Self-help books and newspaper advice columns, such as the famous Ann Landers column, are prevalent for issues involving relationships, money, or etiquette. What if there were an advice column for CEOs?
I am a relatively capable midlevel manager in my mid-40s. I have worked for my employer for 10 years. During the last few years, our company has been losing market share and declining in profits. Our executive team tries to talk a good game with quarterly town hall meetings with employees, but they appear to show no interest in implementing any of the core methodologies of an enterprise performance management framework, like strategy maps, customer profitability analysis, or driver-based budgeting. Some of our executives openly ridicule these managerial techniques and say that real managers just need good old common sense and instinct, not fact-based information. What can I or my co-workers do to encourage our executives to be more innovative?
— Confused and Dismayed
Dear Confused and Dismayed:
Executive teams are one of the more interesting social groups for research and behavioral study. Even the most talented executive teams fail to reach their full potential due to their lack of trust and confidence in one another and the inevitable conflicts, reduced commitment, and avoidance of accountability that result from mistrust.
Sometimes you just have to figure out how to manage your bosses. Resistance to change is often the root of their problem. This is understandable because resistance to change is human nature â€“ people like the status quo. I have relied on a simple formula to overcome resistance to change. It is (D x V x F) > R, where R stands for resistance. Do not underestimate how large the R is; it can be enormous. Therefore, if D, V, or F is zero or small, then their combination will not exceed R. You will need all three factors in great abundance. OK. You are now asking what D, V, and F stand for.
D is dissatisfaction with the current state. Unless people have discomfort, they will not be interested in changing anything.
V is a vision of what “better” looks like. When people see a different view of their circumstances that can lead to an improved condition, they will consider changing.
F is often neglected as it stands for “first practical steps.” Some may think that a lot of dissatisfaction (D) with a solid vision (V) is sufficient to overcome that large resistance (R) variable. Large amounts of D and V are not enough. If people think the vision is overly theoretical, complicated, costly, or impractical, they will not pursue changes to realize that vision. You need F to make the vision attainable.
So how do D, V, and F apply to influencing your executive team? Most enthusiastic and well-meaning managers try to promote their vision. They get excited about implementing enterprise performance management techniques with embedded business analytics, such as strategy maps for critical projects and initiatives and with identified core business processes that need to be improved. My advice from experience is to first focus on the D. Here is why.
Change will only result when people feel compelled to change. Having high levels of dissatisfaction and discomfort, the D is your best lever to influencing your executives. But dissatisfaction is often latent, not overt. You will need to create the discomfort in them. My suggestion is to use the Socratic method of questions, named after the classical Greek philosopher Socrates, who stimulated rational thinking and illuminated ideas by posing questions to his students, such as Plato.
Do you have the nerve to start asking your executive team questions like these? Are our largest customers presumably our most profitable ones? Are any of them so demanding of us that the extra costs erode our profits? How do we know? Do all of our managers and employee teams understand our strategic objectives? How do they know how what they do each week and each month contributes to achieving our strategy? Are the performance measures we monitor more weighted toward lagging after-the-fact reporting that we react to? Or do we monitor leading key performance indicators (KPIs) that enable us to make proactive decisions? If it is the latter, how well do the leading KPIs correlate with the lagging ones? How do we know which types of customers to retain, to grow, to acquire as new, or to win back? How much is optimal to spend on each customer type with deals, offers, and promotions to retain, grow, acquire, and win back? Won’t any spending amount above or below the optimal for each customer type lead to destroying shareholder wealth?
In many cases, the executives may not have good answers. That is when you can hit them with the knockout-punch questions. If they do not know the answers, ask them, “Is that is a good thing? How long can we keep making decisions without knowing these answers?” If you ask these thought-provoking and deliberately disturbing questions in the right way, you will not need to spend much time on promoting your vision (V) of the equation, the variable that many managers prefer to begin with. By exposing and converting latent problems into ones evident to your executives, the solutions become more obvious and understandable.
And what about the F in the equation as “ the first practical steps? Many organizations embarking on the journey of adopting enterprise performance management struggle with how to get started. Consider pilots and rapid prototyping with iterative remodeling techniques to demonstrate value and prove concepts. These accelerate learning and will get more buy-in.
Always remember that in the absence of facts, anybody’s opinion is a good one. And usually the biggest opinion wins, “ which is likely to be that of your boss or your boss’s boss. So to the degree that your executives are making decisions on intuition, gut feel, flawed and misleading information, or politics, your organization is at risk. Write me again in few months and update me on how you are progressing. You can make a difference. ###
By Gary Cokins, EPM Channel Contributor, from: http://businessfinancemag.com/blog/dear-ceo-advice-column-you-may-want-read
Gary Cokins is an internationally recognized expert, speaker, and author in advanced cost management and performance improvement systems. He is the founder of Analytics-Based Performance Management LLC at www.garycokins.com in Cary, North Carolina. His career: First ten years as an executive with a division executive with FMC Corporation; next fifteen years in consulting with Deloitte, KPMG, and EDS; and last fifteen years as a Principal Consultant with SAS, a leading provider of business intelligence and analytics software. See Gary’s articles on EPM Channel here.