“Everyone gets excited about change, except when it happens to them.”
These battle-hardened words were shared with one of us (Robert) years ago by the CMO of GE.
The data certainly backs up her frustration. Depending on the study, 30% of change initiatives fail outright. An additional 40% fail to meet performance goals. Only 20% of organizations rank as having strong change leadership capabilities.
Why do we fall short?
Well, you know the story of the six blind men and the elephant. In too many situations, we don’t have one way of describing the path forward. We aren’t focused.
In this article, we will provide a way of thinking about leading change – how CEOs and CMOs can ensure that their organization focuses on those investments that deliver the most value to the customer.
“We are not that good at leading change” – John Kotter, author of Change Leadership
How To Focus On What Really Matters
– David Newberry
Organizations of all sizes are having to cope with a more complex business environment, a faster-changing marketplace, and an increasingly demanding customer. Competition is everywhere, and the organizations that will win will be those that can focus all their resources on delivering their core purpose and creating value for their customers.
Obviously, resources are always constrained. Therefore, it is essential that all available resources be invested wisely to meet the objectives. This calls for resource optimization. Many companies are looking at adopting techniques like Agile Methodology and Lean Manufacturing, which have transformed software development and auto manufacturing, as a means of gaining competitive advantage.
So what are the underlying principles of Agile Methodology and Lean Manufacturing?
In very general terms, Agile and Lean are both geared toward the exact same end goal – to create value for the customer. For clarity, this is anything that the CUSTOMER sees as being valuable, rather than the company. This requires strong connections between teams, colleagues, core purpose, one’s own work and most importantly the customer. However, what is interesting is that each methodology has a very different approach to using connection to achieve the same end goal.
Agile Methodology is focused on creating more value for the customer by unlocking the inherent talent of the team. It is really about effectiveness, providing more value with the people resources that are available. This is achieved by focusing this talent on the areas that matter the most to the customer through regular self-inspection and review, both internally and with customers.
Lean Manufacturing, on the other hand, is focused on ensuring every investment made results in value for the customer, by optimizing the processes that go to delivering that value. It is really about efficiency, by eliminating waste and by making obvious what adds value by reducing everything else.
Many organizations are considering how to implement these approaches but recognize they will require a change in the way that they currently operate. Change can be difficult, but done the right way it can have far-reaching consequences in transforming the fortunes of the company – for the benefit of customers and employees alike.
Resolve Primary Constraints To Delivering Customer Value
– Robert Heinzman
David argues that Agile and Lean create precision for creating the right customer experience. But as he and I’ve discussed, and as adherents of these and other frameworks (e.g., Balanced Score Card) can abruptly find out, it’s easy to be precise about the wrong thing. Darts thrown in a tight cluster do not win the game if they miss the bull’s eye.
So how do you accurately identify the sequence of investments that will win?
The Business Triangle℠ is a universal framework for how businesses operate. It is entirely based on the target customer’s experience. The target customer’s experience is envisioned as being in the middle of this triangle. In sum, it is a language ideal for focusing a team’s critical conversations to win.
The Business Triangle maps four key capabilities that every business or function needs to be successful:
- Developing winning value propositions – why serving your target customer is better.
- Selling to create perfect purchase moments.
- Delivering target value and generating referrals.
- Supporting capabilities create economies of scale. Depending on the business, these might include IT, Finance, HR, Facilities, or Legal.
How does The Business Triangle create accuracy?
It provides teams a shared framework for identifying the current primary constraint to delivering customer value. At any point in time, one of the capabilities around your business triangle is going to be the least optimal. It’s the choke point. Identify it, resolve it, repeat – for you will always have one primary constraint.
In my experience, this simple approach has profound implications. It provides both focus and accuracy. It provides a shared language for the design and vetting of strategy. And it diffuses politics.
Finally, an investment in resolving the primary constraint to customer value provides the highest return of all possible investments.
Anchor Strategy And Customer Focus In Everyday Business
– Romek Jansen
If you want to deliver Customer Value in a sustainable manner, you have to iterate in short cycles and continuously execute, measure, learn and adapt. That is what Agile, Lean, and The Business Triangle framework boil down to. ”If change is hard, make it continuous.”
Continuous improvement also requires continuous team alignment. We all know how frustrating it can be if you work your way towards a deadline, to find out that “it wasn’t that important” or, that you have acted upon outdated information. It is no surprise that in retrospect, “better team communication” is often the #1 learning for the next set of iterations. The key word here is ‘better’, not just more.
The classic 100+ slide strategy presentation is a piece of (what should be) history still in use today. A fast and proven way to disengage team members is to bombard them with new versions of lengthy strategy documents and hastily updated multipage spreadsheets.
In an agile world, you still need a strategy, but not an overly elaborate one-year plan. Agile strategy is not a detailed waterfall of activities and tactics covering the next four quarters, until the next budgeting round.
A clear and brief explanation on WHY you want certain strategic goals to be achieved, combined with empowered teams is often all you need to be able to execute a strategy. Provided with the context of a WHY, teams will be able to determine the WHAT and the HOW themselves. They will be able to define their sub-goals based on urgency and impact, taking into account the most recent insights in their respective fields of business, effortlessly and better than micro-management ever could.
With “The Business Triangle”, “Business Model Canvas” or the “A3 Strategy” you can structure your strategy conversation. My professional focus has always been to translate these strategies into operational tasks. Once strategy has been defined, it needs to be turned into a digestible format for the bigger audience.
When you visualize priorities and dependencies, every team member will know how they can contribute to company success without having been specifically told what to do, at any given time. At Boardview, we developed the ‘Growth Map’ concept as a way to anchor strategy and customer focus in everyday business life.
In a volatile marketplace where customer behavior can change in a matter of weeks, you need to be agile. Change management is not just a project with an end date anymore. It has become the new and continuous “normal” state.
Leading the way in change means being able to walk a continuously changing path, while incorporating new insights on how to walk it. Doing new things a new way in a controlled and routinized fashion.
Agility won’t be a competitive advantage for long. Not being agile will be a disadvantage.