Before you Start Making Changes | 52 Week Turnaround

Rule #7: Locate the Elephants

July 14, 2013 by Jeanne Goldie Leave a Comment

How do you navigate operational change when there's an elephant in the room? — How do you navigate operational change when there’s an elephant in the room?

Almost every business has an elephant or two; the problem everyone pretends isn’t there. How do you successfully create change without the elephant crushing your plans?

Elephants can take many forms. They can be a troubled department that creates a permanent roadblock, or a dysfunctional team. Sometimes they can be a poor technology choice, where the cost was so great replacement is prohibitive but functionality is far less than optimal. Other times the elephant is the ghost of past decisions, a bad outsourcing decision, or a poor acquisition. In a smaller firm it might be a ledger full of “accounts payable” where the elephant is that those accounts are likely to never pay, but no one takes them off the books because the reality would just be too bleak if they were removed.

In many workplace cultures, pointing out the elephant is actively discouraged. In some rare cases, it’s career suicide. Pointing out problems can be viewed as negative, or whining, so sometimes it’s best to figure out what the elephants are, and how you’ll work around them in your strategy rather than charge the elephant head on.

Creating a strategy that derives results that may allow the group to put the elephant to rest is a win-win. If you do decide to “tackle the elephant” head on, it’s critical that you have strong supporters, a great plan and a reasonable timeline. When you create your strategy you may not name the elephant in your plan, but you need to absolutely account for it in your design.

Have you ever had to work around the elephant in the room? How did you conquer it? Share in the comments below…

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Rule# 6: Build a Measuring Stick.

July 11, 2013 by Jeanne Goldie Leave a Comment

Find a way to measure the benefit of your plan, bonus points if you can tie it to costs or revenues! — Find a way to measure the benefit of your plan, bonus points if you can tie it to reducing costs or increasing revenues!

I was raised to be “of service” to others. My mother is the first to volunteer for any task that needs doing and we all developed a strong sense of duty towards others. Most likely that is why I spent much of my early career in government and non-profit work before turning to the corporate world.

I was very effective in getting financial and executive support for my projects because I had a secret weapon. I majored in accounting in college, and it gave me a firm grasp of the numeric value of any activity and the importance in being able to attribute activities to the revenue or expense ledger. At a non-profit or government agency I was always the person trying to measure our results, determine the activity’s value relative to costs or expense and then find someone who would be willing to pay for it. We were famous for having all of our employees able to recite chapter and verse how many people we had helped at what cost and with what results, preferably tied to a monetary measurement. Later, when I worked for an insurance company and had to evaluate non-profits for partnership opportunities, an instant mental “No” was rendered when they couldn’t reasonably demonstrate some quantifiable results or outcomes, and the “No” was doubly reinforced if the staff gave me significantly different answers than the director or development director.

It’s not easy to measure things, some defy easy quantitative measurement. If I keep fifteen teenagers in an after-care program that keeps them from going home alone in the afternoon and possibly getting into mischief, how do you quantify it? Graduates of your program may not have made it to college yet, so you don’t have a warm fuzzy story for the fundraising brochure (but as soon as one of them does, put that kid in a college t-shirt, on campus, holding a bunch of textbooks and get that picture! Sells ’em every time).

In for-profit businesses there are initiatives that can also defy easy quantification. What does “deliver better customer service” translate into in dollars and cents? What about community outreach or sponsorships? What exactly does reducing customer response time yield that will make a dent in earnings season?

Find a way to measure it. There is almost always a way. Talk to people in similar arenas, and talk to some not in the industry. Talk to your Human Calculator, give them all the approaches you came up with and have them get creative.

If you can measure the value it adds or the costs it saves, and if you chart incremental progress, you can demonstrate success, which keeps enthusiasm high for your project, even if there is a bobble along the way.

So how DO you measure the Teenager After-Care example?

One approach:

Studies show that kids between 13 and 15 are X times as likely to get pregnant and Y times as likely to get into trouble that will do Z to their criminal record when they go home alone after school.

A pregnant teenager costs the American taxpayer (or county taxpayer or city taxpayer) $___, while a juvenile arrest costs the taxpayer $____. By funding aftercare for these 15 teenagers we are greatly reducing the odds of these things happening, and saving taxpayers $(all of the above multiplied by the results expected if the 15 kids weren’t in care) which is ten times (or hopefully some other ridiculously high number) the cost of providing funds for the program. So we save our community 9 times every dollar we spend!

How have you found ways to quantify things that defy easy measurement? Share in the comments below, you’ll be helping everyone!

By the way one of my favorite Albert Einstein quotes is “Everything that can be
counted does not necessarily count; everything that counts cannot necessarily
be counted.” Very, very true. But to sell your idea, you need to try to count it!

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Rule #5: Find your Allies

July 10, 2013 by Jeanne Goldie Leave a Comment

It takes a village, pick the right villagers to gather their pitchforks and join you!

