Doing Personalization Correctly

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Doing Personalization Correctly

GUEST POST from Shep Hyken

Companies today face three critical marketing and Customer Experience (CX) challenges:

  1. How can you keep customers coming back?
  2. How can you get your customers’ attention so they don’t consider switching to the competition?
  3. How do you create an experience that makes price less relevant?

These questions and others can be answered in one word: Personalization.

It used to be that personalization was a marketing tactic. Simply using the customer’s name in the salutation of an email or letter, such as “Dear Shep,” was personalization in its most basic form. Include a reference in the body of the message, for example, what city the customer lives in, and you had what many considered to be a more sophisticated personalization program.

Today, the concept of personalization has blended into part of the customer experience. Using a name is barely a personalized experience. Using information about the customer that feels like the company or brand knows them takes marketing from promotional to customer experience.

For example, if I call a company that I’ve done business with and have questions about a new product I’m interested in purchasing or a customer service question, the company representative should have enough information about me to know how long I’ve done business with them, what products or services I’ve purchased, what problems, questions, or complaints I’ve called about and more. Using that information the right way is the beginning of a more powerful personalized experience. Customers like it when you know them.

And this concept goes beyond live interactions between a customer and an employee. A modern-day personalization messaging campaign is powerful and turns traditional email or text message marketing into a highly personalized experience.

This same experience can be used in email or text messages, either as part of customer support when customers “write in” with a question or for marketing when you want to push a message to the customer. Used the right way, you’re showing your customers that you know them.

On a recent Amazing Business Radio episode, I interviewed Ronn Nicolli, chief marketing officer of Resorts World Las Vegas. He talked about how storytelling can hit an emotional chord with a customer, helping to create and maintain an image that customers embrace and look forward to. And when the customer can relate to the story—or maybe they are part of the story—you connect at a different level. A higher level.

Nicolli said, “Ten years ago, email marketing was like fishing with dynamite. Throw the dynamite in the water—in the form of a big email campaign—and see what floats to the surface.” It was a mass marketing campaign, and the extent of personalization was the customer’s name. Today, because of advances in technology, Nicolli says, “AI gives us the ability to market in mass, but on a one-to-one basis.”

What you’re selling may be the same for everyone, but the message is highly personalized by merging the customer’s name, dates they did business, comments they made and more into the message. Nicolli referred to the AI program as an intelligent learning program.

Curating personalized messaging and visuals in mass that speak to each individual is going to resonate far better than a general message with no personalization other than the customer’s name. Nicolli shared that he can send out a million emails, and the messages are all re-curated to ensure they are meaningful and speak directly to the customer. For example, the resort may want to promote a seasonal package to its database. A message to a customer/guest who comes in with a group of friends for college basketball’s March Madness tournament weekend will receive a different email than a customer who frequents the hotel with a spouse or loved one for the occasional romantic weekend—even if the promotion is asking for the same call to action.

So, whether you’re personalizing the experience for customer support or a marketing message, it’s now all part of the customer experience. Our latest customer experience research finds that eight out of 10 customers prefer a personalized experience. They will even pay more for it, making price less relevant. They want to do business with or go to the place, like the title of the theme song from the hit 1980s TV sitcom Cheers implies, ‘Where Everybody Knows Your Name’.

This is what your customers want and expect. So, take your customer experience efforts to the next level with a personalization strategy that creates an emotional connection and gets customers to say, “I’ll be back.”

Image Credit: Shep Hyken, Pexels

This article was originally published on Forbes.com

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‘Stealing’ from Artists to Make Innovations Both Novel and Familiar

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AKA Self Plagiarism

Stealing from Artists to Make Innovations Both Novel and Familiar

GUEST POST from Pete Foley


This morning I came across a wonderful piece of music by one of my guitar heroes, Robert Fripp, of King Crimson fame.  It was a duet with Andy Sommers (The Police).  You don’t need to listen to it to connect to the insight it gave me, but if you are interested, you can watch it here. It’s interesting and innovative music

I’m a fan of Fripp, in part because of his technical expertise with the guitar, but mostly because of his innovation and restless creativity.   King Crimson are not a top 40 band, but they’ve enjoyed a long and successful career going back to the late 1960’s.  Their longevity derives, at least in part from their ability to completely reinvent themselves, and challenge their audience on a regular basis.  But they do so while also retaining a loyal following and owning a unique space in music.  They have, over 50 odd years, managed to walk the tightrope between constant change and ongoing familiarity.  

