Accelerated Change

Many senior managers find the prospect of large-scale change daunting to the point of complete paralysis.  To avoid contemplating such an unattractive proposition, they will simply ignore the warning signs and hope to escape to another, more successful company or into retirement before judgement day dawns.  Unfortunately, this course of action often results in the problems getting worse rather than better.  Eventually, the company will slide into oblivion or will be forced into drastic action under what may be the most unfavourable conditions.  Apart from the generally recognised difficulty of carrying out major change, the reluctance to act stems from a lack of confidence in handling the process, or a recognition that it is a very long haul – longer often than the likely tenure of many senior executives.

Fortunately, several companies have been brave, or foolish, enough to undertake major change programmes and have blazed a trail others can now follow.  Although the approaches described here can be used to prevent extinction, they can also help any company improve performance significantly and gain considerable advantage over their competitors.

Essentially, the approach described in this paper adopts best practice ideas from companies and academics around the world, notably in the USA, the UK and Japan, and from initiatives in the UK such as the Royal Society of Arts ‘Tomorrow’s Company’ enquiry.  By looking around to see what works, we can benefit from the experience of pioneering companies such as Xerox and Hewlett-Packard in the USA and Unipart, British Airways and BAA in the UK.  What the experience of these companies shows is that there are four common themes which run through successful change programmes.

1          Focus

  • By the CEO and senior team on the key issue
  • On the change process and programme itself

2          Visibility

  • Constantly expounding and explaining the vision and strategy
  • Making the whole programme very open and all elements public within the company
  • The change team and CEO being seen to lead the programme

3          Ownership

  • Ensuring ownership at every level by allowing people to define their own contributions
  • By recognising success publicly

4          Consistency

  • By ensuring that all actions support the realisation of the vision
  • Ensuring horizontal and vertical links

Most of the elements of the approach proposed here can be found in books and articles on topics such as strategy, change management, TQM, BPR, culture change and policy deployment.  This deliberate attempt to take the best from previous approaches and learn from the mistakes and successes of experience means that we have a much better understanding of the consequences of our actions.  It also means that we are not attempting to reinvent wheels when perfectly good ones already exist.  We are working with clients to exploit what is known rather than explore the unknown.  The evidence from successful, rapid change programmes such as Southern Pacific Railway is that it is not so much a question of trying to discover wonderful new techniques to revolutionise management practice, but of using existing, proven management tools imaginatively in combination with one another.

These cases also highlight the critical importance of six factors:

  • A clear, simple and explicit vision which can be linked to specific actions throughout the company: a vision which is based upon a sound understanding of the business environment and of competitive threats
  • From the vision,  the identification of a key goal which become the sole focus of the business
  • At the outset of the project, the establishment by the managers concerned of agreed plans to reach their targets
  • A concentration on managing the process rather than the outputs
  • A highly visible, rigorous and disciplined approach to managing the project
  • The absolute and explicit determination of the chief executive to prevent anyone from impeding progress

This approach can be considered as having two parallel streams of activity.  The first concentrates on the hard elements of strategy and turning a well thought out and articulated vision into specific actions right through the organisation.  The second stream concerns the softer elements to ensure commitment and includes the provision of training necessary to support the change process when it is needed, the development of appropriate reward and recognition systems and the implementation of recruitment policies which support the future needs of the business.  The implementation of the specific actions required is not left to chance.  In both streams, the programme is very actively managed by a process of regular reviews led by the chief executive.  Also, there is a continuing process of negotiated dialogue between senior management, middle management and the implementation teams to establish and agree specific targets and appropriate measures.  Individuals and teams must be regularly monitored and held accountable for the achievement of their programmes.

