How does one go about leading with change when serious budgetary constraints and departmental politics stand in the way?
The change will not undertake itself. If, as the saying goes, change is the only constant, someone must take charge of leading with change in order for it to be successfully implemented.
Working with a company that had seen tremendous growth for a period of several years, only to fall into stagnation, I encountered an atypical entrepreneurial leader. His vision, direction, and initiative had driven his company into tens of millions in revenue in a very short time, a dangerous place for a large ego.
The difficulty began as the company endured strategic drift as the market flattened and his vision, direction, and initiative were no longer enough.
This company was perched on a crumbling foundation. As long as sales continued to increase, things went well, and costs were not an issue. However, when sales began to soften, costs, as well as inefficiencies, began to take a serious toll on the organization and its ability to meet company objectives.
To find solutions, we began to analyze the attributes and issues within the internal and external environments of the company. The intention was to find out why the company was seemingly floundering and also to find methods to stop the internal cost bleeding.
The external issues became clear relatively quickly. The company products were no longer competitive. The primary product line had run its course. The leadership, however, refused to let go of the golden goose even though it had died. In the words of the CEO, “they would dance with the one that brought them.” Even in the face of analysis that showed this course of action had not made a profit in more than two years.
Assembling the Team
The only alternative was to find ways to drastically reduce costs through efficiency and empowerment. The employee base was highly experienced, well-supervised, committed, and loyal to the company and its mission. This was an obvious asset. The plan started by assembling a team of volunteers who wanted change.
The employees who have worked for an entrepreneurial, somewhat autocratic leader for a number of years had a great deal of apprehension about an undertaking such as this. Some people even thought this was a ploy to find the non-loyal employees and let them go. However, by demonstrating trustworthiness and that nothing would go beyond the group, the process started moving successfully forward slowly but surely.
Cross-functional teams were created to evaluate internal and external processes and products. Two separate groups of teams were set up. First, smaller groups were to analyze certain functions and processes.
Making these teams cross-functional added unbiased, objective observers to the groups. The idea was to have someone there to ask “why.” It was not about just knowing what a given process or function did.
From a double-loop perspective, it was necessary to know why the process did what it did. The first step for the process groups was to examine the processes or functions in detail. The second step after this process was complete was to create a process of function flow chart to bring to a larger group composed of all the different smaller process groups for analysis of efficiency and potential redundancy.
Finding Unnecessary Redundancies
When the flow charts were examined in the larger group, it became clear there were a lot of unnecessary redundancies and in some cases, no realistic justifiable reasons as to why some processes were even being accomplished. The only viable reason was that the tasks in question were potentially a throwback to some formerly used system that was no longer in service.
This company grew very rapidly through a process more similar to growing crystals than anything else. Processes just tended to get added to other processes with no analysis of efficiency or value. This was a reactive process engineering activity rather than a proactive process engineering strategy.
By examining process flow and then scrutinizing it at two levels, we created a system that did not allow for redundancy or unjustified work processes or functions. Because any process that could not withstand the two-step system would be allowed to continue, it created a much leaner operational system within the company.
For example, as it became clear that each process was being examined meticulously by a quality control process at each step within the process, the group began to wonder if such a level of quality control was necessary.
It was determined that due to the level of experience of the workforce, quality materials sourcing, and the quality of supervision that, quality control could be reduced by as much as 75 percent across the board with less than a .001 chance of increased quality issues. This was an acceptable trade-off to the group, and so it was implemented. Valuable time was redeemed in many areas.
Empowerment the Process
As the change process took on greater importance to employees and managers, more and more cost reductions began to take shape. The real magic came when the participants of the change group were authorized upon group agreement that something needed to be changed or removed, and then it was. This empowerment gave the whole process its life.
Because these employees now had ownership, things began to change dramatically and quickly. Within a few short months, the group was able to increase the overall costs versus revenue spread by as much as 10 percent. They did this by eliminating unnecessary processes and functions, increasing productivity, reducing the cost of goods sold, and adding some new products or enhancing existing ones.
Although the entrepreneur brings the vision and often the initiative and drive, they cannot do anything without the commitment of the employees to follow their lead. The easiest and often the most productive method to accomplish this is by giving the employees job ownership.
Many very successful high-tech companies have witnessed tremendous growth and success in extremely difficult economic times by allowing their employees the freedom to make serious mistakes through personal ownership in order to pursue great creativity.
Giving employees ownership brings synergy into play. The total output of the employee’s efforts is greater than the sum total of the employee’s talent, company input, and the time applied.
In the rapid pace of change in business, entrepreneurial leadership can often make a difference. Whether that leadership resides at the top of the company or is entrepreneurship within an organization, empowerment may well be the secret to success.
Empowerment allows people to take ownership to learn about the organization, themselves, their job, their customers, and all aspects of their impact on the business. Great leadership is not just about pointing out the direction to go. Sometimes it’s more important to learn how to lead a learning organization.
What Has Been Your Experience Leading With Change?
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