The Novelty-Familiarity Dichotomy:  Stepping back, that tightrope is one of the biggest challenges we all face as innovators.  Hitting the sweet spot between novelty and familiarity is key to both trial and repeat. If we don’t offer something new and interesting, then people have no reason to try us, and are better off staying with their existing habits and behaviors.  But make it too different, and we create a barrier to adoption, because we ask potential users to take a risk by straying from the proven and familiar, and to put effort into trying, using and understanding us. 

This reflects the somewhat schizophrenic, or at least dual personality of our collective human behavior.  We are drawn to familiarity, but have also evolved to crave novelty.  Our desire to experiment and explore is key to why we are the dominant species on the planet, and have expanded our presence to just about every habitat on the planet.  But the lower cognitive demands of the familiar mean much of our life is still dominated by habits, comfortable repetition and familiar activities.  Whether we an artist, a brand, work in an office, or are simply in a romantic relationship, we all have to navigate this dichotomy.  

Self Plagiarizing:  That brings me back to Robert Fripp.  Given his history of continuous change, and much as I enjoyed the track, I was surprised that the core riff sounded very, very similar to a King Crimson song Thela Hut Ginje, released the year before.  They are both Robert Fripp co-compositions, so he was effectively ‘stealing’ his own ideas, or self plagiarizing. 

Initially that seemed odd for someone who has for decades been a formidable change agent.   But I often learn a lot about the innovation process via analogy from music and fine arts.  So I started thinking about self plagiarism, and if it is a tool we could or should use more in innovation in general, as a potential way to maintain familiarity while also driving change  

Transferring our own signatures into multiple new executions ensures familiarity and hence reassures to our ‘loyal’ users.  But in parallel, putting those signatures in new contexts also provides a way to draw in new ‘fans’, or safely break monotony for our ‘regulars’.   Of course, at one level, the reassurance element is exactly what branding does.   But the concept of self plagiarism is potentially a way to achieve this on a more subtle, implicit level.   

Name that Band!  The arts community are masters of this.   It’s amazing to me how often we almost instantly recognize an artist, even if the painting or song itself is not familiar.  Maybe it’s a unique voice, a unique style or sound, or perhaps a signature motif.  Whether it’s David Bowie, Mick Jagger, Pablo Picasso,  Salvador Dali or Taylor Swift, we intuitively and largely unconsciously recognize their ‘style’.   Of course, explicit continuity and consistency is also important.  The wall of color in a supermarket acts as both a signpost, and reinforces important popularity cues.   Even in more dispersed digital environments, more ‘explicit’  cues provide important and cognitively simple cues that tie individual innovations to over-arching brands.  

But self reference, or self plagiarism is an additional tool that I think is worth exploring.  It allows us to leverage (implicit) sensory cues to reinforce brand consistency, and is one potential way to reinforce continuity in the face of evolutionary or even disruptive change. And just as you may intuitively recognize a song by your favorite artist without having to ‘think’ about it, it can operate very quickly, and help an innovation to ‘feel’ right.

Bob Dylan Goes Electric: And having more implicit tools can help with some of the inherent constraints of consistent branding.  Chasing familiarity can be both a blessing and a curse; ask any classic rock band on a greatest hits tour.  Or for any of you who saw the excellent “A Complete Unknown’ movie about Dylan, that culminates in the outrage he created with his core fan base by ‘going electric.  Maintaining familiarity ‘talks’ to a loyal audience, but can also be quite constraining, especially for the most innovative amongst us. And this can be especially challenging if, as in Dylan’s case, the outside world is changing quickly and we need or want to respond.  But there are numerous examples of artists who have done this quite successfully.  For better or for worse, Dylan still sounded distinctly like Dylan after he ‘rebranded’ as electric.  David Bowie, Madonna, or the different ‘periods’ that describe Picasso’s catalog are good examples of dramatic change and reinvention that still maintain some familiarity and consistency.  

