Does anyone know of an organization that’s not being transformed currently?
From the grocery on the corner through the accountancy office to the Catholic Church, all the businesses are in for some kind of change. If you don’t just want to go with the flow, you try to grab it and control it somehow. First of all, you give the child a name and compress the desired direction into a brilliant slogan.
The success of transformations obviously takes more than a slogan so we take a look at other aspects as well in our coming articles. But for now,, let’s stick to its name and slogan as the focus of transformation and the way it comes to resonate throughout the organization.
When I decided to write about this topic the first thing popped into my mind was Li Kun Hi, the recently deceased chairman of Samsung and his famous “Frankfurt declaration”.
The East Asian work mentality, by our standards anyway, may seem fanatical to be frank. The Korean leadership style is not quite known as the exemplary of the democratic, involving school. Therefore, it is unlikely that Li Kun Hi should have done anything more than to give instructions and raise his eyebrow to make the changes he wanted. So why did he decided to shock the hundreds of senior executives from all over the world in Frankfurt with videos of messy production lines in ’93? Why did he tell them to “change everything except your wife and kids”? And if it wasn’t enough, he boldly added: the plan to achieve top quality is to be implemented even if it resulted in a drop in sales. Why did he dramatize the issue of quality problems in ’95 by setting fire 150,000 mobile phones and faxes he thought were not flawless in front of 2,000 shocked colleagues?
I think he wanted to send a message and he wanted his message to be heard and remembered for life. They heard it and engraved it. The rest is history. In just 10 years Samsung has put its rivals behind and now produces one fifth of South Korea’s GDP.
No doubt Li Kun Hi was a divisive character. Probably none of us would want him for our boss. But we have to admit that he masterfully defined and made powerfully visible the focus of transformation throughout the company.
Transformation is a two-layer change. One layer is changing the operation. It’s the faster one. The other is capability building, which guarantees slower but more long-lasting results. Each layer has three pillars. The first pillar of the operation change is the focus, and its power/impact can be easily assessed by the following questions:
- Is the top management articulating a clear cross-area business focus?
- How many things are they focusing on at a time? Can the priorities be seen clearly?
Li Kun Hi made it clear what the point of change was, which competitors should be put behind and also declared that sales volumes – which we all know are the sacred cows – should be cut if this was necessary to achieve high-quality. What a blasphemy!
The typical counter-example of it is the multi-page priority list that a former CEO of mine had received from his boss along with some additional annual targets. As my CEO had more bosses he could expect some more similar pages. He could decide whether to prioritize and lead or manage goals and tremble. He made up his mind, he chose to focus.
The first pillar of the skill building layer is the unambiguous display of the expected attitude in the organization.
- Is it clear what kind of attitude we are asking for?
- Is the message coming through the noise?
- How often do we repeat it?
- How many new routines do we expect from the people to learn?
150.000 products set on fire is a rather loud message. Li said that everyone should come to work at 7:00 a.m. every day instead of the previous 8:30 a.m. to “absorb the reform half-asleep.” It’s a clear and simple message of the expected attitude even if it certainly didn’t make sense everywhere in the company. It is just one – albeit quite extensive – routine he expected from everyone to improve rapidly: manage quality issues.
In this article we have been dealing with the designation and presentation of the transformation’s direction. This job certainly falls to the top leadership who defines strategy. In the next blog, the middle management will come to centre as we take a look at the operational coordination of changes.