Business Success: Adaptability Traditional Methods

Traditional Methods

Traditional change methodologies designed for the mechanistic model are typically “rational, top-down, expert-driven, and planned.” And even though nearly three-fourths of change initiatives, such as total quality management or reengineering, fail, most organizational change initiatives still operate under these models.

Adaptability

Total Quality Management 

Total quality management (TQM), for example, is defined by the International Organization for Standardization as “a management approach for an organization, centered on quality, based on the participation of all its members and aiming at long-term success through customer satisfaction, and benefits to all members of the organization and to society.” “One major aim [of TQM] is to reduce variation from every process so that greater consistency of effort is obtained.”

This approach is based primarily on the philosophy of Dr. W. Edwards Deming, pioneered in the 1930s and 1940s. However, he later abandoned the terminology of TQM “because he believed it had become a superficial label for tools and techniques.” “The real work, which he simply called the “transformation of the prevailing system of management,” lay beyond the aims of managers seeking only short-term performance improvements. This transformation…required “profound knowledge” largely untapped in contemporary institutions.”

In a letter to Peter Senge, Dr. Deming (then almost 90) wrote:
Our prevailing system of management has destroyed our people. People are born with intrinsic motivation, self-respect, dignity, curiosity to learn, joy in learning. The forces of destruction begin with toddlers—a prize for the best Halloween costume, grades in school, gold stars—and on up through university. On the job, people, teams, and divisions are ranked, reward for the top, punishment for the bottom. Management by Objectives, quotas, incentive pay, business plans, put together separately, division by division, cause further loss, unknown and unknowable.

Business Process Reengineering

Business process reengineering (BPR) is based on a theory by Frederick Winslow Taylor that variation is waste. It actually makes sense for areas within a business that are highly linear and measured. Originally conceived as a way to reshape processes, it became the rationale for the massive layoffs in the 1990s that had such a disastrous effect on the economy. “Its bias toward static, written rules means it cannot handle the abstract, dynamic thinking and actions of humans in a knowledge based economy.” By imposing actions from outside, it ignores the knowledge of the people within the system and undermines their value in the process of realignment.

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Business Success: Collaboration in Action: A Case Study

Competition has been the driving force behind the U.S. freight rail industry and related public policy since the first railroad began operations in 1830. This is a curious phenomenon for a contiguous “network” of railroads within a transportation “system.” With competition in the marketplace and competition for government attention as the prevailing influences, the system continues to underutilize rail technology, even though railroads move freight on one-third the amount of fuel and consequent air pollution as trucks moving on the highway. Next Michael Sussman, founder of OnTrackAmerica, describes how collaboration is helping to rebuild and strengthen the national railway system.railroad_crossing

Power of Collaboration in the Railroad Industry
By Michael Sussman
Railroads are energy, capital, and space efficient. Yet their market share of an otherwise growing transportation demand has continually declined since the early twentieth century. What is it about this competition-based system that suppresses the use of efficient modes of transportation?

Competition, as a commercial and regulatory principle, often rewards better-operated companies. But it is usually ineffective at preventing companies that enjoy more financial and political clout from dominating the marketplace. How often in recent years has that domination had a detrimental impact on our greater communal interests? The country needs a rail system that advances in concert with our national needs; instead, it has developed according to its corporate needs.

In 1995 it became apparent that many smaller freight railroads across America were under-supported by policy makers and lending institutions. This threatened the long-term economic vitality and overall quality of life in America.

The railroad industry was cost-cutting by consolidating srvice to higher-volume components of the rail system. This path, while leading to greater profitability for the industry, contributed to a far less efficient transportation system than was called for by post–World War II demographic and business trends. The years since have been characterized by dramatic population growth, steadily increasing freight traffic, ongoing growth of rural and urban communities, and the proliferation of small businesses, distribution centers, and time-sensitive shipping needs. The trucking industry, in spite of its inherent fuel disadvantage, has filled this service gap ably. But with the increase in fuel prices and its uncertain future availability, the question becomes “Now what?”

To satisfy the imperative for collaboration between government and private sector, a broad network of relationships with government representatives at the federal and state levels was established. The success in bridging the public-private sector communications divide led to the founding of OnTrackAmerica, a nonprofit organization dedicated to creating new methods and forums for the multistakeholder development of better policies and more effective private initiatives.

This collaborative approach has proven to be been highly effective in creating financing breakthroughs for smaller freight railroads. Project and industry funding options typically are offered by individual entities competing against other funding sources. This alternative approach leads to benefit for all involved by facilitating cooperation among multiple banks and government agencies. In practice, it has resulted in significantly higher capitalization levels with better terms than if those funding sources were made to compete for the entire project.

