If we want change to be lasting and more effective, we have got to get better at leading it.
A group of us were talking the other day about leading through change, and I couldn’t help but recall the many reorganizations I’ve watched (or been part of) during my years in the Five-sided Puzzle Palace. It might surprise you to know that not all my experiences with change in the home of the world’s greatest military were positive. Some were slightly less painful than others, but almost all were less than effectively executed – yes, I’m being charitable – because the changes weren’t well led.
In fact, we’ve led it so badly for so long, the very word “reorganization” has taken on an adversarial connotation. I’ve heard it called realignment, refocus, transformation, shake-up, even “simply changing who people work for,” but not once did it feel like we were doing anything but reorganizing.
I’ve got the stick for a minute.
Here’s some lessons that came from examples I’ve see of how NOT to lead during change. I know there are other kinds of change besides a reorganization, but the leadership lessons learned – or not learned – apply across the board.
Most importantly, don’t plan the change in secret. I know… you don’t want to distract anyone from their work by giving them something else to stand around and have fact-free conversations about. Well guess what – too late. You can’t stop the rumor mill with secrecy, and they’re already distracted all day long by wondering “How does this change affect me?” They’ve even given it a pet name, like The Great Disorganization of 2015, Musical Cubicles or Rearranging Deck Chairs on the Titanic.
Instead, communicate, communicate, and communicate some more. To the whole organization. Start with the “why” you’re changing, follow with “what” you’re trying to get out of the change, and continue with soliciting “how” it might work better from the people whose day-to-day activities are affected by the new way of doing thing. You’re trying to get buy-in from the doers, not the affirmation by middle management that they’re okay with the new power distribution.
Next, pleeeeeese don’t change the organization to fix someone’s lack of performance. As in, don’t move a function away from a poor manager and give it to a top performer as a reward. If you do, you can bet you’ve just sent a horrible message to your workforce.
Instead, make sure the change is about the good of the organization. Individual needs do not override the collective goals of the organization (thank you, Mr. Spock). If a manager’s not getting the job done, get him some help (development, coaching, etc.) or replace him. It shows that accountability is more than a slogan on the break room bulletin board.
Finally (almost), don’t continue down a dead-end road just to save face. Not all newly-created organizations work the way they’re envisioned. Teams don’t gel, new leaders don’t lead, promised resources don’t materialize, etc., etc. In fact, a lot of changes don’t pan out the way we think they’re going to, so…
Fix what you messed up, and don’t be shy about telling people why you need to change again. Help your people build change resiliency, and keep everyone’s focus on organizational performance.
Okay, really last… don’t drag out the implementation date. It’s hard on people to have to dance between their current, but soon-to-be-former boss and their soon-to-be boss. Would you rather have your tooth pulled in one appointment or have pieces of it extracted over a series of months?
Change happens, and there are winners and losers in every re-shuffle, but the only people who are happy with change are those in charge of it and those who benefit by it. Still, led properly, growth and success are its by-products, and everyone can get behind that.
Onboarding matters more than any other activity for speed-to-productivity and employee retention.
Onboarding employees today has taken on a new significance. No longer just “new employee orientation,” It can set the stage for long-term success, engagement and employee retention.
A recent SHRM report stated that Onboarding has four distinct levels, called the Four C’s: Compliance, Clarification, Culture, and Connection. The problem is the order—that model needs to be stood on its head, in exactly the reverse order.
Connection comes first. First employment days are wasted with forms and compliance… stop that! Spend that first day—the entire day—connecting with the newbie in a fun, meaningful way,
Make onboarding fun!
that lends value to the new employee first, the organization a distant second. Create an environment that someone wants to be a part of… demonstrate values today that will be reinforced tomorrow. Early connections are lasting connections. Later connections are just that—late.
Culture. Speaking of values… Included in that non-compliance first day, and possibly many more, is the weaving of culture norms and organizational values in demonstrable form, so that words and actions are immediately congruent, and new employees don’t have to wonder what things like “we value innovation” really mean.
Clarification starts assimilating that new employee into the organization and their specific role. Here we help these new folks understand their place in the company, their contributed value, and their significance in the long term for doing the job they were hired to do. It also reinforces their career direction and potential path—something critical for newer employees today.
Compliance events only occur after we have produced distinct connections, shown demonstrable culture and values, and provide some real job and career clarification. Compliance is an organization-only need, and as such brings up the rear in establishing long-term value to an employee. It’s important, but only to us. The employee doesn’t need it to realize his or her value. It must be done, but minimize its significance and distraction.
