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Leading Change (and Change Management)

May 17th, 2010 by

Leading Change


“Leading Change” is clearly more difficult than arriving at the realization that change is needed…If you want to validate the prior statement reflect back on all of the “change agents” that have crossed your path over the years and ask yourself the following question: How many of them have truly succeeded? While we’ve heard a lot about change of late as it relates to our current political landscape, the power of real change is trivialized when it becomes little more than a political sound-bite. Whether in business or in life in general, I have found that change can either be your best friend or your worst nightmare – which is it for you? Nobody ever said change was easy, but it’s critical that you understand that change is essential. In today’s blog post I’ll discuss why CEO’s and entrepreneurs (and not just politicians) need to become masters at catalyzing and leading change.

Why is Change (and Change Management) Important in Today’s Business?

While there is little debate that the successful implementation of change can create an extreme competitive advantage, it is not well understood that the lack of doing so can send a company (or an individual’s career) into a death spiral. Companies that seek out and embrace change are healthy, growing, and dynamic organizations, while companies that fear change are stagnant entities on their way to a slow and painful death. 

Agility, innovation, disruption, fluidity, decisiveness, commitment, and above all else a bias toward action will lead to the creation of change. It is the implementation of change which results in evolving, growing and thriving companies. Much has been written about the importance of change, but there is very little information in circulation about how to actually create it. While most executives and entrepreneurs have come to accept the concept of change management as a legitimate business practice, and change leadership as a legitimate executive priority in theory, I have found very few organizations that have effectively integrated change as a core discipline and focus area in reality.   

Consider the modern workplace…In executive circles, leaders often talk about employees who are not on-board, resist change, and are reluctant to try new things.  And among the ranks of employees, conversations that take place in the hallways and break rooms often center around whether or not executives really know what they’re doing, and whether the newest change initiative is just a passing fad.  Actually, these reactions are reasonable, given the pace that change is occurring in most of organizations.

Leading change is certainly not without risk, but if implemented properly it can breathe life back into the most tired business. The most successful companies incorporate disruptive thinking into all of their business and management practices to gain distinctive competitive value propositions. “Me Too” companies fight to eek out market share in an attempt to survive while disruptive companies become category dominant brands insuring sustainability. So why do so many established and often well managed companies struggle with disruptive innovation? Many times it is simply because companies have been doing the same things, in the same ways, and for the same reasons for so long that they struggle with the concept of change.

Change as a Critical Success Factor for Innovation

As a CEO Coach many of my engagements with chief executives focus on helping them to embrace change through disruptive innovation. Why didn’t the railroads innovate? Why didn’t Folgers recognize the retail consumer demand for coffee and develop a “Starbucks” type business model? Why didn’t IBM see Dell and Gateway coming? Why didn’t more established social networks see Twitter coming? How did the brick and mortar book stores let Amazon get the jump on them? I could go on-and-on with more examples, but the answer to these questions are quite simple…The established companies become focused on making incremental gains through process improvements and were satisfied with their business models and didn’t even see the innovators coming until it was too late. Their focus shifted from managing opportunities to managing risk, which in turn allowed them to manage themselves into brand decline…

At one end of the spectrum take a look at the companies receiving investment from venture capital and private equity firms, and on the other end of the spectrum observe virtually any category dominant brand and you’ll find companies with a disruptive focus putting the proverbial squeeze on the “me too” firms occupying space in the middle of the spectrum. The continued rapid development of technology is taking the concept of globalization and turning it into hard reality facing businesses of all sizes, it is time for executives and entrepreneurs to examine their current business models from a disruptive perspective.

Why the Pursuit of Perfection is the Enemy of Change and Change Management

One of my contentions about why change is difficult to implement is that too many executives want perfection to precede action, and the truth is that the pursuit of perfection is one of the great adversaries of speed. In fact, at the risk of being controversial I’m going to take the position that perfection does not exist. I hate to break it to you, but those of you who regard yourselves as perfectionists simply exhibit perfectionistic tendencies in an unrealistic attempt to achieve what cannot be had. The pursuit of perfectionism might lead to small, incremental increases in quality, but at what cost? What the pursuit of perfectionism will cause is time delays, cost overruns, missed deadlines and unkept commitments. I would suggest that rather than seeking what cannot in most cases ever be achieved, that it makes more sense to seek the highest standard of quality that makes economic sense relative to the constraints of an ever shifting marketplace.