What taking this kind of approach looks like for us will of course depend upon the area in which we are innovating.  But sensory cues, shapes, or relative design elements are all cues we can self-plagiarize, that add layers of familiarity, and are often difficult for competition to copy without evoking as, and hence increasing the ‘mind-share’ of their competitor.     

Of course, this is not to suggest replacing brand (visual) language and brand first design with subtle, implicit cues.   But the journey of a brand is complex, and in today’s world of rapid change, we are likely to increasingly need ways to manage ever greater changes within a ‘familiar’ context.  Thinking about different, potentially complementary ways to do this is never a bad idea. 

Image credits: Pixabay

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Three Real Business Threats (and How to Solve Them)

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“The Call is Coming from Inside the House”

Three Real Business Threats (and How to Solve Them)

GUEST POST from Robyn Bolton

“The call is coming from inside the house” is one of those classic quotes that crossed over from urban legend and horror movies to become a common pop-culture phrase.  While originally a warning to teenage babysitters, recent research indicates that it’s also a warning to corporate execs that murderous business threats are closer than they think.

In the early weeks of 2025, Box of Crayons, a Toronto-based learning and development company, partnered with The Harris Poll to survey over 1500 business leaders and knowledge workers to diagnose and understand the greatest challenges facing organizations.

They found that “while there is a tendency to focus on external pressures like economic uncertainty, technological disruptions, and labor market issues, our research shows the most critical challenges are unfolding within the workplace itself.”

The threat is coming from inside your house.

Here’s what they found and what you can do about it

Nearly one (1) day each workweek “is lost to the fear of making mistakes.”

Fear is at the core of all the issues making headlines – burnout, disengagement, lost productivity. It  “breeds doubt, prompting individuals to question themselves and others, instigating anxiety, hindering productivity, and promoting blame instead of teamwork.”

Fear is also a virus, spreading rapidly from one person to their team members and on and on until it infects the entire organization, embedding itself in the culture.

Executives and managers are key to breaking the cycle of fear that kills innovation, initiative, and growth.  By reframing mistakes and learnings, rewarding smart risks even if they result in unexpected outcomes, and role-modeling behaviors that encourage trust and psychological safety, their daily and consistent actions can encourage bravery and remaking the culture.

70% of people don’t see value in listening to people they disagree with.

Unless you’re employed by Lumon Industries, it’s impossible to be a completely different person at work compared to who you are outside of work. So, it should come as no surprise that most people no longer listen to opinions, perspectives, or evidence with which they disagree.

The problem is that different perspectives and experiences are essential to elements of the problem-solving process.  Without them, we cannot learn, develop new solutions, and innovate.

Again, executives and managers play a critical role in helping to surface diverse points of view and helping employees to engage in “productive conflict.”  Rather than rushing to “consensus” or rapidly making a decision, by expressing curiosity and asking questions, people-leaders create space for new points of view and role model how to encourage and use it.

87% of leaders lack the skills needed to adapt.  64% say funding to build those skills has been cut.

Business leaders are fully aware of the changes happening within their teams, organizations, and the broader world.  They recognize the need to constantly adapt, learn, and develop the skills required to respond to these changes.  They can even articulate what they need help with, why, and how it will benefit the team or organization.

But leadership training is often one of the first items to be cut, leaving new and experienced people-leaders “ill-equipped to manage the increasing complexity of today’s workplace, stifling their ability to inspire, guide, and support their teams effectively.”

The solution is simple – invest in people.  Given the acute need for support and training, forget big programs, multi-day offsites, and centralized learning agendas.  Talk to the people asking for help to understand what they want and need and how they learn best.  Share what you can do right now with the resources you have and engage them in creating a plan that helps them within the constraints of the current context.

Answer the phone

Just like that terrifying movie moment, the call threatening your business isn’t coming from mysterious outside forces—it’s echoing through your own hallways. The good news? Unlike those helpless babysitters in horror films, you can change the ending by confronting these internal threats head-on.

What internal “call” is your organization ignoring that deserves immediate attention?

Image credit: Unsplash

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Building Transformative Teams

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Building Transformative Teams

GUEST POST from Greg Satell

One of the most common questions I get asked by senior managers is “How can we find more innovative people?” I know the type they have in mind. Someone energetic and dynamic, full of ideas and able to present them powerfully. It seems like everybody these days is looking for an early version of Steve Jobs.

