Returning to our flight metaphor, at this point, you have pushed the throttle forward, and your hundred-ton strategic change project begins to lumber down the runway. You build up speed until you reach the point where people recognize that the old right thing is now wrong. You continue to build momentum until you pass the critical point where you need more runway to stop than to take off. People now see what the new right thing is. You celebrate a little; you have overcome the initial gravitational forces and broken through the first barrier of change.
As you continue down the runway, your airspeed climbs until you reach that magical point of “rotation,” where the plane’s speed is sufficient to pull back on the wheel and lift the nose up. Then the friction and noise of the tires on the tarmac disappear as you break free from the earth. Now people not only see the new right thing, but they believe in the path that will enable them to go from doing the new right thing poorly to doing it well. You celebrate a bit more; you have broken through the second barrier of change. You are airborne.
Given all the energy it takes to get off the ground, it should be smooth flying from here, right? By some rules of fairness, it should be, but anyone with any experience in leading strategic change knows that some of the toughest aspects of change are yet to come. Like a plane, where dashing down the runway and then lifting off are necessary for flight, all it takes is a bit of a throttle back on the power, and the plane will come crashing back to the ground. Despite breaking the bonds of earth, gravity still exerts its invisible power, waiting for the opportunity to pull flights of fancy back into its crushing embrace.
Thus, even after overcoming the initial force of gravity and breaking through the first two barriers of change—i.e., failure to see and failure to move—the third brain barrier remains: the failure to finish. This force silently, patiently, and persistently waits for any opportunity to demonstrate its ruining power. Con-sequently, successful change must also overcome the third barrier of failure to finish—not going far or fast enough.
Whether the focus of the transformation is on quality, innovation, customer service, speed, or globalization, the full impact and benefits of the “organizational” change cannot be realized until the majority of “individuals” change. Quite simply, new transformational strategies do not make a difference until people think and act differently. Historically, as we have already pointed out, people do not change easily or quickly. When you have an organizational change that involves thousands of individuals, it is impossible to implement the change overnight; instead, it takes months and months, if not years. It takes time for the desired changes to ripple through the organization. As a consequence of this time lag, there is a significant risk that people will get tired and lost during the interim. These are the two principal forces that hold organizations back from moving fast enough or going far enough in their change—people getting tired and people getting lost.
People get tired because organizational transformation is fundamentally not about transforming the organization; it is about transforming the people who work in it. Certain aspects of the organization—its strategy, structure, or systems—can and often need to be transformed. However, have you ever seen a transformational strategy make a long-term difference when the individuals in the company did not have to transform their thinking and behavior? Have you ever seen a new structure work when the people in that structure did not change their thoughts and actions? The answer is no. The “rubber” of change meets the “road” of results in people’s behaviors. If the people themselves don’t change, the wheels spin, and the strategic initiative gets zero traction.
For example, an airline can decide that its new strategy and culture will focus on putting the customer first, as British Airlines (BA) did a few years ago. BA even implemented a program called Customer 1st. BA can create a new mission statement; it can put out a thousand press releases; it can put up a million Customer 1st banners in airports all around the world; but customers experience and respond to the change only when ticket agents, reservation agents, flight attendants, ground personnel, etc. actually put the customer first. Until then, it is all just corporate peacock feathers.
This is not to say that organizational elements, such as incentives or information systems, do not have an impact on people and their behaviors. Clearly, they can and do. For example, people act on the information they have, so information systems matter because of the type, quality, and speed of information they deliver to people. The point is not to say that systems do not matter. Rather, in the final analysis, what really matters in organizational transformations is the change in people’s behaviors and how systems either enhance or detract from that.
Unfortunately, too often this simple fundamental is forgotten, or at least temporarily lost, in the system focus of the moment. In one sense, this is understandable. How can a senior executive reach out and change 100,000 employees? How can a department manager reach out and transform even 40 people? It is hard to conceive of changing individuals, so we naturally reach out and try to pull one or two organizational levers, which we hope in turn will change the individuals. We reach out for the incentive lever or the organizational structure lever. We do this for a good reason. These levers do have an impact on people. Unfortunately, far too often their impact is less than we imagine or hope.
Over the last 50 years, research has consistently demonstrated that, to employees, organizational elements such as strategy, structure, or even compensation and incentive systems are abstract and remote. In contrast, the example they see in their bosses, the reinforcement they get from their peers, or the punishment they get from customers is much closer—it is “proximate,” in academic speak. Research further demonstrates that proximate factors drive people’s behaviors significantly more than do distant factors.
This is one of the reasons why transformation levers such as “reorganization” do not produce the results most executives hope for. This disappointment and our inability to see the limitations of new organizational charts in transforming people are partly why we see reorganization after reorganization. In many firms, it looks as though executives never graduated from the childhood game of musical chairs. These executives seem to have forgotten (or perhaps never really understood) that a new organizational chart has an impact only when individual people on the charts behave differently. If the boxes and reporting lines change but the attitudes and behaviors remain, so do the results.