The Programme 

i        Defining the vision and setting goals 

  • Establish an inspiring and stretching, but achievable vision of the future
  • Develop a coherent and robust strategy capable of delivering the vision
  • Set strategic goals that will contribute to the realisation of the vision.  Establish these on the basis of a competitive audit and good information.  You have to be at least as good as the average in all areas
  • Create a ‘change team’ staffed by the most able people to manage the programme
  • Change is a hearts and minds process – facts and emotions are both important – use hard data and war stories
  • Translate the long-term strategy into medium-term and short-term targets
  • Develop financial plans to support the strategy and to illustrate the benefits
  • Let each department or division develop its own local vision and strategy to contribute to the overall vision and strategy.  Ensure that these are consistent.

ii        Developing Commitment

  • Run a ‘headline’ event, facilitated by professionals, to disseminate and discuss the vision, long and short-term strategy and financial plans: you need to involve people
  • Run workshops in each department or division to debate and agree their local contribution
  • Managers of each operating unit need to identify their own performance criteria and indicators
  • Review horizontal as well as vertical linkages to ensure consistency of purpose
  • Publish each manager’s list of criteria and key performance indicators
  • Recognise the power structure which exists.  If you have unions, involve them from the start and continue to communicate
  • Ensure that the whole process is open and honest – don’t try and hide mistakes.

iii        Managing the Process

  • Each manager needs to agree, with the change team, benchmarks and measure for local criteria
  • Establish milestones on the way to achieving the target performance
  • Let managers form improvement teams to work out how to achieve targets.  Links between improvement teams – KPIs – strategic plan – vision, lock everyone into common overall purpose
  • Start teams on their own: simple improvements before moving to complex process improvements
  • Publish an ‘accountability matrix’ which includes:
    • the corporate objective
    • the department objective
    • measures to be taken
    • who is responsible
    • the KPI impacted
    • the benchmark
    • date for review
  • Establish regular reviews to create and maintain urgency – top management involvement via change team.  Focus reviews on process and learning
  • Share best practice: encourage peer group learning
  • Change team must review KPIs and financials monthly
  • Progress towards targets is reflected in managers’ pay
  • Aim at improving KPIs at 25% a year, year-on-year
  • Be prepared to modify or add performance indicators and targets – some will have been based upon guesswork
  • Well into the project try and convert improvements into monetary values
  • Process problems will impede some performance improvements.  Prioritise and allocate to manager responsible.  Aim at over 50% improvement a year.

iv         Involvement of Senior Managers

  • The CEO must be seen to lead the programme by:
    • introducing it
    • appearing at all training courses
    • chairing the change action group
    • having the manager leading the change team reporting to him
    • allowing change team hiring, including external specialists
    • firing those who obstruct progress
    • conducting the review process, getting involved and asking questions
  • The change team must comprise senior, experienced people.  Recruit the best into the team, including external resources.

v          Training and Stealing

  • Use the change team to train others – you will need well-trained, internal facilitators
  • Resist the temptation to invent everything for yourselves: steal good ideas from wherever you can.
  • ‘Borrow’ tools and techniques and training programmes
  • Actively seek new approaches, but evaluate them before using
  • Use the ‘action learning’ approach to training and make it ‘just-in-time’
  • Invest in training for key project staff to help manage the process.

vi         Telling the World     

  • Maintain a constant flow of information on progress internally
  • Tell suppliers early on.  It’s very hard to improve if they don’t.  Work with them to improve their performance
  • Make sure you can deliver before you tell customers.  Don’t raise expectations before you can satisfy them.

vii        Making it Stick

  • Maintain an active role by the CEO – leadership of the process cannot be delegated
  • Recognise the enthusiasm will wax and wane.  Be prepared to re-invigorate.

Most managers will recognise much of what has been outlined here and either be doing it or have already tried it.  But this is not from the ‘been there, done that, got the t-shirt’ school of management.  Of course, the various elements of the process should be familiar, that is the point.  It is like using a recipe where many of the ingredients are familiar, but their use in that particular way and in that combination, is not.

An important difference between the approach outlined and conventional approaches is that the whole programme is planned end-to-end at the outset.  It is not designed as a series of stop-start stages which are reviewed and decisions made regarding what to do next.  The essence of this approach is that it is planned as a smooth curve, necessarily slower at the start while the whole programme is planned, but accelerating as it progresses.  Reviews take place regularly, but without slowing progress.  The pattern is illustrated in Figure 1 below.  Curve ABC shows what is often assumed – constant change.  ABDE is closer to what normally happens with progress being halted while reviews are held and decisions on what to do next are made.  Time is wasted and momentum lost.  Curve AF, of course, represents an ideal picture, but is close to what can be achieved if the whole programme is planned in advance.  Progress is never exactly as planned, but small adjustments can be made without slowing the programme.

