Friday, September 4, 2009

“The illiterate of the 21st Century will not be those who cannot read or write…

…but those who cannot learn, unlearn and relearn.”

This quote from Alvin Toffler, noted author (remember Future Shock?) and futurologist is a great way to put us in the mindset of this month’s topic: Dealing with Change. Aside from being one of my favorite topics to teach and facilitate, it is in my mind, one of the crucial core attributes of successful leadership in today’s dynamic business, political and service environment.

To further set the stage, consider the results of a recent survey by McKinsey & Company of more than 1,600 executives, senior managers and mid-level managers worldwide where they were asked, among other things, about how well they have responded to the current economic crisis. No one doubts the economic crisis represents disruptive change but a significant test of leadership (RPC edition 10/08) as well. In the survey, respondents were asked to rate their level of satisfaction as a business leader in various areas. What caught my eye were 3 specific areas that are telling in the area of leading change in today’s environment. They are (percentages are % very satisfied with performance):

•Retaining, attracting talented people: 35%(C-Suite)/26%(Mid-Mgmt)
•Positioning company for growth: 34%(C-Suite)/27%(Mid-Mgmt)
•Developing people’s leadership capabilities so they can manage crisis: 29%(C-Suite)/ 25%(Mid-Mgmt)

Why do only a third of C-level executives and roughly a quarter of mid-level managers feel they are doing very well in these areas? Why are they struggling with adapting to the changes created through the economic crisis? From my own 30 years of experience, I offer three reasons why this might be the case.

*Wait it out – Embracing a wait it out strategy by definition puts the organization behind their competitors. Forward thinking leaders continue to use the recession as a means to re-evaluate their strategies and re-tool their businesses for the new realities of the business, political and service economy. A wait-and-see leader will only be able to react to the new environment with little leverage to dictate direction like their forward thinking counterparts.

*Unprepared culture – I suspect the organizations that were not very satisfied with their performance in these areas were likely not doing very well in the same areas before the crisis. Their culture likely was not built on a platform of continuous change. By instilling an evolutionary mindset to change in the hearts and minds of the organization, a leader will be in a much better position to make the crucial decisions necessary to embrace the crisis head-on.

*Lack of people skills – Change is an emotional process. Leaders who are not comfortable leading in a culture of accountability, transparency and empathy are doomed to lag behind on their limitations of these crucial people skills. Change cannot be successful without people embracing the change as a positive, a mindset the leader must enable through open and transparent communications.

How are you handling the new realities?

Lead Well.

Rick Lochner

Wednesday, September 2, 2009

Are we there yet?

How many times have we heard that refrain from our children (or maybe from our significant other!?!) when their impatience got the best of them? Or maybe we’ve said it ourselves in different situations for the same reason. In most cases, it is because they don’t have a sense of time or speed relative to setting correct expectations of arrival.

In the business sense, whether for-profit or non-profit, we find ourselves either half way through our operational year or possibly just beginning a new one. We are likely compiling data telling us how well our business has performed over the last 6 months because of that natural halfway or transition point. Or are we? This issue focuses on the all-important role of measurements as a crucial element of effective business alignment. We are talking about not only what we measure on a regular basis, but also how we measure what we do in order to make informed business decisions.

The first place to start is to be clear on what we are capturing and the usefulness of what we capture. There are essentially 4 levels of “stuff” we measure, Data, Information, Knowledge and Wisdom or sometimes referred to as the DIKW Hierarchy. Like many topics in and around leadership, much has been written about these 4 elements so I am going to focus on the salient points of each.

• Data is what we measure directly. It is raw in nature and is the least useful element to making the level of business decisions we need to run our business.
• Information is organized Data. In a practical sense this means we import all the available data into a spreadsheet or database and sort or index the data to make it more useful to making a meaningful business decision.
• Knowledge is Information in context. While Information is useful for many business related decisions, its usefulness is limited without the context around the Information gathered. Knowledge allows us to make informed strategic decisions.
• Wisdom is Knowledge over time. When we apply Knowledge over time we create an environment in which the learning of the organization is exponential due to the richness and usefulness of each decision leading to even more useful outcomes.

