88% of change initiatives fail. What’s up with the other 12%?
In this webinar, Vern Oakley (CEO, Tribe Pictures and Author, Leadership in Focus) and his special guest Campbell Macpherson (Author, The Change Catalyst) present a high-level discussion on leading change and what it means for today’s business leaders.
– How one person can be a change catalyst
– Why culture is so crucial to change
– Why emotion trumps logic when it comes to change
– Why clear communication is key and how best to achieve it
This webinar is for leaders and those who support leaders tasked with steering a large ship in the open ocean.
Hello, hello everyone. Welcome to today’s webinar, Courage, Communication, & Change, where we hope to have a high level discussion on leading change and what that means for today’s business leaders. I’m Scott McDowell, director of marketing here at Tribe Pictures, and I will hand it over to today’s cohosts in just a second, but I wanted to get a few small pieces of business out of the way first. First of all, thank you for coming. We do recognize that you could be doing a lot of other things on your lunch hour today, so I appreciate the fact that you’re here. The other thing is, there will be a replay available in the next few days, and I’ll be sure to send out any resources with links and other ephemera that we discuss in today’s webinar.
By the way, there is a questions pane here in the GoToWebinar control panel on your right, you can see a questions box. Feel free to use that, we will hope to have some Q&A towards the end of today’s webinar. It should last about 40, 45 minutes, and then maybe a few questions after that, we’ll see, but we’d like to keep it under an hour in total, get you back to your day. Now I’d like to introduce your hosts for today’s webinar, Vern Oakley, who is the CEO and creative director of Tribe Pictures. He is a 30-year veteran of using video to communicate in all sorts of ways, and the author of Leadership In Focus, which I should add was recently awarded a gold medal in the Axiom Business Book Awards. Our special guest host today, Campbell MacPherson. Campbell MacPherson has been enabling organizations to successfully instigate sustainable change for almost 30 years across the globe. He has a remarkable wealth of experience in a variety of industries and business disciplines.
He’s been an advisor to CEOs and leadership teams. He’s been a board member, strategy director, HR director, marketing, e-business head, and internal change leader. What hasn’t he done? Campbell is the author of a new business book published by Wiley called The Change Catalyst: Secrets to Successful and Sustainable Business Change, and it has been called essential reading for CEOs and leaders of change. It is a finalist in the 2018 Business Book Awards, as well. He’s also an accomplished, insightful, and acclaimed speaker, which is why we asked him to join us this afternoon, and his website, by the way, is changeandstrategy.com. We are very pleased to welcome Campbell to today’s webinar, and on that note, I will pass it over to you, Campbell and Vern.
Great, thank you Scott, I appreciate the introductions, and with that long list of accomplishments, I can say that the one thing that Campbell has not done is he has not been on a webinar, so we’re very lucky to have him today.
Well, I met him at a mergers and acquisition conference in New York, and he was the lunchtime speaker, and if any of you have been around a bunch of private equity folks and investment bankers and a whole delegation from China, and they dropped their phones and they weren’t texting for almost an hour, so he’s very entertaining, and I’m excited to be here co-hosting with him.
Well Vern, I’m thrilled to be here. That was quite an introduction, thank you Scott.
Change is inevitable. I know for me, this slide is very, very powerful. At the same time, it is a, “Duh, wow, of course I knew that.” I kind of feel that we need to get beneath it and talk about how people can bring that into their gut and how they can really understand it. Do you want to talk about it?
Yeah, absolutely. Yes, it is a bit of a duh, I like that, I like that. The first time I heard this was in a recording of Benjamin Disraeli, who was UK prime minister about 150 years ago, he said “Change is inevitable, change is constant.” That was 150 years ago. What he neglected to mention, obviously, was the pace change is just being accelerated. I think the change that we’ve all seen since he uttered those prophetic words would’ve left him dumbfounded, really. I mean the change we’ve witnessed in the last few decades, just with globalization of the internet, which has transformed our lives and transformed our business lives forever. We’re even now living longer, life expectancy has doubled in the last 100 years, and now exceeds 80, even more if you’re wealthy.
I think all of these changes are nothing compared to the changes that we’re about to see in the next 10 to 20 years, which is why change is inevitable.
I think about change and I think about my grandfather, who was a young boy in Hastings, England. He came to America with a steamer truck and his tools, he was a carpenter. In his lifetime, he witnessed the first car on the road, the transition from horses to cars, and later in his life he’d witness the first man on the moon. That amount of change, that took 60, 70 years in his lifetime, is now happening every five to 10 years. The velocity of change has increased, and that’s where I think the story is.