But just to make sure that there is no misunderstanding, let us say again that changing strategies, structures, or systems is important to transformations. However, they are not the transformation. At best, they are catalysts and facilitators. The problem is that, in too many cases, executives view these valuable means as the ends. Once the strategy, structure, or system is changed, they think the job is done and that “the rest will naturally happen.” Nothing could be further from the truth. The crux of success or, in other words, the key to overcoming the failure to finish, lies in changing a large number of individuals, not in pulling organizational levers.
Unfortunately, changing individuals is not easy, especially if the change required is dramatic. Gravity is a powerful opponent. Consider that a plane flying across the Atlantic Ocean will burn one-third of its fuel just taking off and getting to cruise altitude. Changing people is no different. Tremendous energy and effort are required to get people to change.
As we discussed earlier in the book, people are programmed to survive and, as a consequence, naturally stick with what has worked, what has proven successful. Most people do not walk by faith. Most people wisely live by the philosophy of seeing is believing. If they did not, they would follow any wild, unproven, idiotic idea that came along. In fact, many employees believe that to be what is wrong with senior managers. Employees call it management by best seller. Too many managers simply grab onto the latest best-selling idea without really knowing whether it will work.
Employees are wise to walk in the proven paths of successful maps. In that wisdom, they resist changes based on whims; they believe in and stick with what they have seen work with their own eyes. The gravity and pull of their previous ways of thinking and behaving exert a constant and massive force. In contrast, to employees, a new destination and path seem to require letting go of gravity, floating in the air, and walking by faith. For most, faith is not an easy concept. As evidence, just ask any clergy, priest, pastor, monk, or rabbi. Trying to get at least some people to change from “seeing is believing” to “believing is seeing” is hard work. A mission statement does not do it. A new organizational chart will not cut it. Faith is not about words or boxes and lines. Faith is about trust.
Employees ask themselves, “Do I trust the promised outcomes? Do I trust my own ability to behave in new ways and achieve the desired results? Do I trust that if I put in all this time and effort to walk this path, the rug will not be yanked out from under me, and a new strategy, structure, and system will be announced just as I’m getting the hang of things?”
If you are trying to get employees to think and behave differently, their willingness initially to walk by faith is a function of how much they trust you. If they trust you, they will venture forth. If they do not, they will not.
Although this is true, it is beginning to sound a bit philosophical, so let’s bring it down to a concrete and practical level. Consider the case of an airline gate agent, Sam, working for Your Average Airline (YAA). As the name implies, YAA is not bad but is not particularly good at customer service. However, the new CEO has announced that YAA plans to win the competitive battle by putting the customer first. He even names the new strategy and change program Customer 1st. (The CEO did this, of course, after making sure that BA had not trademarked the phrase.)
Sam listens to the CEO’s presentation about why treating customers badly destroys loyalty and hurts organizational performance. Sam pays careful attention to the arguments about why putting the customer first will differentiate YAA and lead customers to fly YAA more often. He even listens closely enough to see that with more loyal customers and higher occupancy (load factors in the CEO’s lingo), the company will make more money, and as a consequence, Sam will have a more secure and brighter future. Sam begins to accept the new map and destination—the land of Customer 1st. He begins to alter his mental terrain.
YAA’s new CEO, being brighter than most, presents a clear picture not only for why putting the customer first is a great idea, but also for how Sam can achieve it. He is provided the required resources. Sam is given training about how to handle customer complaints at the gate and how to speak in a tone that comes across more pleasantly to customers. The path to the land of Customer 1st begins to come into clearer focus. Sam begins to see not only the destination, but also the path that could lead there. Why doesn’t Sam at this point just take off running down the path without a moment’s reflection in his rearview mirror?
Sam, like all workers, is smart. He does not act on simple blind faith. Instead, he acts on what he believes will give him the best return for his investment. He almost unconsciously makes comparisons between the ratio of effort and reward of the old with the anticipated effort/reward ratio of the new.
In the past, it took little effort for Sam to put the customer second, third, or even tenth. In fact, it was quite easy not to be customer-centric (one of the other key buzzwords used in the Customer 1st training program Sam attended). Up to this point, Sam has had little trouble being Sam-centric.
For example, a customer recently came running up to the gate, completely out of breath, but still shouting, “I need to get on that plane.” The plane was still at the gate, but the final passenger count was completed, and the door was about to be closed. Sam was tired and didn’t feel like being particularly pleasant. It took little effort to say in a fairly unsympathetic tone, “I’m sorry, boarding is closed.” The customer challenged, “What do you mean, closed? I’m late because of a stupid mechanical problem on one of your other flights. Besides, I can see the plane. It’s still at the gate.” Without any effort, Sam replied, “As I said, boarding is closed.” It also didn’t take much effort to tune out the passenger’s ravings that followed. Sam simply walked away. Sam’s effort and investment were low.