Yet the truth is that today’s high value work is not done by individuals, but teams. It wasn’t always this way. The journal Nature noted that until the 1920’s most scientific papers only had a single author, but by the 1950s that co-authorship became the norm and now the average paper has four times as many authors as it did back then.

To solve the kind of complex problems that it takes to drive genuine transformation, you don’t need the best people, you need the best teams. That’s why traditional job descriptions lead us astray. They tend to focus on task-driven skills rather than collaboration skills. We need to change how we evaluate, recruit, manage and train talent. Here’s what to look for:

Passion For A Problem

I once had a unit manager who wasn’t performing the way we wanted her to. She wasn’t totally awful. In fact, she was well liked by her staff, coworkers, and senior management. But she wasn’t showing anywhere near the creativity required to take the business to the next level and we decided to ease her out of her position.

Then a funny thing happened. After she left our company, she became a successful interior decorator. Her clients loved how she could transform a space with creativity and style. She also displayed many of the same qualities that made her so well liked as a manager. She was a good listener, highly collaborative, and focused on results.

So why is it that someone could be so dull and unimaginative in one context and so creative in another? The simplest answer is that she was a lot more interested in interior decorating than she was in our business. Researchers have long established that intrinsic motivation is a major component of what makes people creative.

The biggest misconception about innovation is that it’s about ideas. It’s not. It’s about solving problems. So the first step to building a transformative team is to hire people interested in the problems you are trying to solve. If someone has a true passion for your mission, work to develop the ideas you need to crack the problem.

Collaboration Skills

We often think of high performing teams being driven by a dominant, charismatic leader, but research shows just the opposite. In one wide ranging study, scientists at MIT and Carnegie Mellon found that high performing teams are made up of people who have high social sensitivity, take turns when speaking and include women in the group.

Harvard professor Amy Edmondson has researched the workplace for decades and has found that psychological safety, or the ability of each team member to be able to give voice to their ideas without fear of reprisal or rebuke, is crucial for high performing, innovative teams. Google found much the same thing when it studied what makes great teams tick.

Stanford professor Robert Sutton also summarized wide ranging research for his 2007 book, The No Asshole Rule, which showed that even one disruptive member can poison a work environment, decrease productivity and drive valuable employees to leave the company. So even if someone is a great individual performer, it’s better to get rid of nasty people than allow them to sabotage the effectiveness of an entire team.

The most transformative teams are the ones that collaborate well. Unfortunately, it’s much easier to evaluate individual performance than teamwork. So lazy managers tend to reward people who are good at taking credit rather than those who actively listen and provide crucial support to those around them.

High Quality Interaction

There is increasing evidence that how teams interact is crucial for how they perform. A study done for the CIA performed after 9/11 to determine what attributes made for the most effective analyst teams found that what made teams successful was not the attributes of their members, or even the coaching they got from their leaders, but the interactions within the team itself.

More specifically, they found that teams that work interdependently tend to perform much better than when tasks are doled out individually and carried out in parallel. Another study found that teams that interacted more on a face-to-face basis, rather than remotely, tended to build higher levels of trust and produced more creative work.

While the quality of remote working tools, including teleconferencing apps like Zoom and collaboration tools like Mural and Miro, have greatly improved in recent years, we still need to take the time to build authentic relationships with those we work with. That can include regular in-person team meetups for remote teams or even intermittent relationship building calls unrelated to current projects.

What’s crucial to understand and internalize is that the value of a team is not just the sum of each individual contribution, but what happens when ideas bounce against each other. That’s what allows concepts to evolve and grow into something completely new and different. Innovation, more than anything else, is combination.

Talent Isn’t Something You Hire, It’s Something You Build

The truth is that there is no effective answer for the question, “how do we find innovative people?” Talent isn’t something you hire or win in a war, it’s something you empower. It depends less on the innate skills of individuals than how people are supported and led. As workplace expert David Burkus puts it, “talent doesn’t make the team. The team makes the talent.”

All too often, leaders take a transactional view and try to manage by incentives. They believe that if they contrive the right combination of carrots and sticks, they can engineer creativity and performance. Yet the world doesn’t work that way. We can’t simply treat people as means to an end and expect them to achieve at a high level. We have to treat them as ends in themselves.

