What A Caterpillar Can Teach You About Growing Your Business

Master Near Constant Change

 

Many people think that businesses should develop a strategy and stick to it at all costs.

But Sid Mohasseb, serial entrepreneur, investor, venture capitalist, and former the Head of Strategic Innovation for KPMG’s Strategy Practice teaches an entirely different approach: It’s the ability to adjust your strategy, almost constantly, that brings success. The environment is uncertain and changing, and changing with it is vital.

Sid teaches that we must push for more and evolve from one approach to another.

I recently had the opportunity to talk with him about his new book, The Caterpillar’s Edge: Evolve, Evolve Again, and Thrive in Business.

 

Prepare for Constant Flux

Why a caterpillar?

The caterpillar evolves many times over before it becomes a butterfly. It changes form until it turns into a completely different species. The caterpillar teaches us the wisdom of constant and incremental evolution and offers the promise of flying.  To compete, to advance and to win, in our businesses and in our personal lives, we must evolve constantly and purposefully, always.

 

“Things do not change. We change.” -Henry David Thoreau

 

How is the game changing? And how do leaders prepare for the constant flux?

Innovation is constantly approaching from every corner of the world. The speed of change fueled by unprecedented technological advancements and constantly increasing customer expectations are challenging companies to “stay relevant” – competitive advantages are temporary. The game has changed from, “How do I gain an advantage and defend it?” to “How do I change to stay relevant?”

To win in a state of constant flux, leaders must shift their minds and change their actions. First, by realizing their addictions (old assumptions, orthodoxies, biases, etc.). Next, by aligning with uncertainty – no plans can be permanent and no decisions are certain. Leaders must learn to live with probability and a portfolio of related plans – always ready to take the path that offers the most likelihood of success. They should also appreciate the reality of their capabilities and aim to build the future in increments; success cycles must be shorter and capabilities (people & systems) have to be created accordingly. Last, leaders must constantly look for the next advantage and aspire for more “Aha’s.” They should look for and discover the next challenge or opportunity, always; innovate, always (create new value), and evolve, always.

 

“To win in a state of constant flux, leaders must shift their minds and actions.” -Sid Mohasseb

 

How to Embrace Change

Why do we so often refuse to deal with change and uncertainty?caterpillar-cover

The refusal is more natural than intentional. We refuse to deal with change because of our fears of unknown (what is on the other side of change) and comfort with the status quo (comfortable routines we are used to and have served us well in the past). Most people embrace change when they i) realize the severity of the problem they face and ii) gain trust that what they can change to is a better state. We often refuse to change because we believe that the status quo does not present a major danger and/or we don’t trust the alternative paths offered by our leaders.

At business school and later at work, we are trained to look for certainty to plan to and execute against – assuming reduced risk. In our personal lives, we are comfortable living with probability and operating in uncertainly – there is a 40% chance of rain, and we decide, based on our risk tolerance, to take an umbrella or not. In our professional lives, we are expected to be certain and execute with confidence in outcomes. People, on a personal level, can innately adjust to uncertainty. However, they are reluctant operating with uncertainty at work because corporations expect and reward the illusion of certainty.

 

“The only thing that is constant is change.” -Heraclitus

 

3 Categories for Leaders to Plan in a World of Change

3 Unconventional Ways to Provide Stand Out Customer Service

This is a guest post by Monika Götzmann. Monika is the EMEA Marketing Director of Miller Heiman Group, a global sales training and customer experience company. It specializes in customer service coaching.

Customer service can have a decisive role in the success or failure of a business. In fact, an American Express survey found that 59 percent of people would try a new brand for a better customer service experience, while 70 percent are willing to spend more with companies who provide a great service.

 

59% of people would try a new brand for a better service experience.

 

Unconventional Yet Effective Customer Service Training Tactics

Here, we look at three unconventional customer service training tactics to help your business stand out:

1. Customer Service Training for Everyone

One highly-effective, yet unconventional, tactic is to insist that everybody in a company undergoes customer service training, even if their role is not directly linked to delivering customer service.

Perhaps the most notable example of this is Zappos, who insist that every recruit goes through four weeks of customer service training. The result is that all staff members, even in corporate positions, have first-hand experience of dealing with customers and can better understand their needs.

 

“Customer service is not a department. It’s everyone’s job.” -Unknown

 

2. Understanding Basic Consumer Psychology

Another unorthodox customer service training method is to focus on consumer psychology. Although people are all different, there are a number of behaviors and thought processes that are fairly typical for all consumers. According to Harsh Vardhan, writing for “YFS Magazine,” some of the fundamental customer traits are as follows:

  • When given a choice, customers generally pick the easier way
  • Customers want reassurance or solutions as quickly as possible
  • Pricing is not so important to loyal customers

Teaching your reps these basic concepts can allow them to deliver more satisfactory customer service.

