Being a NOW Leader
Leadership is not for the faint of heart. It demands that we part from the pack in order to define a new future by redefining the present.
We are in the midst of the most fundamental economic shift in a century. For 100 years our economy was driven by the realities of Mass Production. The Mass Production way of thinking created more wealth for more people than any system in the history of man. And it permeated EVERY part of our society from the office to the factory to the classroom.
We have certainly been blessed, however our challenges are far greater now and as leaders we face new macro trends.
Just as the Agricultural Age ended around the turn of the previous century and was replaced by Mass Production, we now see that Mass Customization drives our economy enabled by instant access to everything courtesy of the Internet.
Mass Production was THEN; Mass Customization is NOW.
THEN leaders are those who live in the past believing that hierarchy, command and control, functionalization and centralized decision making are still relevant concepts and viable models. NOW leaders understand that the economic shift is so huge that is has flipped pretty much every traditional rule of good management.
Today decisions are made and customer problems can be solved at the speed of light. Leaders that understand this see that their role has shifted from making decisions and solving problems, to enabling others to do this work. They also understand that for their people to make decisions in real-time that are aligned with business goals, employees have to truly understand where the business is going and what part they play in its success.
NOW leaders are a new breed of cat – or perhaps it is better if I say they are the best of the old breed. This is because they are leaders who are smart enough to see and embrace the shift from THEN to NOW, and recognize that the shift redefines the very role they must play.
In our Mass Customization world engaging employees is not merely a good idea, it is a survival requirement. Research shows that high-engagement companies enjoy a 19% increase in operating income, a 13% increase in net income, and 27% increase in earnings per share versus low-engagement companies (Peter Crush, “Employee Engagement ROI: Rules of Engagement”).
As a nation our futile attempt to engage employees, the people who determine our success in a NOW economy, is nothing short of sad. The Gallup Organization shows a slow but steady decline in employee engagement over the past 30 years. In the typical organization, leaders have managed to engage only 25% of employees.
Last year at this time I was finishing up Business at the Speed of Now (which was published in December). I believed The Great Recession was not going to go away easily because it is not what it appears to be. It is not about bad loan practices, it is about a global economic shift of seismic proportions driven by customer’s desire for Mass Customization. And my hope remains that my book will help leaders find the courage to part from the Mass Production pack and cross the chasm into the new world of Mass Customization.
On one hand I see THEN leaders spinning trying to find a way out of their own private recession; we still see business failures and layoffs in the headlines every day. On the other hand, I work with NOW leaders who see their organizations prosper even in this rugged economy. This prosperity is in no small part because they see the shift and have embraced it as opportunity.
Are you a THEN leader or a NOW leader?
Engaging Employees: The Economics of Micro Ingenuity
BY JOHN M. BERNARD
Wouldn’t it be a dream if every employee could add $13,000 to the bottom line of your business each and every year? No need to dream because research shows that’s exactly what happens when an employee shifts from being disengaged to engaged.
Every employee has ideas for taking waste out of their routine work. Some frontline workers see simple things that can be done to improve the customer experience and others have easy-to-implement ideas that can grow revenue.
In Business at the Speed of Now I demonstrate the economics of small ideas. A simple example is that if an employee has an idea, and that idea removes a small amount of waste from a repetitive process, it doesn’t take much of an idea to save $1,000 annually. So, using simple math, if you have 100 employees and each saves $1,000 by implementing one equivalent improvement idea each, your business adds $100,000 to its bottom line.
Now, keeping the same math in mind, if each of your 100 employees implements 10 ideas annually and each saves $1,000 then your business will enjoy $1 million more on the bottom line every year. This is how the economics of micro ingenuity pays off.
This may seem like a wild dream, but not when you realize that Toyota’s employees on average have been implementing 70 ideas annually for more than 30 years, according to Toyota expert and author Norm Bodek. At the same time General Motors implemented one idea per employee every seven years. Yes, you read that right. And this fact reveals why Toyota has grown at a much faster rate than GM, which was once the most powerful company in the world.
Toyota is a NOW company, General Motors lives in the THEN world.
Micro ingenuity is a powerful reality, and in my experience is the one true sustainable competitive advantage a company can build. But how does Toyota do it?
Next week I’ll share how Toyota focuses employee ideas on the practical reality of their daily work – the work employees can and should control.