Onboarding today is the real deal. This is a challenge that can allow Human Resource professionals to play an absolute critical role in the long-term success of new talent. But you’ve gotta do it right, and focus on what’s important for the talent first.
I have a client where we just implemented a rigorous onboarding effort, that includes recruitment, orientation, and also the first several weeks of after-orientation employment. It’s already had a positive effect on retention and engagement, and both of those translate into significant organizational results.
There, I said it. I’m Kevin Berchelmann and I’m not a Packers fan.
“Hello, Kevin.”
It’s not that there’s anything wrong with the Packers as a football team; as a matter of fact, I actually think they’re pretty cool. I’ve even been to a game at Lambeau Field, and there’s no question that was an experience for a lifetime.
It’s just I’m from Texas, which causes a couple of problems. First, we have a couple of football teams here (maybe you’ve heard of them), and second I’d likely lose my Texas card if I bypassed two local teams in support of <gasp!> the Green Bay Packers. Anyway, let’s move on.
Photo by Mike Morbeck
I am, however, a fan of Aaron Rodgers. The guy is a class act, and he shows it in so many different ways. On the field, he’s one of the best. Ever. His record stands alone, and I won’t repeat all the stats here. Suffice to say, he does his job pretty damned well.
But even better than that, he’s a solid leader. For example, Aaron recently bought his offensive lineman personalized ATVs for Christmas. It was a big deal for four really big guys; green and gold ATVs each painted with the lineman’s jersey number and initials on the sides. And no, I’m not five months late in posting this. Those ATVs took a while to be custom-made, and they were just delivered this week.
Now look; the purchase price of all four of those didn’t put a dent in Aaron’s net worth. And frankly, those linemen could likely afford those ATVs on their own, even though the $20 grand would have a bit larger impact on their budget than Aaron’s.
That’s not the point. The point is, these four guys are the ones most responsible for Aaron Rodgers’ success. We use the phrase “blocking and tackling” all the time. These guys, however, actually no-shit block all the time. And Aaron knows that, appreciates that, and recognizes that. That’s what real leaders do — take care of those people who take care of them. Respect and recognize those who embrace our vision and help us succeed.
And these are the people who do it every day, day in day out. Not the prima donnas or elites who are already well rewarded for their efforts. No, these are the guys who get up in the morning and get the job done, though most people don’t even know their names. Except Packer fans of course, because those folks are bat-shit crazy, and likely know every thing about every player.
So… I’m not a Packers fan. I’m not even a recovering Packers fan. But I respect leadership well done, and Aaron Rodgers exemplifies that.
Gutsy decision to oust current CEO Mark Fields, a 25-year Ford veteran, in favor of Jim Hackett, a Ford outsider and most recently the CEO of Steelcase. Hackett had most recently been running Ford’s Smart Mobility initiative.
In all fairness, Fields had a tough act to follow; he followed Allen Mulally’s rock star tenure as Ford’s CEO. Mulally, another industry outsider, was personally responsible for averting Ford’s bankruptcy and refusing a government bailout — the only legacy automaker to do so. A CEO of our times, to be sure.
The bigger difference between them however may actually have been Mulally’s leadership ability, where he demonstrated transparency, a culture of positive leadership and the real benefits from working together, no easy culture shift for a behemoth like Ford. None of those traits personified Fields, more known for his combative approach than any easy-going personality. Fields is the guy who said that employees worrying about their pensions would be “a great motivator.” Cultures are hard to manage, and clearly Fields failed at driving Ford’s.
Late to the game
Fields, as CEO, said repeatedly that Ford didn’t want to be the first company to offer self-driving cars. Conversely Bill Ford felt otherwise, saying “I don’t want to be slow. We need to be quick in everything we do.”
Fields was playing catch-up, using the backs of employees to fund the effort; he announced earlier this year a plan to cut 3 billion in costs and as many as 1400 white-collar jobs. I can imagine the discussion… “Let’s get innovative!” says Fields. “Great—how do we pay for it?” says senior staff. “Let’s whack a couple thousand surplus employees—that’s a good start,” says Fields. A decidedly un-innovative approach; CEOs have been whacking folks to save a few bucks since time immemorial. It ain’t new.
The auto industry is being disrupted by companies like Tesla, Uber, and even Google and Apple with their self-driving efforts. Add to that the completely predictable decline in US auto sales, and you start painting a pretty good example of a lack of vision.
Conversely, Jim Hackett is Ford’s go-to guy for the future. “This is a time of unprecedented change,” Bill Ford said during a conference call. “And time of great change, in my mind, requires a transformational leader. And thankfully we have that in Jim.”
