How’s your Change Initiative going? Are you having fun yet?
I’m guessing you answered, “No!”
Why? Because bringing major change to any organization is a tough assignment. Entrenched people and ideas and habits favor the status quo, and even when that status quo is no longer working, the response of the organization is typically to just give the problem more time. “This too shall pass,” everyone says. “We’ve been through rough times before, and this is no different. What worked then will work now.”
But sometimes it is different. Sometimes the organization has quietly aged in place while the world around it has changed to the point that what worked before will not work now. Sometimes what’s needed is a revolution.
For some time, I’ve been involved with two organizations—a manufacturing company and a non-profit—both of which have faced this dilemma, and it fascinates me how much these very different organizations have in common.
The manufacturing company was living in the past. It had a dominant position in a niche market, but that market had been slowly shrinking for decades, to the point that the 70-year-old factory was badly underutilized and the fixed overhead was being carried by a smaller and smaller base of business. The aging workforce was resistant to change (there was a sign in the foreman’s office reading “When pigs fly,” evidence of his disdain for any new ideas), and rejection of modern manufacturing methods made it impossible to find customers for new work. The necessary changes all required various certifications, but that was regarded as nonsense, a waste of time and money. An attitude of “we’ve always done it this way” prevailed. Once, they cleaned up the place for a customer visit, and were proud of the result. “The place looks great,” they told themselves—but it didn’t. It looked relatively good, better than it had in years, but of course the customer saw it in the context of a wider world, and to him it looked absolutely awful.
The non-profit organization was also well-established and had been in the same location for most of its life. Decades before, they had made a major investment in upgrading their facility, but by now it was obsolete, and the city had grown away from it, leaving it isolated. However, entrenched Board members had fond memories of past greatness, and they were determined that the drop-off in interest and financial support was only temporary. It wasn’t. Before long, they faced an existential crisis.
The solutions to these two problems were similar. In both cases, new leadership was brought in and changes were basically forced upon the organizations.
In the manufacturing company, the factory was substantially overhauled and modernized, quality certifications were obtained, and new markets opened up. A lot of people left (mostly by retirement—over a few years the average tenure dropped from 35 years to eight!). and those who stayed were given extensive training.
In the non-profit organization, a new leader was brought in. He had an abrasive personality, and seemed hell-bent on offending all of the existing supporters, starting with the largest donors. But by the time the crisis arrived, he had succeeded in persuading a majority of the Board that major change was necessary. Ultimately, they sold their building, collaborated with a couple of other organizations, raised millions of dollars, and moved to the city’s thriving downtown.
Looking back on these two sagas, it’s striking how different the picture looks than it did when we were living in daily crisis. In both cases, the consuming issues dealt with people, in one case trying to get established employees to accept change; in the other, trying to temper the new leader’s troubling management style.
In the manufacturing company, the change was generational. A new, young leader had the vision and the skills needed to move the company forward, but members of the executive team—even new hires—struggled to perform. Operations went through five leaders in as many years before finding the right person, and the sales department went through two.
Looking back on Board meetings in those transitional years, it’s amazing how much effort went into trying to salvage the wrong person in the job, and how quickly things improved when the right person finally arrived.
There’s an important lesson there about insisting on top quality in people and not settling for anything less. Peter Schutz, a former leader of Porsche, always advised people to hire slowly and fire quickly. That’s good advice, albeit easier said than done. Once you’ve filled a critical position, it’s difficult to believe that backing up and starting over will be easier than trying to fix what you’ve got —but in retrospect, it’s usually a good idea.
In the non-profit organization, the resolution was simpler, though no less painful. We ultimately realized that we had gotten from our exasperating leader all that we could—his revolution was already in motion—and all he had left to offer was his difficult personality. It was time to end the constant conflict and move forward. The new executive is an extraordinary leader, and has the enthusiastic support of the entire staff and Board. There are still problems, of course—non-profit organizations always face challenges—but the replacement of conflict with collaboration has resulted in a great place to do great work, and exciting innovation has ensued.
In both cases, I wonder if the rosy present would have been possible without the turbulent past. Revolution is frequently necessary, and almost always difficult and unpleasant. But I think it’s important to recognize that difficulty and unpleasantness don’t have to be new long-term realities, but can instead be short-term growth phases.
So if your situation needs a revolution—and sooner or later it probably will—realize that it’s likely to be difficult and unpleasant, and that it’s possible that the right team to start a revolution may not be the right team to finish it. What is certain, though, is that once your revolution has succeeded, you’ll have a vast improvement over the status quo.
At least until the next revolution.
Alec Pendleton took control of a small, struggling, manufacturing company in Akron, Ohio, at an early age. He sold off the unprofitable divisions and rebuilt the factory, quadrupling sales of the remaining division within seven years. These decisions—and thousands of others he made over his time as president and CEO—ensured that his small manufacturing business thrived and stayed profitable.
Read more of Alec’s thoughts on successfully running a small business.
This story was originally published in the MPI Group blog.