Effective leaders provide their teams with a sense of shared purpose and common mission. They provide an environment of psychological safety not because of some misplaced sense of altruism, but to enable honest and candid collaboration. They cultivate a culture of connection that leads to genuine relationships among colleagues.

What’s crucial for leaders to understand is that the problems we need to solve now are far too complex for us to rely on individual accomplishments. The high value work today is done by teams and that is what we need to focus on. It’s no longer enough for leaders to simply plan and direct action. We need to inspire and empower belief.

— Article courtesy of the Digital Tonto blog
— Image credits: Pexels

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What Innovation is Really About

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What Innovation is Really About

GUEST POST from Stefan Lindegaard

Sometimes a short and simple word-play brings out some great reflection.

  1. Resistance kills Change
  2. Fear kills Experimentation
  3. Bureaucracy kills Speed
  4. Control kills Flexibility
  5. Tradition kills Disruption
  6. Pressure kills Creativity
  7. Hierarchy kills Agility
  8. Silos kills Collaboration
  9. Organizational inertia trumps Talent

Now, read that RIGHT to LEFT.

This is in many ways the essence of innovation in my view.

Image Credits: Stefan Lindegaard

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Change Behavior to Change Culture

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Change Behavior to Change Culture

GUEST POST from Mike Shipulski

There’s always lots of talk about culture and how to change it. There is culture dial to turn or culture level to pull. Culture isn’t a thing in itself, it’s a sentiment that’s generated by behavioral themes. Culture is what we use to describe our worn paths of behavior. If you want to change culture, change behavior.

At the highest level, you can make the biggest cultural change when you change how you spend your resources. Want to change culture? Say yes to projects that are different than last year’s and say no to the ones that rehash old themes. And to provide guidance on how to choose those new projects create, formalize new ways you want to deliver new value to new customers. When you change the criteria people use to choose projects you change the projects. And when you change the projects people’s behaviors change. And when behavior changes, culture changes.

The other important class of resources is people. When you change who runs the project, they change what work is done. And when they prioritize a different task, they prioritize different behavior of the teams. They ask for new work and get new behavior. And when those project leaders get to choose new people to do the work, they choose in a way that changes how the work is done. New project leaders change the high-level behaviors of the project and the people doing the work change the day-to-day behavior within the projects.

Change how projects are chosen and culture changes. Change who runs the projects and culture changes. Change who does the project work and culture changes.

Image credits: 1 of 850+ FREE quote slides available for download at http://misterinnovation.com

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The Enemy of Customer Service is …

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The Enemy of Customer Service is ...

GUEST POST from Shep Hyken

I recently had the wonderful opportunity to interview Brian Hamilton on Amazing Business Radio. Brian is the chairman of LiveSwitch and an entrepreneur who has started, built up, and sold numerous businesses. At the end of every show, I ask, “What last nugget of wisdom can you share with our listeners?” He shared an amazing answer:

“The enemy of customer service is pride.”

As he shared what he meant by this profound statement, I knew it was going to be something I would write and talk about.

If you’ve been following my work, you know one of my favorite concepts is The Customer Is NOT Always Right! Let’s use that as a starting point to understand how pride can be the enemy of customer service.

When we’re taught (or told) by the boss that the customer IS always right, and one day a customer makes a statement that isn’t right or accurate, we have conflict. Or maybe the customer is argumentative. We have been taught and told – maybe even ordered – to treat that customer as if they are right. But they are not. For example, what happens if you have a liberal 30-day return policy and the customer comes to return the item on day 60, insisting they were told the store had a 90-day return policy? Can you see the conflict? They are clearly wrong, and that conflict is where pride kicks in and gets in the way of good customer service.

Enemy of Customer Service is Pride

For some, it’s hard to put pride aside and empathize and sympathize with the customer’s errant point of view. While we may not directly tell the customer they are wrong, we say something that is combative or argumentative – even if we say it nicely. When pride gets in the way, we might find ourselves thinking:

  • “I know more than this customer.”
  • “They clearly don’t understand how our system works.”
  • “If they just listened to reason, they would realize they’re wrong.”

Those types of thoughts are our pride getting in the way of serving our customers at the highest level. Instead, consider this:

  1. Listen without interrupting, even if you know they’re wrong.
  2. When you do finally talk, choose the right words to avoid escalating the situation.
  3. Empathize and acknowledge their frustration or concern.
  4. Focus on finding a solution rather than proving who’s right.