 

“The customer’s perception is your reality.” -Kate Kabriskie

 

3. Playing Devil’s Advocate to Your Own Products

Leading the Malcolm Baldrige Way for Exceptional Results

Align Your Organization to Create Exceptional Results

 

How do leaders align and engage a workforce in the midst of uncertainty?

 

Authors Kay Kendall and Glenn Bodinson are expert Baldrige coaches. They studied more than two dozen organizations that delivered exceptional results following the Baldrige Criteria, key principles derived and championed by Malcolm Baldrige in the mid-1980s to improve productivity and competitiveness. Their research was supplemented by talking with more than fifty CEOs to gain insights on performance excellence. I recently asked them about their work and their new book, Leading the Malcolm Baldrige Way.

 

Disengaged workers have 37% higher absenteeism.

 

What do readers, who may not know Malcolm Baldrige, need to know before picking up your book? How will studying the Malcolm Baldrige Way help business leaders?

Malcolm Baldrige was a very successful businessman before Ronald Reagan tapped him to be Secretary of Commerce.  He was deeply concerned about the future of manufacturing in America.  At that time, the 80s, Japan was dominating in the automotive and electronics manufacturing industries.  Both of those industries – and others in America – were being plagued by poor quality, and consumers were making choices to go with Japanese products.  Secretary Baldrige championed an effort to establish a presidential award based on rigorous standards that would recognize manufacturing and service organizations that achieved high levels of performance.  After Baldrige’s untimely death, President Reagan decided to honor his friend with what became known as the Malcolm Baldrige National Quality Award.  Studying Leading the Malcolm Baldrige Way will help business leaders in any industry, in any situation – flourishing or in peril – learn how to align their employees to deliver exceptional results.

 

Why Engagement Matters

To those who think culture is soft, what statistics can you share that demonstrate engagement matters?

Leading the Malcolm Baldrige WayOne study showed that companies with high levels of employee engagement have five times higher shareholder returns over five years.  There is also clear evidence that engaged employees create loyal customers.  If that isn’t compelling, consider the flip-side of engagement.  Statistics from a recent article in Harvard Business Review cited, “Disengaged workers had 37% higher absenteeism, 49% more accidents, and 60% more errors and defects.  In organizations with low employee engagement scores, they experienced 18% lower productivity, 16% lower profitability, 37% lower job growth, and 65% lower share price over time.” Those are staggering costs for organizations.

 

 

Engagement is the rage these days in leadership circles, yet still many leaders don’t work on engagement. Why is this?

Honestly, we don’t understand it.  The evidence that engagement matters and impacts bottom-line results is clear.   There is also the notion that treating employees as valued assets is what leaders as decent human beings ought to do.  In the latest recession, we saw a lot of leaders with an attitude of “My employees should be grateful just to have a job.”  As the economy picked up, we saw many employees jump ship as soon as there were opportunities to work for an organization with a better culture, where they were treated as valuable contributors to the mission and vision.

 

Research: Companies with engaged workers report 6% higher profits.

 

Don’t Make Excuses

12 Principles that Guide High-Performance Organizations

Unlocking the Secrets of High-Performance

They may seem, at first glance, to have nothing in common—different industries, challenges, experiences, leaders, competition, you name it. But there is something about this group of organizations that drew attention and merited study.

And that was their performance. These businesses outperformed their competition. Consistently.

Brian MacNeice and James Bowen recently spoke with me about their research into these companies and their new book, Powerhouse: Insider accounts into the world’s top high-performance organizations. Brian and James are founders of the international Kotinos Partners consultancy. They are experts in high performance.

They outlined 12 principles that guide the organizations that outlast and outperform the competition.

 


“Engagement on its own is only a stepping stone to sustained high-performance.”

 

12 Characteristics

How did you arrive at the common characteristics of organizations achieving excellence?

Effectively these emerged gradually through the research. We studied each institution with an open mind and on its merits. Then we shortlisted, at the conclusion of our research in each case, what we thought were the fundamental drivers of that institution’s enduring outperformance. When we compared the lists we had created across several of the institutions, the common characteristics became evident.

Secondly, because our research process was quite extended, we had the opportunity to use some of the later studies to test and validate hypotheses emerging from the earlier ones.

Finally we used some of our client work, which was progressing in parallel, to further refine our thinking.

 

I often ask leadership experts whether leaders are made or born. You take on that question with regard to high-performance organizations and say that they are made, not born. What leads you to this conclusion?

Simply put, the leaders who we spoke to in the organizations we researched were consistent in articulating and reinforcing that view. Without exception they talked about how they viewed the enduring sources of their advantage as being their people and their organizations, and they each described their roles as being about setting direction and ambition and then facilitating and enabling their organizations to achieve and extend those ambitions over time.

