This is the second post in this series on the role of intangible asset management in innovation which began this week profiling the book “Confidence” by Rosabeth Moss Kanter. Today we look at two case studies from her studies of organizations who succeeded at reinventing themselves.
Facing Responsibility – Gillette’s Turnaround
In 2001, Gillette was a well known global brand which had not kept up with marketplace innovations. Gillette had championship assets but a minor league cultural system that mired its people in bad habits and avoidance of responsibility.
Their new CEO Jim Kilts and his leadership team moved to transform this behavior while solving business problems. Their actions forced the company to take a look at itself, face facts, and restore responsibility and accountability. Kilts’ guiding principles included:
- Straight talk about problems and expectations
- Courage to admit responsibility
- Open dialogue and widespread communications
- Clear priorities and attention to detail
- Performance feedback
They placed all of the facts on the table with no room for those responsible to avoid them. This included a complete top down analysis of strengths, weaknesses and key issues. He clearly articulated his expectations in terms of a new behavior he desired (set and achieve realistic targets; annual and quarterly objectives with structured feedback).
Gillette drowned in meetings. Kilts introduced a new more efficient meeting approach that promoted fact-based management, open communication, simplicity, collaboration, measurement, reports, and methods for working together. He wanted excellent performance that included the ability to collaborate across business units.
Kilts emphasized cultivating one-on-one customer relationships. Visits to customers for developing an ongoing dialogue was essential. Quarterly objective reviews of business units were instituted on a few broad priorities for growth with detail on implementation (e.g. business, markets, competition).
Managers were encouraged to break down performance into specific elements, look at details, chart statistics, and assess patterns. Each business unit maintained a “business health chart” tracking key indicators. Quarterly meetings were held with top management to score postings and provide coaching.
In October 2005, Procter & Gamble bought 100% of Gillette for $57 billion.
Inspiring Initiative & Innovation – BBC’s Turnaround as “One BBC”
Of all the pathologies that accumulate, the most damaging to people and organizations is passivity and learned helplessness. The true test of any culture is whether it is possible for everyone to take initiative and for everyone to be trusted to perform when the pressure is high.
Cultural change begins with symbols and messages from management but must be accompanied by behavioral changes through formal programs that support the culture, leadership, and competency development of your human resources (staff or volunteers).
Beginning in 2000, director-general Gene Dyke started a turnaround of the world’s largest news organization who had historically lived off the license fees charged to British consumers. The result had been a slow, bureaucratic, low risk tolerant organization that stifled innovation. But Dyke and his team worked to rebuild the BBC culture around themes and underlying management practices that promoted:
- Just do it – “don’t complain make something happen”
- Inspire creativity everywhere – “everyone has a say”
- Connect with all audiences – “build genuine customer contact”
- Value people – “respect them, give them initiative”
- Lead more, manage less – “focus on a vision, motivation to reach it”
Each of these themes were led by a employee team to develop initiatives around them.
Within 18 months Dyke’s One BBC cultural change initiative demonstrated evidence of a culture of innovation was growing:
- Departures from tradition – popular programming was being developed locally rather than “only London” by going out into the community to learn from customers
- Fast, decisive action – faster time to market for programming that often went against the old BBC charter guidelines
- Innovations through collaboration – web site interactivity increased across all business units led by its New Media group to create new customer experiences
- Surprising successes – a new trainee used training video funds to create a ten minute pilot for a new comedy about life in a dead end, white collar job – and The Office was born.
Leaders can energize depressed people, passive teams or sluggish organizations when they:
- Believe in people and their power to make a difference. Leaders must show this through investing in the things that matter to people.
- Redirect energy tied up in negativity into more positive action.
- Make initiative possible and desirable by making it easier to contribute new ideas and support systems that fund and manage them.
- Start with small wins…things people can control. Give them a taste of victory.
Leadership is about how you build confidence in people. Leaders should articulate standards, values and visions. Leaders should be role models, leading through the power of example. Leaders must build formal mechanisms to support confidence: processes, routines and structures. Leaders must ensure to deliver confidence at many levels: the self, among one another, in the system, among stakeholders (internal and external).
DNA of Confidence for Organizations
Kanter lists three imperatives based on her research.
1. Individual and System Accountability
- Foster straight and factual discussion
- Communicate expectations early
- Repeat the standards to everyone through clearly articulated goals and priorities
- Ground vision in details of execution
- Make information transparent and accessible
- Access to abundant performance data empowers
2. Mutual Respect, Communication, Collaboration
- Structure collaborative conversations -across positions, departments, groups
- Reinforce respect and inclusion – not just with stars but all team members
- Define joint goals and collective definitions of success – create “wins” where everyone benefits
3. Initiative, Imagination and Innovation
- Open channels for new ideas
- Welcome from everyone, every place…fund them, praise them, sponsor them
- Treat people as experts in their work
- Encourage small wins and grassroots innovation
A Leader’s Ultimate Work
Leaders build and strengthen ties with their stakeholder network that provides support, loyalty, revenue, or capital. A turnaround requires closer, more collaborative efforts with stakeholders than normal.
Your organizational values are key to your character. They can be taught and communicated. They can be reinforced. Once instilled, people will use them to internalize them by being more accountable, collaborative, and risk taking.