Steven's Blog

Process, Not People

The key to rapid culture change in any organization is process, not people. First focus on changing processes. Attention to people comes later.

For example, in working with a leadership that was having difficulty in coming to consensus and making decisions in a timely manner, I asked them to try a process I had developed. Unconvinced, they humored me and gave it a try. As a result, they worked through a list of seventeen strategic issues requiring decisions in two hours. Previous efforts had taken weeks with no result. The CEO and many of the managers had ascribed cause to cultural and communication issues, or otherwise to personalities of certain individuals in the group. Yet simply changing process fixed most issues right away.

Having tried the new process that works, most the managers on the leadership team were eager to repeat it for other decisions, and teach it to staff so that it may be used throughout the organization. That will change behaviors around decision-making all over the company, effectively changing the culture. There was no need to convince people of new values, change mindset, embark on elaborate training programs, or move people around or out. All it took was convincing the managers to try a new process. Nothing is more persuasive than success, and that takes care of the rest.

Some individuals simply won’t take up a new process. There are only three causes for a performance gap:

  1. “I don’t know how!”
  2. “I don’t want to!”
  3. “Even if I wanted to, I can’t!”

For each cause, the treatment is different. “I don’t know how!” is remedied with education. “Even if I wanted to, I can’t!” is remedied by removing structural impediments, conflicting policies or processes, or providing sufficient resources. “I don’t want to!” is the most insidious cause. People act in their own perceived best interests. Find out what that is, and address it, or alternatively move the person out.

Effecting culture change by focusing on people first can be like trying to boil the ocean. Yet, if you can identify behaviors key to the culture you want to create, change processes that result in that behavior. If the processes work, most people will take them up. The processes will become the norm in the organization. For the individuals who don’t take to the new processes, identify cause and use the appropriate treatment. In doing this, you will achieve steady, rapid progress in changing the culture of your organisation.

For rapid cultural change, focus on process first, then on people in a second stage. For most people, a process that works is all that is needed.


People are Resilient and Adaptive

Economists predicted that the stock market would tank if Donald Trump were elected, as people had apocalyptic fears of what his policies might do to the world economy. The economists got it right and so very wrong at the same time. The stock market did tank as it became clear Donald Trump was the victor, and then rebounded and soared.

I don’t mean to be a validation of Donald Trump. Make your own decisions on that. Rather, people’s fears of a possible reality are often much greater then the fears they have once the same reality is upon them. People absorb new realities much faster than we often think possible, and have remarkable ability to cope and adapt. In the case of the election of Donald Trump, it took only hours for traders to digest and deal with the election results.

I bring up this recent example of human resilience and adaptability because so many CEOs of companies whom I encounter in Japan and elsewhere, when confronted by staff with apocalyptic predictions when proposing a necessary strategic change, hesitate.

“If we try to bypass our dealer network, we will lose all our customers!”

“If we drop this one product line, our customers won’t buy anything else from us ever!”

“If our sales force targets economic buyers rather than the corporate factotums tasked with collecting proposals for review, no one will do business with us again!”

Some CEOs hesitate to make the changes they recognize are needed, not so much because they buy into the fears of their staff, but rather out of concern about the staff’s ability to cope. Such concerns are often exaggerated.

Once a change is made, and people absorb the new reality of the business, people rapidly adapt and cope. It is the role of the leader to understand that, have to courage to pull the trigger, with the confidence in knowing that his or her people will be OK with the change despite what they may have said beforehand.


Presume the Best in People: The Gains Far Exceed the Losses from when you are Wrong

Recently, when traveling first class on the Shinkansen (the Green Car), I noticed that conductors no longer check passengers tickets. It used to be that uniformed conductor, often female, would first distribute complimentary disposable wet towels to new passengers who had just boarded, noting their seats numbers, and then some minutes later return to the same seats to inspect tickets. Now they just distribute towels. No one checks the tickets.

I figure they decided it was not worth bothering first class passengers–the ones that pay extra money for their seats. It also happens to cut conductors’ work in half. I can imagine that the people in Japan who cheat by sitting in first class without a fist class ticket, or simply mistakenly sit in the wrong car, are exceedingly rare. Why go through all the trouble of inspecting tickets, creating an undue burden on the staff and customers alike, the vast majority of customers do the right thing? And even if a few people do cheat the system successfully, who cares? What’s the impact? At the same time, how much good will does Japan Rail generate with its elite customers by demonstrating they implicitly trust us? What’s the profit derived from that?

In business, I see people go to great lengths to avoid being cheated at the expense of forgoing potential opportunity–such as requiring burdensome report filing by staff, when staff could be out selling or doing some good for customers. I have seen business leaders approach a potential partner with a suspicion that he or she will try to pull something, and be tentative and circumspect in discussions, rather than being open, imaginative and discussing possibilities.