What about the benefits—the return on his investment? Surely Sam could not have liked the ranting and ravings of the irate customer. True, he did not. However, the ranting and raving were not all that negative for Sam, partly because Sam had become quite skilled at tuning them out over time. What were the positive rewards of being Sam-centric, rather than customer-centric? Power and control. The customer did not get on the plane for one simple reason—because Sam said so. In Sam’s book, that was not a bad outcome at all. In fact, it felt pretty good. For one brief moment, Sam had the destiny (or at least the destination) of the customer in his hands. When it came to looking for a good effort/outcome ratio, Sam did not have to walk by faith. He knew from experience that what he already had was good. One ounce of effort (I’m sorry, boarding is closed)—three pounds of reward (I control your life).
Now consider the same situation but with the new customer orientation. Assuming that the customer arrives late enough that it is not within Sam’s authority to get him on the plane, Sam still has to turn down the customer. However, the new Customer 1st strategy asks him to put much more effort into both the words and tone he uses. The customer still shouts, “I need to get on that plane.” Sam still has to say, “I’m sorry, but boarding is closed.” But this time he also has to work hard to convey a tone of understanding and sympathy. The customer still challenges, “What do you mean closed? I’m late because of a stupid mechanical problem on one of your other flights. Besides, I can see the plane. It’s still at the gate.” Now the new investments required by the new strategic map start to pile up. Sam has to think into the customer’s situation and convey even greater sympathy. Sam has to think, “I can understand this customer’s frustration. Anyone would be frustrated in his shoes.”
Still, sympathy alone is not enough. The new organizational transformation requires more. Whereas before, Sam could have just tuned out the customer, now he must put significantly more effort into solving the customer’s problem. To do this well, Sam needs to know what other flights on YAA will get the customer to his destination and what flights on alternative airlines might also work. In the same instant that Sam must process this information, he also needs to say something such as, “I can imagine how frustrating the situation is, and I will do whatever I can to help you get to San Diego. We have another flight in 90 minutes that I think I can get you on. I may even be able to upgrade you.”
For all his extra investment of attitude and energy, what does Sam get? At first, he is not sure. The first time he tries this new approach, he has to walk by the faith he puts in the trainer’s or his boss’s promise. Sam is hoping for the smile and “thank you” that had been promised, but what does he get? The first time he tries this new approach, he gets a customer who fires back, “I don’t care about an upgrade or leaving later, I need to get on that plane. What part of that plane don’t you understand?”
At this point, Sam is tempted to retaliate, but instead, he exercises even more faith in the new destination and path, saying, “I appreciate your frustration, but as I said, I can get you on our next flight to San Diego.” Eventually, the customer relents and agrees to go on a later flight. He even manages a “thank you” before stomping off.
Unconsciously, Sam compares the return on investment ratios (ROIs) of the old and the new. The old way: not much effort and a nice reward of feeling powerful. The new way: lots of effort and not that much reward. Should Sam continue to have faith that the rewards will improve, that customers will smile and thank him over time? Should he continue to believe that eventually their smiles and thanks will translate into better performance for the company and a more secure and rewarding future for him?
Unfortunately, Sam is alone in his thoughts. There was no one else at the gate during the encounter—no boss, no peer. No one was around to say, “Nice job.” No one was there to encourage him to have faith and hang in there.
Repeat this one scene over and over again, and it is easy to see why Sam gets tired (Exhibit 6-1). If Sam gets tired, it is easy to see how the gravitational pull of Sam’s old mental map could overpower the initial momentum of the new. Multiply Sam by several hundred other similar gate agents, and it is easy to see why the new Customer 1st strategy might not transform the organization or its results.
In sum, change efforts fail to finish because people get tired. They get tired in an absolute sense because change requires energy and effort. The more substantial the change, the more energy and effort must be expended in targeting change in individual employees. More important than the absolute level of energy required is the tiredness that comes from the effort of walking a new path that seems to provide an inferior ROI to an individual employee. Employees get tired of walking by the vapor of faith when the concreteness of the past has worked and would continue to work just fine, from their perspective.
Because major transformations of people and organizations are long journeys, people not only get tired along the way, they can also get lost—very lost. Over the long transformational journey, they lose track of where they started, where they are, and where that places them in relation to where they thought they wanted to be and go. Once all this uncertainty sets in and employees feel lost, pressing ahead is not very compelling.