Change, Change Management, Agility, Speed, and Reducing Cycle Times

One of the key considerations that must be understood when implementing change is the necessity of moving quickly. There are those that would argue that speed in synonymous with undisciplined decisioning, but I would caution you against confusing speed with reckless abandon I’m a big proponent of planning, assessment, analysis and strategy, but only if it is concluded in a timely fashion. “Analysis Paralysis” leads to missed opportunities and failed initiatives.

Earlier in my career I served as Director of Internet Strategy for what was at that time the world’s largest web-enablement firm. While serving in that position I coined the term e-velocity which we trademarked and used to describe the influence that technology was having on the pace at which business had to be conducted in order to remain competitive. It used to be acceptable to take 12 to 18 months to roll-out an initiative, but in today’s world you better be able to do it in 90 days or it will be obsolete before it gets to market.

When I first started in business it was usual and customary to produce 5 and 10 year business plans and today I work off of rolling 90 day tactical business plans. The latest advances in Business Process Management (BPM) have seen a reduction in the planning and budgeting cycle from 120 and 90 days to 45 days. But, is 45 days good enough? How many days constitute a responsive cycle time? Many believe the right number is between 5 and 10 days. Why is cycle time reduction important? Because shorter planning and budgeting processes facilitate greater flexibility and responsiveness.

In today’s competitive business environment you must quickly be able to assess risk and make timely decisions. You cannot be successful being guided by fear and hesitation. When in doubt, remember that “Speed Kills” and that “he who hesitates is lost.” Don’t fear change…embrace it. I think General George S. Patton said it best: “A good plan violently executed today is far and away better than a perfect plan tomorrow.”

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The original source for this post can be found here: http://www.n2growth.com/blog/leading-change/

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Leading Change Isn’t Hard

Is leading change difficult? Only if you don’t know what you’re doing. As much as some people want to create complexity around the topic of leading change for personal gain, the reality is that creating, managing and leading change is really quite simple. In fact, catalyzing and leading change isn’t very daunting at all if you understand the 3 pillars of change. To prove my point, I’ll not only explain the entire change life-cycle using the 3 pillars of change in three short paragraphs, but I’ll do it in simple terms that anyone can understand…

Identifying the Need for Change:

The need for change exists in every organization. Other than irrational change solely for the sake of change, every corporation must change to survive. If your entity doesn’t innovate and change with market driven needs and demands it will fail…it’s just that simple. The most complex area surrounding change is focusing your efforts in the right areas, for the right reasons, and at the right times. The ambiguity and risk can be taken out of the change agenda by simply focusing on three areas: 1) your current customers…what needs to change to better serve your customers? 2) potential customers…what needs to change to profitably create new customers? and; 3) your talent and resources…what changes need to occur to better leverage existing talent and resources? 

Leading Change:

You cannot effectively lead change without understanding the landscape of change. There are four typical responses to change: The Victim…those that view change as a personal attack on their persona, their role, their job, or their area of responsibility. They view everything at an atomic level based upon how they perceive change will directly and indirectly impact them. The Neutral Bystander…This group is neither for nor against change. They will not directly or vocally oppose change, but neither will they proactively get behind change. The Neutral Bystander will just go with the flow not wanting to make any waves hoping to perpetually fly under the radar. The Critic…The Critic opposes any and all change. Keep in mind that not all critics are overt in their resistance. Many critics remain in stealth mode trying to derail change behind the scenes by using their influence on others. Whether overt or covert, you must identify critics of change early in the process if you hope to succeed. The Advocate…The Advocate not only embraces change, they will evangelize the change initiative. Like The Critics, it is important to identify The Advocates early in the process to not only build the power base for change, but to give momentum and enthusiasm to the change initiative. Once you’ve identified these change constituencies you must involve all of them, message properly to each of them, and don’t let up. With the proper messaging and involvement even adversaries can be converted into allies.

Managing Change:

Managing change requires that key players have control over 4 critical elements: 1) Vision Alignment…those that understand and agree with your vision must be leveraged in the change process. Those that disagree must be converted or have their influence neutralized; 2) Responsibility…your change agents must have a sufficient level of responsibility to achieve the necessary results; 3) Accountability…your change agents must be accountable for reaching their objectives, and; 4) Authority…if the first three items are in place, yet your change agents have not been given the needed authority to get the job done the first three items won’t mean much…you must set your change agents up for success and not failure by giving them the proper tools, talent, resources, responsibility and authority necessary for finishing the race.