Remember, the goal isn’t to win an argument. It’s to win the customer. (Another concept I’ve preached for years.) When we let go of pride and focus on helping, we create better outcomes for everyone involved. So, the next time you find yourself in a situation where you know the customer is wrong, ask yourself, “What’s more important, being right or being helpful?” The answer will guide you toward better customer service. Don’t let pride get in the way of good customer service!

Image Credit: Shep Hyken, Pexels

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Re-Framing Your Strategy for the Chaos of 2025

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Re-Framing Your Strategy for the Chaos of 2025

GUEST POST from Geoffrey A. Moore

Spring is in the air, which brings to mind the season’s favorite sport — no, not baseball, strategic planning! Let’s face it, 2025 has been a tough year for most of us (and it’s still early days), with few annual plans surviving first contact with an economy that was not so much sluggish as simply hesitant. With the exception of generative AI’s growing impact, most technology sectors have been more or less trudging along, and that begs the question, what do we think we can do with the rest of 2025? Time to bring out the strategy frameworks, polish up those crystal balls that have been a bit murky of late, and chart our course forward.

This post will kick off a series of blogs about framing strategy, all organized around a meta-model we call the Hierarchy of Powers:

The inspiration for this model came from looking at how investors prioritize their portfolios. The first thing they do is allocate by sector, based primarily on category power, referring both to the growth rate of the category as well as its potential size. Rising tides float all boats, and one of the toughest challenges in business is how to manage a premier franchise when category growth is negative. In conjunction with assessing our current portfolio’s category power, this is also a time to look at adjacent categories, whether as threats or as opportunities, to see if there are any transformative acquisitions that deserve our immediate attention.

Returning to our current set of assets, within each category the next question to answer is, what is our company power within that category? This is largely a factor of market share. The more share a company has of a given category, the more likely the ecosystem of partners that supports the category will focus first on that company’s installed base, adding more value to its offers, as well as to recommend that company’s products first, again because of the added leverage from partner engagement. Marketplaces, in other words, self-organize around category leaders, accelerating the sales and offloading the support costs of the market share leaders.

But what do you do when you don’t have company power? That’s when you turn your attention to market power. Marketplaces destabilize around problematic use cases that the incumbent vendors do not handle well. This creates openings for new entrants, provided they can authentically address the customer’s problems. The key is to focus product management on the whole product (not just what your enterprise supplies, but rather, everything the customer needs to be successful) and to focus your go-to-market engine on the target market segment. This is the playbook that has kept Crossing the Chasm on entrepreneur’s book lists some thirty years in, but it is a different matter to execute it in a large enterprise where sales and marketing are organized for global coverage, not rifle-shot initiatives. Nonetheless, when properly executed, it is the most reliable play in all of high-tech market development.

If market power is key to taking market share, offer power is key to maintaining it, both in high-growth categories as well as mature ones. Offer power is a function of three disciplines—differentiation to create customer preference, neutralization to catch up to and reduce a competitor’s differentiation, and optimization to eliminate non-value-adding costs. Anything that does not contribute materially to one of these three outcomes is waste.

Finally, execution power is the ability to take advantage of one’s inertial momentum rather than having it take advantage of you. Here the discipline of zone management has proved particularly valuable to enterprises who are seeking to balance investment in their existing lines of business, typically in mature categories, with forays into new categories that promise higher growth.

In upcoming blog posts I am going to dive deeper into each of the five powers outlined above to share specific frameworks that clarify what decisions need to be made during the strategic planning process and what principles can best guide them. In the meantime, there are still three more quarters in 2025 to make, and we all must do our best to make the most of it.

That’s what I think. What do you think?

Image Credit: Pexels, Geoffrey Moore

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Three Practical Keys to Managing Uncertainty

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Three Practical Keys to Managing Uncertainty

GUEST POST from Robyn Bolton

“A Few Good Men” is one of my favorite movies.  As much as I love Jack Nicholson’s classic line, “You can’t handle the truth!” lately, I’ve been thinking more about a line delivered by Lt. Daniel Kaffee, played by Tom Cruise – “And the hits just keep on comin’.”