To understand this, we need only return to Sam, our gate agent. When we last left Sam, he was getting tired. It took lots of extra effort to put customers first. In many cases, that extra effort was not yielding extra benefits. Fortunately for YAA, Sam was willing to walk a bit more by faith than the average person. Sam knows from past experiences that seeing usually is believing, but sometimes believing is seeing. He knows that sometimes, you see something only after you first believe in it. He trusts you—his boss—which makes it easier to have faith in the future. Consequently, he persists in his Customer 1st efforts. He gets some encouragement from you, and he pays special attention to peers, who also seem to be trying. Sam tries to ignore those colleagues who have only bad things to say about the whole Customer 1st notion.
Six months go by. Sam has been working on being more sympathetic, using the phrases he was taught, and solving customer problems more efficiently and effectively. He feels as though he has made some progress, but how much? He is not sure. “What about the rest of the organization?” he wonders. “Are they working as hard as I am?” In his immediate work group, Sam knows that he is in the minority. Most of the others are not really taking this Customer 1st thing all that seriously. “Is his work group typical, or are most of the other groups moving down the path? Has any of his effort made any difference to customers? Have the collective efforts made any difference? Are load factors up? Are customer satisfaction levels up?” Sam just doesn’t know where things stand. He is starting to feel lost (Exhibit 6-2), in which case, why should he keep moving forward?
As Sam’s questions suggest, he is concerned both about his personal position and that of the company. He wants to know how far he has come personally. He has a sense that he has made progress, but he is not sure how much distance he has covered and how much more remains. He also wants to know how far the company has come. Sam does not want to be the only one who is putting in all this extra effort. He knows that many of the per-sonal benefits (a more secure future) depend on organizational benefits (better financial performance) and that he alone cannot bring about the desired organizational results. If others are not doing what he is doing, if others have not made the progress he has made, Sam has no hope of seeing the benefits in which he has believed and trusted.
Unfortunately, in YAA no baseline measure was ever taken of customer satisfaction with Sam’s behavior. Neither Sam nor you (his boss) really know how unhappy or happy customers were with Sam before the new strategy got underway. Perhaps more unfortunately still is that no measure has been taken since. Sam feels like fewer customers stomp away unhappy and more customers smile and thank him, but the changes have been so small over so many days that the difference is hard to see.
At the corporate level of YAA, though, there were some baseline measures. For example, corporate had measures of complaints per thousand customers before the transformation. In fact, rank-ing as one of the worst airlines on this measure was a key driver for the strategic change. Since implementing the change, company executives have tracked customer complaints per thousand over the last several months. They also have been able to track the level of repeat business from frequent fliers as one important measure of customer satisfaction. Finally, senior management even had an outside consulting firm conduct some customer satisfaction surveys early in the program, as well as more recently.
Not surprisingly, the results were mixed. YAA was making progress. The number of complaints per thousand was down significantly. YAA had moved from last to fifth best on this measure. However, customer satisfaction was actually down. The consultants explained that this was largely a function of raised expectations. Before the transformation, YAA customers had little reason to expect good treatment. With the launch of Customer 1st and the resulting media attention, customers’ expectations went up. Although YAA employees behaviors toward customers improved, they did not improve as fast as expectations, and as a consequence, customer satisfaction scores actually dropped.
Executives of YAA worried that disseminating this and other information presented too many risks. What if competitors acquired this privileged information? What if employees got disheartened by the drop in customer scores and were too unsophisticated to appreciate the explanation? What if someone leaked this information to the media? These and a hundred other questions like them kept YAA’s executives from letting anyone know how things were actually going.
As Sam’s boss, you’ve heard rumors about how things are going, but no one has shared any concrete numbers with you. When Sam asks about progress, you can say only that you have not heard anything official. When Sam asks about his progress, what do you say? You tried telling him that he is doing fine, but he did not seem satisfied and wanted to know what specifically was going well and what he should work on. Your comment “just keep up the good work” did not put a smile on Sam’s face.
Is it little wonder that Sam is not only a bit tired, but is feeling lost, as well? If this were a physical trek through the wilderness, how long would we expect Sam to keep going if he was unsure of where he was, the progress he had made, or how much farther it was to where he wanted to go?
Even after getting employees to see that the old right thing is now wrong and to recognize what the new right thing is, and even after getting them to believe in the path that will take them from doing the new right thing poorly to doing it well, change efforts often falter. They falter because people get tired and lost and, therefore, fail to finish. They do not go far or fast enough. Those at the controls fail to apply the right power and thrust after takeoff, and gravity is there to pull the flight of fancy crashing back to earth.
The next chapter, Chapter 7, outlines the keys to overcoming this third and final brain barrier. Without this knowledge—even though a change project has broken through the barriers of seeing and believing—there is little hope of achieving a lasting change.
Once Chapter 7 has laid out these key steps, Chapter 8 walks back through the principles and applies them to the challenge of changing to greater growth. With the model firmly in place and integrated with the challenge of growth, Chapters 9, 10, and 11 provide a pragmatic toolkit for leading strategic change.