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The original source for this post can be found here: http://www.n2growth.com/blog/leading-change-isnt-hard/

Re-posted with author Mike Myatt’s permission, he runs a great blog at http://www.n2growth.com/blog/




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Outsourcing Your SAP Application Support

March 20th, 2010 by
SAP outsourcing

SAP outsourcing

I believe it was Peter Drucker who opined about outsourcing and then wrote a book on the subject. The original premise was that low level administrative functions, which were not a key or core focus of the business (like mail rooms) could be outsourced.  Fast forward several years and business has learned that virtually all “non-value add” functions can be outsourced.

IT infrastructure was value add as long as something new or better could be developed to provide cost savings, efficiencies, improvements, or as many commentators note “better, faster, cheaper” solutions. Now that the “last mile” of technology is becoming more costly with lower returns IT departments are moving into full blown maintenance mode. They are becoming the modern day “mail rooms” to be outsourced for lower cost to focus on more fundamental or core business requirements.  IT departments have allowed themselves to become a type of “administrative” overhead and a key target for cost reduction.

This outsourcing trend has focused primarily on infrastructure tasks like network monitoring, database administration, e-mail system maintenance, OS and Office application rollouts, etc.  With all of the hype around “cloud” computing, or what used to be referred to a few years ago as “ASP” (Application Service Providers), or application hosting this trend will accelerate.  

I see this same trend beginning to occur in the business application space as well. The business application functions are moving into maintenance mode and are slowly being outsourced. Those functions which support the supply chain at many companies have automated, streamlined, and process improved (i.e. “better, faster, cheaper”) so that they are now mature.  With that maturity the last mile of improvement becomes cost prohibitive with little payback.  For more insight on this topic please see the following posts:

Competitive Pressures and Value Propositions, Is Lean the Answer? 

Business and IT Alignment – Integrating Technology and IT Spend with Business

Operational technology adoption generally follows a fairly consistent adoption model:

  • Implement
  • Stabilize
  • Improve
  • Maintain

As soon as maintenance operations begin to stabilize, and as the processes and support requirements are finalized the IT area becomes a prime target for outsourcing. 

Future IT Application Alignment and Trends

The next few years of the application space will see a MAJOR separation of consultants, vendors, applications, and solutions around operations, sales, and new products / services.  Forward looking IT organizations will be those who can move into the “value add” areas of the enterprise to support and automate sales, marketing, engineering (i.e. innovation functions), etc., the losers will be those who continue to focus on operations after the initial “low hanging fruit” has been picked. 

For those in IT areas, lead, follow, or get out of the way (or you WILL be run over!)

As an IT leader if you want to avoid obsolescence and outsourcing then it is important to retool your organization with the best and the brightest to begin focusing on the customer and innovation portions of the business.  Once operations are well underway the next phase for the successful IT leader who does not want to face outsourcing their department, and possibly their own job, is to partner with the sales, marketing, and engineering sides of the business for long term success.

The Operational CIO must Become a Strategic CIO

The past business application focus has seen a focus on finance and operations.  Key metrics in the past have included improving month-end close times, reducing various supply chain cycle times, and overall view of operational and financial data in real time.  These are all the lagging indicator side of the business which is focused on the CFO / COO side of the business.  It is time for application vendors like SAP as well as consulting companies to begin focusing aggressively on the sales, marketing, and innovation / engineering portions of the business.  Or, in business terms, the leading indicator portion of the business. 

The successful CIO of tomorrow will be the one who can build a bridge with technology solutions between the CEO and the CFO / COO. Those CIOs (and by proxy their subordinate IT leaders) who are able to make that transition to covering the holistic business will see their career prospects flourish. Those who don’t will be marginalized, stagnate, and find tremendous budget pressure slowly collapsing their organizations.  I’ve penned a few things on this topic as well which explains the changing dynamic for the CIO and the future of the application space.  Here is a short piece that explains that new relationship in more detail:

What is the Proper Relationship for the CIO, CEO, and CFO?

A permanent change in today’s business and consumer landscape is leading to a permanent change in IT staffing and project work in SAP and all other commercial applications.  You can either plan for it, adjust to it, and then learn to work within the coming paradigm or you can be run over by it.  Global economic conditions and the near financial collapse have created a permanent change in how businesses operate and customers purchase.  Financial institution regulatory controls have closed the door to many of the previous credit holes that allowed some of the out of control speculative and self-indulgent spending by consumers.   That trend is not likely to change for many years.  It is even less likely to return to the heady days of free flowing credit and consumer spending binges which fueled so many speculative bubbles. 