Accelerating Change

Figure 1: The Extent of Change

 

The proof of any pudding is, of course, in the eating.  This one is no different.  I know from a great deal of evidence and my own previous experience that major, transitional change is difficult, dangerous and takes a long time.  Where this approach has been used, change which might have been expected to take five to ten years has been completed in two or three: that’s something worth making an effort for.

Managing Strategic Change

John Marti discusses how senior managers can facilitate and drive significant corporate change.

‘Managing change is easy, most of us do it most of the time’.

This is not the commonly held perception of change, but it is true, or at least, it can be true.  Although we may not recognise the fact, most of us are changing constantly.  Generally, this change is something we initiate or we regard as favourable to our interests, so we accept it. What we don’t like is someone else’s change, especially when it is imposed upon us.  Typically, our reaction is to resist in some overt or covert way or to go along reluctantly with the intention of reverting when the opportunity arises.  I know of many meetings to explain change over the years where no-one argues, but they leave muttering “over my dead body”.  Why?  Because it is not their change, they don’t own it and whilst they might understand the logic, they don’t really believe that it is necessary or they don’t buy-in emotionally.  Of course, it may be that they do believe, but “nobody asked me so I’m not going to do it”.

The lesson here is quite obvious.  If we can find ways of involving people in deciding the change which affects them, they are much more likely to accept it and make it work.  In particular, we need to let them question the ‘what’ and decide the ‘how’.  Don’t plan everything for them, but do create a favourable climate.  We have to give people a reason to change, beyond “do it because I say so”.  Creating the climate is a ‘hearts and minds’ process which involves two important elements:-

1          Generating dissatisfaction with the status quo.  In some cases, this is very easy where the performance of the organisation is obviously poor:  the business is losing money, there are large numbers of customer complaints or workplace morale is very low.  In other cases, dissatisfaction is not so obvious.  This is especially true when a company has performed well historically and although the signs of decline are becoming evident, it has not yet reached the edge of the cliff.  The ‘boiled frog syndrome’ is much in evidence.  If you place a frog in cold water and heat it slowly the frog dies, but place it in boiling water and it jumps out.  Without unavoidable signs of crises, many managers prefer to ignore the evidence of their eyes on the simple basis of “if I can’t see it, it’s not there”.  Many of us will know about the near disasters of Philips, IBM and Xerox.  Huge companies worldwide, all with a very successful past, but very nearly no future.  All could have avoided their crises.  Managers in each one knew of the problems besetting them, but it took a new leader to galvanise them into action – almost too late.

Corporate memory is important and useful, but “the way we do things around here” can easily turn into corporate sclerosis.  As I have said before, nothing gets in the way of future success as much as past success.  Quite often, managers need to be shocked into believing that change is essential to survival, let alone future success.  Ideally, we need evidence that appeals to both logic and emotion and clearly shows that all is not well.  This can come from many sources, external and internal:  customer surveys, competitor reviews, operational reviews, staff surveys.  A way then needs to be found to ensure that the responsible management team can accept the validity of the information provided and debate and agree the likely consequences of failure to change and improve.  One way which I have found to be effective is to prepare the factual evidence in considerable detail covering all important aspects of business performance.  This information is analysed and presented to the management team without conclusions.  It then becomes the first task of the team to debate the information and agree its conclusions and the implications for their business.  In this way, the managers generate and take ownership of the problems confronting the business.  Also, the debate centres upon facts and problem resolution rather than opinions.

The important needs to be separated from the critical: too often I find managers attempting to tackle an impossibly wide range of issues, all of which could be classified as important and many as urgent.  Few, however, have the power to fundamentally affect the long-term success of the business.  These are the handful of critical things which must be done to ensure survival and success.  These issues have to become the primary focus of attention.

2          Understanding that something better is possible.  Making sure that people are dissatisfied with the status quo is essential, but it is not sufficient.  Unsettling and destabilising people may be necessary, but if we leave them like that, we will be worse off than before.  People in organisations need to know that someone can see a way through the problems and can articulate a brighter future in a way that they can understand and relate to.  That future must not seem to be the product of idle day dreams:  it has to be relevant, it has to be possible and it has to be inspiring.  As I have said in a previous issue of ‘Talking Points’, this vision of the future has to be part of a clear, coherent strategic framework which everyone can understand.  This facilitates the sorting of issues into the important and critical categories.  In terms of strategic change, this is an essential step as it removes much of the deadwood from the path of progress.  Suddenly, we know what we are not going to do because it is not critical.

