5 Truths of Corporate Transformation

Over the last week I have been taking in everything Africa. Staying firstly in Sth Africa and now the Congo, I have been constantly amazed by the company’s transformation and in particular Nelson Mandela. Still a long way to go yet if the countries can mirror their former leader’s change then there is hope.

Mandela was not perfect but made the ultimate sacrifice by putting his people before himself. He embraced the constraints imposed on him via being in jail for 27 years. He remained discovery driven and reminded himself “I am the master of my fate. I am the captain of my soul.” He entered jail an angry man but he emerged an enlightened one. He forgave his oppressors and subscribed to the ‘sum of us’. 

If these are the truths that propelled Mandela, I have attempted to seek the truths that propel Corporate Transformation.

Roger Martin the esteemed author of ‘The Design of Business’ bemoaned that the “role of big companies is to turn great people into mediocre organisations.”My goal of the past few blogs is to present a range of settings in which troubled organisations figured out how to learn from the past, and break from convention, to make creative changes. But the real value of exploring stories of transformation at these organisations is that they can equip you to write a more compelling story for your organization.

If what you see shapes how you change, and where you look shapes what you see, then my hope is that seeing what these leaders have achieved will help you achieve your agenda for reform and renewal. Specifically, my hope is that it will allow you to reckon with the five truths of corporate transformation. Because the truth is, the work of making far-reaching change in long established organisations is the hardest work there is.

That’s why the first challenge of change is originality – for leaders to see their organisations and its problems as if they’ve never seen them before, and with new eyes, to develop a distinctive point of view on how to solve them. All too often, especially in long-established companies long-held expertise gets in the way of ground-breaking innovation. As Cynthia Barton Rabe warns, in her argument on behalf of zero-gravity thinkers, “What we know limits what we can imagine.” But we’ve seen time and time again it’s the leaders and change agents who see a different game that produce the best results.

To me that’s the enduring lesson of the one of a kind turn around strategy developed by Swatch’s founder Nicolas Hayek. “Everywhere children believe in dreams. And they ask the same question. Why? Why does something work in a certain way? Why do we behave in certain ways? We ask these questions every day. People may laugh, but that’s the real secret behind what we have done. We kill too many good ideas by rejecting them without thinking about them, by laughing at them.”No one is laughing at Nicolas Hayek today – although few of his colleagues are copying his playbook either.

That’s why the most effective leaders I know aren’t big fans of ‘benchmarking’ the competitors – a commonplace exercise for inspiring change that often serves to reinforce the problems of tunnel vision previously discussed. How enlightening is it, really, to learn from the ‘best in class’ in your industry, especially if best in class, isn’t all that great? So why not learn from innovators outside your industry as a way to shake things up and leapfrog your rivals? But looking for ideas in unfamiliar fields is not just about relocating what works from one industry to another. It is also (and more significantly) about reimagining what’s possible in an industry.

Lexus as we’ve seen, got some of it’s most powerful ideas for customer service by studying luxury hotels and Apple’s retail environment.

In its Disruption Philosophy, TBWA uses what it calls the ‘CEO Hat’ exercise to encourage organisations afflicted with tunnel vision to develop their peripheral vision. Participants search for out of the box answers to important strategic questions by reaching into boxes filled with hats from breakthrough organisations such as Virgin and southwest Airlines – and then adopt the mind-set of those free-thinking companies as they think about the questions with their clients.

Psychologist Jerome Broner, in his collection of essays, In Search of Mind, has a pithy way to describe what happens when the best of the old informs the search for the new. The essence of creativity, he argues, is “figuring out how to use what you already know in order to go beyond what you already think.”The most effective leaders I’ve met don’t simply disavow the pass. They reinterpret what’s come before to develop a line of sight into what comes next.

Sometimes, the most rewarding path to the future is built on a return to first principles, “Over the last few decades, we got known as being nicer and nicer instead of being cutting edge and revolutionary,”concludes Kathy Cloniger, who retired as CEO in 2015 and wrote a book called Tough Cookies. “We got confused about who we were. In some sense, we are simply returning to the spirit of the founder.”

It’s one thing for leaders to use fresh eyes to devise a new line of sight into the future. It’s quite another to muster the rank and file commitment to turn a compelling vision into a game changing performance.

Even Interpol’s Ron Noble, who sits in the middle of the urgent struggle against terrorism, has struggled to energise countries around the threat of lost, stolen, or forged travel documents. “If you look at history, he said, governments and law-enforcement agencies respond with the greatest sense of urgency to failure of epic proportions, much more so than they rise to opportunities. So I have to give then hypotheticals: Can you imagine this scenario? Can you imagine this disaster? How would you justify it to your people? Then I tell them stories, show them cases of Interpol has done to prevent those disaster. I am in the persuasion business – persuading governments to act on future threats. Stories are a powerful way to persuade.”

The opposite of urgency, after all, is complacency and as Professor John Kotter explains, “Almost always, complacent individuals do not view themselves as complacent. They see themselves as behaving quite rationally given the circumstances.”

Sure, it is the job of leaders to be effective and engaging teachers – to rally their colleagues around a distinctive set of ideas and a well-designed strategy for bringing those ideas to life. But the best leaders I’ve met, regardless of their industry, experience, or personal style, have also been insatiable learners.

The doctors and administration of Virginia Masons have learned about new ways to run a hospital from the ways in which Toyota builds cars. 

The marketers of Pedigree learned new ways to position their brand and connect with customers by relearning the brand’s history and getting reacquainted with the ideas and values of its founders.

It goes back to the well worn mantra: “If all you ever do is all you’ve ever done, then all you’ll ever get is all you ever got.” That’s true for organisations and it’s true for people who run organisations. In a business environment that never stops changing, leaders can never stop learning.

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