Issue 32, Thursday 16 November, 2000
Made in New Zealand - twice winners of the America's Cup
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Award is a free fortnightly email magazine featuring the tools, techniques and best-practices that deliver high performance in the new economy
In this issue

Twenty Minute MasterClass
Change insurgency - the guerilla war in your workplace
Quick Case Study – customer service
Sixty Second Snapshots
>> Merger madness
>> Workplace ethics
>> Measuring Business Excellence
>> Great managers never forget the basics

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Twenty minute MasterClass®
Change Insurgency – the guerrilla war in your workplace

We know, we know. The new-economy glossies are full of 'change' stories. The gurus talk little else. You did it in school, deal with it at work, can't escape it in the media. Sorry Folks. It is part of your daily life. You'd better get it right. It's important (sigh). And here's the viewpoint of no ordinary pundit – Robert B Reich himself!

Aside - who is Robert B Reich? Author, professor, former labor secretary in the Clinton administration; change insurgent. His new book, The Future of Success (Knopf), will be out in January 2001.

There's this mantra. People mutter it to themselves in airport departure lounges. It's a comfort to know there's something worse than knees in the chin economy all the way to LA. It goes something like this:

'The Web changes everything – including change. And it's not just the Web. It's the whole digital thing. Wireless. The human genome project, complexity theory, the new economy and the new science. Organic computers. Tom Peters! Gary Hamel. Information – too much to read, too little time. Email. Oh my God – email! I'm drowning in it! I wish I could just get a grip on this stuff.'

That's where people like Reich (and publications like this one, in our own modest way) come in. We synthesise. Contextualise. Simplify. And make judgements about what's important. Let's see how Reich sets the scene:

In this whole 'change' world, he says, power has shifted from inside to outside, from corporate planners to aggressive buyers. All of us – customers, clients, investors – have a huge array of choices. And can switch to something better instantly.

Change today happens suddenly, unexpectedly, unpredictably. It occurs in companies just as in biological systems or in tech breakthroughs – sudden, non-linear, always on. Amplitude and direction can't be forecast:
- killer apps can come from anywhere
- new competitors are lurking everywhere
- markets emerge, flourish, inspire imitators, breed competitors, and disappear seemingly overnight
- big brands, once long-to-establish and seemingly unassailable, now burst on the scene like a new strain of virus, finding competitive spaces and market niches that were previously invisible
- buzz can make a product overnight. Or break it.

'Company' no longer refers to a fixed set of assets and employees operating with a set strategy and in a defined market, Reich says. A company is a living organism competing, collaborating, and co-creating in a network of other companies. It is moving and morphing into different revenue streams where it can add value, extract profits – and change the rules of competition in entire industries.

Can't change? You won't long be a player. And hiring change agents, who used to carry the banner for change inside large companies, is no longer the right way to think about or to practice change. Change today demands the change insurgent. The what? Forget about change agents, Reich says. Old fashioned. Faster, cheaper, better is all very well. Linear improvement – cutting costs, questioning bad practices, applying new technology to an old task, inching the company closer to its customers – is all very well. But not enough. Insurgency means:

continually inventing a better organization – change insurgents focus less on products and markets, more on readiness. The whole organization has to scan technologies for possible applications, scan markets for possible needs, scan everywhere for newly emerging technologies – and then move like lightning.

aiming for dexterity rather than just growth – the web's mandate: Stop cutting costs, start growing revenues, is now, in the next decade: More discipline about growth, more focus on adaptation. It's no longer enough just to grow. The job of the change insurgent is to focus companies on their ability to manoeuvre.

exploding the organization and putting it on the web – turning old-line companies into on-line companies. And taking the opportunity to change the context in which the company operates – with B2B Web-based auctions and partnerships. Equity instead of fixed prices, performance-based pay in place of fixed payrolls, stock options, project teams, and contract workers.

working from wherever you are – change agents depend on title, authority, or official sanction to get their work done. Not the insurgent, who relies on great ideas, powerful visions, and daring examples – and can operate from anywhere.

Ten rules of change insurgency
Resistance to change doesn't go away. Even guerrillas need weapons. Here's Reich's armoury:

1. Manage the blood supply.
In an economy that's all about the intersection of talent and ideas, change insurgents manage turbulence – monitoring the flow of new people into a team or a department to produce a creative tension between the old hands who know the ropes and the new hires who are there to disturb the status quo.