I agree with you and I think it sets to really rocket, it’s really accelerated. Particularly with AI, and with AI I mean obviously artificial intelligence, but also augmented intelligence. Not only do computers remove a lot of white collar workers around the world and businesses today, but it will also help us do our jobs even better. Artificial intelligence currently can select, can identify cancers better than the best oncologists, but it doesn’t put oncologists out of work. It just makes them even better at what they do. I believe you’re familiar with Ray Kurzweil from Google and winner of the ’99 US National Technology and Innovation Award.
In his book a few years ago, he predicted that 2029 manufacturing, agriculture, and transportation sectors in our countries will be almost entirely automated, and I think he might have been a bit conservative because can you imagine in the not too distant future, how many lawyers will we need and what will they be doing? Financial advisors, bankers, investment professionals? In every industry, the employee model is going to be turned on its head.
It’s funny, because today I was trying to arrange an appointment with a business colleague and he said, “Talk to my assistant, Amy.” I had my assistant, who is a real live human being, Sabrina, she’s amazing, and it turns out that his assistant was an AI assistant scheduling his life.
That’s fabulous. That’s fabulous. The way we work has got to change, because the job for life days are over, the career for life days are also gone. We’re all going to have multiple careers during our lifetimes, but I think all of the change that’s going on in the next decade will mean that all of us will be working, several of us will be working more part time, more self employed. Our organizations are going to have to change massively to cope with this.
Yeah. I remember at the lunch, Dr. Kai-Fu Lee was giving us some incredible statistics. Do you want to share those?
He actually said that 50% of all white collar workers today will be replaced by machines in the next decade, and then he laughed.
Which I thought was a bit rough, but I’m not as pessimistic as Dr. Lee. I think that augmented intelligence is the future, it’s working out how technology can make us even better at our jobs.
I like that concept, because it’s like, it’s not the AI versus the humans, because in the future I think that AI is going to be able to win. It’s the humans plus AI that’s going to make the difference.
Exactly. I agree. With all this wonderful change, the bad news is you can now see on your screen is that 88% of change initiative fail. They fail to deliver the outcomes they set out to achieve. I think I’ll just pause for a second to let that sink in.
We’ve had about 25 people just leave the webinar, Campbell, thank you for depressing every one.
Look, I’ve only just begun. [crosstalk 00:08:57] is the [inaudible 00:08:58], I’ve found this from [inaudible 00:09:01], who has a great report in early 2016 that they came up with. They basically, I think they went through 250 large size organizations and found that 88% of the change initiatives fail to deliver the outcomes they set out to achieve. Then I did some research and a similar number of business strategies, mergers and acquisitions, all suffer the same fate. I find that … at first I found that gobsmacking, but the great thing is that I then knew I had the hook for the book. The key question, obviously that comes out of that is slide three, and that is, why?
Well, I have to do a little spoiler alert here, so please stay with us because we’re going to tell you how you can make it successful, how you can be part of that other 10 to 12%.
The research I did in putting the book together is I found 10 significant major key reasons why [inaudible 00:09:56] and the first one, the reason why I started the book why it fails, is we all learn from our mistakes. Actually, we learn even more from other people’s mistakes, to be perfectly honest, but the number one reason why change doesn’t succeed is that people just don’t like change. In fact, I think we hate it. I think when it comes to change, particularly in the workplace, we have an instinct and desire to cling on to the status quo.
I think that’s really true, and I’ll bring back the title of this, encourage, one of the things in order to deal with the fact that people don’t like change is we need courage. My favorite quote about that is John Wayne. Courage is being scared to death and saddling up anyway. I know with some of the changes coming down the pipe, artificial intelligence, big data, robotics, a lot of us can be scared, myself included, but we’re going to have to saddle up anyway and move on.
As change leaders, Vern, we really have to go there. That’s one of our challenges, we have to help our people overcome the fears that we see on this slide. Fear of failure is perhaps the number one fear in business. Not only do we fear that we might try and fail as employees, but we feel the consequences of the failure. As change leaders, we need to make sure there are no adverse consequences to failure, and failure becomes a learning experience. One of the key fears on this list is fear of the unknown, and really it’s a case of understanding that people have this fear, this is an innate human fight or flight survival instinct. We’re basically tribal beings, and you can see this in business when you take someone out of one team and put them into another. You can see that they instantly start to throw rocks at the other team.
I’m glad we brought this thing about the audience, because when we do our work that’s where we start. We do communication and video and strategy that all comes out into a film that’s meant to make people to think something or to do something or to feel something or to buy something, or to buy into something, and a lot of that has to do with being empathetic to where they are at that moment in a continuum. Are they afraid, are they excited? Is there a new product? Is there a takeover? Once we understand the context of that, we can really help with the communication problem.