Even the clients’ existing bankers, who previously had declined further lending, are included in this collaborative approach. Rather than being pitted against other banks, the current bank is urged to offer what it can and what it prefers, as its part of an overall strategy for helping the client grow.

In the case of the Iowa Northern Railway, a corn-hauling railroad that was suddenly in the heart of the alternative energy belt, additional capital was required that outstripped the lending limits of its local bank. A collaborative approach provided bankers at Iowa’s Lincoln Savings Bank with the understanding and assurance they needed to expand the railroad’s credit from $150,000 to over $1.5 million. This facility became the anchor for $30 million in additional funds secured from a Federal Railroad Administration loan program, a Chicago regional bank, several equipment lenders, and even the railroads’ customers and suppliers.

The basic orientation of competition is toward individual gain. Yet so much of what occurs in business involves multiple parties, with all parties benefiting if success is shared. Shared benefit and the resulting gain are the foundation of collaboration. What if our “for individual gain” concept of competition was reoriented to a competition (or striving) to make the greatest contribution to the community? That model of competition would naturally lead to a refocus of business plans and activities toward “collaboration for the common good.”

While competition is a useful tool in certain elements of regulating private interests in the marketplace, it can be a dangerously wasteful force in public policy discourse and formulation.

Competition, unfortunately, is now the overarching principle of interaction, not just between political parties but also among agencies, legislative offices, committees, think tanks, universities, and other entities that influence and produce public policies. The marketplace of ideas should continue to accommodate competing ideas. But the process for thinking and teasing out competing ideas requires our best collaboration.

Our world and our economies are undergoing changes at a rate that demands we upgrade public-sector management processes. OnTrackAmerica has taken on the challenge of bringing forward a new method for large-scale industrial policy, planning, and implementation. By lowering antagonism and increasing trust among businesspeople, academic and industry experts, the community, and policy developers, the potential emerges for unveiling the best solutions and resulting public policy. Just as cooperative multimodal relations among transportation providers are now clearly needed to advance the efficiency of the overall system, collaboration among public policy creators is the necessary ingredient for improving our national transportation policy.

Design improvements for intelligence and efficiency at the level of governance do not have to wait for the crucible of crisis. No law or regulation mandates that business must depend only on competitive, vested-interest lobbying of government legislators and policy makers. All well-intentioned citizens are entitled to advance leadership and cooperation in government and commerce. Contrary to what is expressed in popular culture, many people in Washington and beyond are anxious to participate in productive collaborative engagement. A new model of leadership that convenes and facilitates that collaboration is the missing ingredient.

Leadership Techniques: Using Storytelling

Story telling…is one of the world’s most powerful tools for achieving astonishing results. For the leader, storytelling is action oriented—a force for turning dreams into goals and then into results.

— PETER GUBER of Mandalay Enter Group

Storytelling has always been a powerful method for teaching and inspiring. In many cultures, it is the primary method of sharing and retaining knowledge through the generations. It is also an effective way to communicate to various stakeholders at every level of the organization.

A gifted salesperson gains acceptance by telling a story that sets a product or service up as the hero. A manager rallies direct reports to make short-term sacrifices as they work towards a long-term goal. A talented chief executive translates the company mission statement into an emotional narrative that attracts investors and partners while inspiring employees. When a problem arises, it is also a powerful technique for creating calm and inspiring hope.

Four Truths of Storytellingstorytelling

Unlike fantasy storytelling, the practice in business is built on truth and authenticity. To be effective, the storyteller must be seen as someone with integrity. According to Peter Guber of Mandalay Entertainment Group, there are four kinds of truth found in effective storytelling.

Truth to the Teller

As mentioned earlier, authenticity is critical to the success of the story. The storyteller “must be congruent with his story—his tongue, feet, and wallet must move in the same direction. The consummate modern shaman knows his own deepest values and reveals them in his story with honesty and candor.”

The power of storytelling comes from its ability to tap our emotions. Whether you are aware of it or not, most opinions are formed, decisions are made, and reactions are triggered at this level. So the secret is to get to the heart of the listener. To do this successfully, the storyteller must speak from the heart.

Truth to the Audience

Storytelling may evoke a sense of leisure. However, when using this technique in business, the storyteller must consider that time may be the scarcest resource. So a commitment to efficacy and value is the essence of this truth.