Create too much turbulence, and the organization loses the capacity to get things done. Knowledge, skills, and relationships are sacrificed in the name of creative chaos. Create too little, and people stagnate.

2. Find, hire, and promote people who discomfort
Wanna move your company out of its comfort zone? Hire 'uncomfortable' people. Bringing in new blood isn't good enough – not if the new people all come from the same place and have the same attitudes. Change insurgents surf across different talent pools, picking the best people from different companies, backgrounds, disciplines, and generations.

3. Subvert the 'relations' people
In the old economy, where stability and predictability were the orders of the day, people with 'relations' in their titles proliferated. Their jobs: preventing change. Eliminating disturbances and muting turbulence.
- customers are upset, unhappy, demanding better service? Send them to customer-relations. They'll smooth those ruffled feathers (and eliminate the need for change)
- engaged in questionable practices that draw the attention of the press? Deploy the public-relations experts: Explain away operations that ought to be changed
- discontented employees raising tough questions about how the company treats its own people? Send them to the folks in employee relations: Settle the malcontents down
- how about legislators who challenge the company's environmental record? They'll get a call from the government-relations team.

In the new economy, the 'relations' heat shields, who think that they're the company's staunchest defenders, become its worst enemies -- by protecting it too well from demanding customers, clients, and constituents.

The insurgent's alternative? Use technology to route demands around them. Email, intranets, and extranets can move information across borders, around established bottlenecks, and over chains of command – so that complaints, suggestions, and alternatives get a hearing inside the company.

4. Conduct heat
Getting around the heat shields is important as an improvement but insufficient as a strategy. Learn how to play offence – by figuring out how to conduct heat. Change insurgents learn to move complaints, concerns, problems, and competitive threats to the right place in the organization and with the right intensity. Blasting people with a constant cascade of complaints and bad news simply demoralizes them. But keep their feet in the fire.

It's essential, Reich says, that people in responsible positions not be able to deny the existence of the problems and challenges that the company has to confront.
- forward emails from unhappy customers to the people who can really do something about the complaints
- go out into the field and videotape real customers shopping in a store, or using the company's product or service (and show the tape back at headquarters – to everyone, because different people will pick up on different things)
- assign employees to check competitors' Web sites and to analyze what the competition is doing that outperforms their own offerings
- post up-to-date data on company sales, earnings, and market price for every employee to see, so that everyone is involved and no one can duck what the market is saying about how they're doing.
- In every case, the point is the same: Make it impossible for people inside the company to stay comfortable and to plead ignorance.

5. Turn the geeks and salespeople into change allies
Why? Because they're the people closest to the sources of change: the new tech and those relentlessly demanding customers. They spend time with the problems, opportunities, complaints, and challenges that signal the arrival of a major competitive moment. They can become a squad of powerful truth tellers – if you can get them to say it.

Problem is, they're trained to do the best with what they've got. No-one's told them their opinions matter. Send them a signal that their services as heat conductors are valuable and important, and you may be able to enlist them as change insurgents who can keep the heat on, inside the business.

How? Try modelling the behaviour you want to see. Spend time in the field actually selling. Listen to what key customers have to say and signal this to the sales team.

6. Hold change resisters' hands
Be nice, OK? Every organization has change resisters – people who are uncomfortable with change, threatened by it, would rather not have to deal with it. It's not always appropriate to come charging out of the undergrowth at them, firing in all directions. Or to hold their feet too close to the fire. Metaphor heaven, eh?

So Whaddya do? Well, change doesn't always, maybe doesn't often, mean loss. Affirm and celebrate what works. Nurture the culture when it adds strength and resilience. Show people that you value them. And that you value what brought the organization to this point. After that, you show people that change is constant. Providing context, as much as content, is the job of the change insurgent.

It's important to pick your battles and to set the right pace, Reich says. Don't try to change everything at once. If you have the luxury of time, setting a pace that lets even change resisters find a way to fit in can produce an organization that continues to function well, even as you introduce a new mind-set and a fresh way of working. Once resisters discover that change isn't nearly as threatening as they had feared, you can quicken the pace. Sometimes, a gentle hand is the way to go.