Every great caper takes a team (see The Sting, Ocean’s Eleven, Trading Places). There may be someone leading the charge but it takes a village to pull off a victory. Smart change agents make sure they have the right villagers charging by their side. Here’s some to start looking for right now:

EF Hutton: No, not the real E.F. Hutton (he’s deceased, be very, very worried if he shows up). You need the “opinion leader,” a team member with enough gravitas, experience and respect from the other team members that they pay attention when this person speaks. In his book, The 21 Irrefutable Laws of Leadership, John Maxwell describes in “The Law of E.F. Hutton” that the person who is the “real” leader of the team is most likely not the official leader. When they speak, everyone listens. Get this person on your side and you’ve won half the war.
The Human Calculator: You know this person. They can calculate it all in their head, run data up, down and sideways and spit it out in record time. They look at data and see patterns others miss, usually saving you a few serious mistakes. And it’s effortless for them, like breathing.
The Historian: The Historian knows everything that has been tried before and may even know where the bodies were buried. Sometimes this person can be a bit of an Eeyore (“Well Sonny, we tried that in aught eight but it just didn’t fly”). The historian you’re looking for is the one who remembers bits and pieces of systems and research that were built for other projects that just might be useful and knows who worked on those projects. You slice a great deal of learning curve by talking to people who have tried similar things.
The Top Producer/Chief Rainmaker/Revenue Generating Machine: Often this person will be a contender for the EF Hutton slot but if not, they are a valuable source of feedback on what works and what doesn’t.
The Fixer: The backbone of many teams. This person can take a statement like “IT says it will take 200 hours to build the interface so they can’t get to it until next year,” roll the situation through their head and come out with “Okay, the platform they’re using in sprocket accounting is nearly the exact thing that we want and they have lots of bandwidth because we really only care about counting widgets here. They also have a student intern this summer, let’s hijack the intern and see if we can copy over the system and have the intern recode the smaller piece that needs to be changed.” This is also the person that knows that Mary in Customer Service is dying to change her job and move into project management so she’ll volunteer her time for any task or project that might get her closer to that goal. They have lots of people’s cell numbers and can get them to answer day, night or holidays. They usually talk 800 miles per hour and you can see the wheels turning when they do. They have lots of favors on deposit in the favor bank. Very handy to have in your corner.
The Front Person: This is your smooth talker. Speaking in perfect “corporate-speak” they are the official face of your change. They need to be well liked, reasonably respected and easily able to talk their way to those at the top of the house.
The Executive Sponsor: In an ideal world you’ll have an upper level sponsor who stands behind what you’re trying to do. You’ve convinced them of the importance of the plan and they have the will and ability to pull resources from other departments to help jumpstart your plan. They also are the first to back your Front Guy when they’re presenting to the top of the house. If you don’t have an executive sponsor, you will absolutely need to have #4 in your corner.

Draft each one of these players on your team well before you make any public announcements about your planned changes. It’s usually going to take drinks, lunch or coffee for you to get them on board. Be prepared to change your plan based on the feedback they give you. Let them punch holes in it and knock it around a bit. You’ll end up with a better plan.

What other team members have you found invaluable when you’re creating a change? Share your suggestions in the comments section.

P.S. If you’ve ever wanted a great explanation of exactly how Billy Ray Valentine and Louis Winthorpe III beat the Duke brothers on the commodities floor in Trading Places listen here.

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Rule #4: Do the Math: Follow the Money

July 9, 2013 by Jeanne Goldie Leave a Comment

Like it or not, the trail of money will direct your path.

Make a business plan! It’s the number one rule for all new ventures. Every business book, every “get rich quick” book, every project management handbook insists upon it.

What the experts often fail to say is just how important it is to be realistic. You can make any business plan work on paper if you’re creative enough. “We will quadruple our revenue by selling 4000 additional widgets next month!” “How many did you sell this month?” “35, but I’ve got a GREAT plan!”

It’s entirely possible that your change strategy is so brilliant, so life changing, that it’s the next Apple computers or internal combustion engine (please feel free to write me so we can interview you for our “Five for Fridays”). But more likely, you are not the exception. And that’s where doing your math homework comes in.

What is the team doing now (selling, closing, producing, treating, turning). What does your proposed change do to that number? What is the cost of the change? Have you factored in the opportunity costs involved (see Rule #3)? What extra incidental costs will result (support staff, additional technology costs) if your project comes to fruition? Don’t base it on the best month your team ever had. Base it on an average month. And if your year is seasonal, run it for each quarter, using an average per quarter.

Is it worth doing? Is the potential disruption of processes and routine worth the net result of your activity? And even if you think so, would anyone else agree? Get someone from outside your industry to punch holes in your strategy and to ask lots of questions. It may uncover some other areas you need to look at.

Moving results into dollars and cents, either in terms of revenue growth or cost savings, can go a long way towards advancing your strategy. Numeric arguments that show they’ve taken all the factors into account will win every time.

And for those of you in the government or non-profit sector who don’t measure all activities in terms of dollars and cents, we’ll talk a great deal about how you can measure in Rule#6.

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Rule #3 Weigh the Opportunity Cost

July 8, 2013 by Jeanne Goldie Leave a Comment

Joseph Schumpeter, economist and Master of opportunity cost

During my freshman year’s eight o’clock microeconomics class one of the few things that made absolute sense to me was the concept of Opportunity Cost, a theory by Friedrich Von Weiser. It was an “aha” moment of epic proportions where I could finally explain the best way to determine the true cost of making one choice over another.

Simply put, if you have finite resources, when you choose one path of action, you will be using some of those resources up, and they will no longer be available for other activities. If you plan a course of change that will require 400 hours of IT time, without additional overtime or staffing, you would be making those resources unavailable to other departments or projects.

Opportunity Cost forces you to run the overall value of any planned activity or change against the resources it will use up. Is it worth 400 hours of IT time to update a website? Maybe. Is it worth 400 hours of IT time to update the website if it will slow customer service response time for your internet customers? What other projects will need to be put on the backburner in order to pull the IT team for 400 hours?

This is why you will need to be able to absolutely quantify the net savings or revenue that will result from your plan of action. You must show that the resources you require are the highest and best use of those finite resources.

P.S. Unfortunately about the only other thing I recall from my very early class was of Von Weiser’s fellow Austrian, Joseph Schumpeter, not his economic theories, but his desire to be known for three things; “To be the world’s greatest economist, the finest horseman in all of Austria, and the greatest lover in Vienna.” He claimed to have achieved two of the three. Clearly he weighed his opportunity costs.

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