So who generates dissatisfaction with the status quo and who provides this vision of a better future?  The specific answer depends upon the particular circumstances of the organisation, but in general every major change effort has to be led.  Strategic change needs a leader who galvanises people, provides them with a compelling picture of a more desirable future, breaks down barriers and creates a climate for change.  As I said in a previous ‘Talking Points’, “…. the vision is achieved by aligning people ….. gaining their trust and creating coalitions”.  The key here is trust.  Leaders need to have many qualities, but if they cannot inspire trust then people will not follow them and without followers there is no leader.

The role of the leader in the strategic change process is vital.  Leaders articulate the vision and they also grant permission for the process – they act as the process sponsor.  With a clear vision and good sponsorship, the change may succeed: without it, it will certainly fail.  But in order to lead effectively, the leader has to engage in the process: it has to get to the top of their agenda.  What leaders can’t do if they want the change to work is to indulge in baton passing.  Saying, “I have a vision of a better future and I empower you to go off and create it.  Let me know how you get on”,

doesn’t work.  Strategic change is not a relay race.  It is more like a marathon where we all run together, but we are pretty sure that some won’t last the distance.

When we think about change, we tend to consider the outcome rather than the process.  Having a vision of an inspiring and idyllic future is one thing – making it happen is another.  There is a very natural tendency to look out across the valley to the green fields on the other side and imagine ourselves there.  What we often ignore is the difficult climb down from where we are and the arduous climb up the other side. And what about the river at the bottom – very deep and fast flowing?  Also, when we look across the valley, the distance is foreshortened.  What is in reality a considerable journey looks quite short and we find it hard to imagine that it can possibly take very long.  But unless we are prepared to think about the detail of the journey we expect to face, we will certainly underestimate the length of time it will take and the difficulties we are likely to encounter.  We need to consider potential hazards, plan to overcome them and accept that we will face as yet unknown problems.  Without good implementation, an inspiring vision remains just that, an inspiring vision which eventually fades and dies.

Strategic change programmes usually involve several functions and are often implemented via multi-functional project teams.  If project teams are used, it is vital that the rules of engagement are clearly defined.  Firstly, each individual project must be clearly specified so that no-one is in any doubt about the intended outcome.  Secondly, the project client or sponsor and the project manager must be identified – individuals not committees.  These individuals must have clear, distinct, single-point accountability for delivery of their respective roles:  simplicity, clarity and accountability are essential to success.

Implementing strategic change in this way reflects the holistic nature of the change.  Whole system change with its built-in interdependencies, means that one part of the system cannot be changed without affecting other parts.  Many ‘Business Process Re-engineering’ (BPR) projects, for example, have foundered on the rocks of unanticipated consequences.

It is essential that implementation is planned and monitored.  Clear goals need to be set with a timetable for achievement and well defined accountability.  Short-term milestones must be identified during the detailed planning stage and then used to monitor performance.  This helps to ensure that the implementation remains on track and provides the basis of a feedback process which allows all involved to assess their progress.

One of the most vital elements of implementation is communications.  Everyone who is affected by the proposed change or who will need to take some action as a result, needs to know what it is and what it means for them in their job.  This may seem to be a daunting task, but failure to communicate will only serve to feed the rumour mill.

Below is a summary of the more important elements of the change process:-

i           Information: use all the relevant information you can to create a desire for change and to reinforce commitment.  Provide a strategic framework; a context for the change which allows people to see something other than operational difficulties.  Remember that most strategic change occurs in response to external pressure.

ii          Behaviour:  out with the old and in with the new.  New ways have to be demonstrated – symbols are important.  Reinforce and praise new behaviour; make a fuss.  Ignore or let go minor mistakes, they will be made.  Work to get obdurate people on-side, but punish persistent intransigence or sabotage.