I agree, and I think you said the keyword there, empathy. Empathy is critical, as business leaders and as leaders of change, we can only succeed if our people succeed. We can only deliver successful strategies through our people, and that comes from completely understanding and genuinely communicating with our people. I’ve seen so many organizations go through major change where the CEO things he or she can stand up and just broadcast communication. This is going to be the change, it’s going to be fabulous, thanks very much. Get back to your day jobs. The big broadcast emails that answer all questions, and it’s just not enough, as we’ll discuss in a couple of slides’ time.
Let’s figure out what else, what other things, what lessons could we learn from mistakes that others have made?
Here’s the top 10, here’s the first chapter of the book. We’ve been through people don’t like change, there’s a lot of other fears that we need to go through. A lack of clarity, and we’ll talk about clarity later. I know this is something you already got on, Vern. Implications, process, inertia, and emotions, and of course, leadership, but why don’t we talk about the implications issue first. Isaac Newton back in the 1600’s said that every action is an equal and opposite reaction, and too many change initiatives and corporate strategies fail because they don’t understand the consequences of what they set in motion.
I’m wondering if they also just don’t understand the implications of other technologies. I think of Blockbuster, in this case. Blockbuster didn’t understand the implication of streaming that was coming down the pike, and had already happened in the music business.
That is true. At a very macro level, there’s not believing the implications of new technology or change in the industry, but on a micro, inside the company basis, when CEOs actually pause to understand the implications of a new strategy or a new change, that’s when they really engage with their people. It’s back to your audience point. The CEO of the largest investment platform that I was working for a few years ago, he had a new strategy. He was going to double the size of the business, he was going to quadruple the profit. It was all a very exciting strategy. Before he pushed the button, I convinced him to get all of his managers and senior leaders around in one room. There were 50 of us, and to understand the implications, he stood up and said, “This is what I want to do. What could possibly go wrong?”
It was the most powerful session that he ever ran. By the end of the day, not only was everyone completely bought into the strategy, but the reason why they were bought in was because we looked through what could go wrong, and we had solutions for them. We had resolutions for all the consequences.
I love that concept of modeling out what could go wrong and then figuring out that plan.
Everybody loves to throw rocks at the CEO’s newest strategy. It was a bit uncomfortable to start with, but it worked out well. That brings us to inertia, you had a really good point about Blockbuster. Blockbuster were complacent, we see on this slide the three different types of inertia. Let’s start from the one you talked about, that complacency. Complacency kills successful companies, and you can see the [inaudible 00:16:16] from Andy Grove there. When he was in charge of Intel, he used to take his board out of the business and make them turn around and walk back in the business with a fresh set of eyes, looking for where are we complacent, where do we not understand the implication of change? Where are we not seeing improvements that we can make?
Campbell, I recently bought his book to reread it, because I thought it was so valuable, and what I found as ironic is Intel after he left did become complacent, really had to reinvent its entire business model and it’s almost a totally different business now.
No, it is. It is. It used to be Intel Inside, now it’s Intel Service, Intel Networks, Intel Cloud. They’re a completely different business, isn’t that interesting? As he said, only the paranoid survive. The other two types of inertia are worthwhile talking about, and it’s all in the book, but the middle one is the midterm inertia, which everyone on this webinar will be able to identify with, I am sure. Any time you get a large change initiative, as soon as it gets going it ends up getting ahead of statements like a locomotive heading down the track, and it builds up momentum, builds up momentum, and no one is politically brave enough to stand up in front of that train and say, “Stop, I think we’re heading in the wrong direction and actually, I’m not sure we should be a train.”
That just doesn’t happen. What people need to do, to be successful, is to build a pause for reflection within any big change initiative. Too many of these initiatives end up hitting the buffers at the end of the tracks.
It makes a lot of sense that that’s the opposite of the initial inertia, the inertia is that you’re going to quickly that you don’t really take that time to pause and reflect and say, “Yeah, have things changed since we implemented the change initiative?”
Exactly. Is the outcome we’re setting out to achieve, is that still valid? Often it’s the politics that surround … everyone is on board this train and as a CEO once said to me when he got so cross with his senior team, the stood up and slammed the table and said, “You’re either on the train, or you’re under it.” [inaudible 00:18:47] it didn’t work.
Luckily, we’ll get to culture in a slide a little later, that’s a cultural no-no, I think.
Let’s go to the next one, because this one is probably my favorite and it’s about emotion trumps logic every time. In so many change leaders, CEOs forget that emotion is four times more powerful than logic. I use that because there was a 2004 study of 50,000 employees by the corporate executive council. I’ve got the study on my website if you want to have a look at changeinstrategy.com and go to the blog section. It proves that when it comes to engaging employees, emotional commitment is four times more powerful than rational commitment. Four times more powerful.
We totally understand that, because when we talk to our clients, an example is there was a company going through a lot of change, there was a technology company and the head of brand came in and threw two, four inch notebooks on the table to me and said, “We want everything in these notebooks in your video.” I said, “Well, how long is the video?” He said, “I want it to be two or three minutes.”
