of Teaching the Elephant to Dance
Empowering Change in Your
ORGANIZATIONS ARE LIKE
ELEPHANTS--SLOW TO CHANGE
the past decade I've consulted with, studied, and managed a wide range of
organizations. My experience tells me that organizations are like
elephants--they both learn through conditioning.
shackle young elephants with heavy chains to deeply embedded stakes. In that way
the elephant learns to stay in its place. Older elephants never try to leave
even though they have the strength to pull the stake and move beyond. Their
conditioning limits their movements with only a small metal bracelet around
their foot--attached to nothing.
powerful elephants, many companies are bound by earlier conditioning
constraints. "We've always done it this way" is as limiting to an
organization's progress as the unattached chain around the elephant's foot.
ties you to the past. The very factors that produced today's success often cause
tomorrow's failure. Consider Xerox, for example. Xerox had a close call with
disaster--and it was mostly because of its own success. In the early and middle
1970s Xerox could do no wrong--at least that's what they thought. They hired the
best people, had the best marketing activities, and "owned" the
market. Even to this day executives say, "Make me a Xerox," when they
want a copy. But all the "right" activities led the company to the
brink of disaster.
they were invincible, Xerox executives refused to take the Japanese competition
seriously. They didn't realize, for instance, that the Japanese had a 50 percent
cost advantage until five years after they lost significant market share. CEO
David Kearns saw the need for change.2 He got his elephants to leave
their past constraints behind.
about institutions trapped by their successful past, how about Sears? Sears was
the largest U.S. retailer. But Sear's merchandise sales actually declined 2.4
percent--during a period of double-digit inflation in the 1970's and early
1980's. Sear's stock price fell from $62 a share in 1972 to $14.50 per share in
1980. Yet no one was willing to change the creaking bureaucracy that assureds
high overhead costs--forty executives in the drapery department alone--and slow
response to changes in customer tastes.
took massive intervention to save the unwilling patient. Nothing less than
all-out war--in the words of Sears CEO Ed Brennan-- "to destroy a thing
called Headquarters and a thing called Field and create a thing called
Sears." Store closings and 21 percent reduction in employment, including
the early retirement of 1,500 career executives, prodded the elephant to
consider new ways;. Slowly, the "Store of the Future" took shape--very
slowly--too slowly for customers as Sears continued to lose market share. Can
Sears survive? There are hopeful signs. But the jury is still out.3
successes and past practices root American and European companies firmly to old
ways of doing business will not succeed in the future.
today's fast-paced world, elephants are an endangered species. Slow, ponderous,
bulky pachyderms can't move fast enough to escape the competitive laser gun.
Fleetness of foot is required. So gazelles survive, not slow-to-change
change doesn't make it happen. Too many organizations still have metal bracelets
around their feet. You need to mobilize the support of your people behind
no doubt that General Motors needs to change. Consider these facts. In 1986 GM
had the highest labor cost of any U.S. or Japanese car company, $4,148 per
vehicle compared to $2,379 at Ford and $630 for Toyota. And that's after GM
invested $45 billion to improve its competitive position. Ford workers turn out
85 Tauruses per person per year, while the best GM workers turn out 68 Corsicas
and Berettas per worker per year. Quality has been a big focus for GM over the
past several years, stung by Ford's success with the "Quality is Job
1" motto. Quality has improved. The number of defects for GM cars reported
by new car owners after ninety days has dropped 8 percent over the past two
years. But the Japanese imports report a similar 8 percent improvement, and they
still show a stunning 37 percent fewer problems.5 There are positive
signs indicating that GM is changing--slowly. Can GM make it? No one knows. We
do know, though, that the need for change doesn't necessarily produce change.
the U.K. luxury car maker, faces similar problems. Though it has doubled output
per employee over the past four years, it still lags behind its principal
competitors, Mercedes and BMW, by as much as 50 percent. The huge cash required
for new models and equipment modernization pose additional challenges. Perhaps
that's why Jaguar directors were willing to sell their British heritage for some
American porridge from Ford Motor Company. All over the world organizations face
the need for change--and mobilize the people to create it.6
about strategies when you are in a volatile multinational market and try to
dance with a gorilla? Ask Steffan Edberg. He's the Managing Director of the
highly successful IBS, a Swedish-based IBM software and services business
partner. Steffan's organization is the largest IBM mid-range system agent in
Europe. He's grown by acquiring small, well-positioned firms in several European
countries. Lychgate, plc, for instance, is his 95 percent-owned U.K. subsidiary.
brings to the table cross-border contracts, bargaining clout with the gorilla of
the industry (IBM), and a depth of experience in the software and systems
industry. Each firm retains its present management and draws from the capital
and accumulated experience base of its other multinational offices, strengthened
by the group's synergy.
to several experts on how to create change.