Thankfully, indeed. Hackett knows what it’s like to lead 100-year-old company; he views change is critical to the company’s survival; and he has a history of giving fans what they want. Exactly what is needed at Ford today.
Bottom line, if automakers are going to stay around, they need to get off their collective butts, invest in new technology, and make some things happen. Investments today will allow survival in the future. But you must have the courage to see the future, set a vision, then pursue that vision violently.
I may wish you would have fired Mark Fields a year earlier, Bill Ford, but you’ve taken a step in the right direction. Tough job, but it does make you our Leadership Leader for May.
Milquetoast
John Skipper, President ESPN
It seems everyone on our leader-laggard list this month is whacking people left and right. ESPN recently laid off (that’s fired) about 100 people (10% of the total workforce), most of them on-screen personalities from various shows and reporting efforts. Executives claim it’s a simple branding reposition and not a mandate from parent company Disney.
“These decisions impact talented people who have done great work for our company. I would like to thank all of them for their efforts and their many contributions to ESPN.” — John Skipper
“Dynamic change demands an increased focus on versatility and value, and as a result, we have been engaged in the challenging process of determining the talent—anchors, analysts, reporters, writers and those who handle play-by-play—necessary to meet those demands,” Skipper wrote to employees.
What a load of crap. The reasons are always simple for layoffs. Someone made some mistakes along the way, and the answer to those mistakes is short-term money-saving via reduce payroll. ESPN claims to have outlined a new strategy for the network, including an increased focus on its ESPN app with the multiscreen approach around big events, more live news video, and enhanced video and audio streaming. They also plan to bolster ESPN’s online presence
Look, ESPN has been hemorrhaging subscribers for several years now (roughly 12 million in six years), a natural result of fewer people attached to cable televisions as a revenue source. Considering ESPN pays billions of dollars to various leagues to be able to broadcast these events, they simply didn’t prepare for the sudden decline in revenue. It seems the only people that didn’t realize fewer people are using cable, ergo fewer people are paying for televised events, was ESPN. I knew it, you knew it, my neighbors knew it.
ESPN, however, apparently did not know it. And their negligence in planning directly caused about 100 people to lose their job, many of those were solid, valuable, high performing employees. And here’s the thing; do the math — ESPN pays billions to sports leagues for the right to broadcast. How much of a dent does the salary for 100 employees actually make? This is the same network that signed a nine year $24 billion deal with the NBA. You’ve gotta whack a whole lot more than 100 analysts, reporters and announcers to cover coin like that.
Now, let me throw a wrinkle into this: ESPN is not our Leadership Milquetoast this month because they laid off hundred people. No, they are our milquetoast because they still haven’t fixed their business model, and this layoff is a distraction that further postpones any real and meaningful shift in strategy. Just do something is a juvenile response to a valid business need, and confuses activity with meaningful change.
It’s that ridiculous activity — instead of impactful business change — that brings ESPN and John Skipper into our spotlight, pulling down our dubious Leadership Milquetoast position for May.
Laggard
Brian Cornell, CEO Target Corporation (NYSE: TGT)
What the hell are you doing, Brian?? TGT stock has been on a vicious two-year decline, currently trading at a five year low, a market-cap reduction of almost $13 billion. Waiting until just after the nick of time to exit the Canadian market, that was a $5B+ write-down. Same store sales and total revenue have fallen for four consecutive quarters.
All of this after Cornell announced a two-year turnaround plan in 2015, committing to cut costs, prioritize merchandise categories, increase grocery and online sales and open more small-format stores.
Oops… seems he now needs a turnaround plan for the turnaround plan.
At a time when innovation and strategy need to be at the forefront, Cornell whacked Casey Carl, Target’s Chief Strategy and Innovation Officer. It seems Carl, a 20-year Target veteran, was a bit too innovative and strategic. Now, the strategy is to copy Wal-Mart — remodeling existing stores, investing billions in lower prices, and hoping really hard that online sales increase (that last one wasn’t Wal-Mart’s, just Target’s).
Speaking of online… did I mention that Jason Goldberger, originally president of target.com, was pushed out of the chief digital officer role? Those duties transferred to the incumbent CIO. Now, I like CIOs as much as the next guy, but unsure how much that role aligns with the intense marketing and online savvy necessary for Target to catch up to Wal-Mart with its digital strategy.
And while we’re discussing whacking folks… don’t forget the departure of the Chief Marketing Officer, Chief Legal Officer, Chief Human Resources Officer, Chief Stores Officer and the head of the grocery division; since Cornell’s ascension, only 2 of the 11 executive leadership team remain. Lots of things can cause such a leadership turnover, but most of them are bad, and all point to the CEO.