But, just like Lt. Kaffee had to make peace with Lt. Cdr JoAnne Galloway joining his Cuba trip, we must make peace with uncertainty and find the guts to move forward.

This is much easier said than done, but these three steps make it possible.  Even profitable.

Where We Begin

Imagine you’re the CEO of Midwest Precision Components (MPW), a $75 million manufacturer of specialized valves and fittings.  Forty percent of your components come from suppliers now subject to new tariffs, which, if they stay in effect, threaten an increase of 15% in material costs.  This increase would devastate your margins and could require you to reduce staff.

Your competitors are scrambling to replace foreign suppliers with domestic ones.  But you know that such rapid changes are also risky since higher domestic prices eat into your margins (though hopefully less than 15%), and insufficient time to quality test new parts could lead to product issues and lost customers.  And all this activity assumes that the tariffs stay in place and aren’t suddenly paused or withdrawn.

Three Steps Forward

Entering the boardroom, you notice that the CFO looks more nervous than usual, and your head of Supply Chain is fighting a losing battle with a giant stack of catalogs.  Taking a deep breath, you resolve to be creative, not reactive (same letters, different outcomes), and get to work.

Step 1: Start with the goal and work backward. The goal isn’t changing suppliers to reduce tariff impact.  It’s maintaining profit margins without reducing headcount or product quality.  With your CFO, you whiteboard a Reverse Income Statement, a tool that starts with required (not desired) profits to calculate necessary revenues and allowable costs. After running several scenarios, you land on believable assumptions that result in no more than a 4% increase in costs.

Step 2: Identify and prioritize assumptions.  With the financial assumptions identified, you ask the leadership team to list everything that must be true to deliver the financial assumptions, their confidence that each of their assumptions is true, and the impact on the business and its bottom line if the assumption is wrong.

Knowing that your head of Sales is an unrelenting optimist and your Supply Chain head is mired in a world of doom and gloom, you set a standard scale: High confidence means betting your annual salary, medium is a team dinner at a Michelin-starred restaurant, and low is a cup of coffee. High impact puts the company out of business, medium requires major shifts, and low means extra work but nothing crazy.

Step 3: Attack the deal killers.  Going around the room, each person lists their “Deal Killers,” the Low Confidence – High Impact assumptions that pose the highest risk to the business.  After some discussion to determine the primary assumptions at the beginning of causal chains, you select two for immediate action: (1) Alternative domestic suppliers can be found for the two highest-cost components, and (2) Current manufacturing processes can be quickly adapted to accommodate parts from new suppliers.

A Plan.  A Timeline.  A Sense of Calm.

With this new narrowed focus, your team sets a shared goal of resolving these two assumptions within 30 days.  Together, they set clear weekly deliverables and reallocate time and people to help meet deadlines.

A sense of calm settles on the team.  Not because they have everything figured out, but because they know exactly what the most important things to be done are, that those things are doable, and they are working together to do them.

How could you use these three steps to help you move forward through uncertainty?

Image credit: Pixabay

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We Need to Stop Rooting for Change

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We Need To Stop Rooting For Change

GUEST POST from Greg Satell

Today, everyone seems to want to associate themselves with change. Jeffrey Immelt, General Electric’s former CEO, loved to call his firm a 124 year-old startup. Its value fell by 30% under his tenure and would later collapse. Bill Gates pointed out that the culprit wasn’t innovation or disruption, but basic mismanagement.

It seems that, these days, Immelt’s leadership is closer to the rule than the exception. Everybody wants to be an innovator. Nobody wants to be associated with the status quo. Even political conservatives describe themselves as a “movement,” a seeming contradiction in terms. Change has become gospel, an end in itself rather than a mere means to an end.

The truth is that innovation is less about new ideas than it is about identifying meaningful problems. Too much happy talk about change can actually undermine meaningful transformation. If your focus on the fabulous yonder obscures your view into the day-to-day, you’re most likely headed for trouble. We need to start taking change more seriously.

Change Is Hard. People Are Struggling

Humans struggle to adapt. Our brains are not wired for change, but build synaptic pathways based on past experiences. These can change over time, but with some difficulty. We are also greatly influenced by those around us, whose brains have been shaped by similar experiences. Finally, there are often genuine switching costs that need to be overcome.