In a Japanese coffee shop after ordering an iced coffee, I discovered that they had added sugar beforehand after tasting it. I asked to have something else, which was fine as long as I paid. They had to charge me for the product because I had “drunk part of it.” It was my fault, according to them.  At Starbucks, you can get another drink if you like, no questions asked, and not have to pay for the first. I have done that on occasion. How many people actually abuse Starbuck’s service?

For most situations where being duped is low-impact and rare, presume the best in people. The gain from captured opportunity, goodwill, and trust far exceeds the cost of the occasional times you may be duped. And if you are duped, forget about it! Your overall gains wipe out any occasional loss.


The Fallacy of the Buy-In Imperative

Staff involvement in decision-making is useful means of ensuring buy-in and achieving success, as long as staff involvement does not entail abdication of your role as a leader. Not all staff involvement is good, and buy-in is not always imperative for success. Some decision are best taken unilaterally, and some changes are best imposed despite objections.

People act in their own best self-interest as they perceive it, and this does not always align with your best interest for the business, particularly when attempting strategic change. You as a leader set direction as you see fit, even over objections and resistance. To do otherwise would be unethical.

However, this does not mean that you cannot involve your staff and achieve the ever sought-after buy-in. The key is in how you involve your staff in the decisions at hand. My most successful client CEOs always make decisions of “whether” to do something unilaterally, whereas decisions of “how” to do it with staff involvement.

For example, a CEO client of mine decided that the company should drop a business line of trading in commodity products in order to make room for growth in their technologically differentiated product which the company produced. Sales manages balked at the suggestion. Half of sales were in the commodity line, and customers typically bought both.

“How will we make sales and profit quota? Will customers leave us? Will my bonus be cut? Will the company be forced to lay people off?” The sale staff ruminated on their fears. Their own perceived interests superseded the strategic business interests of the CEO.

The CEOs first inclination was to take the time to convince staff of the merits of the decision and getting buy-in before taking. However, this was unlikely to happen. The longer he waited, the more entrenched staff became in their position. In fact, the hesitation of the CEO became validation of their concerns. In the meantime, the company was missing out on business opportunity, and putting its future competitiveness at increasingly greater risk.

This is precisely the kind of “whether” decision that a leader must make unilaterally. Whether to drop the commodity product line was not a valid question to be put to staff. This decision is in the sole purview of the owners and leaders of the business. Yet “how” to go about doing it is precisely where to seek staff involvement. The CEO made the decision to drop the line, and worked with staff on the how. Initial resistance and fear gave way to productive action. Most bought into the decision and came up with great ideas for how to make the plan a success.

There is nothing wrong with consulting with your staff to help you make a decision related to strategic change. However, you make the decision as you see in the best interests of the business. Lack of buy-in should never be the deciding factor or a reason for delay. Yet once you have decided, involve your staff in the how.


Secret to Persuasive Strategy: To Persuade Others that you’re Right, Talk about why you might be Wrong

All senior level executives and managers are asked to develop and present a strategy, whether global, regional, or simply for a domain that they oversee. Many create long slide presentations with lots of data to justify why the strategy is right, and feel they need to persuade others and convince them. Their arguments provide support for their conclusion. However, the most effective way to persuade others that your strategy is right, is to talk about all the reason it might be wrong.

All strategies are based on assumptions, whether explicitly stated or not. For example, “This course of action is based on the assumption that are only three major competitor brands in the Japan market.” What could possibly go wrong?

Every strategic assumption’s mirror image is a risk, and can be restated as such. For example, “The risk is that brand X, which has been ignoring the Japan market up to now, decides to enter.” How do you handle risk? You can take action to prevent the risk from realizing, and you can plan contingent action should the risk be realized.

While it may seem detracting from the persuasiveness of your strategy to talk about everything that might go wrong, the reality is the opposite. If you can explicitly enumerate assumptions, restate them as risks, say when you will be able to validate whether or not each assumptions pans out, and talk about your preventative actions and contingencies plans, you will be come off as highly convincing. You will have demonstrated that you have thought your strategy through, and are prepared to safeguard the business when things go awry–and things always go awry.

Strategy, its management, and its execution are just as much about process as content. If you can demonstrate that you have sound processes for these, the specific content of the strategy matters less. You show yourself as someone who is in control because of strength in strategic process capability, not just brilliance in strategic content development.


Pride and Confidence

The goal of every business is to create a customer, and its mission is to contribute to the society in which it serves. This is not about CSR or charity. Every successful business does something to make people’s lives better in some way.

As a leader, you want your staff to take pride in what they do, and have confidence in their talent and expertise. We often default to relying on hitting targets, big wins, quarterly results, etc. to boost people’s confidence and give them a sense of pride of accomplishment. However, this rarely endures the inevitable ups and downs of business, and can often ring on an individual level.

If you want to boost pride and confidence, ask your people to think of all the people they helped in some way during the day before going to sleep. This is applicable to any individual in any role in an organization, including yours. Who have you helped today in some way? Today, I helped you.


