Are You Committing the Seven Deadly Sins of Business Transformation?
by Mohan Nair, author of “Strategic Business Transformation: The 7 Deadly Sins to Overcome“
Every day millions of Americans arrive at work filled with low-level dread and resignation. Since the recession hit (or perhaps before), they’ve been overloaded, overstressed, and overwhelmed. The typical workday is a marathon of rushing from one task after another, with few breaks between these bursts of effort, and even fewer words of thanks from equally frantic managers and coworkers. By the time they drag themselves to the finish line at 5:00 (or 6 or 7 or even later), they’re completely drained and wondering how they’ll ever do it all again tomorrow.
Yes, too many employees these days are running on empty — and no matter how great their work ethic or their fear of unemployment, at some point the pace becomes unsustainable.
The problem is not that employees don’t want to work hard. It’s that they have nothing to believe in. When people are motivated by a cause, they’ll work without stopping and without loss of energy. Their dedication to the cause will fuel them. The problem is too many companies aren’t animated by a cause at all—and their employees just live for the end of the day and for Friday.
I’m a fervent believer in the power of, well, believing in something. If your company isn’t giving employees a cause — if the organization exists solely to create revenue, in other words — they won’t be partners. They’ll be foot soldiers. And when you fail to meet your employees’ needs, they’ll fail to meet yours.
Giving employees a “power source” — which I define as servant leadership, cause-focused strategies, and authenticity — is crucial. That cause, which bears little resemblance to the corporate-speak mumbo-jumbo in the typical mission statement, should spark enthusiasm in consumers and dedication in employees. It should be an inspiring ideology that is intrinsically linked to the company’s value proposition and competency.
Think Apple. Think Disney. Think Google.
It’s this cause — this ideology — that powers strategic business transformation. And because our world is changing so rapidly, businesses have to transform themselves over and over again in order to keep up or lead markets.
It used to be that markets reformed every several years with new ideas on what customers are interested in. But now markets and customers are transforming because they encounter more unknown unknowns, those changes that they never anticipated and started to notice only after they happened. Companies that want to survive and grow must find the insight to know what their customers value and are willing to pay for continuously.
Winning companies transform themselves in order to transform the customers they serve. They don’t manipulate markets nor do they just add another feature or capability to their arsenal. In fact, they don’t think of their capabilities as arsenals because they don’t see battles; they see opportunities to transform, not destroy.
If you’re ready to transform into an innovative, cause-driven, employee-and-customer-
Sin #1: Ignoring the new principles of business transformation.
Many companies that fail focus on the outward manipulation of markets and customers driven from the “ego” of the organization. Unfortunately for them, today’s markets are sensitive to purposeless wealth creation. No amount of end-of-the-year donations to needy organizations can make up for a lack of purpose and value. Mission and money must go hand in hand.
If you think of making money without thinking of the greater contributions to society, you will neither attract the right people nor make money in the long run. This is because people themselves are changing. Finding meaning at work powers the twenty-first century employee population. This population knows insincerity from truth, so leaders cannot ‘fake it.’ They have to be able to feel the plights of customers and people in our society. The fuel that drives our new economy fills the containers that bring purpose to profits.
Sin #2: Driving without a cause.
Most companies have mission statements — as well as vision statements, value statements, and other official website/employee handbook fodder. Yet many employees don’t believe in them and never use them. What they need is a cause, and that’s altogether different. Once organizations know why they exist, to whom they want transformation to happen and why, they gain the audacity and authenticity to drive strategic business transformation.
Don’t confuse ‘cause’ with ‘mission’. A cause is a lasting theme, an architecture that supports the transformation of the greater environment. It has personal, rather than organizational, implications. Missions are given to groups marching in lockstep; causes are taken up by creative individuals. A mission is a bounded, purposeful action. Missions impose the will of managers on employees, whereas causes are grounded in the latent, unexpressed will of the overall organization.
Discovering a cause greater than any one employee and greater than the whole propels organizations beyond the speed of lofty, purposeless, or narcissistic goals. In my book I cited Whole Foods as an example of a cause-driven company, and this quote by Cofounder and Co-CEO John Mackey in Harvard Business Review: “I think Whole Foods’ highest purpose is a heroic one: to try to change and improve our world. That is what animates me personally. That is what animates the company.”
Sin #3: Missing market momentum.
Traditionally, products seek customers, customers form markets, and markets move with momentum. In transformation principle, momentum is identified before anything else, customers and prospects respond to momentum, then products respond to serve these prospects to move with purposeful intent. Momentum is a unique way to view the market. Companies that don’t understand it will miss the drivers that indicate where momentum is going.
Momentum drivers often lead “old” customers to consider their options in a whole new way. Being able to predict these changes of mind and heart, even before the customers themselves do, allows companies to get in first with products destined to be hot sellers.
The most telling experience occurred recently when I was watching a sunset. A person nearby stated, “I wish I had my phone” when he was thinking of taking a photograph of the sunset. These customers would have rejected the idea of a phone and camera combined in the past. This is transformation at its best.
Sin #4: Ignoring the two orders of value.
If you assume that rational and emotional value propositions are all you need to consider, think again. There’s also a “higher order” value proposition: the symbolic. Customers symbolically attach to the product or the company that sells the product. They come to identify with the purpose of the product and what it stands for. Organizations that are able to transfer and connect market momentum into value to the customers that emerge from a transformation will gain market share and be very successful.