The goal of the process is to induce an altered emotional state. This requires that the storyteller build suspense and stimulate curiosity. The storyteller can take a few steps to assist the process:

• Practice on a group of colleagues who still need convincing. Study the nonverbal responses to detect the emotional power of the story.
• Identify the audience’s emotional needs and deliver with accuracy and integrity. Manage expectations throughout the story, and conclude with an unexpected twist or insight that leaves the audience convinced and delighted.
• Involve the audience in the storytelling experience. Guide the listeners to see themselves as the heroes of the story. Elicit suggestions or strategies as you guide them to your conclusion.

Truth to the Moment

Never tell a story the same way twice. Given the dynamic nature of business, as described in Chapter 1, as well as the audience, an effective story is one that sounds different each time. In addition, the more the storyteller involves the audience, the more unique the process becomes.

There is an inherent paradox here. A great storyteller is both well practiced and flexible enough to improvise. A skilled storyteller can vary the story without “losing the thread of the focus.”

Truth to the Mission

A great storyteller conveys that the mission of the story is greater than the self. To evoke a real desire for change, the storyteller has to weave a tale that advocates for the good of all. This brings passion and emotion to the group to take action.

Even in today’s cynical, self-centered age, people are desperate to believe in something bigger than themselves. The storyteller plays a vital role by providing them with a mission they can believe in and devote themselves to. As a modern shaman, the visionary business leader taps into the human learning to be part of a worthy cause. A leader who wants to use the power of storytelling must remember this and begin with a cause that deserves devotion.

The Heart of Storytelling

Technology has provided many new venues for storytelling. Beyond the physical gathering of people, stories are shared through print, radio, television, and movies.
State-of-the-art technology is a great tool for capturing and transmitting words, images, and ideas, but the power of storytelling resides most fundamentally in “state-of-the-heart” technology.

At the end of the day, words and ideas presented in a way that engages listeners’ emotions are what carry stories. It is this oral tradition that lies at the center of our ability to motivate, sell, inspire, engage, and lead.

Business Skills: The Art of Listening

Listening may or may not be an “act of love” or way to “tap into people’s 

listeningdreams,” but it sure as hell is (1) an uncommon act of courtesy and recognition of worth from which (2) you will invariably learn amazing stuff…and (3) it will build-maintain relationships beyond your wildest dreams.

—Tom Peters, best-selling author

To be a strong leader, you must be able to influence others. In highly complex organizations, everyone plays the role of leader from time to time. And communication is an essential mechanism for the exchange of knowledge and intentions. Mastering the art of listening is essential to the success of all participants in an interdependent organization.[i]

Those who are good listeners greatly increase their influence on others. Although listening is passive in nature, when someone feels heard, he or she feels inspired and validated. Sadly, many leaders fail to listen because they are biased, impatient, bored, or rigid in their views. This prevents the critical exchange of knowledge, insights, and intentions.

Listening skills are rarely taught. Communication training in business schools typically focuses on argument and persuasion. These skills fit the old management model with its top-down, authoritative approach.  Managers had little reason to listen. They communicated down the chain of command, and the workers followed orders.

As stated earlier, as organizations embrace new business models, listening is becoming an integral part of the communication process. Two-way interaction helps to clarify and prevent confusion, aid comprehension, and improve connection.

Listening goes beyond just hearing. Hearing usually triggers a reflexive response without any thought or reflection. Listening is deliberate and requires interpretation. A good exercise in listening is to ask recipients to reflect back what they heard.

Bad listeners:

  • Interrupt. They are impatient and may like to dominate the conversation.
  • Are inattentive. They are easily distracted, perhaps even multitasking.
  • Exhibit mind-drift. They are easily bored, perhaps even self-centered.
  • Are biased. They have strong marginal views (out of the mainstream), and cannot expand their thinking.
  • Have closed minds. They have already drawn a conclusion or stay with their own beliefs.

Good listeners:

  • Are quiet. They talk less than the speaker.
  • Are patient. They never interrupt the speaker.
  • Are unbiased. They avoid prejudgment.
  • Are curious. They ask clarifying and open-ended questions.
  • Pay attention. They sit attentively, take notes, concentrate.
  • Employ nonverbals. They smile, maintain an open posture and eye contact.
  • Reflect back. They verify and reinforce what was heard through summary comments.

Skillful listeners are natural leaders in the new business landscape with their ability to influence, engage, and inspire.

Come back for more business intelligence and change management focused blogs by The OLIVIAGroup! Feel free to comment with questions, insights, or additions to this post. 


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[i]             William F. Kumuyi, “Sir, Listen Up!” 2008, http://findarticles.com/p/articles/mi_qa5391/is_200806/ai_n27900527/print?tag=artBody;col1.