7. Use tough love
But sometimes nursing the resisters is a luxury you can't afford. There are times when you can convince them that change is inevitable. And there are times when you simply have to lay down the law: The game is changing, and they can either play within the new rules or play somewhere else.

For important people doing important work in important companies, gentle suggestions to join the change insurgents won't ever be enough. Under such circumstances, you have to be prepared to fight power with power.

8. New times demand new measures
Here's a real toughie – changing how you keep score. The truism – what gets measured is what gets done – can become the death knell of every change insurgent. It's hard enough to create an environment for constant change; it's even harder to make the case that change is necessary and is in fact working, when all of the traditional indicators continue to determine the way that the company keeps score.

Learn to play a double game. First, play their's, the way they play it. As survivors of the dotcom shakeout are rapidly learning, it's not enough to insist that the new economy change the laws of economics: You still have to be able to appreciate and play by the old rules if you want to stay in the game. Learn to speak the language of finance and venture capital.

Second, learn your own game. Master the art of coming up with new metrics and measures – performance indicators that reflect the new rules of the game.

Creating a new sense of urgency? Try focusing on metrics that highlight speed: Time to bring a new product or service to market; to replenish or to restock the shelves; to fill a customer order.

Focusing on customer experience? Try creating metrics for every contact that a customer has with the company: % orders handled perfectly; % of mistakes that are corrected perfectly; % of customers who rate their experience good or excellent.

Or perhaps the change agenda is performance in the talent wars. New metrics can buttress your argument that there are other measures besides ROI or ROE that the company needs to pay attention to: Offers accepted by new recruits; employee retention among new recruits; new recruits headhunted away from key competitors, and so on.

9. Just do it
Whether the enterprise is a specialty-foods store or a global retailer, change insurgents share a common attribute: They don't wait for permission. They don't ask for resources. They don't try to build consensus. They make a decision, see how it plays out, and either reinforce it or change it. Change insurgents thrive on decisions: Make an informed choice, implement the decision, read the feedback. Repeat the cycle. The new economy thrives on speed and implementation. The job of the change insurgent is to alter the speed and comfort level of the organization. And the best way to do that is just to do it.

10. When you've gotta go, you've gotta go
You live by the sword – expect to die by the sword. Change insurgents know that shouldering the company away from its comfort zone is a high-risk, high-reward game. Succeed, the company thrives, and they earn both personal credit and the chance to stay in the game. Fail, and they're likely to be dog tucker.

But sometimes even if they succeed, they end up losing: They expend so much energy in the process that they begin to question the value of the effort, or they burn so many bridges internally that it becomes clear that they're no longer welcome, or effective. Or, sometimes, they leverage their way to a better opportunity either on their own or with an organization that appreciates their approach to change. Whatever. The trick is to know when it's time to go.

Listomania: How to detect change resisters. Listen!
For every action, there's an equal and opposite reaction. Change insurgents are bound to evoke their opposite: change resisters. How can you tell who's a change resister and who's not?

Listen to what people say:
That seems risky. You bet it is, the question is whether the risk is worth it, given the chance that it might work – and also the inherent risk of not changing.
Let's go back to the basics. What basics? Mass production? Command-and-control? The idea that basics exist is usually wrong, because the world has changed profoundly since the time when there was one right way to do everything.
It worked before. Past success is the enemy of change – especially when it's offered as a safe alternative to blazing a new trail.
We're fine just the way we are. Maybe -- but it's unlikely that you'll stay fine unless you change. Success breeds complacency.
There's no threat. There's always a threat, there are always dangers. If they're not 'out there,' they're 'in here': Internal threats are often the most destructive.
That's not in our core competence. Too bad. You'd better learn. Let yourself be bound by old competencies and you're building your own coffin.
The numbers don't work. Old models are often irrelevant to the new economy. Pay attention to cash flow, but don't let the 'green eyeshade' guys prevent change from happening.
It's a slippery slope – start down that road, there's no stopping. The real message: I'm not in control anymore! That part is true: Customers are in control. Old-fashioned control freaks are not in control. Anything that's not working can be ended immediately. What can't be stopped are successes.
There will be unforeseen consequences. Of course – the new economy is nothing but unforeseen consequences. That's why constant change is necessary.
Quick Case Study® – customer service
Myra Komar (self-styled as 'The Trainer from Down Under') recently wrote to the the trdev list (trdev@egroups.com):

”I am having to redesign a customer service training session (1 day) for a service industry client - currently delivered via a powerpoint presentation plus hand-outs.