The 7 Deadly Sins of Management
In 1987 when Japan’s hot breath was being felt on the back of the neck of U.S. automakers, President Ronald Reagan signed into law the Malcolm Baldrige National Quality Award. Its intent was to inspire U.S. organizations to do what Japanese companies had been doing since the Japanese Union of Scientists and Engineers founded the Deming Prize in 1950. The Deming Prize had inspired Japanese companies to test themselves against a rigorous set of best-practice management standards.
I’ll skip the detailed history lesson and cut to the chase.
“We have a problem Houston!” The problem is that most U.S. organizations suffer from the 7 Deadly Sins of Management, which I elaborate on in detail in Business at the Speed of Now (pages 28-38). The 7 Deadly Sins of Management are:
- Lack of clear direction
- No line of sight
- Unclear accountability
- Inconsistent language
- Poor issue transparency
- Insufficient resources
- Inadequate tools/skills
Leadership is about vision, setting tone, inspiring people and working from a deeply held set of values. If you want to read the best blogger I know on leadership read Dan Rockwell’s Leadership Freak.
But the work of management is to prioritize and organize work, set up measures, connect people, eliminate fear, communicate progress, and make sure the right resources are in the right place at the right time. I am sorry to say the work of management is tedious and detailed work. And because of that a lot of us are guilty of not wanting to do that work. Heh, life is short and who wants to spend it working in the weeds.
However, by avoiding the detailed work of management, the 7 Deadly Sins of Management propagate in our organizations. But the 7 Deadly Sins of Management come at a heavy price because it causes our people to disengage.
There are several reasons our people can’t engage. They can’t engage because they don’t understand where the business is going. They can’t engage because they don’t see their part. They can’t engage because they don’t know what they are accountable for and they don’t understand the language of the business. To top it off our employees suffer from the fear of making problems visible, inadequate resources and tools, and weak training.
It’s a wonder our people even show up to work at all!
Of course I am being dramatic. But what I am saying here is more commonly true than not. Our people don’t engage and can’t engage because management is not doing its complete job.
Management’s job in this Mass Customization world is to enable people to act on every opportunity every time in order to meet customer needs. For that to be possible, we have to eliminate the sins that prevent our people from being engaged.
Let’s sin no more.
Management Redefined: The Path to Economic Leadership
While our way of life is challenged by today’s economic realities, the solution lies not in some breakthrough political strategy, but instead with those who manage our organizations day-to-day. This applies to most organizations be they large and small, private and public.
The reason I believe this is where the solution lies, is because the way we currently manage our organizations has failed to engage the hearts, minds and passions of our employees. THAT is where the solution lies because that is our largest untapped resource and therefore the biggest opportunity to regain our competitive advantage.
Gallup research shows 67 percent of our people make no extra effort to help our organizations – other than what they are told to do by their bosses. They show up and shut up. Think about it. If you go to work and share ideas and express concern about how poorly things are done, and nothing comes of it, after awhile you check out. And if you are viewed as a troublemaker who asks too many questions, you really check out.
Many managers I meet believe that most employees don’t care, that the average Joe is lazy and unless closely supervised, would really rather screw off than work hard. But this is not human nature and what they observe is a very human response to an unhealthy work environment and management system.
Today we still operate by a management philosophy and system passed down from the era of mass production (when humans were viewed as extensions of machines). So the human behavior we often see is actually in response to those management methods, and is not an indication of human nature.
Therefore, the best path to economic leadership starts by realizing that the human resources we have long called our “most valuable asset,” actually are our most valuable asset AND our most underutilized, untapped, and wasted asset.
This is not a “let’s love our people” message. It’s a practical, realistic business call to action. Management must redefine its job and the system it uses to manage employees’ performance. The NOW Management System creates a shift from managers making the vast majority of decisions (a relic of the past) to enabling its people to make their own decisions. Plus, the system aligns those decisions with business goals to improve customer experience, drive growth and cut costs.
There remains a big gap between how we have managed traditionally, and what management must do in the modern, mass customization economy. Closing that gap will tap into massive levels of innovation, small and large innovations, that will fine-tune everything we as managers must do to thrill customers and delight shareholders.
The path to economic leadership travels through the hearts, minds and souls of our most valuable asset, our employees. To get there, we have to redefine management.
Next: Enabling Innovation: Discovering the Unseen Source
American Competitiveness: Why we are losing the race
I rarely talk to anyone who doesn’t believe as I do that America is in decline. I don’t know about you but I not only dislike hearing this, I refuse to accept it.
The evidence is overwhelming. Our economy is very sluggish, and our gross national product gains are microscopic compared with China and India.
