The New Normal

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A special presentation on dealing with chnage for the Florida Recreation and Parks Association (FRPA) -- Year Two participants in the Abrahams Leadership Academy.

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The New Normal

  1. 1. Creating a Dynamic Organization<br />
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  3. 3. The future of capitalism is here… and it is not what any of us expected.<br /> It is increasingly clear that the current downturn is fundamentally different from recessions of recent decades. We are experiencing not merely another turn of the business cycle, but a dramatic and profound restructuring of the economic order.<br />Harvard Business Review<br />
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  5. 5. This much is certain: when we finally enter into the post-crisis period, the business and economic context will not have returned to its pre-crisis state. Executives preparing their organizations to succeed in the new normalmust focus on what has changed and what remains basically the same for their customers, companies, and industries. <br />Ian Davis is the worldwide managing director of McKinsey & Company.<br />
  6. 6. Workshop<br />What top three things have changed in your industry?<br />What top three things still remain as essential elements for success?<br />
  7. 7. IBM Global CEO Survey<br />Organizations are bombarded by change, and many are struggling<br />to keep up. Eight out of ten CEOs see significant change ahead, and<br />yet the gap between expected change and the ability to manage it<br /> has almost tripled since our last Global CEO Study in 2006.<br />CEOs view more demanding customers not as a threat, but as an<br />opportunity to differentiate. CEOs are spending more to attract and<br />retain increasingly prosperous, informed and socially aware customers.<br />Nearly all CEOs are adapting their businessmodels — two-thirds are<br />implementing extensive innovations. More than 40 percent are<br />changing their enterprise models to be more collaborative.<br />
  8. 8. Outperformers were:<br />INNOVATIVE BEYOND CUSTOMER IMAGINATION<br />DISRUPTIVE BY NATURE<br />HUNGRY FOR CHANGE<br />
  9. 9. Innovative beyond customer imagination…<br /> The Enterprise of the Future surpasses the expectations of increasingly demanding customers by building deep collaborative relationships that allow it to surprise customers with innovations that make both its customers and its own business more successful.<br />
  10. 10. Disruptive by nature…<br /> The Enterprise of the Future radically challenges its business model, disrupting the basis of competition. It shifts the value proposition, overturns traditional delivery approaches and, as soon as opportunities arise, reinvents itself and its entire industry.<br />
  11. 11. Hungry for Change<br /> The Enterprise of the Future is capable of changing quickly and successfully. Instead of merely responding to trends, it shapes and leads them. Market and industry shifts are a chance to move ahead of the competition.<br />
  12. 12. A Death Spiral at DuPont<br /> The impact of the financial crisis began to hit DuPont about a month after the collapse of Lehman Brothers in September 2008. Sales volume slid by as much as 59% in some divisions, good customers cancelled orders and employees were gripped by fear and uncertainty.<br />
  13. 13. CEO Ellen J. Kullman concluded that the company faced a &quot;new reality&quot; requiring fundamental changes if it were to remain successful.<br />Focus on what you can control.<br />Adopt a new trajectory by rethinking your business model.<br />Communication is key.<br />Maintain pride around the mission.<br />
  14. 14. Anyone who tells you they enjoy change… should seek immediate professional help.<br />
  15. 15. Emotional Response to Perceived Negative Change<br />Anger<br />Active<br />Acceptance<br />Bargaining<br />Stability<br />Emotional Response<br />Denial<br />Immobilization<br />Testing<br />Depression<br />Passive<br />Time<br />
  16. 16. Managing Positive Responses to Change<br />PESSIMISM<br />Informed <br />Pessimism<br />Hopeful<br />Realism<br />Checking<br />Out<br />Informed <br />Optimism<br />Uninformed <br />Optimism<br />Completion<br />TIME<br />
  17. 17. The risk is NOTin the change…the real risk is in refusing to change.<br />
  18. 18. The eight major steps of the change process<br />
  19. 19. Build an irresistible case for change<br />
  20. 20. Create a strong sense of urgency<br />
  21. 21. Form a powerful guiding coalition<br />
  22. 22. Create a clear vision for successful change and communicate it relentlessly<br />