We took him sort of at his word, and thought, what’s in these things? What we found was we had to find the emotional thread that really helped people rally around the company, and rally around the leader, rally around the vision. Those facts informed what we were doing, but we like to say information leads to understanding. Understanding, gee whiz, that is great if you can get that happening. Emotions lead to action.
Yeah, that’s cool. I like that, I like that a lot. Actually, when it comes to change, this is doubly so, because you can’t actually force anybody to change. They’ll only change if they want to. There’s an old joke about how many social workers does it take to change a light bulb, and the answer is, just one, but the light bulb has got to want to change. It’s the same when it comes to business change, so we have to help people want to change which means we have to appeal to them emotionally. We have to find their emotional triggers. A successful change in business is a culmination of actions from individuals across the entire organization.
Which means …
Change is tough.
It really is. It is very tough, and actually, as change leaders, everyone on this webinar has it doubly tough, because not only do we have to embrace change ourselves, we’ll go through in the next couple of slides, but also we’ve got to help out the people embrace change because we won’t succeed if they don’t change.
I think the viewers of this webinar are the kinds of people that are interested in learning, and learning about change, being able to be a change leader within your organization assures your place in the organization because so few people are willing to own that. It is tricky, but with this kind of knowledge it can really help you and help your organization, and help your career.
That’s true. We can all be a change catalyst, to use the [inaudible 00:22:12]. I run two key workshops for organizations, one is leading change for leadership teams, and the other is embracing change, which is for everybody. Change is personal, so everybody has to be able to personally embrace change and learn how to embrace change for the company to be successful. The key three behind both of those, that run through both of these, is the next slide. It is the change matrix, it’s how we actually all cope with change, and this is a very simple thing that I’ve put together. The beauty is in its simplicity. On the X axis is whether the change is, whether you have control over the change, or the change is being done to you. On the Y axis is whether the change is big or small.
It sounds fairly basic, but let’s have a little look at it. If change that we are fully in control that is small, that’s in the bottom right hand corner, that’s fairly simple. It’s a change we’ve made to a process, it’s a change we’ve instigated to a small change of work, and we’re cool with that. We just get on with it. We’re fine with that, because we’ve actually instigated it, the little changes that are forced upon us. We might be slightly taken about, but then we adapt. We think, “Okay, it’s not material, we’ll just learn to live with this new form of HR [inaudible 00:23:34].” Those two aren’t the issue.
Okay. This reminds me of, my wife wanted to change the color in our living room. That small change was forced upon me, I finally agreed to it. I saw the light.
Yes, I hope you just adapted and moved on. Let’s talk about the burning platform, because that’s the big change that is forced upon us, and if you can put yourself into that situation, we’ve all been through it. It could be a death, it could be a loss of job, there’s all sorts of big changes. It could be a reorganization at work that we didn’t have any say in. We’ve all been through it, and that has a different set of reactions and experiences that we all go through. The one on the right is the quantum leap, that is the big change I have chosen. Actually, we still go through quite a few emotional experiences and reactions to that, and I think let’s have a look at both of those in the next couple of slides.
Let’s go through the burning platform change. This is a big change that we didn’t expect. It could be a bereavement, loss of job, a reorganization we had nothing to do with. This is a modified curve from modified diagrams from Dr. Kubler-Ross, who was a Swiss psychiatrist back in the seventies, I believe. She wrote a book all about death and reaction to bereavement, and this is an adapted version of that. The first reaction that any of us find to big change that has been forced onto us is shock. We’re completely shocked. Then we move to denial, it’s not happening, surely the leaders will work out this is a bad idea and change their minds.
Then we get angry when we realize they won’t change their minds, then we’re scared of our future, then we reach the bottom of the curve. The good part about reaching the bottom of the curve is the next step is up, and understanding is, okay, we get the change is happening with our head, and we understand the implications theoretically. Acceptance is when we really understand it in our hearts, and we’re actually making the changes we need to move on.
I think, Campbell, the manager of my local Blockbuster never got past depression, because he didn’t come to understanding.
I can understand, and that was made to him, it was the leaders of Blockbuster went through the exactly same curve. The trick, as bringing this back to what they’re talking about, we have to help our people through this. When our people get angry, it’s not because they’re just angry people. It’s not because they hate us, it’s because of a natural reaction to big change that’s forced upon them. When I first saw this curve quite a few years ago now, I finally went, “Oh, it helped me have the empathy that I needed to help people change.”
On the replay, these slides will all be there, so if you need to share this with your leaders at your organizations, talk them through it, it could be really helpful.