Welch, CEO of General Electric, is one expert in producing change. He says,
"We have found what we believe to believe to be the distilled essence of
competitiveness. It is the reservoir of talent and creativity and energy that
can be found in each of our people. That essence is liberated when we make
people believe that what they think and do is important--and then get out of
their way while they do it."7
message: Empower people to change. Help them focus their energies on the new
restates the words of Mr. Matsushita, founder of successful Matsushita Electric
company: "For us, the core of management is the art of mobilizing the
intellectual resources of all employees in the service of the firm."8
people to create the change," says Mr. Matsushita.
Drucker, the greatest management mind in this century wrote similar words in
1946. He said, "Any institution has to be organized so as to bring the
talent and capabilities within the organization; to encourage men to take
initiative, give them a chance to show what they can do, and a scope within
which to grow."9
idea is not new. In the late 1700 Adam Smith similarly felt that the empowered
actions of millions of people were much more likely to create economic progress
than the intelligent decisions a few royal appointees.
THE DISTILLED ESSENCE OF HOW TO EMPOWER
persistent themes haunt my experiences in changing organizations. In a world of
seeming complexity, they are simple themes--themes that sound clarion-clear
messages. These themes form the nexus for this book. I believe they are the way
to empower people to change their organization. This is the way to teach the
elephant to dance.
LEADERS CREATE NEW TOMORROWS
continually change. Customers continually change. Technology continually
changes. Competitors continually change. Each change triggers the need to create
a new tomorrow.
active leader--at any level in the organization--identifies this need and moves
quickly to develop a new strategic approach. This new strategic approach
contains three elements:
- Reposition products/services to build a competitive
- Talented people to execute the new strategies; and
- Organizational resources that tightly focus on the new
come strategies that meet the new conditions in the marketplace,
strategies that give you an advantage.
need for a strategy based on product differentiation hasn't changed much in
2,500 years. In 431 B.C. Pericles recognized the need to identify those factors
that made Athens superior and gave it the upper hand in its war with Sparta. He
identified Athens's openness, optimism, and opinion leadership position.
Pericles sounds very much like many Silicon Valley executives as they wage war
against the Japanese imports. In fact, niche players are the survivors on
today's Fortune 500 list.
San Francisco, Fritz Maytag has crafted a similar competitive edge-producing
strategy. He's president of Anchor Brewing Co., a microbrewery that sells less
than forty thousand barrels of beer a year and employs fourteen full-timers and
seven part-timers. He saw that quality in beer making was his competitive edge.
He's organized his entire company around the competitive edge of a quality beer
made in the pure, traditional way.10
the same industry, Anheuser-Busch-which sells more beer in one day then Fritz
sells in a year--uses target marketing as its way to gain a competitive edge.
Anheuser-Busch sponsors events and advertising that tailors its message
specifically to 210 different U.S. markets. From the military beer drinkers
("This Bud's for all the men and women who proudly serve this great
country") to the waiters and waitresses ("This Bud's for everyone who
serves 'em cold"), Anheuser-Busch seeks to be unique by being everybody's
get the "right" people to execute your new strategy. When Fritz Maytag
first started his brewery twenty years ago, he couldn't hire the
"right" kinds of people to work full-time at the wages he could
afford. He found he could hire very qualified people who wanted to do exciting
things a few hours a week and earn good money for the hours that they worked. So
Fritz hired a small group of part-timers, who turned out to be the
McGovern, founder and chairman of $300-plus million U.S. company International
Data Group, Inc., knows the importance of finding the right people to run his
operation. His company published over one hundred publications in thirty-six
countries with over 2.8 million subscribers. His publications dominate
information services for the information technology industry.
do you run sixty-five semiautonomous business units? "With great
people," Pat replies. Recognizing his own tendency to want to do everything
himself, Pat has become an ardent delegator. He gives each manager complete
autonomy to submit business plans and then run his/her business as long as the
critical performance standards are met. Pat abhors central control and
direction. "If they want to do it--they can do it," he says. "No
one in the central office- including me--ever says no."
it work? Compound growth rates of better than 30 percent and after-tax margins
exceeding 10 percent--several times the industry average--speak for themselves.15
focus the resources on your new strategies. Without resources your new
strategies will be nothing more than pipe dreams. Jack Welch, CEO of General
Electric, sold off more than $5.6 billion worth of industry
"also-rans" and shifted resources into businesses where GE was either
number one or two in the market. The result? GE's profit margin grew by two
percentage points to 10.4 percent and earnings grew at a compound annual rate of
these three prerequisites--new strategies, key people, and focused
resources--help you decide on the "right" new directions. It's
essential to move fast to make it happen. August Busch III is a classic
example of a change-making executive who makes tough decisions--quickly. When
his highly successful beer operation was rocked by scandal in 1987, Busch moved
in aggressively. He fired the three executives involved and accepted the
resignation of his long time friend, Dennis Long, the president of the beer
unit. Busch then committed to run the beer unit directly for the next two years
to ensure the roots of scandal were all stamped out.17 It takes guts
to change, but--if you don't--the economic end is no less certain, only more
painfully time consuming.