But I think it’s time we quit accepting our demise as fact. We need to wake up, look in the mirror, shave off the stubble, hit the treadmill and get back in the game.
While I am not in denial, I think much of our political leadership is in denial. Or, they dare not say a discouraging word for fear of repercussions. So I am not sure which is suffering the steeper decline, our economic leadership or our political leadership.
The cause of our economic slippage is far from obvious to most people. I don’t claim to be the Wizard of Oz, but as a “systems thinker” the curtain is not blocking my view of why we are failing. It seems abundantly obvious.
Over 100 years ago, our nation mastered the age of mass production, implementing the most sophisticated scientific management the world has ever known. We developed and perfected management, accounting, engineering, production, and marketing sciences. Our factories drove costs down while also driving quality up of the world’s leading goods. We tuned our system into the world’s most powerful delivery mechanism and created a global economic powerhouse that remains the envy of the world.
But along the way something got lost and one huge opportunity was missed. Seth Godin talks about how our mass-production centric way of doing business used people as mere extensions of machines. Workers were expected to be compliant and merely do the highly repetitive tasks, which no machine could do. So instead of leveraging our much touted Yankee ingenuity, we made matters worse by developing an education system that created a compliant, factory-ready workforce.
That is when the decline began.
We now have some 100 years of management momentum behind us with little-to-no understanding of the real creative power of humanity. The huge missed opportunity was that while we could have been perfecting how to leverage the ingenuity of every human being who is a part of our organizations, instead we perfected the science of mass production rooted in a man-as-machine mind set.
Does this strike you as odd from the land of the free and the home of the brave? It does me.
The truth is we have failed to tap into the vast majority of the creative talent and passion our organizations have to offer. Human beings want to be productive. They want to be creative. They want to make a difference. Yet, I believe, 90 percent of the available ingenuity goes untapped. And, for what its worth, that makes me sad.
Our founding fathers’ dream of liberty somewhere was totally lost – at least when it comes to our worklife.
To recover our leadership in the economic world, we have to redefine management. It begins there and it ends there. If we do this correctly, we can once again hold our heads high.
Next week: Management Redefined: The Path to Economic Leadership
The Great Recession: Chips and Change
66 days and counting until Business at the Speed of Now will be available in fine bookstores and on eBooks. It’s getting closer to the December 6th release date!
The evolution to a world where we do Business at the Speed of Now enjoyed strange bedfellows, about as incompatible as John Candy and Steve Martin in the goofball movie Planes, Trains, and Automobiles. Henry Ford’s Model T brought into reality mass production management, which shaped and continues to shape how we think about organizations.
Planes, Trains, and Automobiles
The great age of the television gave a glimpse of the coming of social media. And the computer along with the Internet put into our hands instant access to the world and to each other.
Evidence grows that The Great Recession may be far more than a recession after all. Its’ double-dip nature may prove that our global economy is instead experiencing the grinding gears of a fundamental shift.
“This economic crisis doesn’t represent a cycle,” says Jeffrey Emmelt, CEO of General Electric. “It represents a reset. It’s an emotional, raw social, economic reset. People who understand that will prosper. Those who don’t will be left behind.”
A century ago we watched the end of the Agricultural Age as the percent of the U.S. population that worked on farms dropped dramatically in response to phenomenal increases in farm productivity. In the past 30 years the same reset has been happening as the Age of Mass Production draws to a close proven by the rapid decline of factory jobs.
If mass production is dying, what’s being birthed? Mass customization – an age when everyone wants what they want and they want it now! The shift is making YES the only viable value proposition (a service economy in the broad sense), and NOW the only acceptable timeframe.
An odd symbol of the changing world is a little object of much affection, the potato chip. While chips are mass produced, today you can find some 1,400 bizarre flavors around the globe as chipmakers adapt to the regional and individual tastes of its customers. While chips are not customized in the NOW, they serve as a greasy example that even mass produced products must increasingly be customized.
The shift has profound implications to how we think about organizations, and profound implications to the critical nature of individual employee autonomy to make the all essential, in-the-now decisions.
This is the final installment of Part One of our series leading to the December 6th release of Business at the Speed of Now. In Part Two, I’ll explore how the birth of a NOW world came to be as seen through the lenses of the heroes of our age: Superman, James T. Kirk, Spiderman, Austin Powers and t
The Model T Ford: It Changed Everything
84 days and counting until the release of Business at the Speed of NOW
Far more than a boxy black horseless carriage, the Ford Model T is a symbol for many things that made the U.S. a great nation. Not only was it the first automobile produced in mass quantity (15 million were produced between 1908 and 1927), but it fueled a revolution in management.