What I found really interesting is that even big change that we instigate ourselves, we go through a similar change curve. This occurred to me when I was hired by the world’s largest, second largest sovereign world fund in the middle east to go advise them on a three year contract a few years ago now. I’m sitting on the plane thinking, “This is fabulous, this is just the zenith of my career. I’m so excited.” Then during the eight hour flight, I started excited, then I went through apprehension. Have I really made the right decision here? I went through fear. Oh my goodness, what have I done? I then had remorse, either buyer’s remorse or seller’s remorse.
We’ve all been through it, and then finally as we were about to land, I started understanding with my head. I accepted it as we touched down, and I was ready to embrace the change. This is the same sort of curve that happens even when it’s good change that we’ve instigated, so be easy on yourselves. Go easy on yourselves.
I’m embracing the new color in my living room, which I realize is not quite as big a change.
That’s a small change, but this fascinating thing is that now once we see those two areas, the burning platform, the quantum leap, when I showed this to a CEO conference that I was talking to last year they made me stop at this slide and said, “As leaders, we’re in the quantum leap square. Our first reaction is excitement, but our employees, their first reaction is shock. I now get it, how do we lessen the shock, reduce the shock, remove the shock from our employees?”
Of course the answer is back to your point, it’s what you do for a living, Vern. It’s communication, it’s empathy, it’s making sure people are aware of the change ahead of time and ready to embrace it.
Helping to give them the context and understanding why the change, it’s not just an arbitrary, forced on, capricious thing. Letting them have a little peek under the curtain as to the thinking as so helpful to bringing people along, and then they can slowly go through the curve you just showed us. Let’s talk about successful change.
Exactly, and what you just said is the number one reason, essential ingredients to successful change. There it is at number two, leadership is number one but what you’re talking about is clarity, is critical, and that’s number one. The other essential ingredient which is chapter two of The Change Catalyst, as we see here, is focus on the outcomes. Don’t ever forget that process is just an enabler, it’s all about winning outcomes. We’ve talked about [inaudible 00:29:52], we’ve talked about emotions, we’ve talked about engagements, we’ve talked about a pause for reflection. We will talk about a change catalyst, but let’s now talk about clarity because that is critical. What are we trying to achieve, and even more importantly, why?
I love that you’ve got a Yogi Berra slide here.
Yeah, Yogi Berra and Machiavelli, they seem to go together, obviously.
He also said you can observe a lot just by watching. I hope these people are watching our webinar and observing.
You’re quite keen on this, aren’t you? This is quite core to what you do, then?
I am very excited that so many of the companies we work with are really coming around to embracing their mission, embracing their purpose, working with agencies that are helping discover their ‘why’, because it’s much more exciting to go to work when you’re just not doing a transaction from, or moving this widget from here to that shelf. When you actually feel that you are involved, that your contribution is valued, that what you do makes a difference, because one of the most important things we as homo sapiens have is we are seeking connection We’re seeking meaning in our lives, and the ability to understand the company’s mission purpose and why really helps us to have that.
If you want someone to deliver a big change initiative, to embrace and deliver a new strategy, you’ve got to go even further beyond what you’re trying to achieve. You really do need to understand why, because just telling someone to do something is never actually going to get it done. They need to believe in it, they need to understand what’s in it for them. Why are we doing this? It’s like NASA’s janitors weren’t just cleaning toilets, they were helping put the first man on the moon. The interesting thing I discovered while writing this book is there’s a real reason and a right reason for everything, and this is doubly true when it comes to change.
The real reason for change might actually be, for instance, let’s go back to the CEO I talked about who wanted to double revenue and quadruple profit. The real reason behind this change was he was wanting to set the business up for sale. We couldn’t launch this out to the staff as being the reason for change, because of all sorts of implications behind that, but there was an equally true, right reason for change that was more palatable for public consumption. That was take your advantage market opportunities, take advantage of our strengths, your buildings need to grow, more propositions, more people more opportunity, great careers.
That was just as true, but even more compelling for everybody to get behind.
Right, so you’re either, in business, you seem to be either growing or dying. It’s really hard to stay, remain the same, and that’s why change is crucial.
That is true. That is true, and actually one of the key parts of strategy, which is on the next slide, is all about values. I wrote a lot about strategy in the last part of the book, and one chapter I call ‘Values, Shmalues’, which is, the interesting part that I had an epiphany writing this. There are three types of values, and this might be obvious as we start to talk through them, but not all under brand values. They’re not worth what the CEO or the marketing director say they are. They’re actually worth what the customer said they are, and that’s fairly obvious. Let’s move on to the second one, corporate values.
They’re not what you put in your annual report most of the time. They’re not what greet the staff as they light the lifts in the morning. They actually should be what your staff, what your employees actually say they are. Your brand value are what your customers say they are, your corporate values are what your employees say they are, and I think there’s a third bucket that you put in your annual report and you hang from the ceiling. I would call those your aspirational values, they’re the ones that bought the CEO, the marketing director, the HR director, they leadership [inaudible 00:34:04], want the company to aspire to. They want the company to develop, and if more and more organizations looked at their values through those three lenses, you’d actually have a culture that was first genuine, and secondly was allowed to deliver the actual strategy.