So it stands to reason that addressing the Scientific Methodologies in the Business Alignment Model creates an overt means to know if we are capturing the right elements to validate organizational progress. More succinctly, it helps an organization determine if it’s making strategic decisions based on information or knowledge.

As an example, Organization A captured data from expense reduction efforts and compiled the data in a spreadsheet to see if it reduced their expenses to meet a specific target. Organization B also captured data from expense reduction efforts and compiled the data in a spreadsheet in similar fashion. However, organization B will also ensure there were minimal reductions in area critical to its long term Vision and Strategy with the balance coming from less critical parts of the business. Organization A made strategic decisions based on information, potentially crippling their future with across-board-reductions. Organization B made knowledge based strategic decisions and did not lose sight of the contextual impact of their decision. Which organization do you work for?

Lead Well.

Rick Lochner

Thursday, July 2, 2009

Leadership is responsible for 94% of quality problems…

…so it is leadership’s responsibility to help people work smarter, not harder.

These words by W. Edwards Deming are a call to action for today’s leaders to help them focus on the right business goals to execute their business strategies. You may recall Deming as the statistician who made popular the Plan-Do-Check-Act Cycle and considered the father of modern quality control. It is also relevant we consider his thoughts as today’s leaders address the challenges of achieving their business strategies in an unstable economy, an uncertain regulatory environment and untapped globalization.

Against this backdrop are elements of the alignment process that fall between Strategy and Goals in the Business Alignment Model previously mentioned including last month’s issue. These layers often go unnoticed and unattended by leaders until it is far too late. The focus for this month is the Structure layer of the Business Alignment Model. The Structure layer prompts leaders to look at their People, Processes and Organizational Structure to ensure these elements directly support the prevailing business strategy. This is universally true whether applied to large corporate business models or small or mid-sized entrepreneurial ventures.

Having the right people on your team applies to any employees your business may have, and to the vendors, contractors and suppliers your business uses to execute its strategy. People are viewed on 2 planes – capability and compatibility. Capability addresses their skills and knowledge people bring to your business. Compatibility addresses people’s attitude and their ‘fit’ to your vision and culture and, in many cases, more difficult to assess and measure. As Jim Collins, in his book Good to Great states “…if you begin with the ‘who’, rather than the ‘what’, you can more easily adapt to a changing world”. And we are definitely in a changing world!

Addressing the business processes as part of the structure alignment takes us back to the opening quote. If processes do not align to the core strategy then achieving desired results is next to impossible. And it is up to business leadership to make it happen. As Dr. H. James Harrington stated in his book Business Process Improvement in the section devoted specifically to CEOs “The biggest opportunity you have to improve the bottom line comes from improving your business processes” Again, this may seem as though it is geared towards larger organizations. However, it is just as applicable to medium and small businesses managing their employees, vendors and suppliers as well as non-profit organizations managing their organizations of volunteers and staff. Regardless of venue, leadership can cure 94% of the issues!

Lastly, the organizational infrastructure helps leaders view their current organizational structure to ensure it enables fully capable and compatible people to leverage their core processes to successfully execute the overall business strategy. When the organization is too structured or too loose for the business to run effectively, success gets undermined from within and the business will not meet its goals.

In today’s business environment, regardless of whether you are an entrepreneur or a corporate president/CEO – People, Process and Organizational Structure dictate your business success. Leadership is what ties them to the Strategy and Goals.

Lead Well

Rick Lochner

Tuesday, June 9, 2009

The Art of Progress is the Preserve Order amid Change...

- and Preserve Change amid Order"

This quote by Alfred North Whitehead symbolizes the leadership challenge faced by businesses of all sizes and industries in today's competitive economic landscape. The implication in this quote is the balance required maintaining some measure of order in business organizations and plans while at the same time identify and execute change strategies in order to achieve real progress. My experience suggests many businesses are doing one aspect of this process well but struggling to do the other and/or both to full effectiveness.