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Social Media Fads and the Risk to the Enterprise

March 17th, 2010 by

Social Media

Today’s IT landscape is filled with hype around Web 2.0 and while collaboration is a key forward looking initiative for any organization social media requires a specific purpose and goal. Without a clear direction and purpose for social media initiatives they are at best a distracting fad, and at worst an enterprise disaster.

When I look at today’s “Twitter” and “Facebook” applications I see them as a fad. Popular today, and they will be around for a while, but like all “social” outlets they are waiting for the “next big thing.”  MySpace was eclipsed by Facebook and text messaging, while still popular, has been knocked down a couple of pegs by Twitter.

Is social media important to the IT organization and future? Yes, but ONLY in the context of a genuine and legitimate business purpose.

Social Media Study Shows Current Tools Have Little Value In the Enterprise

The other day, while on a flight to a client site, I picked up the back of the seat airline magazine and read through a Harvard Business Review synopsis of an experiment done with Facebook at an Austin based company.   This was a marketing experiment to see if social media like Facebook could be used to increase customer loyalty and therefore influence customer spend, or acquire new customers.  Although the Harvard Review article was very upbeat about this experiment in social media there was little evidence of consumer behavior changes that could be attributed to their Facebook experiment.  First, a little over 2% of the thousands of existing customers the company contacted actually joined Facebook and became “fans”.  The ones that did were already “raving fans” of the company.  The existing customers who joined did slightly increase their overall spend BUT, it is not known if the increase in spend was related to the Facebook offers and promotions or if the use of the social media channel had any influence (in other words, would other marketing channels to provide similar offers have produced similar, or even better results?).

This Harvard supported study showed that new customer conversion was low, the bulk of “fans” were those who were already dedicated customers, and very few new customers were added through Facebook over the 3 months of the experiment.  The rate of gaining new customers was not enough to make it a significant marketing medium for this company.

It is questionable if the medium had any bearing on changing customer buying behavior beyond other types of marketing–, it’s efficacy as a sales source is debatable.   So, in the end, Facebook and other social media outlets may just be all hype.  For this particular experiment there was a specific business purpose, and there was promotion and coupon activity.  So if in the end it turns out to be an effective marketing medium it must be looked at as a small part of an overall marketing portfolio with limited appeal to customers who are already some of the best buyers.  The next question would be whether or not there is any cost / benefit.

The Facebook study confirmed my suspicions about the “value” of these type of social media outlets in the enterprise. That does not mean that some types of social media do not have a clear place in the enterprise, only that today’s hype is overblown and risky to business.

Social Media and Collaboration Must Have a Specific Business Purpose to Have Any Value

In a nutshell, as I have written:

“Collaborative initiatives that are divorced from a specific business purpose are disasters waiting to happen.”

I will say Twitter as a social media platform is interesting because of the ability to gain access to individuals who particpate there that you might never be able to gain acces to any other way.  As a sounding board for media types it is also interesting but there are still very few (if any) great business models on Twitter’s cost effective use to gain, retain, upsell, or cross-sell into your customer base.

From Collaboration to Innovation to Market – Toward a Working Model
http://www.r3now.com/from-collaboration-to-innovation-to-market-toward-a-working-model

I’ve been working with collaboration technologies as a Knowledge Manager for about a dozen years now. I started with collaboration tools in the enterprise long before the hype and the Web 2.0 fervor and I say a lot of the hype is HOGWASH!

Based on my years of collaboration experience, a short excerpt from a recent post:

ERP III – Is the Integration of Collaboration the Future of Enterprise Applications
http://www.r3now.com/erp-iii-is-the-integration-of-collaboration-the-future-of-enterprise-applications

Too many organizations undertake the introduction of social media for the purpose of introducing social media into the enterprise. Again, this is like having information without the context of application and experience. That information is NOT knowledge, nor are collaboration tools which are divorced from a specific business purpose very productive (if at all).

Niether consultants nor business has learned how to use social media to drive business value. There are few consultants out there with a coherent or even minimally functional method for business to use collaboration tools to propel a company’s key value propositions.

What say you?  Are you considering social media in your enterprise?  If so, does it serve a specific business purpose or objective?

I am VERY interested in any of the social media marketing types and their perspective.  Can you help me with ways to gain concrete business value from the use of social media?

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