Jack Welch built his organization to respond quickly to changing circumstances.
He eliminated two executive organization levels and had the more than thirty
business unit heads report directly to him. He also eliminated 40 percent of the
headquarters staff to remove the nay sayers. The system works, Brian Rowe,
senior vice-president and group executive of GE's aircraft engine business,
reported that quick decision making enabled his division to develop a new mid
size fan jet for the Airbus 340 that resulted in $1 billion of orders.
"Under the old bureaucratic system, we'd still be just talking about
it," Rowe says.18
is no rest. Change is a continuous process for large companies and small
companies alike. Take the case of E.T.C. Carpet Mills, Ltd., a Californian
carpet manufacturer. President Michael M. Berns saw that the way to grow his
company was to put some fun into what was a dull and boring industry. So he gave
wild theme parties for employees, suppliers, and customers (like he time he
announced a new vice-president at a "coronation for the Prince of
Sales," where employees wore sixteenth-century costumes and a carriage
delivered the new vice-president to the podium). He gave crazy names (like Cold
Hands and Closed Wednesday) to his carpet colors and issued comic books instead
of sample books. It worked as sales went from $1 million in 1973 to $33 million
then in 1979-81, Berns almost lost his business as interest rates soared and the
economy (particularly for big ticket items like carpets) fell through the floor.
He saw clearly the need for a new strategy. Berns knew the if he couldn't become
the low-cost producer, E.T.C. Carpet would be history. He set a new strategic
direction of efficiency, redeployed his key people by returning managers to
working levels and adding a key financial controller, and redirected his
resources from comic book to developing new, efficient methods. He also worked
hard to mobilize his people to support his new strategic direction. (I'll get to
how he did the in a few pages.) Berns survived and prospered (his 1986 sales
were back at $33 million with record earnings) because he saw the need to change
and moved fast to do it.19
seeing the right new tomorrow isn't enough. You need to mobilize the support of
your people to create that new tomorrow.
A VISION FOCUSED AND ENERGIZES
THAT NEW TOMORROW
experience tells me that an energizing, inspiring vision is the key to
mobilizing support. This vision is the picture that drives all action. It
includes both deeply felt values and a picture of the organization's strategic
Theodore Hesburgh built Notre Dame into a major American university during his
thirty-five years as president. He infused his vision of a revitalized Notre
Dame in students, alumni, faculty, and the general public. Talking about his
role in changing the university, he said, "The very essence of leadership
is you have to have a vision. It's got to be a vision you articulate clearly and
forcefully on every occasion. You can't blow an uncertain trumpet."20
Father Hesburgh's trumpet was never uncertain.
vision is a certain trumpet. It identifies clearly for all concerned--employees,
customers, and suppliers--exactly what the organization stands for and precisely
why they should support it. A vision both enhances an organization's marketplace
competitive advantage, such as IBM's "Provide the best customer
service," and provides deep personal identification with the organization's
work, such as ServiceMaster's "To serve God in all we do."
Maytag has a vision for his company--quality beer made in the pure,
old-fashioned way. He works with his employees by making the best beer,
gathering the best malt, learning the best ways to brew. He takes his employees
to England to visit little breweries, to Germany to learn how to brew wheat
beer, and to Oregon to ride the combine that gathers barley for their beer. He
spends much of his time talking to people about his vision, making certain that
everyone remembers what the brewery stands for.22
the same industry, but on a much larger scale, August Busch III pushes his
vision. Every evening Busch samples the beers produced by his eleven breweries
that day. He examines each one for balance and taste to be certain that it meets
his personal standard of quality. Then he tells his chief brewmaster whether or
not they can ship that day's production. To ensure that his public image matches
his vision, Busch personally supervised the details of his advertising program.
(He once insisted that an entire commercial be reshot because the horses looked
too thin.) He then makes certain that all the advertising is also posted
throughout his organization. No one will forget the company's vision.23
of CEO Mike Berns's vision for E.T.C. Carpet calls for self-management in the
improvement of efficiency. He spends a lot of his time talking to employees
about self management and teaching it as his "Carpet University." He
works hard to get his supervisors, managers, and employees to use his vision.
tightly directs attention to the critical factors that produce long-term
success. It may be the customer service and employee respect at IBM, or the
search for the unshakeable fact at DEC, or the new product development at
Ralston. Whatever, your vision becomes a decisional guide. At every juncture
employees ask, "Is my action in keeping with the vision?" This focus-
and inspiration--empowers people to change.
is needed at all levels in an organization. The supervisor of the mailroom
needs a vision for that mailroom. The manager of data processing needs a vision
for the DP department. The accounts payable clerk needs a vision for his/her
job. Vision--throughout the organization--focuses and inspires effort.