 

iii         Leadership:  without the people at the top being seen to be leading the change, it simply won’t happen.  Overall leadership can’t be delegated, but you can have and indeed you need, leaders at all levels managing the change process throughout the organisation.

iv         Communication:  you can’t do too much!  It needs to be simple, regular, repetitive and honest.  Not too taxing one might imagine, until you’ve explained something for the fortieth time to the same group and they still don’t (won’t?) believe you or give every appearance of not having heard or understood something which to you is blindingly obvious.

v          Control:  you have to be prepared to let go of the reins.  Apparently, your control diminishes, but you have to have faith in your vision and your educative and persuasive powers – there is no other way.  You cannot control every detail, so don’t try.

vi         Influence the Influencers:  in most change programmes you need helpers: disciples who help to spread the word.  But they must understand and commit to the new vision and be able to communicate it clearly and simply: you want and need evangelists.

vii        Politics:  they’re there whether you like them or not.  They have to be managed; if not, they may derail the process.  Identify key groups and get them on-side: if you can’t, isolate them.

viii       Parallel working:  don’t be tempted to do everything in sequence.  Many things will need to be done at the same time.  This puts a premium on the ability to manage disorder – you need jugglers, not just a safe pair of hands.

ix         Constants:  some things need not and will not change.  Identify them and create sanctuaries, ‘safe areas’ where people can rest from the pressures of change.

x          Results:  as with R & D, your lemons tend to ripen before your plums, so be patient.  Everything will take longer than you want.  In large, complex organisations strategic change often takes five to seven years before you see real results.

xi         Review and revise:  monitor what is going on; check against the plan, review regularly and revise if necessary.

xii        Constancy:  you will certainly need to make minor adjustments to your course, but that does not mean you alter course completely.  With your vision in mind, don’t waver: just keep going until you get there.

One final warning:  things will go wrong, so hold your nerve.  There will always be people who tell you that what you are attempting is impossible, or stupid, or both.  They may have a point, but if your team believes in the change, then go for it.

Cargo Cult Marketing

I wrote ‘Cargo Cult Marketing’ after a business trip to Australia in the late 90s and it struck me as equally relevant today. History appears to go like that. While I was there I heard about the cargo cult Indians in the isolated pacific islands. Everybody seemed to think that their behaviour was extreme and unreasonable and the result of their isolation from ‘civilisation’. I was not sure that they were really so strange – or that we are really any different.

On a recent business trip, I came across a reference to the cargo cult Indians of Papua New Guinea. Cargo culters inhabit the upland areas of the country and have seen from their mountain strongholds the great silver aeroplanes landing on cleared strips of ground in the valleys, to disgorge great quantities of food and materials for the native people. They have worked out what is going on and have cleared runways near their mountain homes ready to receive the lumbering aircraft they have seen below them. Now they just wait.

Gifts From The Sky

Elsewhere, on a Pacific island with a memory of Red Cross aid, the islanders dance in front of red-painted crosses and wait for food and other gifts to descend from the sky. On other islands natives worship at an office-like shack where holy men exchange pieces of paper just like bureaucrats. In Vanuatu the local cargo cult, which started in 1940, believes that a man will arrive to free them of missionaries and Europeans and bring them cargoes of refrigerators, canned food and cigarettes. In an effort to speed up his arrival, this cult even fielded candidates in a national election.

In every case the locals have a similar belief – just continue faithfully carrying out the rituals that they have witnessed and one day the materialist Gods will reward them and bestow upon them all the things that they need.

And how do we in the West see rituals like the cargo cult? Well, they are “nice and quaint aren’t they?”, “Picturesque”, “Ought to make a good documentary”. Whatever our words, we are secure in the knowledge that only the “backward” or “underdeveloped” parts of the world could possibly generate such behaviours. The cargo cult mentality could never happen in Europe, we’re just too advanced for all that.

We may not dance in front of red painted crosses or build runways in the mountains, well not quite, but are we really acting differently to the cargo cult islanders of the Pacific? Are we acting differently or, yet again, have we taken the same human behaviour and are acting it out in ways that don’t seem quite so silly to the Western eye?

Now, economic slowdowns may not be very pleasant times in which to try to scrape a living, but they do serve to uncover types of business behaviours that tend to be hidden during the good times. Talking to people in successful and less successful organisations over the past few years there has been a remarkable sense of increased activity everywhere. Everyone you meet is working harder, longer and is under greater pressure than before. But still there is increased competition, falling demand, rising redundancies and firms going out of business daily. So what is happening to all this extra effort? Managers are certainly tired and personal lives and families are being sacrificed to the greater good of the company but still profitable sales are elusive. So what is going on?