This will obviously be a test of patience for Target’s Board of Directors. Unlike Ford, this month’s Leadership Leader, the Target board has demonstrated a penchant for moving way too slowly on CEO decisions. Their undeserved patience helps vault Brian Cornell into our Leadership Laggard for May.
So, I’m watching an old movie this weekend, “In Harm’s Way.” It’s about a U.S. naval Captain (John Wayne) who has his career derailed after the attack on Pearl Harbor. After an interminable time as a desk-jockey doing little important, the Navy realizes they need this guy to go out and win battles.
Enter Admiral Nimitz, played by Henry Fonda. He invites all the muckety-mucks to a men’s-only dinner and cigar party (my kind of place), where he gives Wayne his official promotion to Rear Admiral, effectively acknowledging the Navy’s error.
Nimitz says, “The Navy, we all know, is never wrong, though sometimes it’s a little weak on being right.”
Feel free to substitute your, my, or any of a number of other names for “The Navy” above. Sometimes we forget that doing the short-term “right” is not always the same thing as doing the right thing. In other words, sometimes we’re a little weak on being right.
Now, typically when people — ok, ok, “consultants” — use an example like this, the conversation goes in an expected, typical direction. I’d like to use a different example.
For instance, a top sales guy is unable to complete various required reports in a timely manner. Someone (usually HR) convinces us that we need to “be consistent;” if we discipline others for this egregious — nearly heinous — act, we are summarily forced to do the same thing with this top sales performer.
I say that’s a load of bunk. Absolute, positive, cowardly crap.
And it is cowardly.
Take the courage… use it, find it, or make it, to NOT fall victim to being a little weak on being right. Do the right thing, even if (maybe even particularly if) it seems unfair to average or mediocre performers. Worry about the high-performing sales guy in question; spend zero time being concerned about all those others who only wish you would treat so deferentially.
After all, who can argue with Admiral Nimitz?? Or Henry Fonda?? Certainly not The Duke…??
Damn, United. Just last month, we upgraded your abysmal 2015-2016 shenanigans to an “almost.” And this is how you repay us? With that colossally bone-headed move?
Assuming our readers haven’t been living under a rock, or in Tibet, or someplace where no signal of any kind could penetrate the local ether, United Airlines screwed up. In a nutshell, they tried to remove a passenger after confirming his boarding, and surprise! The passenger didn’t want to get off the plane. United gate agents must have decided that “no doesn’t mean no,” so they called the gestapo airport security, who apparently decided “Hey, let’s just drag him off…?!”
And the whole thing was recorded. Not much wriggle room for any sort of spin story-telling. In fact, I won’t insult you by showing—for the 2 millionth time—that video. Just picture it in your head.
It’s received so much publicity, we weren’t even going to address it here. Sort of like the “that’s just too easy” line of thinking. But then we realized… the lesson here isn’t about some gate agent’s poor judgement, or even the idiot security dude’s MMA moves on an elderly doctor. I won’t even raise the ire of many reading this by reminding that that same elderly doc should have disembarked when ordered to do so and fought his fight later.
Nope, this fiasco is all about—and only about—leadership. In this case, failed leadership. For example:
Someone screwed up way back when. Allowing the aircraft to fully board before saying “Hey, wait a minute, we’ve got to get these four crew members on board.” Mistake #1, and the lack of a process, or lack of a followed process, is a leadership issue.
Someone decided those four United employees were worth removing paying passengers from an already-boarded aircraft. That sort of decision-making comes from the belief they will be supported by leadership. That’s mistake #2, and another leadership issue.
Apparently, a gate agent decided, after three passengers disembarked, that the hold-out passenger warranted calling security, undoubtably knowing something bad might happen. Again, fully expecting to be supported by leadership in that decision and causing mistake #3.
Seriously, either that one security guy has serious issues, or he was trained so poorly he thought standing on another seat to remove a seated passenger with his lates MMA moves was the next step in the checklist. Either way, a leadership misstep that provided the impetus for mistake #4.
The only truly unforced error during the entire situation: Munoz’s comments. First, supporting employees in the face of that video without further investigation, then with the horrendous “reaccomodating” remark, then finally with a too-late sincere-sounding apology.
Look, I get it. Munoz was left a pile of dung from Smisek’s departure. I really do get it. He likely has invested hundreds of hours, if not more, in trying to improve relationships with various categories of employees, agents being just one of them. I get all that. But as CEO of a customer-facing organization, you don’t get to make knee-jerk statements. Ever. When you unwisely do so, it’s on you.