Do they need to be all the same, the brand, corporate, and aspirations actually have to mesh up?
No, they don’t. No they don’t, because you always have no control over them. Your brand values are what your customers say they are. You may think your brand values is simplicity, and your customers say, “You’re the most confusing company to deal with in the entire market.” It might be completely different, but the word is genuine. What are your genuine brand values? Ask your customers. What are your genuine corporate values? Ask your people. Your aspirational values? Get everyone together and go, “What do we want to be like?” Just to finish off this slide, when I was brought in by Virgin to form [inaudible 00:35:01] Virgin Wines back in 2000, I was stunned to find that Virgin did not, and does not, have a brand value.
They have no overt brand values at all, they are just Virgin. I mean, he’s built up a phenomenal empire that is based around really being the world’s consumer champion. No where in any internal document or external piece of marketing did they every say this. You don’t see the Virgin logo with consumer champion underneath it, and the reason is, the moment he did that, people would start to, would be the moment he diminishes the brand. People would actually start to find instances where Virgin didn’t live up to that brand promise. By keeping it implicit, it was very obvious internally, but it was never stated explicitly externally, I thought that as someone who loves clarity that was a bit of a shock for me to find.
The summary of that is be really clear about what your values are, make sure they’re genuine. Be careful how and when you use them.
Ironically, Enron, the day that the Feds closed it down, locked it up, kicked everybody out, they were having a brand values workshop.
That’s when marketing becomes the coloring department, they really have no idea. Of course, that lead to culture, as you were saying. Enron and culture are two words that go beautifully together.
There was such a disconnect, so what we talk a lot about is we’re trying to get to the authentic real version, and particularly with CEO communications that we do, or brand videos or leadership or recruiting, because you want the right people who like what you’re doing, who want to be a part of that team. That’s what creates a culture, and a culture is created over time and through consistent messaging and through the kind of work that you do.
It is, and here’s a wonderful statistics from [inaudible 00:37:05], which is a big, obviously, strategy team. They did a detailed survey of several thousand companies and found that 84% of executives declared that culture was critically important to the business success, but less than half of them believed that [inaudible 00:37:23] did a really good job of managing culture. They know it’s successful, but they know they’re not good at it.
Right. I love the quote you have in the book by Lou Gerstner, “The thing I’ve learned at IBM is that culture is everything,” and he came in and turned around and remade that culture. It starts at the top, it really does.
Culture is the leadership thing completely. As leaders, we actually get the culture that we deserve. We get the culture that we create, and in terms of change, in terms of building a change culture, because we really need a culture where people are eagerly looking for improvements in the way that things are done, we’re allowed to question the status quo. Obviously in cultures where that is certainly not the case, we’re encouraged to learn from failure and we’re open to new ways of working. If we can develop a culture with those four elements, then we’ll have people who are ready to embrace change. Frankly, we’ll leave the competitors in the dust.
To our last slide, courage.
Well, when I saw this quote from Steven Covey, I was so thrilled with it [inaudible 00:38:34] name of the book was going to be, but this is the quote that opens the whole book. “I’m personally convinced one person could be a change catalyst, a transformer in any situation and any organization.” I completely and utterly agree with the words that he’s said, but to do that, as you say, requires courage.
It does, and one of the things, I know we were rehearsing the webinar, I used the word change management, and you said, “No, no, Vern. Change leadership.” I realized of course I’d made my mistake there, because it really does take leadership. It is not a management process, it is a leadership process.
It isn’t. It is a leadership process, completely and utterly. What I call, there are two ways to look at the term change catalyst. The first one is the one that I outline in the book, which is actually I believe people should look to a point, a role of change catalyst. It’s not a program manager, it’s not a part time executive. It’s a business person who bridges the gap between leadership and the employees, and is the trusted confidant of both of them. The role of a change catalyst is to guide the organization to the ultimate delivery of the outcomes, the business needs. The change or the strategy needs to deliver.
A change catalyst focused on outcomes as project manger, or program manager, what they’re good at is driving process, so you really need both. The thing that I didn’t put in the book, and 15 months long from writing it, I think I should have, is we can all be change catalyst. It’s about focusing on the outcomes, respecting process, but realizing the process is the enabler but never taking your eye off the outcome that we’re all trying to achieve. [inaudible 00:40:28] catalysts for change.
How do you think that people that are change catalysts within organization, what’s going to be their career trajectory? Are they going to be people that are brought along when the company’s changing?