What is happening is that we are all dancing in front of our own red-painted crosses because it’s what we know how to do.

We have been trained to do it and we know that we do it very well indeed – never mind that it doesn’t actually improve the business and produce badly needed revenue – when things get bad we’ll all have to dance a little harder. That’s what we’re paid for isn’t it? – well, no actually.

It all comes down to the Western manager’s predisposition to confuse motion with progress, or activity with results. Managers are not paid just to be, nor are they paid to spend long, busy hours in the office. Since managers are paid out of revenues, they must in some way contribute to the creation of revenues (sales) just to cover their salary costs. The panic and uncertainty generated by recent economic scares has forced many managers to think about how to keep their jobs, unfortunately they have not come up with the right answers. Let us look at some of the bigger repainted crosses that have come in for serious adoration in the ‘nineties.

Red-painted Cross No1 – Costs

As soon as the business looks like turning down, get in the cost cutters! As long as we just cut the wastage without affecting the investment in the business that allows us to satisfy customer needs – then fine. Unfortunately, the cost cutting is normally given to the accountants who, being mostly concerned with internal matters, approach this task in ‘efficiency mode’, reducing the problem to a simple accounting equation “big” = “cost” and the priority order of cutting is related to their own understanding of the issues. So systems costs continue but advertising stops now! The time and money spent on cost cutting exercises is vast and does nothing to stimulate revenue generation; often it just makes additional sales in the future even more difficult to achieve because the means of attracting and satisfying customers have been cut away. We have taken the easy option. We have danced round the cross – and been praised for it.

When cost cutting fails to produce better profits… see cross No 7.

Red-painted Cross No2 – Systems Strategies

Systems are “a good thing”; they make us more “efficient” because they can generate a “management information system” to tell us how well we are doing. But they don’t sell and, more often than not, they don’t play a major part in satisfying customers’ needs either. So why are we spending valuable time creating internal upheaval to “upgrade” or install a new system? Again, we know the painted cross and how to dance round it – it helps us take our minds off the difficult problems for which we have no answers “How do we better satisfy our customers’ needs and so attract more business and make more profits?” Too many systems strategies still seem to be all about more paperwork, more forms to fill in (albeit electronic) and the creation of more powerful control systems on people. The ‘nineties, we are told, are about “enabling” people and improving customer service. Although some organisations have moved the IT responsibility to line managers there are still far too many systems that force people into pre-determined moulds. Nevertheless the belief is, as soon as the new systems strategy is in place, miraculously, we will be awash with business again. So that’s all right isn’t it!

When we are not awash with business … see cross No 7.

Red-painted Cross No3 – Databases

That great god of the ‘eighties, The Database, comes in for a remarkable amount of veneration and sacrifice in most organisations. Some businesses have almost been taken over by The Database and the Data Warehouse and countless hordes of acolytes exist purely to satisfy its unquenchable thirst for more data. This red-painted cross has been growing at an unspeakable rate. But what is it all for? Ordering, subdividing and classifying data doesn’t sell. Turning databases into control mechanisms doesn’t sell either. If The Database doesn’t, in some way, improve what you do outside the business (with the customer) it is a Pointless Activity. Spending all week hunched over the computer is not the same thing as meeting and talking to real, thinking, breathing customers who can tell you, face to face, why they bought what they bought and what they will want from you in the future. For those with no interpersonal skills it is of course preferable to spend time with a computer than a real person. Unfortunately, until the business depends on satisfying the needs of machines rather than human beings, the organisation is better off employing people who can do more than just spell “empathy”.

When the Perfect Database fails to improve profits… see cross No 7.

Red-painted Cross No4 – Capacity

This is an obsession that is with us even when there is no recession. How often have you seen the numbers oriented manager push for major investment in plant, production capacity or people based on meticulously researched and prepared financial forecasts (technically known as “a wing and a prayer”), and without any attempt to assess likely customer demand? When challenged, of course, he points to the budgeted returns and declares that “business is not for the faint hearted”, that “one has to take risks to make a return”, “when the going gets tough the tough get going” …and so on, and so on… This is all macho-management nonsense and was never relevant, even in the ‘eighties. Just like the runway in the mountains, let’s build the capacity and, as if by magic, the new business required to fill it will turn up just because the capacity has been created – neat! Overcapacity is a disease that currently afflicts almost every sector, from car manufacture to financial services – and still they want to build more.

