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Leading from the front lines

May 20, 2008

By Laurie Clarke, COO, The Tatham Group

A few weeks ago, I found an interesting article written by Gerard Seijts in The Globe and Mail about leadership and change management. Columnist Gerard Seijts chose a very fitting title for his article about the changes required for an organization to be successful in today’s business environment: Leading organizational change starts with convincing the troops. To me, the word ‘troops’ evokes the image of rows and rows of soldiers standing at attention, waiting to receive their orders. To change its culture, a company must shift from being rigid, departmentalized, command-and-control (in times of peace) to being fast, flexible and flat (in times of combat). In these times, strategy is decided by the ‘top of the house’ however, decisions are trusted to be made on the front line by soldiers armed with their training in processes and procedures using the data they have to guide them.

While there is a rich history underpinning the evolution of the corporation, to understand why organizations are formed the way they are today, we must look back almost eighty years. According to Peter R. Scholtes, author of The Leader’s Handbook, organizational structure and culture in North America was in fact, modeled after the Prussian Army. But this was not an arbitrary decision. In the 1840’s, the railway system in North America was in its early stages, evolving as a major distribution powerhouse; its complex network of railways and schedules was the only way for businesses to deal with the industrial boom. In October of 1841, a train crash in Massachusetts forever changed the way organizations would be managed. Because this was the first major train disaster, the Massachusetts legislature launched an investigation to discover why it happened. Based on their findings, the legislature suggested that businesses should adopt a similar structure to that of the Prussian Army’s – one where central offices would be run by ‘managers’, where there was a clear chain of command as well as clear lines of communication and authority. Why? To ensure there was a clear definition and distinction in roles so that blame could be easily assigned in the event of another accident.

While this structure grew in popularity and became the model for modern companies in North America, in Japan things were quite different. Just after World War II, General MacArthur was the administrator of the U.S. occupation in Japan. In order to help re-build the economy, MacArthur needed to communicate with Japanese people, and as such created an urgent request for thousands of reliable radios. However, because Japanese manufacturers were struggling to fulfill this requirement, MacArthur brought in Dr. Deming to teach them how to implement quality control. With his concepts of Statistical Quality Control and a philosophy that everything is a system – including society, Deming taught Japanese leaders a different way of thinking about operating an organization. One of his students, Ichiro Ishikawa, adapted these lessons and became the leader of quality movement in Japan for the next four decades. Ishikawa’s philosophy was that there should always be a built-in focus on the customer, quality is essential and non-negotiable, everything is a system and there must be trust and cooperation in order to make it all work.

While our business environment has evolved and changed drastically from the 1800s, in North America we have maintained the command-and-control structure. The advantages of making the culture shift toward a more Eastern-based system are obvious and we can point to the many successes of the Japanese. But if that’s the path we should take, why is it so hard to choose?

The answer is simple. From birth we are trained by our parents, school and society to behave a certain way. We are rewarded for doing what we are told, for coming up with creative solutions to problems quickly and for standing out from the rest. As adults, we carry these lessons through to our careers and quickly realize that the organizational structures we enter have similar reward systems (thankfully, since these are skills we have been developing since childhood). We get promoted to leadership and continue to propagate this culture. In other words, shifting to a new way of thinking, whether you call it the Deming philosophy, Total Quality Management, Six Sigma, Tatham or Lean, is asking people to unlearn a lifetime of lessons.

At Tatham Group we know that often, the most challenging part of the journey is just getting started – admitting there may be a better way of operating. That’s why we begin the journey by creating an emotional experience for our clients through Boot Camp. It is a non-computerized simulator that covers approximately a three year life span in a company changing from low profit, complex systems and non quality outcomes to a lean, flexible, fast-reacting and quality producing organization with high profits and productivity. Boot Camp provides people with a shared experience and a common language that helps ignite and energize change. It also creates the common goal and the vision for what is possible – the reward that makes the pain worthwhile.

While Boot Camp participants endure a rigorous learning experience, they also learn a very valuable skill – a discipline and a process for how to change. This discipline incorporates many of the success factors Seijts mentions: cross-functional teams of employees who make the changes, coaching teams and leaders alike, creating a safe environment for experimentation so that root cause can be discovered, ongoing measurement and the most important of all, implementation and continuous improvement. This journey is long, tiring and difficult — ending only when each person’s mindset has shifted.

Although we agree with Seijts on a number of principles, including the fact that communication is crucial, we at Tatham take a slightly different view when it comes to culture change. We believe that changing processes is what changes the culture in an organization. The key is to focus on one customer issue at a time. By starting small, we increase the chances of success. Momentum builds when people get excited about pleasing the customer and when they see that financial benefits become a by-product of their work. Once the first solution is implemented, we coach leaders to focus on the next customer process and so on, until eventually this becomes embedded in the way the company operates. People then begin to see that it is not just a project or fad – but rather a lasting change. So lasting, that when we hear team members ask when they can stop experimenting and measuring, (which happens often) the answer is always, ‘never’.

Organizational change isn’t just about getting out of bankruptcy. It’s about leading each and every individual through a change in mindset. As you engage in taking an organization on this journey of transformation, remember that every person is going through the same journey at an individual level and they are all starting at different points along the way. Your troops are the key to your success. Leave no one behind!