I would recommend that you actually grow your own change catalysts. Obviously, you can hire consultants to help develop then, but the best change catalyst comes from within. They might need [inaudible 00:40:54], but I was working for Anderson Consulting 20 odd years ago. We were working en masse, there were 300 of us within Australia’s largest insurance company. 300 consultants that were there for 10 years, managing, leading, building the change in that organization. As soon as they left, everybody went back to what they were, almost what they were doing. The executive that I knew really well, because I’d moved actually to the business side of it, said, “Thank goodness they’re out, now we can start actually leading our own company.”
It has to come from within. Sometimes it needs a nudge from external, but change has got to come from the top and from within.
I know on the next slide, you and I talked about this at the merger and acquisition conference, I knew we had a kindred spirit when we both quoted this almost simultaneously.
I love it, I can imagine. We were talking the other day about it, how we really didn’t look happy about the fact that he needs, he was preaching. The fact that the world is changing and everyone needs to be the most responsive to change, but it’s so true. Luckily it’s not how clever you are, and luckily it’s not how strong you are. It’s the one most responsive to change. Look at Blockbuster, look at Kodak, and look at a number of different organizations that have literally gone to the wall because they weren’t responsive to change. One of the organizations that have done this the best over the years and the most impressively is Microsoft.
Bill Gates transformed that business. He was late understanding what the internet was going to bring to his business, and he transformed it remarkably in a couple of years. He saw off Netscape, which many of us probably don’t even remember Netscape. Netscape was the browser, and it was a huge threat to Microsoft’s very existence, that Bill Gates saw. Now, the company is going through a similar thing, working towards the cloud. I think what they managed to do is quite remarkable, but it’s very rare to be that responsive to change.
I’ve, in terms of a lover of business stories, I was always intrigued that Bill Gates loaned 200 million dollars to Apple at one point in time to save it from going out of existence.
I think that might have been protect his … it would be known as monopoly, it would be regarded as monopoly [inaudible 00:43:38]. It might have been self preservation, but gosh, he made a lot of money on that investment.
He did. Scott, do we have some questions?
Yes, we have a couple questions that came in. First of all, thanks to both of you. That was very informative, I’m glad that we were able to do this today. If you have any questions, please go ahead and type them into the box. I do have a couple here, which I’ll get to. If anyone’s attending the webinar, would like to ask Campbell and or Vern any questions, please do that now.
I would just suggest that if you guys want to reach out to us, emails are here, we’re happy to answer questions that may have occurred to you over the next few days as you reflect upon this webinar.
Please feel free.
Here’s one question, when you were discussing the change curve you mentioned shortening the length of time for the negative emotions of shock, denial, and anger.
What are some ways to do that?
That’s a great question. The main way is to start with empathy, to be understanding. To understand what people are going through, if you can understand that people are going through shock, and people are going through denial, people are going through fear, then you’ve got a chance of actually helping them through it. There are two ways you can help them through it, one is to try and move them through more quickly, that’s always good. The other ways is to just, but also, sorry, to make sure that they move through genuinely. There’s no point skipping one.
When you reach for your … you know you’re going to be down into the trough, and just to understand, a lot of it is purely empathy and helping people to understand that what they’re going through is quite normal.
I also have found that in terms of the work that we’re doing, in terms of storytelling, you’re starting with the context, you’re starting with empathy, you’re consistently telling stories. It’s not a one time thing and that if there’s any way for feedback, I think sometimes people just need to be heard and maybe you don’t need to actually on the suggestions, but being listened to changes the dynamic. When people aren’t heard, they feel so excluded, and they stay longer in the negative part of the curve.
The messages and complete repeating, continually repeating the messages but in different ways, this is very important because people will move through that curve at different times. Someone is in anger or denial or fear, they’re wanting to believe that there is an upside, but they’re not ready to yet. Part of them might move over to understanding early, but they won’t get to acceptance until they’ve gone through the range of emotions. If you’re in denial, you will never accept.
Yeah, I think Campbell, the other day you were mentioning one company CEO who was talking about change for four years before the change actually came.
That’s a good point. I’d forgotten about that. [inaudible 00:47:04] a few years ago, they had the most successful funded administration business in the UK. They had two thirds of every single mutual fund is administered by this company, so they really have a monopoly is probably the wrong word, but they reached saturation. Cleverly, they could see that was going to happen, and so four years before launching two brand new businesses, one in pension platforms and the other in investment platforms, they started to talk to all of their employees, they have four and a half thousand employees, about how they’re going to reach saturation and how we really need to change, we really need to launch two new businesses.
Four years of communications later, when they launched the businesses, the biggest reaction internally was, “Well, it’s about time. You’ve been talking about it for this long.” If they’d done it four years before, everyone would have gone into shock. “Will I be in the new business, is the new business sexy? Is the old business going to be downsized?” They removed all of the fear from the change because they planned in advance. Now, we can’t all plan four years ahead, but it just shows the value of communicating early and helping lessen the shock, lessen the fear, lessen the danger of change.
