4 Simple Truths About Leading Change – Part 2

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 weeks I have looked at 4 Simple Truths About Leading Change – Part 1 . Today we are going to look at points three and four.

The virtue of vuja dé is that it reframes how organizations make sense of their situations and build for the future. But that’s different from a wholesale break with the past. For even the most determined change agents, history and tradition can be unrivaled sources of strength—as the foundation for an enduring sense of purpose that newcomers can’t begin to copy; as a reservoir of professional wisdom that gets more valuable as times get more volatile; as an engine of expertise that competitors can’t hope to match; as a reminder of founding principles that never go out of style, regardless of how styles change.

I’m convinced that one of the big reasons for the failure of so many change programs is that by focusing almost solely on what’s wrong with their organizations, and by importing off-the-shelf strategies devised by outside experts consumed with what’s new, leaders undervalue what’s right with their organizations, and overlook home-grown strategies rooted in the wisdom of the past. In his first inaugural address, President Bill Clinton offered his perspective on national renewal. “There is nothing wrong with America,” he argued, “that cannot be cured by what is right with America.”

That sentiment speaks to the renewal of companies as well as countries—it’s a political insight with big implications for making change in business. The transformation of the Girl Scouts of the USA is a case study of just this point. When CEO Kathy Cloninger took charge membership was stagnating, traditional programs felt out of sync with demographic trends, and the brand, while ubiquitous, was uncool. In other words, based on the track records of most big organizations in most fields, conditions were in place for years of slow decline, or, at best, modest progress. Instead, the CEO and her colleagues devised one of the most ambitious, far-reaching, fast-paced change programs I have seen—an agenda for transformation that should be the envy of CEOs in every field.

How did the Girl Scouts experience so much change so quickly? When posed this future-focused question to Kathy Cloninger, she immediately turned to the past. Sure, she and her colleagues relied on demographic surveys, competitive mapping, and market research—all the tools of “modern” management. But some of their most eye-opening insights came from getting re-immersed in the ideology, philosophy, and “business plans” of Juliette Gordon Low, the social activist who started the Girl Scouts in 1912. The CEO and her colleagues came to understand what a firebrand, risk-taker, and entrepreneur their founder was—and this appreciation for the group’s hard charging history created a sense of permission to push harder for far-reaching change. What’s past really can be prologue.

Indeed, as Cloninger and her colleagues wrestled with an array of controversial decisions, one of their guiding mantras became WWJD—that is, What Would Juliette Do? “Even though we use the word ‘transformation’ it’s not like we’re breaking from our historical roots,” the CEO explained. “Juliette Gordon Low was a revolutionary. She founded this movement at a time when women didn’t have the right to vote. Her idea of what girls could and should be doing was way out on the cutting edge. Juliette’s work was much more ‘out there’ than what this organization eventually became.”

It is also about caring more than the competition. In his inspiring book Rules of ThumbFast Company cofounder Alan Webber identifies two questions that demand the attentionof leaders. The first is familiar: What keeps you up at night? What are the problems that nag at you? The second is less familiar, but even more important: What gets you up in the morning? What keeps you and your people more committed than ever, more engaged than ever, more excited than ever, particularly as the environment around you gets tougher and more demanding than ever?

That’s a question every organization needs to ask and answer if it hopes to prosper in an era of hyper-competition and nonstop dislocation. Even the most creative leaders recognize that long-term success is not just about thinking differently from other companies. It is also, and perhaps more importantly, about caring more than other companies—about customers, about colleagues, about how the organization conducts itself in a world with endless temptations to cut corners and compromise on values. For leaders, the pressing question isn’t just what separates you from the competition in the marketplace. It’s also what holds you together in the workplace.

Consider the transformation of DaVita, Inc., one of the great turnaround stories of the last decade. Talk about a tough business—DaVita provides about one-third of all of the kidney-dialysis treatments in the United States. Back when CEO Kent Thiry took charge, the company was on theverge of bankruptcy. It had revenues of $1.4 billion, losses of $56 million, and a share price of about $2. Less than ten years later, it had revenues of $5.7 billion, net income of $374 million, and ashare price approaching $60. It is one of the great business comebacks I’ve seen— from a market cap of $200 million to more than $6 billion today.

What’s important, though, is that Thiry turned around the company by turning around the culture. One of the first messages he sent to employees was: “We are going to flip the ends and means of this business. We are a community first and a company second.” Translation: If the people of DaVita could figure out how to treat patient’s right, and treat each other right, then the business would right itself. And that’s precisely what happened.

Life at DaVita is filled with symbols, rituals, and traditions that bear little resemblance to life inside conventional organizations. There’s an official company song (“On DaVita,” to the tune of “On Wisconsin”), which employees sing with great relish. The wildly spirited Nationwide Meeting, in which thousands of employees celebrate awards, mourn the death of patients, and connect with the emotional side of their work, is truly something to behold.

Why do Thiry and his colleagues bother with such outsized gestures? Because the demands on the workforce are so relentless. The company’s 35,500 employees care for more than 116,000 patients, which means they provide more than 16 million treatments per year. That’s 16 million opportunities to overlook a symptom, misdiagnose a problem, or otherwise make a small mistake that could have deadly consequences. It’s hard to make a purely business case for people to care as much as they need to care in order to deliver great service. You have to be motivated by something deeper— a sense of commitment not just to patients, but also to one another.

Paul Romer, the influential economist, is celebrated within the profession for his vital (albeit highly technical) contributions to our understanding of the relationship between new ideas, technological change, and growth. To us civilians, though, he may best-known for a passing quip that he made to New York Times, a one-liner that has become the mantra of the moment for everyone from the White House to Silicon Valley: “A crisis,” Romer famously said, “is a terrible thing to waste.” 

That’s the spirit that animates the four principles I sketched out, over the past two weeks. Change agents who aspire to make a real difference inside their organizations simply cannot use the long shadow of economic crisis and slow recovery as an excuse to downsize their dreams or stop taking chances. The challenge for leaders in every field is to emerge from turbulent times with closer connections to their customers, with more energy and creativity from their people, and with greater distance between them and their rivals.

The organizations that opened my eyes and captured my imagination did so because they offered a compelling alternative to a demoralizing status quo—the only way to create a compelling future for themselves.

Here’s hoping that, following their example, you don’t let this crisis go to waste

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