!
If
it is success what you are looking for your company, there are many tools and
ideas that can prove invaluable for you. You can go a very long way by using
principle similar to the ones the company I mentioned at the beginning of this
article is using. However, you will only cover the final extra
mile by looking carefully at the attitude of the people around you.
To
conclude this article I would like to show you a very amusing and useful quote
I found on the internet which exemplify one form of attitude.
Yesbutters and
Whynotters
Yesbutters don't just
kill ideas.
They kill companies,
even entire industries.
The yesbutters have
all the answers. Yesbut we're different.
Yesbut we can't
afford it.
Yesbut our business
doesn't need it.
Yesbut we couldn't
sell it to our workforce.
Yesbut we can't
explain it to our shareholders.
Yesbut let's wait and
see.
All the answers. All
the wrong answers.
Whynotters move
Companies.
The next time you're
in a meeting, look around and identify
the yesbutters, the
notnowers and the whynotters.
God bless the
whynotters. They dare to dream. And to act.
By acting, they
achieve what others see as unachievable.
Why not, indeed?
I
am at your disposal
[1] This title is a “snowclone” of the
phrase: "The economy, stupid", used by Chester Carville in support of
the Clinton’s successful presidential campaign against the sitting president
George H. W. Bush in 1992.
[2] I was unable to identify the author (to
whom goes my perennial gratitude).
[i] Difficult
to believe? Here are some trivial examples:
· Emails: I used to receive
between 250 and 300 email per day. Had I spent 3 minutes reading each mail I
would have occupied at least 12 hour of my time reading and answering emails.
If I focus on the most important matters I should read only the email addressed
to me. I activated a rule moving all emails where I am on cc: to a special
folder and the daily rate of email worth reading went well below 50 (implying 2
hours or less for emails). In “Principles” terms:
o I focused on the most important topics (it is
difficult to believe though that 50 emails can be dealing with equally
important topics)
o I can take responsibility on the issues
addressed directly to me
o I can (and have) eliminated waste by working on
more relevant topics
· Management: I invited my
colleagues and reports to set their missions by defining a max of three
objectives (thus the three most important things they need to focus on)
o They focused their time and effort on the most
important topics
o We have time and resources to take
responsibility on the issues raised
o They can (and have) eliminated waste by working
on more relevant topics
· Meetings: anyone inviting to
a meeting should put on the agenda a max of three topics which are pertinent
and crucial to their own mission
o Meetings are focused, shorter, and more
interesting
o We have time to take responsibility on the
issues raised
o We can eliminate waste by readdressing
resources towards more relevant topics
· Sales Team: I invited my
sales team to work on the 20% of the customers generating 80%
of the revenues
o They focused their time and effort on the most
important clients
o We have time and resources to take
responsibility on the issues raised
o They eliminated waste by working on more
relevant topics
I could continue forever with examples, but this is the bottom
line: applying the Principles and the drills connected to them helped my units
overachieving the budget and our profitability target for the first time in
many, many years. This is the CLEARCUTCASE: The only thing that matters is the
outcome of your action.
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