Just two more questions here, what type of change education do you recommend to be an expert in this space and lead change? From Kelly.
Wow, that is really good. Every single major business school has various forms of leading change programs, I know I’m just designing one for Henley Business School at the moment in the UK, just to give that a plug. Actually, I find experience has been my best teacher. There are some very, very good courses out there. London Business School has a good leading change, I know Harvard does. There’s several good business school courses. The Change Catalyst and Experience is a good option as well.
Since all change is personal, too, I do believe any of the kinds of readings one does on a personal level about your spirit, your meaning, your purpose, your why-
You mentioned the book about why to me the other day.
Yeah, Simon Sinek’s book Start With Why is a very powerful book because if you discover your own personal why, and a lot of companies have taken that into that, or books around purpose I think are very helpful.
I have a question from David here who asked, can change take place without giving permission to accept setbacks or failure in finding or managing it?
That’s a good one. Could you repeat that while I just focus on what the question was?
Yeah. Can change take place without giving permission to accept setbacks or failure in finding or managing it?
That comes right to the heart of it. The answer is yes, but I think it’s unlikely, if I understand the question properly. I think as leaders, we need to set a culture where failure is okay. Failure is a learning process, so we either overtly or covertly give permission, give people permission, to try and fail. It’s all about building the right culture, and you can overtly give people permission to do that, or covertly, but my answer is it is critical to be able to give permission to fail. I think that’s one of the key cultural success stories. Cultural success, give people permission to fail.
I don’t know what company David is from, but I imagine he maybe experienced change happening and then not being supported when there are things that are tried and failed. That really is so crucial in a successful change program, otherwise you’re sitting in that 80 plus percent of change programs that failed, because the people aren’t allowed to make mistakes and learn from those mistakes. It creates a culture of fear, and a culture of fear leads to people not trying things. That leads to people being out of business.
You have to fail. In order to succeed, we have to fail. Every successful person has failed more times than they’ve succeeded. What’s the story of Thomas Edison? Failed 99 times, his 100th, it wasn’t a bad effort. It is about learning about failures, and a culture to learn from failures. That’s like the locomotion that I talked about, the locomotive that I talked about before. You need to be able to stop and say, “We are heading in the wrong direction. Let’s stop, let’s not call it a failure.” In fact, one of the hotel organizations, I can’t recall which one, doesn’t allow the world failure in it’s lexicon at all.
It’s a glitch. We’ve had a glitch and we’ve learned from it, and now we’ve moved on.
I love the fact that they’re changing the words.
Let’s do one more here, this is a good one. Can people, for example, new hires, be taught to embrace change, or are there some people who are just hard wired to resist? How long should you work to inspire them to change if this is an innate point of view?
That is a great one. How long one is impossible to answer, because in the end, if you can’t change the people, you have to change the people. Most people can be taught to embrace change without a doubt. In fact, most people want to learn how to embrace change, because change is a key part of life and it’s going to be an even bigger part, even more important part of life and a more frequent part of life. Yes, helping people through the change curve, helping people to embrace change is a key part of what every leader needs to do if they wish to be successful. The only way to be successful is through your people, and for them to be successful, they need to embrace change.
Yes, but it’s a bit like leadership. You have a, what’s the word? A natural, people are natural leaders, but even those that aren’t natural leaders can be taught to be damn good leaders. Same thing when it comes to embracing change. Some of us cope with change really easily, and others need more help. Even those of us that cope with change easily, every now and then we have a glitch and we need help to embrace the change. Sometimes change is so big we need help to embrace it.
I think one of the things about a person who may not be embracing change, the hiring matrix that I’ve started to apply is I really am curious, I’m interested in people’s curiosity. If we find that people are really curious, we find that that correlates really well with change and their ability to embrace change, because we’re in a business that’s gone through five tech revolutions, from film all the way up to digital internet. We have to have people that are curious and learning new things.
People are hiring, companies are hiring on attitude far more than they are on qualifications these days. I mean, qualifications might get you get a short list down, but then it’s all about the attitude that someone brings to the job. If that attitude is that they embrace change eagerly, or more eagerly than others, then they’re the ones you want to hire. Once you’ve got them in there, yes, you can certainly help develop their ability to embrace change.
Okay. Well, on that note, I want to thank everybody who participated in today’s webinar. Thanks to Campbell and Vern for delivering that information, we appreciate you spending your time with us today. I will be sure to send out a replay of this webinar so you can share with colleagues, as well as contact information. If you have any questions, feel free to get in touch with me, Scott, at tribepictures.com, or Vern or Campbell directly. You have their email addresses, and thanks once again.