As the other Kevin’s mom likes to say, “You kind of brought that on yourself.”
Oscar Munoz is April’s Leadership Laggard. And the vote wasn’t even close…
CEO John Stumph blamed the creation of over two million fraudulent bank and credit card accounts on individual rogue employees – more than 5,300 of them who were summarily fired.
Claiming that “there was no incentive to do bad things,” Stumph defended the head of community banking, Carrie Tolstedt, as the “standard-bearer of our culture” and justified her $125 million retirement payout.
Turns out he also exercised 1.5 million stock options (worth just $83 million) the month before the company was hit with $185 million in fines for the deceptive practices.
Now:
Stumph is now the ex-CEO, Tolstedt got fired instead of retired, three other senior executives were fired for cause, eight remaining senior executives forfeited their 2016 bonuses, and Wells Fargo’s reputation stopped its free-fall.
Unsurprisingly, it turns out Mr. Stumph wasn’t paying very close attention to the community banking business unit or its Senior EVP. Last week, Wells Fargo released the report of its directors’ investigation into the cross-selling practices, laying the blame squarely on Stumph’s blind spot when it came to Tolstedt, Tolstedt’s controlling management style that actively discouraged dissention, a couple of dishonest regional VPs, and lax corporate oversight.
The extremely decentralized organizational structure favored the business units and led to the creation of fiefdoms in the company with “substantial deference” to the feudal lords and ladies. Without effective checks and balances, Community Banking was able to mask the signs – like high attrition and under-funding of new accounts – that something was seriously amiss. Changes in the reporting chain and new corporate control functions introduced by the Board should realign accountability and responsibility.
The Board allowed itself to be misled about the extent of the problem, but they get credit for bolstering their oversight responsibilities, creating an Office of Ethics, Oversight and Integrity (albeit, just after the nick of time), and for setting aside funds to make it right by the customers rather than forcing arbitration. And, while it’s not all about the money, the $180 million they clawed back from ex-senior executives and withheld from current members of the Operating Committee will almost cover their fines.
As tempting as it may be for some to paint the new CEO, 29-year Wells Fargo veteran Tim Sloan, with the same brush as Stumph, but Sloan hasn’t shied away from accepting responsibility for himself and the rest of the senior leadership team, he’s engaging with Wells Fargo employees in an effort to regain their trust, and so far he’s re-hired back about a thousand of the 5,300 employees that were fired.
The Wells Fargo scandal was a direct result of failed leadership, but leading is a journey, not a destination. They’re not out of the woods yet, but we’re definitely seeing signs that the Wells Fargo senior leadership is serious about rebuilding lost trust with their customers and shareholders. We wish them well at the annual stockholders meeting next week.
Net Result: While John Stumph’s place on the Laggards list is secure, Tim Sloan and the current Wells Fargo senior executive team are looking more like Leadership Leaders every day.
CEO John Watson commented on the oil pricing impact with a Captain Obvious remark: “…we maybe have gotten a little sloppy in the past few years.” I think, given the 200K+ headcount slashing that occurred in the industry, “sloppy” may not have been the word I would have used.
Now:
He mentioned several things they should have been doing already. The good news is that they certainly seem to be doing those things now. Watson outlined his plan by saying they needed to focus on five things:
First, finish project under construction which reduces spend and brings on new revenue.
Second, reduce capital expenditures and focus on work that’s profitable lower prices.
Third, lowering operating expenses by getting more efficient at everything.
Fourth, complete planned asset sales.
And finally, do all of this while operating safely and reliably.
Frankly, in all fairness to Watson and Chevron, they knocked this outta the park. In 2016, Capex reduced by over $11B; 2017 spend will be another $2.5B less, and those projects have a two-year horizon for cash flow. Revenue is up $8B, and earnings up almost $1B; Opex and SG&A down over $2.5B. They maintain over $7B in cash, the stock price has more than recovered from the 2015 decline, and they continue to outperform every competitor.
And if simply brilliant financial and operating results aren’t enough, there’s this: John Watson says the reason he has stayed with Chevron for 36+ years, is “every time I said, ‘Well, gee, I wish I could do something else,’ I was moved on to some other part of the company.”
“If you have to leave a company to get a new challenge, I think that’s a really sad statement,” Watson says. “I think it’s a missed opportunity for some companies to not try to retain their workforce and keep them stimulated over time.”
True words—we would do well to replicate that thinking in other organizations.
Sort of a “Heckuva job, Brownie,” only this time for real. Way to go, John… good on ya. You’ve led Chevron from a 2015 Milquetoast to a 2017 Leadership Leader.
