GILD 2013: From diagnosis to PIGs: One guy’s experience leading change

Bob Knowling began his session on “Leading Change” by telling the audience that he’s not a management guru and that what he has to offer to the group here is just one guy’s point of view. Well, that guy has over 30 years of experience leading companies through periods of high growth and organizational turnaround. Here’s a summary of what he’s learned during that time.

First, Make a Diagnosis

When you go to the doctor, do you want him to pull out a scalpel within five minutes of meeting you? No, you want him to make a diagnosis first. The same is true when it comes to organizations. Bob uses a three-pronged process: the technical-political-cultural (TPC) diagnosis.

• Technical system – What are the performance results? And what do you measure? The objectives must be quantifiable, and you should never have more than two or three, so pick the ones that really matter.
• Political system – How are decisions made? Who grants resources? Is it done by consensus, or by who has the loudest voice (or longest tenure, or best relationship with the boss)?
• Cultural system – What is the system of rewards and recognition? How do people get ahead?

Using this process to make a diagnosis is a pre-cursor to launching a change program.

Understand that People Don’t Like Change

We are creatures of habit and comfort and, any time there’s a leadership change, we get nervous. But we’re not concerned for the organization, we want to know: “what about me?” When GE acquired NBC, David Letterman did a bit about visiting GE. Watch the video>>

Bob asked Jack Welch what he thought about the video and you know what he said? That it’s a real depiction of what people go through during a change, and it’s important to remember that. So, what can you do?

• There must be a felt need for change. A burning platform forces change; in a crisis you have few options. But change can have the greatest effect when people are performing well and the sky is blue. In that case, you have to create a crisis. Too many organizations focus on internal battles, but you need focus on the external, on the competition, to create a crisis that will create the need for change.
• You must have a motivating vision. This isn’t about hanging a plaque on the wall. You need to communicate the vision, let people know what hill you are trying to take. And your vision needs to be aspirational. It doesn’t even need to be right; sometimes you can be wrong and  simply change course once you figure that out.
• You must re-architect. Ensure you have the right people. Bob uses a nine-cell review matrix to gauge capabilities based on an objective (performance) and subjective (values) basis. This development tool shows him who to focus on and who can’t be saved.

Process improvement groups. PIGs. These are groups that Bob assigns to do one of four things: grow revenue, improve business processes, reduce overhead, or improve customer satisfaction. He takes only the very best, the “sparklers,” no matter where in the business they work. He takes them out to a one- to two-year assignment. He pays them more and promotes them into key strategy jobs when the assignments finish, and he’s transparent about that. And it’s all carved out, with no incremental expense to the business. It’s not for the faint of heart, but it has worked for Bob.

Why Change Efforts Fail

• Resistance to change. You need to expect it.
• Weak leadership. You can’t waver in the wind; you must be a committed, strong leader.
• Management lacks courage. Don’t ask permission to change because the answer will either be no, or it will be yes and they’ll simply watch you, waiting for you to fail.
• Incremental expectations. Incremental won’t cut it; it has to be meaningful.

So what should you do? Bob says: “Just do it. Find out later why you weren’t supposed to pull it off.”

So, how do you and your organization handle change? What has worked for you in the past? Share with us in the comments below.