4 Simple Truths About Leading Change – Part 1

We are living through the age of disruption. You can’t do big things if you’re content with doing things a little better than everyone else or a little differently than how you did them before. In an era of hyper-competition and non-stop dislocation, the only way to stand out from the crowd is to stand for something special. Today, the most successful organizations don’t just out-compete their rivals; they redefine the terms of competition by embracing one-of-a-kind ideas in a world filled with me-too thinking.

That’s why, over the past two years, I immersed myself in the struggles and triumphs of organizations that are achieving dramatic results under some of the most trying conditions imaginable. I have looked at the strategies and tactics of a diverse collection of innovators in a wide varietyof fields: a high-profile Internet company that reinvented customer service for the digital ageand invented a powerful brand in the process; the irrepressible billionaire who rescued the Swiss watch industry from oblivion and transformed it into a global juggernaut; a 95-year-old hospital, based in one of America’s most distressed cities, that has redesigned how it works and what patients experience; the leader of one of the world’s most famous crime-fighting organizations, who has visited 125 countries in a crusade to transform how police respond to the threats of the 21st century.

These innovators were not paralyzed by the degree of difficulty associated with their agenda. In fact, they were energized by it. They were making big things happen in new ways—unleashing innovations and driving transformations that will shape the fortunes of their organizations and the future of their fields. In the process, they developed a set of principles that define the work of leaders in every field. There are four of those principles—simple rules for transforming your company, shaking up your industry, and challenging yourself.

This week we will look at the first two.

Or, to use a term that’s become popular in creativity circles, the best leaders demonstrate a capacity for vuja dé. We’ve all experienced déjà vu—looking at an unfamiliar situation and feeling like you’ve seen it before. Vuja dé is the flip side of that—looking at a familiar situation (an industry you’ve worked in for decades, products you’ve worked on for years) as if you’ve never seen it before, and, with that fresh perspective, developing a distinctive point of view on the future.

The cutting-edge marketers at TBWA Worldwide, the celebrated Madison Avenue agency, have learned to develop “fresh eyes” to look for disruptive ideas about what comes next. As marketing specialists, TBWA has designed memorable campaigns for some of the most glamorous brandsof the last few decades, from Absolut to Adidas to Apple. As creative strategists, TBWA has invented a blueprint for organizational renewal it calls “Disruption Days”—wide-open, free-wheeling, yet highly structured examinations of the assumptions, practices, and behaviors that stand in the way of progress for a brand, a company, or an industry.

TBWA chairman Jean-Marie Dru, the figure most closely associated with the agency’s disruption model, is adamant about the deep-seated changes it is designed to provoke. The process “is at once a method, a way of thinking, and a state of mind,” he says. “It is a matter of questioning the way things are, of breaking with what has been done or seen before, of rejecting the conventional.”

TBWA has conducted more than 3,000 Disruption Days around the world and the methodology has improved and evolved over the years. But certain techniques remain central to the process. For example, TBWA has developed a list of 60 what-if questions to guide strategic rethinking. What if we stop focusing on the traditional competitors and focus instead on the source of business (often indirect competition)? What if we reconsider using strategies usually considered taboo for this category? What if, instead of differentiating the brand we redefine the category experience?

What if we reverse the logic of things? The specific questions, of course, are less important than the spirit, which is to challenge conventional wisdom.TBWA also uses what it calls the “CEO Hat” exercise to encourage organizations with tunnel visionto develop a new line of sight. Participants search for out-of-the-box answers to big strategic questions by reaching into boxes filled with hats, shirts, and other paraphernalia from breakthrough organizations such as Apple, Virgin, Target, and Southwest Airlines—and then adopt the mindset of those free-thinking companies as they think about the questions with their clients. “We define possible strategies for companies through the eyes and values and under the leadership of a different CEO,” explains Laurie Coots, TBWA’s chief marketing officer. “The sheer act of being free to think like somebody else gives you permission to generate ideas that you might not get to otherwise.”

That’s the lesson of the “CEO Hat” exercise. The most creative leaders I’ve met don’t aspire to learn from the “best in class” in their industry—especially when best in class isn’t all thatgreat. Instead, they aspire to learn from innovators far outside their industry as a way to shake things up and leapfrog the competition. Ideas that are routine in one industry can be revolutionary when they migrate to another industry, especially when those ideas challenge the prevailing assumptions that define so many industries.

Consider the transformation of Virginia Mason Medical Center (VMMC), a 90-year-old hospital in Seattle, Washington with 400 doctors and nearly 5,000 employees. For years, despite a rich history, Virginia Mason struggled with deteriorating finances, inefficient processes, and uneven quality. Its new CEO, Dr. Gary Kaplan, didn’t focus on what other hospitals were doing. (Many of them, after all, had the same problems.) Instead, he became fascinated with the legendary Toyota Production System. Eiji Toyoda had used the Toyota Production System to drive Japan’s flagship company to global prominence—and Kaplan came to believe that his organization could borrow methodologies from the automobile industry to fix its problems.

So the CEO began leading 14-day trips to Japan in which doctors, nurses, and hospital staffers get exposed in the intricacies of how Toyota organized work, tracked quality, and solved problems.

There were classes and meetings, of course, but a defining piece of the experience is when doctors, nurses, and hospital staffers spent several days working eight-hour shifts in a factory. They staff the lines, do the work, and, like their Japanese counterparts, are expected to use the Toyota Production System to solve problems. “This is a real eye-opener for the team,” Kaplan explains. “We stick a bunch of doctors on an assembly line. We use the methods and tools we’ve learned, we come up with suggestions, and the Japanese put them into place! They did things they never thought they were capable of doing. It changes the way you think.” 

Years of in-depth study of Toyota have transformed Virginia Mason. The hospital eliminated millions of dollars of inventory, cut the time required to deliver lab results by 85 percent, and reduced
staff walking distances by 60 miles per day. One frontline team redesigned how nurses interact with patients and with each other—allowing nurses to spend 90 percent of their time at the bedside, as opposed to 35 percent before. Indeed, the student is now a teacher: The hospital has become so proficient at Toyota’s techniques that it created an institute to show other companies how to practice what it has learned.

Next week we will look at the remaining two truths

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