Leading Change and the Refraction Layer

My father used to help people who set off explosions on the surface of the Earth. No, this was not for blowing things up. It is what is called “non-destructive testing” in hunting for oil. With the right kinds of sensors on the Earth’s surface and some sophisticated math, you can develop a image of the Earth’s interior many thousands of meters deep by interpreting the feedback of compression waves from the explosion.

Imaging the Earth using compression waves is complex in part because of refraction layers. What’s a refraction layer? A layer whose substance is distinct from the layer above it. Refraction layers change waves. The more distinct the substance of the refraction layer, the more dramatic the effect on the wave. A refraction layer may deflect a wave into oblivion partially or completely, change its direction and speed as it continues downward, or otherwise cause it to dissipate entirely.

Organizations have refraction layers too. Like setting off an explosion at the Earth’s surface, leading change from above propagates waves downward through management layers. The greater the difference in thinking, behavior and values from one layer of managers to the next, the greater the impact on the change effort as it propagates. A refraction layer in an organization can deflect a change effort partially or completely, sending it off into oblivion, or it can dramatically alter the its direction and speed. Sometimes, a refraction layer can cause a change effort to dissipate entirely.

One of the most common mistakes I see in change efforts in companies is the attempt to bypass a refraction layer. For example, a global ship services company in attempting to change the way its Japanese sales organization sells was reluctant to hold senior sales managers accountable for the changes.

“They have strong personal relationships with big clients,” an Asia-based senior director explained. “They have always sold in a specific way and it has worked for them, and they don’t want to change. I don’t want push those managers too hard, because I don’t want to jeopardize the sales they bring in even though this change what we need for future growth in the current business environment. So, we have focused our efforts on the more junior staff.”

However, the junior staff take their cues from the senior sales staff on how to sell and how to behave. In the end, none of the changes promoted by the leadership were adopted by junior staff, and the company continues to lose market share to competitors.

A Japanese client company of mine had a refraction layer in the heads of its several sales divisions. Most were resistant to the change promoted by the leadership. Previous attempts to bypass the division heads and focus only on changing the behavior of sales staff had failed. Desperate for change, the company’s leadership overcame its reluctance to deal with the division head layer. Some division heads were replaced and others were given support in handling the change. None were ignored. As a result, the behavior of sales staff changed and performance jumped.

Many Japanese companies inadvertently create refraction layers through systems of seniority-based promotion, whether formal or tacit. People who enter a company as graduates tend to move up through the ranks together over the years forming distinct layers, like layers of sedimentary rock in the Earth. Yet unlike the interior of the Earth, refraction layers in organizations are are not, well, set in stone. Managers can be changed, and they can be changed out. However, refraction layers whether imaging the interior of the Earth or propagating change through an organization cannot be bypassed or ignored.


Obesity and the Peril of Mistaking Cause

The American Medical Association recently reclassified obesity as a disease after years of resistance and debate. Previously, obesity had been considered a behavioral disorder. What behaviors? Gluttony and sloth. If you were overweight or obese, your doctor would advise you to eat less and exercise more without a second thought. However, with 80% of Americans overweight and 30% in the obese range, the idea that that we are simply a nation of lazy overeaters has become, well, difficult to swallow.

There is mounting evidence that we have gotten the cause of obesity wrong. People still continue to get fat, or go through cycles of weight loss and regain. The problem seems nearly intractable, but how much is this because we have been mistaken about the cause?

So consider this. What if gluttony and sloth are in fact the result of obesity rather than the cause? If so, then simply exercising more and eating less is merely treating symptoms without addressing cause, and not likely to be effective. In fact, eating less and exercising more has been shown to be entirely ineffective in sustainable weight loss, and even ineffective in the short-term for some people. Eat less and exercise more, huh? Bad advice for overweight people, with sometimes disastrous consequences.

Mistaking cause in business can be just as perilous as in health. A Japanese client company of mine was growing obese with inventory resulting from the poor sales of products from a recently established factory. The CEO asserted, “Steve, you see the problem is that Japanese people are just lazy. Our sales people just won’t put in the required effort. They take their salary, drink tea and read the newspaper when they arrive in the morning, but they don’t exert themselves.”

Now I associate many traits with the Japanese people–some flattering and maybe some less so–but sloth is not among them. And what about all the Japanese companies selling successfully with sales teams constituted entirely of Japanese people?

The CEO continued, “What we need to do is change the sales people somehow. Maybe we need skill improvement. Maybe a better attitude. I don’t know. But something has to be done about the behavior of the sales people.”

Yet what if the observed “laziness” of the sales people were not the cause of the poor sales performance, but rather the result? Wouldn’t addressing the behavior of sales people be just as ineffective as eating less and exercising more in addressing obesity?

I interviewed sales managers and staff around the company.

“The problem is that the CEO didn’t talk to us before deciding to build the factory,” commented one senior sales manager. “We could have told him that there was no market for the product. The assumptions about price and quality were all wrong.”

“Oh, that factory’s product!” remarked a sales person I interviewed. “For Japanese customers, the quality is too low and the lead times too long. For overseas customers, the price too high and the quality is well above their requirements. The product is in a no-man’s-land. I won’t touch it.”

Talking with current and potential customers as well as other market players, we ultimately identified true causes. None of the causes identified had to do with the behavior of the sales people.

The company changed the product strategy. It did not change the sales force. The factory is now profitable. The company shed excess inventory and has become lean again.

And what about the real causes of obesity? Well, obesity appears to be a result of multiple conditions, few of which are related to behavior.

I don’t think it was easy for the medical community to admit that they had gotten it wrong. The CEO of my client company had to swallow a bit of pride as well, but he did so quickly and with grace. The AMA took somewhat longer.