The Productivity of Doing Nothing

The best way to achieve rapid progress in your professional is to regularly schedule doing nothing. Management is primarily brain work as opposed to hands-on manual labor. The higher the level of the manager, the more significant the brain work becomes. We advance our businesses by the power of our ideas and innovation. One good idea can eliminate countless fruitless meetings, unnecessarily lengthy processes, rapid growth in profit, or an improved capability of staff. Ideas are not the product of brute force labor, but rather emptying of one’s mind. The best ideas come not so much when when are grinding away at our work, but rather when we are idle.

As managers, we need to be idle with regularity at our best all the time. We cannot improve and succeed if we try to cram every waking hour with work, filling our minds with so much as to crowd out any possibility of new ideas. The most important part of our work ironically is not to work.

Put idleness into your schedule, even during business hours. Yes, that’s right–in the middle of the work day. Take yourself for a walk. Go to an art museum. Sit at a sidewalk cafe and watch people. Clear your mind to make room for new ideas. What is it that you observe? How does what you observe relate to your business and to your life? You may find that while you think your mind is relaxing and idle, after you return to whatever you are working on, suddenly a new approach is clear to you. We may make ourselves idle, but our minds never stop working on our challenges even without our knowing.

My most successful clients schedule idleness into their work without compunction or guilt. They make it habit. In fact, the most successful managers I know work the fewest hours. You can too as long as you have the courage to do so.


The Senior-Level Salesman Who Won’t Change

For many companies in Japan, markets and strategic priorities have changed faster than the way senior sales staff do things. The target customers, industries, ways of selling and delivering value must change if the company is to thrive. Yet so many CEOs of companies in Japan lament about senior sales people who cling to the past. This includes Japanese leaders of Japanese companies, not just non-Japanese leaders of non-Japanese companies.

While fears are frequently exaggerated or unfounded, CEOs often hesitate to push too hard, as they don’t want to damage important relationships with key customers which they view as owned by the salesman. At the same time, it is impossible to address change among junior sales staff while senior sales staff is recalcitrant. Efforts at training junior staff are doomed to fail. And so we are at an impasse, where improving on current ways yields little in terms of results, and doing things in a new way is impossible.

I have written before that performance gaps have only three causes:

  1. I don’t know how to…
  2. I don’t want to…
  3. Even if I wanted to, I can’t!

Number One is addressed by teaching people “how to…” Number Three is about removing structural impediments. However, it is Number Two that is the hardest to address because neither teaching nor restructuring processes address cause. The senior salesman who won’t change is frequently a “don’t want to” problem, and to address it you must understand motivation.

Many senior sales people in Japan have built their careers through experience and building a network of relationships with customers. They view their value in terms of the customers they know, and their familiarity with an industry. Many sales organizations in Japan do little in terms of training. Few have any formal sales methods or processes. Junior sales people are expected to learn only by imitating those who have gone before them. As such, the senior salesman also views his value not so much in that he knows sales process, but rather that he IS the sales process.

However the reality is that sales not merely a network of contacts, but rather a profession, and a noble one at that! There are principles, methods, practices, and language that work regardless of product, industry or market. A competent sales professional is capable of being in successful in any industry, and you have likely met good sales people who have worked in many different sales roles successfully.

A strategic change that makes an imperative of selling into new industries and markets, developing prospects from scratch, and selling new types of products and services can be highly threatening to a senior salesman who sees his entire value as based on who he knows now, what he sells now, where he sells it now, and how long he has been doing the same. All at once, he sees the edifice of his career built up over decades as razed. His network is no longer valued. His industry and product knowledge is no longer relevant. His ways are no longer the paradigm for all those junior to him.

His informal status suffers a demotion. In fact, he may view himself as suddenly lowered to the same level as freshman sales staff with a clean slate, only his slate of course has been wiped. Now he must learn and advance anew like the others, only he may be closer in years to retirement than they may be in years spent in the company. Who would not feel threatened?

A frightened senior sales person may have value of which he or she may be unaware. Practices that they may have considered industry or product specific may be applicable elsewhere. These can be brought out and documented for others to learn from. More importantly, a senior salesman has a possible leadership role. He is already viewed as a paradigm. More junior sales people will still look to him for guidance. However, the paradigm of behavior should be one of openness to learning new things, taking risks and going for new opportunities, and not letting fear of failure get the better of you.

A senior salesman need not see the edifice of his career razed, but he does need to renovate. You can help with that. Start by working with the senior sales staff and sales managers first before attempting to train all staff together. Build sales principles, processes, tools, and methods together with the leaders first. Document the sales methodology so it can be shared, taught and improved. Decide with the leaders together how to roll out the new methodology to staff, how to teach it, how to hold staff accountable for using it, and how to practice and improve it regularly. Make the senior sales leaders partners in change strategic change, whether managers with staff or informal leaders to whom others look up because of seniority. Address the “I don’t want to” concerns in this way.

Not every senior salesman will want to change despite your best efforts to appeal to his self-interest. That cannot be helped. However, in my experience, most will change if approached in the way I described above. This gives you your best option, which is certainly better than simply giving up on your veteran sales staff, or compromising strategic objectives.