Companies know they need to change.
This may be because things are not working well or competition is nipping at their heels. They need to take the next step forward and do things a bit or a lot more differently than they are today. At the same time they must balance change with a key question;
“What are Your Organizational Values”?
Most of us tend to be reluctant to change. We have become comfortable in doing what got us to where they are. We aren’t willing to make the changes necessary to improve. But the world is moving on and we must change to keep up with:
- Customer and consumer wants and demands
- Antiquated equipment and systems
- New technologies
- New competition
My consulting work deals with changing something with my client.
All realized that they needed to make improvements of some kind. Yet, they were very reluctant to make the changes necessary to get the benefits they needed.
Here are two examples:
Company A had a long history of making quality and nationally known products. Their sales and profitability were declining. There was an increasing demand to customize their product. Their operations were set to make the more standard item. They were also trying to work the customized product in the same operations. This was slowing production down.
And, they were trying to make repairs to products that either had defects or were returned for refurbishment. This gummed up the production. It caused delays and long lead times in getting products out.
My company recommended instituting Sales and Operational Planning (S&OP).
We could then gather information on customer requirements and coordinate this with manufacturing. The company could then plan production and smooth out their manufacturing. Products could then be completed on a timely basis.
Various groups such as Sales, Customer Service, Operations, and Quality were in favor of this new approach. However, the managers and executives were reluctant to try this. They went through training and conducted meetings, but they did not use the S&OP method. They continued to do things their own way. The end result was that there was no noticeable change or improvement.
To handle the customization and rework we recommended setting up a separate department.
This would then deal with these special customer requirements. The majority of the production (80%) which was non-custom would go through the current operations. The customized work would go through standard operations. But, when customization was required, the work would move to the customization operations. In that way, the standard items would not be slowed down by products that needed special care.
The plant manager refused to make the changes recommended.
He claimed that his operation was fine, even though the facts showed otherwise. He made no changes and things continued to plod along. Products continued to be delayed and customers continued to be unhappy. Sales continued to lag.
None of the recommended changes violated the theme, “What are Your Organizational Values”. They stayed up with new demands on the company. Yet, the executive hierarchy was not willing to deviate from their comfort level.
Without executive management support, the S&OP work suffered.
The employees felt that if management wasn’t serious that they did not need to be, either. There were no ramifications for not participating. There is a saying;
“Tell me how I am rewarded and that is how I will act”.
That saying was never truer in this instance.
Company B had a very season business dealing with the gardening industry. They were located in a very old and dilapidated facility. Operations and material storage were kept on multiple floors. The flow of materials and production was poor. The use of space was terrible and limited by the weight loadings allowed in the facility.
The entire operation was inefficient.
The owners realized that changes were necessary to meet the anticipated growth of the business. They knew that they could not continue in the present facility. Instead, they needed to move to a new plant that better met their current and future needs.
Our initial work was to determine what those needs would be. Once that was completed, we were to:
- Help find a facility that met the requirements we established.
- Secure it
- Get it set up and running.
A large amount of time was spent establishing the company’s projected needs for the next five years.
A new facility plan was then devised and a general layout created. Everything was approved by the ownership.
We were now ready for the next phase.
This involved finding and securing a new building. At that point, the ownership balked and stopped any further work. The owners determined that their old, dilapidated, multi-story building would be fine for both now and the future.
After all of the time, effort, and money spent to find a solution, they decided to make no changes at all. Even in the current location. This was a head-scratcher. If you know that a change is needed and are not committed to making one, why even start working on a project? When faced with a dynamic future, the status quo is unacceptable. Yet to these owners, it was perfectly fine to do this.
Reluctance is sometimes worse than being given a flat-out “No.
By doing this the executives are sending a mixed message. This is, “We want something done, but aren’t supporting it. If something goes wrong, it is on you. We have no accountability because we never agreed to the project”.
In essence, they are saying that “We kind of want to change, but not really.”
If you are truly intent on making changes, everyone must know you are serious.
A lack of participation — or actually working against it — is not acceptable. If that message of commitment is not sent, chances are good that any project will fail. At best, there will be significant issues that will require extra work to succeed. This is what happened in these two examples.
The big question here is, “What are Your Organizational Values”?
Is it to maintain the status quo?
Or, is it to follow what many successful companies do and use Continuous Improvement?
There is an old axiom that companies either grow or die.
Status quo does not lead to growth.
How many companies that led their industry failed to change and died? Do the names K-Mart, Bethlehem Steel, Blockbuster Video, and Sears ring a bell? All were bypassed by newer, innovative companies. And then, they ceased to exist.
In the early 1990s, a study was conducted by Ken Preiss, Steve Goldman, and Dr. Roger Nagle. They determined what high-performing companies were doing to be leaders in their industries. These companies stood head and shoulders above their competition.
They found there were four characteristics shared by successful companies. They termed this “Agility.”
One of the “Agility” principles was “Mastering change and uncertainty. “
The companies were able to react quickly to changing business demands, needs, and issues.” This means that successful companies are able to plan for, anticipate, and react quickly to a changing business environment. Successful companies also are able to counter the abilities of their competitors.
They quickly and adeptly modify their own business in order to remain competitive under new circumstances.
If certain companies are doing this, why isn’t everybody doing it? There is a lot of information available to all businesses and their owners about Agility. And yet, why isn’t everyone invested? To answer this, I offer the following:
• A company’s leaders must admit there is a problem and that change is needed. The widely accepted definition of insanity is to do the same things over and over again and expect a different result.
• When it is agreed that change is necessary, leaders must determine what needs to be changed. They must then commit to doing it. There are many and interconnected parts, that must all be changed. Otherwise, those areas that are ignored can undo the good established in other areas.
• Leaders cannot partially support an effort to change. They are either in or not. If not completely in, don’t even start. You are asking for failure; worse, you will spend a lot of time and money to bring about failure.
• Leaders must make sure your people are invested and realize the importance of this. They are accountable for the success and must accept that failure is not an option.
One of my idols is Jimmy Valvano.
We were both born in Queens New York and attended Rutgers University. He played on the basketball team that finished third in the NIT, a big deal in the 1960s. He then coached at various schools, including North Carolina State. In 1983, they won the national championship. It was one of the biggest upsets in collegiate basketball.
Jimmy died in 1993 from cancer. Before he died, he appeared at the ESPYs to receive an award. He spoke about life’s difficulties. His message was timeless and was true about the following thing;
“Don’t give up, don’t ever give up.”
What does this have to do with change?
When you make a change, things may not go smoothly.
In fact, if they do, consider yourself very lucky. There will be times where you will want to go back to what was safe, comfortable and familiar. That is a big mistake.
If that was the right thing to do, no one would ever change. In that case, we would not evolve. We would not accomplish many of the great things that we have as individuals, a society and a world. Change is uncomfortable. Change is risky. But change brings about many new and wonderful things. Pick anything in your life that you could not do without. It didn’t exist at some time. Then someone imagined it and a change occurred. Without that change, it wouldn’t be here today for you to love and appreciate.
This is so true in business.
Someone thought of:
- Just in Time
- Lean six sigma
- Artificial Intelligence
Each of these brought about change. They revolutionized business.
What is stopping you from change? We experience change every day of our lives. Business is no different and we should embrace change, not fight it. Change will occur with you or without you. Embrace change and don’t be afraid. What doesn’t kill you makes you stronger. And also makes you more successful. That is why we are in business.