So how does today's leader manage order and change simultaneously? The answer lies in the business Strategy. Simply stated, your business or organizational strategy dictates how your business or organization competes in its industry and markets. Having created strategies in businesses from large corporations to small entrepreneurial, mature and start-up, for-profit and non-profit, I find this definition of strategy to hold true universally. The strategy is a by-product of the leader(s) taking an objective and in-depth look at their external environment in order to create the Vision I spoke of last month. It also holds the results of an unbiased view of the business or organization's internal capabilities identified through a detailed SWOT (Strengths, Opportunities, Weaknesses and Threats) process or similar assessment process. What the Strategy looks like in the practical sense is a series of goal categories (also referred to as strategic objectives) determined to be critical to the business in a competitive environment.

It is not enough to just have a strategy as a stand-alone document. It must also link both the business goals and the vision of the business to be effective in the context of creating real progress. Linking the strategy to business goals is accomplished through the creation of specific goals from each of the critical goal categories identified in the strategy. This alignment typically represents managing "order amid change" in the opening quote. Just as important is the linkage of the strategy to the vision of the business. This alignment ensures the critical goal categories are relevant to the overall direction of the business and/or organization. If you cannot articulate clear alignment between current strategic objectives and the direction your business is going, the competitive markets will take the business where they want it to go. In essence, without direction (read: control), any road will look like a valid one! This represents the managing "change amid order" element of the opening quote.

Organizational movement can just happen and be confused for progress. Real progress requires a strategy that is both linked to the vision and the specific goals of the business to be effective. Last month I spoke of two types of leaders during times of challenge and change. The first are those who are busy managing order. The second types are creating real progress!

Lead Well

Rick Lochner

If the economy is not going back to what it was...

why are you still running your business the same way it was back then?

In a recent networking event, I asked the assembled businesses if they thought the economy would revert back to the way it was 2 years ago. No-one raised their hand. I then asked how many have changed their business model to account for that new reality, only 4 or 5 out of 30 raised their hand. Leadership is about managing change and there is no more significant change requiring authentic leadership in recent history as now. Yet we see many businesses large and small not coping well with the necessary changes needed to keep their businesses viable. Some of the larger companies are getting government attention to exercise the level of leadership they need to recover from this recession. However, a vast majority of the companies will need to leverage their ability to change on their own and reach into the leadership tool kit for some never before used tools.

Understanding how to manage change involves first recognizing that a change is needed. Recognizing the skills and knowledge that brought your business to this point may not, will not guarantee your success going forward. More importantly, has your attitude changed with the new reality? What are you customers asking for now? What are your suppliers telling you now? What are your own sales and operations people saying about their ability to succeed now? What is your Vision? Under normal circumstances, a Vision is what would help direct the organization during times of change. As these are not normal times, having an organizational Vision is even more critical to the success of the business. Every business needs a sense of direction and I would go so far as to suggest the reason many small and mid-sized businesses are stalled is the absence of a clear Vision.

It is not enough to just have a Vision. It must be communicated openly and frequently to the rest of the organization as well as to suppliers and customers. Leadership during change requires a communication strategy second to none to ensure all organizations contributing to your business success are on the same page. However, this requires the business leader to be transparent and authentic. Transparency requires the leader to be frank and honest about what is going on in the business and effectively communicate where the business is going. Authenticity means being a leader whom those associated with the business can trust. The leader during times of change and challenge must be credible and the rules of what a credible leader is in this economy are uncompromising. You cannot be credible through taking a pill or getting a shot. You cannot gain it by submitting to a surgical procedure. It comes from your attitude and your heart. Your credibility comes from your ability to execute the actions necessary to lead without looking in the rear view mirror!

In my experience, there are two types of leaders during times of challenge and change. The first are those who stall and wait for change to happen. The others are those who drive forward continuously with a purpose to achieve their Vision. The first types are victims and act accordingly. The second types are true leaders and are rewarded accordingly.

Lead Well

Rick Lochner

Tuesday, March 31, 2009

Are you aligned with your customer’s business…

…and how do you know?

Last month we took an internal view of business alignment using the Pittsburgh Steelers and a celebrity chef as examples of how everything within our business must be in sync, or aligned to produce superior results. In this month’s issue we will take an external view of business alignment. This view uses the same principles of the Business Alignment Model and applies it to your customers, suppliers, distributors and anyone else outside your business you depend on for your success.