Even more particularly, given that many of the organizations we researched could be reasonably described as “values-driven,” their leaders saw a fundamental aspect of their roles as being about defining, representing, facilitating and rewarding those values in their organizations. The Mayo Clinic, Tata, Doctors Without Borders (Médicins sans Frontières) and the US Marine Corps were particularly strong examples in this regard.

 


“Overengineered engagement initiatives can become impersonal and feel false.”

 

4 Pillars of High-Performance

Let’s talk about the four-pillars to delivering high-performance.

Copyright Brian MacNeice and James Bowen, Used by permission Copyright Brian MacNeice and James Bowen, Used by permission

Every organization knows it needs a plan. Where do most go wrong?

There are lots of ways in which organizations go wrong when it comes to planning, but for this discussion we will highlight two that we observe again and again in our work.

First, we suggest that organizations go wrong by planning on a basis of “inside-out” rather than “outside-in.” That is to say, their leaders tend to look at last year’s model and last year’s performance and identify tweaks they can make with a view to delivering incremental performance improvements next year. This model of planning tends to be short-term and tactical in nature and anchored in a historic, likely outdated, view of the world.

 


High performance organizations plan from the outside-in, not inside-out.

 

High performance organizations come at planning from the outside-in, using a much more strategic, future-oriented approach. They start by looking outside their organizations to understand how the context within which they operate is changing. Sometimes they do this by looking at their organizations through a series of discrete “lenses” – for example industry, market, customer, competitor, technology, regulatory, people – to understand (a) what dynamics they observe, (b) what opportunities and/or challenges arise as a result of these dynamics, and (c) how these dynamics might play out over the course of their planning horizon. Armed with these insights – in particular a much deeper understanding of cause-and-effect – they are better positioned to create strategies that bridge from where they are now to where they want to be over time. Relative to the first approach we discussed, plans developed this way tend to be more ambitious, radical and lower risk all at the same time.

Second we would suggest that organizations go wrong because they view planning as a task rather than as a capability. They view it as a chore to be endured once a year to fill a template, and which brings with it a significant cost in terms of time away from the frontline. Their engagement and investment in planning reflects this attitude – for them it’s about getting to the end of the process as quickly and painlessly as possible.

The approaches we observe in high performance organizations, by contrast, are more consistent with Eisenhower’s famous mantra that, “Plans are nothing, planning is everything.” They understand that their organizations, and the worlds in which they are operating, are always changing, and as such they develop planning as a dynamic, enduring competence. They operate “with their heads up,” tracking changes in their context all the time, taking on board the lessons of their experience and factoring insights into their plans on an ongoing basis. Some of these organizations have moved away from a traditional, annual model of budget-based planning towards a more continuous, iterative model of strategy development and deployment.

 


“Plans are nothing, planning is everything.” -Dwight Einsenhower

Is Leadership a Passing Phenomenon?

This is a guest post by Dr. Ichak Kalderon Adizes. Dr. Adizes is a leading management expert and author of over 20 books. He offers an interesting perspective below.

Leadership: Quo Vadis?

It is in vogue now to lecture, write and debate the subject of leadership. I claim it is a passing phenomenon, like the concepts of administration, executive action and management were before it.

All of those concepts deal with the same process: management of change, taking an organization from point A to point B.

At the beginning it was called administration.  That is why MBA stands for Master of Business Administration.

Over time “administration” was found to be too limiting as a concept. It was delegated to low level supervisory and bureaucratic positions, and the concept of management was born. Business Schools across the country changed their name from Graduate School of Business Administration to Graduate Schools of Management.

The concept of management was not yielding the right understanding of the process of transforming organizations, and the concept of Executive Action was born. Titles such as CEO, CIO, CMO etc. appeared like mushrooms after the rain, and executive programs emerged in the market place.

Still not good enough to explain how organizations should be transformed, the concept of leadership started dominating the literature.

What is going on here?

Administration, Management, and Leadership have a common purpose. They are theories that prescribe how organizations should be transformed and how to manage change. They are all based on the same paradigm of individualism, that a single individual is the driving force of this transformation, whether it is called Chief Administrator or Manager or CEO or Leader.

 

“The achievements of an organization are the results of the combined effort of each individual.” –Vince Lombardi

 

As long as we remain with the same paradigm, no concept will be satisfactory. We will continue to change titles, embellish concepts and continue to chase our own tails, reinventing the same wheel from administration to leadership. Leadership will be assigned its place in the annals of social sciences next to management and administration.

Passé.

Individuals cannot transform organizations. It is a team process.

No individual possesses all the ingredients in his or her personality that are necessary for successful management of change.


“Individuals cannot transform organizations. It is a team process.” -Dr. Adizes

 

Change the Paradigm