PARTICIPATION EMPOWERS CHANGE
single thread that runs through all of my "success" stories--and
correspondingly is absent in most of my "failures"--is the involvement
of large numbers of individuals in drafting the vision. Cross-disciplinary-,
multifunctional-, multi organizational- level teams empower people to understand
and support the vision.
Insurance (U.K.) Ltd. is the second oldest non-life insurance company in
Britain. Managing Director Peter Duerden saw the changing nature of the
insurance business. After he had studied the winners and losers among his
product lines--and discovered that the presumed winners were actually losers and
the assumed also-rans actually the big winners--he launched Operation
"Staying Ahead." He appointed sixteen managers to work with the Boston
Consulting Group in planning and implementing the new strategic direction.
Duerden kept the entire staff informed- including the unionized work
force--asked for, and got, more than two hundred personal letters from staff
members with suggestions. After study, the group recommended and installed a
reorganization that shifted more than half of the jobs geographically or
skillwise, dropped management levels between customers and service providers,
and lowered the age of management by ten years. Participation in the program led
to its swift adoption and payoff at the bottom line. In 1986 Royal's income grew
REINFORCE THE SYSTEM
systems give people the tools to use the new vision. They give people permission
to use those tools. Performance systems guide day-to-day activities. They must
expect, measure, and reward using the new vision. Human resource/personnel
policies give permission to use the new vision tools. Selection, orientation,
training, promotion, and compensation policies encourage the use of the vision.
Last, the cultural system--heroes and symbols--subconsciously reinforces the use
of the new vision.
the $1-plus billion janitorial services U.S. firm, provides extensive training
to its people to empower them to use the ServiceMaster vision. General partner
William Pollard said, "Before asking someone to do something, you have to
help them be something." Pollard's organization provides detailed
instructions on the "something that needs to be done"--a three-inch
thick manual that breaks the job of floor polishing down into detailed
five-minute cycles. And they provide a plethora of individual training programs
designed to help employees "be something." The vision plays a
prominent role in all of these training activities. It is discussed frequently
during the meetings.25
systems empower using the vision.
ACTIONS TELL THE TALE
actions tell the tale, You are the point person toward whom everyone will
look--and most people will follow. The bottom line in all change efforts is the
dedication and commitment--as it is reflected in concrete, specific actions--of
the individual driving the process.
the following example of how Ray Kroc instilled his vision of cleanliness:
his way back to the office from an important lunch at the best place in town,
Ray Kroc asks his driver to pass through several McDonald's parking lots. In
one parking lot he spots papers caught up in the windscreen of shrubs along
the outer fence. He goes to the nearest pay phone and calls the office, gets
the name of the local manager, and calls the manager to offer to help him pick
up the trash in the parking lot. Both Ray Kroc, the owner of McDonald's chain
(in his expensive business suit), and the young manager of the store meet in
the parking lot and get on their hands and knees to pick up the paper.
anecdote is told and retold thousands of times within McDonald's to emphasize
the importance of the shared vision of cleanliness. In short, your actions in
living your vision, much like Ray Kroc's action on living his, will motivate
your employees to use The new vision.
graphically symbolize this process--and provide you with a continual program of
the book-- the following graphic heads every chapter.
This graphic symbolizes the book's overriding theme: when you
create the right marketplace and personal value vision, you empower people to
change. At each step I'll elaborate on the model by adding specifics.
GETTING STARTED--THE PLAN OF
the following chapters you'll walk through the basics. I'll spice up your
reading with examples from large organizations--IBM and British Air--as well as
mid-size organizations such as Mrs. Fields Chocolate Chippery and local
government departments, and very small start-up companies such as Lychgate Ltd.
I believe that every organization can change. My examples reflect my
intend to give you lots of examples to demonstrate that change can happen. The
elephant can learn to break its chain to the past. Change is not an event, it is
an enjoyable and rewarding journey. I'll help you by pointing out the trials
left by others.
each of these phases you'll walk through the most important operational
decisions that indelibly shape your effort. At each stage you'll be actively
involved in the process. I intend this to be a hands-on book, one that will
provide you with the opportunity to work along with me.
MY BIAS--JUST SO YOU KNOW
first part is complete until the author lays out his biases for you, the reader.
In that way you can evaluate whatever I say in terms of my prejudices.
believe in action. In this world it is not what you know that matters.
Rather, it's what you do with what you know that counts. Information is
valuable--action is invaluable.
want to encourage you to act today to begin the change process. I want
you to talk today with your people about the vision you and they would
like to see for your organization. I want to encourage you to meet today
with your people and discuss how all of you can use your vision to accomplish
your new strategies.
so, on with the journey!