Take Trader Joe’s, for instance. The company has convinced its customers to bring bags that they bought from Trader Joe’s to collect their own groceries. It has successfully tapped into “green” market momentum.
The customers of Trader Joe’s are participating at both levels in acting to save paper or plastic and to recycle bags every time they visit. This has huge economic value because the company saves on the cost of bags, but the consumers do not see it that way. Consumers see themselves aligning with the grand vision of a better world without excess, and they believe that Trader Joe’s is conforming to their world view authentically.
Sin #5: Overlooking transformational servant leadership.
The new organization is a workspace with no walls. Leadership styles of the past cannot conform to the unbounded workspace commanded by remote employees, portable tablets, portable computers, and worldwide internetworks. Hierarchical management techniques and paradigms are breaking down. You may try to bend the iron bars of the hierarchical organization to make it “look” better — but if you aren’t practicing true servant leadership, you won’t be able to attract the talent it takes to compete in the transforming marketplace.
What is transformational servant leadership? While the concept is maddeningly difficult to pin down, it contains several basic truths:
- It’s based on service rather than hierarchical controls. Leaders believe in something greater than themselves.
- There are no sharply defined leaders and followers. Leaders lead when it’s appropriate and follow when it’s appropriate.
- Organizations are populated by project-centered self-leaders who partner with one another when needed.
- Leaders strive for dramatic inner change, re-engineering, and self-identification with corporate goals. In other words, it is about personal change creating group change that triggers corporate change — and not the other way around.
They are powered by a desire to serve others, and they forget themselves, and this is the source of their undying energy and success. They do not come to this easily but through self-doubt, suffering, ridicule, and even pain. Yet they are among us, and we should realize that we cannot judge anyone in our organization to be inadequate, of not having ideas to transform the world around them. Our purpose is to nurture and to find the goose that lays the golden eggs rather than be in the business of ideas. Be in the business of nurturing people with ideas, and the ideas will flow.
Sin #6: Mistaking capability for strategic competency.
Capabilities are what you can do for customers. Competence is the unique recipe of your capabilities and what you can do better than others consistently as far as your customers perceive. You can always gain a new capability: just learn how to do it yourself, hire someone who knows how to do it, or partner with another organization to fill that void. Stopping there, instead of understanding your competencies and using them to formulate your strategy, is the sin. It keeps you from being able to create value that people want and are willing to pay for.
Being good at one key capability is not sufficient — unless, that is, it is non-replicable. Winning, using competencies, involves:
- Creating brand awareness among your customers and prospects who feel an alignment between the organization and their values.
- Defining communicable cause/purpose that is about a transformed customer and experience with that customer.
- Combining key ingredients that reflect a valued recipe that creates a strong, enduring, and authentic “aftertaste” to the customer who keeps returning because of it.
- Creating a structure that drives social networked feedback interactively with an approachable organizational structure.
Trader Joe’s has gained loyal customers because they are capable in selling you good produce and groceries. But they are competent in driving their belief systems about conservation, their shopping experience, and their community spirit. Many other stores have the same ingredients (capabilities) as Trader Joe’s. What they don’t have is the recipe (competency).
Sin #7: Expecting flawless execution without a performance platform.
It is critical to find the talent ahead of time, find the capabilities of the future ahead of time, and to ensure that your operating capability anticipates rather than responds to a transformed market. What if Amazon couldn’t ship its products on time and accurately? Customers would go to the competition, of course. And yet, it’s common for companies to do more and more — to implement greater and greater change — without a context for employees and customers to frame improvement initiatives.
There are two categories of performance management corporations must master: human (inspiring, organizing work, people performance and incentives) and corporate (analytics, systems and methods around the financial, operational, customer and strategic outcomes and outputs). To execute well in the second category a company must have capabilities in four areas: monitoring, measurement, management, and direction setting. As if that weren’t complicated enough, companies must be able to strike a careful balance between surviving today and investing in tomorrow.
I call this balancing act ‘building the plane while flying the plane’. You have only one plane, but if you just kept flying it you would eventually encounter a storm that you would not survive. If you stopped and built the plane of the future, you would lose the battles you currently face. So you must build a new plane while flying the plane into battle.
It’s tough to determine how much to invest in the now and how much to invest in the future — especially since the future is a transformed environment. Prioritizing is part science and part art. The ability to make these decisions is where leaders truly earn their keep.
This is all deeply complicated stuff, to be sure. But Mohan insists it is possible for corporate leaders to transform (themselves, their organizations, and their customers), to make money, to keep their collective soul, and to give the people who do the work a real reason to come to work.
I challenge today’s businesses to choose to transform. Develop a strategy that reflects your beliefs and let others, both employees and customers, choose to take up your cause. Transformation is never easy, but it is almost always worth the blood, sweat, and tears that come with it.
Born and raised in Singapore, Mohan Nair is adjunct professor of business with the Kellogg School of Management, Nair teaches executive courses in supply-chain management and cost and performance management. In addition to “Strategic Business Transformation” he is also author of “Activity-Based Information Systems: An Executive’s Guide to Implementation” and “Essentials of Balanced Scorecard“.
This is an article contributed to Young Upstarts and published or republished here with permission. All rights of this work belong to the authors named in the article above.