  23. 23. Empower others to act<br />
  24. 24. Plan for and celebrate small wins<br />
  25. 25. Institutionalize the change<br />
  26. 26. Common push-back tactics<br />This is not FAIR<br />This is too HARD<br />You changed the RULES<br />Why am I being PUNISHED<br />This is too SCARY<br />I’ll sit here and WAITit out<br />I’ll just REFUSEto change<br />I’ll ARGUEabout the change<br />I’ll start a REVOLUTION<br />
  27. 27. Four antidotes to change resistance<br />Bring employees face-to-face with the external pressures to change<br />– the pressure is real and it is not going away!<br />Engage change “zealots” to set the pace<br />Manage employee feelings – deal directly with their fear<br />Support the new expectations with new tools, systems and coaching<br />
  28. 28. Key Drivers of Business Success<br />Tolerate<br />Nothing<br />Less<br />Global study:<br />16 countries<br />29 firms<br />139 offices<br />5,589 respondents<br />From: Practice What You Preach by Maister<br />Financial <br />Performance<br />CR=104.12<br />Quality P&S<br />&<br />Customer Relationship<br />CR= .404<br />Employee<br />Satisfaction<br />CR=.277<br />CR=.275<br />CR=.249<br />CR=.334<br />CR=.280<br />Empowerment<br />High Standards<br />Coaching<br />CR=.371<br />CR=.365<br />CR=.285<br />CR=.191<br />CR=.247<br />Long-term<br />Orientation<br />Enthusiasm, Commitment,<br /> Respect<br />Training & <br />Development<br />Fair <br />Compensation<br />
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  30. 30. Great Places to Work Study<br />At the heart of our definition of a great place to work - a place where employees &quot;trust the people they work for, have pride in what they do, and enjoy the people they work with&quot; - is the idea that a great workplace is measured by the quality of the three, interconnected relationships that exist there: <br /><ul><li>The relationship between employees and management.
  31. 31. The relationship between employees and their jobs/company.
  32. 32. The relationship between employees and other employees. </li></li></ul><li>The key elements of a strong culture<br />
  33. 33. Atmosphere Issues<br />You do not need a fancy title or a top box on the org chart to initiate culture change.<br />You do not need a huge budget or expensive software to initiate culture change.<br />You do not need the buy-in of every single person in your organization to initiate culture change.<br />You simply need a strong belief and passionate commitment to creating the best possible place for you and your peers/people to work.<br />
  34. 34. From 1,000 companies down to the top 30 as judged by both customer and employee satisfaction and engagement<br />Amazon<br />BMW<br />CarMax<br />Caterpillar<br />Commerce Bank<br />Container Store<br />Costco<br />eBay<br />Google<br />Harley-Davidson<br />Honda<br />IDEO<br />IKEA<br />JetBlue<br />Johnson & Johnson<br />Jordan’s Furniture<br />L.L. Bean<br />New Balance<br />Patagonia<br />REI<br />Southwest Airlines<br />Starbucks<br />Timberland<br />Toyota<br />Trader Joe’s<br />UPS<br />Wegmans<br />Whole foods<br />
  35. 35. Key attributes of the firm’s of endearment<br />They align the interests of all stakeholder groups, not just balance them.<br />They operate at the executive level with an open door policy.<br />They devote considerably more time than their competitors to employee training.<br />They empower employees to make sure customers leave a transaction experience fully satisfied.<br />They make a conscious effort to hire people who are passionate about the organization and its products/services.<br />
  36. 36. Key attributes of the firm’s of endearment<br />They consciously humanize the company experience for customers and employees, as well as the working environment.<br />They project a genuine passion for customers, and emotionally connect with customers at a deep level.<br />They treat suppliers as true partners and encourage suppliers to collaborate with them in moving both of their companies forward. <br />They consider their corporate culture to be their greatest asset and primary source of competitive advantage.<br />Their cultures are resistant to short term, incidental pressures, but also prove able to quickly adapt when needed.<br />
  37. 37. The five key elements to build trust with employees:<br />Honesty<br />Respect<br />Transparency<br />Consistency<br />Fairness<br />
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  40. 40. It is the responsibility of the leaderto foster a dynamic culture<br />Values<br />Communications<br />Role Modeling<br />Stories / Examples<br />Rewards<br />Punishment<br />

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