"The client is asking for more interactivity and role-plays and [I wonder] if anyone out there has some activities I could incorporate or modify for the program.

Some of the issues Myrna identified:
- can't teach an old dog new tricks
- believe they are already delivering good service
- want them to cross-sell
- promote membership benefits
- solve problems without necessarily always referring to supervisor."

We kinda liked the salty and robust response from one James Mason (who's well known, by his own account, to regulars on the trdev), who replied (in part):

"After about a billion and six different training programs, seminars, and engagements, I've come to the opinion that the reason Customer Service sucks is because the wrong people do it, or they do it for the wrong reasons, or it's a flat out lie, and that the term is adopted by companies who haven't the gumption to tell their customers the truth, which is that they don't much care for people, and that, had they another way to do it, they'd just as soon never actually have to deal with you, but just count the freakin' money.

"This being the case, I don't even DO PowerPoint presentations any more. I don't make up fancy books. I don't do worksheets. I don't do handouts. And I don't do prepack. Ever.

"Every session is a customized program that we develop on the fly in the first 45 minutes of the session. We talk about the characteristics of the group. What the company says it does. What the company actually does. The levels of employees I'm dealing with. The culturalities (a James (r) term, meaning "cultural realities") of the organisation. And so on. Then we talk. For about another 45 minutes. We play Telephone (this is a fabulous game; some people call it Telegraph). Everybody laughs. Then we start work.

"We do the H5W about customer service (How, What, Where, Why, When, Whom). We talk about escalations, and when they're needed. We discuss dialogue. We sing stupid songs, that we make up from a motto or jingle, either theirs or the competition's (You do NOT want to know what we did to the old Burger King song, but I will say that we weren't holding pickles OR lettuce, and special orders, as you prolly already know, DO upset us).

"As to the old dogs, there's a reason there aren't any old dogs at the race track. If they can't learn new tricks, they need to go somewhere else. The truth is that customer service is the most important aspect of business. Period. And most companies give it short shrift.

"So find out what the company believes. 

"Do they BELIEVE in their employees? Then let them do whatever they need to do to make a customer happy (I'll remind you that Nordstrom employees don't need permission to spend $200-500 to satisfy a customer (depending on the employee's level, experience, etc). 

"Do they believe in their product? Then the return policy should be "if you don't like it return it. We DO like it." 

"Do they believe in their customers? Then don't treat them like proto-criminals, ready to screw the company at the drop of a hat (statistically, companies that have "no questions asked" customer return policies have less than a 2% abuse factor; and less than 1/3 the national average of shrink. I know; I can't figure it out either). 

"Do they believe in their mission? Then the employees should know it by heart.

"Customer service is DAMN hard, and the training is DAMN hard too. It's supposed to be. Like Tom Hanks says in "A League of Their Own": "It's supposed to be hard. If it was easy, everyone would do it. The hard ... is what makes it great".

"Finally," Mason said, "I have to say that, if they're allowed to deliver good service, then they WILL "believe they are delivering good service." But if they're NOT giving good service, then no money, no power, no anything on earth can make them believe that they are. And there's no activity that can make you believe something that you don't."

James E Mason, Practice Director, PerforMax/LVMS [PerforMax Training and Development & Las Vegas Mystery Shoppers], a division of ORG/CustomerCentric (sm) "It's All About The Customer"(tm)
Sixty second snapshots®
Brutally short summaries of material too valuable to junk

SSS 1 – Merger Madness
Involved in a company merger or acquisition? you may want to read two articles by Audrey Choden of Training by Design:
Merger Madness: Survival Skills for Training Professionals provides tips for increasing your chances of surviving. Click here for the article.
Merger Madness: How to Keep from Losing Survivors describes common mistakes that employers make during and after a merger and how to correct them. Click here for the article,

SSS 2 – Workplace Ethics
Jeffrey L. Seglin (Assistant Professor, Emerson College, Business Ethics Columnist, Sunday New York Times, Email: jeffrey_seglin@emerson.edu, jseglin@post.harvard.edu. Home page) our favourite popular ethicist, recommends for your attention a new newsletter called VALUES FOR MANAGEMENT: A Web Magazine for Hi-Tech Managers. It's published by the Center for Business Ethics and Social Responsibility at the Jerusalem College of Technology.