“I will build a car for the great multitude,” said Henry Ford at its initial release. “It will be large enough for the family, but small enough for the individual to run and care for. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be so low in price that no man making a good salary will be unable to own one – and enjoy with his family the blessing of hours of pleasure in God’s great open spaces.”
In 1909 it sold for $850 (equivalent in today’s dollars of $20,709), but by the 1920s mass production techniques were so successful that the sales price had dropped to $290 ($3,289 today). At that price, the automobile achieved Ford’s dream and became standard transportation for the masses.
While that reality is incredible in and of itself, the enduring contribution of Henry Ford was a system of thinking – a logic for running an enterprise – a management approach that was so effective and efficient it was widely emulated. Specialization, functionalization, centralization, simplification. Ford tuned his system, employing some of the earliest “management science” techniques, and that thinking is still in popular use in the vast majority of enterprises today.
The result of great efficiency was a circular economic engine that produced affordable products and worker wages sufficient to buy the very products the mass production engine generated. The great American middle class was born, fed, sheltered, and eventually made increasingly comfortable with dishwashers, plasma televisions, computers and an iPhone in every hand.
While a blessing in a thousand ways, Ford’s system of management became so ingrained in our management thinking that we lost track of the fact that it was an ideal construct for its time, not the only way to run an organization. Mass Production worked THEN.
Today, our economy thrives on Mass Customization. We live in an era where YES is the only viable value proposition and NOW is the only acceptable timeframe. This is NOW! Failure to understand this fundamental shift puts any business at risk of surviving through the biggest economic shift in a century.
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Business at the Speed of Now: The Countdown
The countdown begins.
In 87 days, December 6th to be precise, Business at the Speed of Now will hit bookstores across North America and be speeding across the Internet as an ebook. By mid-January, it’ll be flying off the shelves around the world in such places as
London, Singapore, and Sydney. Over the 14 weeks leading to its release, I am going to share a series of 22 posts intended to bring into clear focus the biggest management challenge the world has seen in a century.
But this isn’t going to be all work. I have some fun in store along the way.
Framing up four major topics, each with five blogs of exploration, I will share with you what is nothing short of the reinvention of modern management. Each section will be brought to life with cultural icons.
The opening series, using iconic products of the last century, we’ll look at the history of management beginning with the Model T and Henry Ford, paving the way for the economic transformation of a nation based on the principles and methods of mass production. We’ll also trace its success and then introduce you to the world of NOW, where Mass Customization dominates, yes in the ultimate value proposition and NOW is the only acceptable timeframe in meeting customer needs.
In part two we’ll look at some of our cultural heroes, and the lessons they offer for leaders who are making the transition from mass production to mass customization. We’ll enjoy some fun with such classic characters as Superman, James T. Kirk, Spiderman, the hip spy Austin Powers, and of course, the great Wizard of Oz.
Then in part three, we’ll use the inspiration of great companies and great brands to explore the lessons of transformational leadership. We’ll touch on Starbucks, Nike, Apple, Amazon, and Google for some energizing perspectives.
And finally, we’ll lean on the wisdom and style of some of the best leaders in history, individuals who changed the rules and drew many others to follow their departure from the past. We’ll go back in history with Abraham Lincoln, we’ll remember Henry Ford and his great contributions, and I’ll share some of the transformative thinking put forth by an unlikely character, a statistician named W. Edwards Deming. And we’ll close up this section with one of the best leaders of our age, Ford Motor Company’s Alan Mulally.
And the final post will tie all the pieces together just in time for the launch of Business at the Speed of Now. We’ll talk about THEN, and we’ll thrive in the NOW.
Join us on this journey. Invite your friends. Register and join in the conversation.
It’s going to be fun.
(We would love to hear your comments. To comment, click on the headline of this post and then you’ll be able to comment.)
Putting Your Sister-In-Law Out Of Business
The possibility of having a graphic designer in Indonesia and your sister-in-law, who may live down the street from you, in competition for your business is real and its implications are profound. This new reality, enabled by the internet, sets in motion a competitive whirlwind that could easily be seen by any local designer as incredibly unfair, and stirs anger among the traditionalists as to a means to obtain image counsel. While there is certainly merit in the argument, low cost and speed are attractive lures for the consumer. No place for IBM to go for council, but the new realtor opening doors down the street doesn’t need high-end expertise. (more…)