When the capacity turns out to be a cost not an investment… see cross No 7.

Red-painted Cross No5 – Fad Surfing

And “Management by Objectives” begat “Management by Walking About” begat “Strategic Business Units” begat “Time Management” begat “Customer Care” begat “Globalisation” begat “Excellence” begat “Total Quality” begat “BS5750” begat “Re-engineering” – and each would solve all our ills. And of course they didn’t. How can this have happened? It has happened, quite simply, because most fads concentrated on measuring the easy things like standards, controls and internal customers that can be classified, processed and boxed rather than difficult things like external customers who don’t always know exactly what they want but do pay all our salaries. Today’s fads include “Loyalty”, “Data Warehouses”, “Micro-Marketing” and “Customer Relationship Management” (CRM), only of course they are not fads – they are the real thing!

This red-painted cross says that working hard to create change internally will, somehow, give the customer exactly what he wants – if only.

Ah yes but it’s not our fault it didn’t happen… see cross No 7.

Red-painted Cross No6 – Y2K

Too important to be a fad, Year 2000 activities are soaking up budgets all over the place. As Y2K hasn’t happened yet, any word against the activity is, of course, heresy. But what is it really all about? Vast amounts of money being “invested” in updating systems that were never meant to be running this long, expanded by managers keen to cut headcount regardless of long-term consequences. Just like BSE, nobody seems to be to blame. While the “investment” goes on, other budgets are reduced and sacrificed to the Y2K altar. But what happens in 2000? What happens when we find that business has not ground to a halt and customers are still impatient to be served? What happens when we try to compete with businesses that have not cut every budget to meet Y2K needs and have continued to invest in marketing and their most important asset, their customers? We can’t say that Y2K is not important, the Californian earthquake showed what happens when a company loses all its data, but it is a wonderful excuse to do absolutely nothing about the world beyond the company walls.

When this one, too, fails to deliver the business… see cross No 7.

Red-painted Cross No7 – Blaming those who are doing the business

If we are giving prizes for longevity, this must be the oldest Red-painted Cross in the clearing. For thousands of years, managers (those who stay at home) have been successfully laying off the blame for non-performance on the poor grunts who have to do the work. The much-maligned salesman or marketer whose job it is to try and implement the elegant but impractical plans worked out by people who have never seen, let alone spoken to, a customer. The biggest problem is that dancing in front of this particular cross, is not a ‘neutral’ activity, it can actually do harm. As the people in the business realise that, in spite of the elegant mission statements and quality promises, what really matters round here is not the customer but the internal System, they either: 1. Leave, or more likely, 2. Dump the customer; spend more time in the office and get down to some serious politicking. The fact that the customers are leaving gives them less of a System to manage doesn’t seem to worry anybody – it’s probably the ideal opportunity for them to “review”, “develop” and “enhance” the System into something even bigger and better.

THE MORAL

Like smoking, there is never a good time to give up dancing in front of the Red-painted Crosses. You have to believe it is better for you and that eventually you will be rewarded. Common sense alone says that it must be more profitable to concentrate on looking after the customer rather than the Internal System, because that is where the revenue comes from. Nevertheless, you can be sure that the way will be strewn with obstacles; you should bear in mind the following.

  • Never forget the customer is the business
  • Never let anyone else forget the customer is the business
  • The business will survive by what it does outside, not inside the business
  • The internal System can stop you succeeding, but cannot make you succeed
  • If the old ideas didn’t work, try something different
  • Don’t be infected by the panic of the non-visionaries
  • Those that shout loudest typically know least
  • Don’t confuse motion with progress

BACK TO BASICS …

It’s probably about time that we all looked again at how we approach business. To the innocent it must seem that we are unnecessarily complicating what is, after all, an extremely simple situation.

If you are to remain in business then you have to create and retain customers. You will do this by giving the customer what he or she wants, at a price that is both attractive to the customer and profitable to the organisation.

There really is nothing secret or complicated about the concept of basic marketing. It might not always be the most fashionable approach, nor always the most macho – but it is undeniably the most effective. Allow yourself to be distracted by anything or anyone else and all you will have is lots of free time to spend dancing in front of Red-painted Crosses.