Here's how editor Michael Gros describes the mission of the newsletter: "The world of a Hi-Tech manager is a complex one, as managers must bridge the gap between traditional economics and the fast-paced, quickly-changing environment of the 'New Economy'. This new environment brings with it a whole range of dilemmas for managers. Values for Management, aimed at International Hi-Tech managers, will focus on how values can be used to assist managers in dealing with such issues. In each bulletin we will focus on a specific value-related topic, providing, in digest form, information as well as examples of best practice from the world press."

The specific topic of the first issue is employee loyalty in the hi-tech world.You can request a copy of the newsletter by Emailing Mr Gros at: gros@mail.jct.ac.il

SSS 3 – Measuring business excellence
MCB University Press recently bought Measuring Business Excellence and appointed new editors. “The journal,” they say, “seeks to be the preferred outlet for scholarly works that have a high level of applicability in the practice of business excellence, with emphasis on both measurement and future directions.”

Why am I telling you this? Apart from the obvious – reading MBE will be good for you – your Award editor is a member of the global Editorial Advisory Board, which, again according to the editors (and who am I to disagree) “consists of highly accomplished representatives from academia and practice alike. Academicians are in the business of seeking truth; practitioners deal with reality on a daily basis. The journal seeks to wed the input from these two realms so as to facilitate the merging of truth and reality.”

“Business excellence as a term is illusive,” they say. “As with movements in the past, business excellence is vulnerable to disappointing executives, managers and employees by failing to deliver the goods. Executives fail to realise gains that accrue to owners; managers get squeezed between executive demands for financial performance and implementing long-term improvements; employees perceive a cycling of monthly flavors.”

“To address this vulnerability at the outset, business excellence should not be seen as a panacea. Rather, business excellence should be seen as a never-ending pursuit. The journal seeks provide the ongoing evolution of defining what business excellence is and how it can be achieved, and the value derived from its achievement. As the principal vehicle for achieving this end, the journal sets out to provide those involved in business research and practice with definitions, models and tests of business excellence, its metrics and measurement schemes, and its future directions.”

SSS 4 – Great managers never forget the basics
Great managers never forget the basics, Thomas A Stewart wrote in a recent eCompany book review. That's why he was delighted to receive a copy of a new book by Charles Handy; 21 Ideas for Managers. It's a wonderful book. It belongs on every manager's bookshelf – new managers should be required to read it. It's a superb, brief but comprehensive, elegantly written summary of basic success factors.

Handy's 21 ideas are not hard to describe.

The first is that different people have different strengths, different kinds of intelligence; a good manager recognizes that, learns what each person's skill is, and doesn't try to force a sprinter to run a mile and a half.

The second is that people's needs and ambitions change, and a good manager finds ways to give people a work environment that releases the effort, enthusiasm, energy, and effervescence that make for good performance.
The third is that we all have unspoken contracts about work - what I think I owe the company and vice versa, what I think I owe my colleagues and vice versa - and it's a good idea to brings these out in the open.

"It is really very simple ..." Handy says. And it is. He makes it even simpler with well-told anecdotes, a few interesting exercises, and (at the end of each brief chapter) questions to think and talk about with the people you manage.

"... but very difficult," he continues. "Ideas [this book] can give you, but never courage, nor the willingness to trust others, nor the patience to wait for others to grow into that trust, nor the patience to forgive."
Not an advertisement
We'd like, as always, to remind you about EDGE FIRST, our companion eZine dedicated to leaders and leadership - a fortnightly serving of provocative thinking about what it means to be a leader, and the tools, techniques and best-practices that drive leadership improvement. If you haven't seen it, click here for a complimentary issue.

In recent issues
Competing for the future - Hamel is THE MAN, embrace innovation!
Women and leadership - for real progress ... give men the nappies
Quick case study/Jennifer White - on picking winning teams
tompeters! - new economy DNA. Flaky? Irresistable! The survival kit
Snapshots of the new economy - from Seybold to Subramanian
eStrategy - best, first, fastest, lastest ... just watch out for Wal-Mart
A better way - but don't try this at home
Gen II - who wants to be a CEO
>> Next issue November 30 - reader contributions warmly received
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