For the moment, let’s focus on your customers. Every customer you have, whether business or consumer has a purpose and/or strategy behind their buying decisions. They look to achieve their own results by way of goals establish to succeed in whatever circumstances brought them to you. A business customer may have a more deliberate and pronounced Strategy, Structure and Goals whereas for the consumer customer these may be more implied, but still there. In other words they are looking for alignment on some level when they become your customer.

So where do you fit in their alignment process? Are you directly helping them solve their Goals or are you directly helping them achieve their Strategy and Vision? For the readers who do business with other businesses, look at your 5 largest customers and place your services and products in their business alignment process. Were you working on a project to achieve a tactical objective or was it tied to a strategic goal? Think of it as the difference between being a vendor or a strategic partner. In the consumer business, think of it as the difference between a single order and repeat business.

This idea is also valuable to you in your relationships with your own vendors and/or partners. I recall a first time meeting with a supplier to discuss a new application. The first question the CEO asked me was “What is your Vision?” I knew immediately I was speaking with a company who understood business alignment and where she wanted her company to participate in it. As I’ve outsourced parts of my business operations, I discussed my Vision with each supplier to ensure I am working with people who want my business and not just my order!

This idea of external business alignment is the basic foundation to building loyal relationships with customers, suppliers, distributors and all those who are instrumental in your success in today’s business environment.

Lead Well.

Rick Lochner

Thursday, March 5, 2009

We can learn much about Business Alignment from...

...the Super Bowl Champion Pittsburgh Steelers.

I am sure everyone reading this either watched or heard of this year’s Super Bowl and in particular how this year’s game went down to the wire. What likely did not get as much press describes how the Pittsburgh Steelers became the first franchise to win 6 Super Bowls since the Super Bowl format was created. While I am not inherently a Pittsburgh football fan, I believe their story is a great example of internal Business Alignment, the topic of this month’s Leadership message.

In an exclusive interview published in the 1/31/09 weekend issue of The Wall Street Journal, Bill Cowher, who coached the same Steelers to the 2006 Super Bowl title, commented on how the organization successfully works the way it does. When speaking of the challenge in building chemistry among the players due to free agency, the importance of building chemistry in management is crucial. “You have to have everyone reading from the same page. If there is division within the structure of the organization, it’ll seep down onto the field”. Considering the Steelers organization has had only 3 coaches since 1970, they have put a unique face on business alignment putting them in a unique position of stature in their industry. I would bet Scott Phelps gets credit for being part of the organization’s success as does Santonio Holmes, the 2009 Super Bowl MVP.

Internal Business Alignment occurs when all of the elements that contribute to Mission accomplishment are in sync with each other. It means the Strategy aligns with the business Vision. It means the organizational structure and business processes are systematically aligned to produce the desired results outlined in the Strategy. It means establishing, tracking and measuring the business Goals to directly achieve the Strategy and, ultimately, the Vision. Alignment, like gravity, applies universally across all types and sizes of business. Your business may denote a unique application of business alignment, but the alignment is crucial to your business success nonetheless.

To put this in another context, an accomplished chef had this to say recently when we spoke of Business Alignment. He said it reminded him of a term used in the culinary world called "Mise En Plac”, a French term meaning: 'put in place' or 'in its place'. It basically describes all the prep work done before initiating the actual cooking. It encompasses the organization of equipment and tools that are to be used for the product, washing and cutting of vegetables or “mirepoix” and the proper measurement of herbs and spices. In a business sense, every CEO and Business owner has to be the 'celebrity chef'. Every 'celebrity chef' knows what the desired result is and it's their responsibility to communicate their vision to those doing the prep work. Without clearly stating their intentions, it is difficult to motivate a group or team to work towards a common goal! That's when you start making seemingly simple mistakes like confusing sweet basil with oregano!

So no matter whether on the biggest field of sport or in famous kitchens, no matter what industry or size of business, clarity of purpose and vision leading to achieving desired results will put you at the top of your business. Are you ready for your next Super Bowl?

Lead Well.

Rick Lochner