The notion that transformation can be challenging is nothing new. What managers often fail to account for, however, is that change never happens in a vacuum. It must be seen in context of everything else that’s going on in people’s lives, including pressures related to family, economic and health concerns.

Consider that research points to a dramatic increase of anxiety and depression since the start of the pandemic. Another study reported in Harvard Business Review found that 76% of employees in 2021 reported at least one mental health symptom, up from 59% in 2019 and 50% have reported leaving a job due to mental health concerns, compared to 34% two years earlier. Those are dramatic increases on already high levels.

Yet even before the pandemic there were signs of trouble. A 2014 report by PwC revealed that 65% of respondents in corporations cited change fatigue, 44% of employees complained they don’t understand the change they’re being asked to make, and 38% say they don’t agree with it. Should we be surprised that so many change initiatives fail?

Too Much Early Talk Ignites Resistance

Managers launching a new initiative often seek to start with a bang. They work to gain approval for a sizable budget as a sign of institutional commitment. They recruit high-profile executives, arrange a big “kick-off” meeting and look to move fast, gain scale and generate some quick wins. All of this is designed to create a sense of urgency and inevitability.

Yet this approach can often backfire. Any time you ask people to change what they think or how they act, there will be some who won’t like it and they will work to undermine you in ways that are often dishonest, underhanded and deceptive. Starting a transformation initiative with a big kickoff just gives them an early warning that they’d better get started sabotaging you or change might actually take place.

Unfortunately, there are perverse incentives involved in many initiatives. When change involves new capability, there are inevitably vendors involved and consultants are brought in to manage the process. Often, in addition to helping to design and procure systems, these consultants are given the assignment for organizational change management as well.

At first, it may seem intuitive and sensible that the same vendor that designs the system helps implement the program. However, what is often missed is that these consultants are much more heavily financially incentivized to close the deal, which can often be worth hundreds of millions of dollars, than to drive genuine long-term transformation.

So it shouldn’t be surprising that what passes for “organizational change management” is often little more than an internal communication strategy and a training program implementation. That clearly doesn’t suffice.

Change Is Nonlinear. There Are Advantages To Starting Slow

People who are passionate about change naturally want it to happen as soon as possible. This is especially true of action-oriented managers, who pride themselves on executing a plan quickly and efficiently. There are often informal organizational incentives as well. Executives who are seen to be hard-charging and who “get things done” can be more likely to move up the corporate ladder.

Yet consider the case of Gandhi and the struggle for Indian independence. Soon after returning to India from South Africa, he called for nationwide strikes in response to the repressive Rowlatt Act. The people immediately rose up, but things quickly spun out of control and ended in tragedy. A decade later, he learned from his mistake and set out on his Salt March with just a small, disciplined cadre, which would inspire the world and help lead to Indian Independence.

Similar strategies have proven highly effective in organizational transformations. When Wyeth Pharmaceuticals began its shift to lean manufacturing, it started with a single team in a single plant, but success there led to a transformation involving 17,000 employees. When Experian sought to shift to a cloud-based enterprise, it started with internal API’s that had limited effect on its business, but helped lead to genuine and complete change.

What each of these had in common is that they started with a keystone change, which had a concrete and tangible goal, involved multiple stakeholders and paved the way for future change. While the initial wins were small, they showed what was possible and, because they were successful, they were able to build momentum and grow exponentially.

Change isn’t linear. Success grows exponentially on success. That’s why you often need to start slow to move fast.

Making Change Meaningful

My friend Srdja Popović once told me that the goal of a revolution should be to become mainstream, to be mundane and ordinary. If you are successful it should be difficult to explain what was won because the previous order seems so unbelievable. Yet many leaders approach change initiatives as if they were swashbuckling heroes in their own action movie.

The simple truth is that every change initiative starts out weak and vulnerable, without a track record of success. People are bound to be suspicious. They already have everyday struggles and don’t want someone else’s idea to add to their burden. Most often, they’ll pay lip service, take a “wait and see” approach and then turn away at the first sign of trouble.

The problem with cheerleading change is that it puts the cart before the horse. People don’t embrace change because you came up with a fancy slogan, they adopt what they find meaningful, that creates genuine value to their lives and their work. Without that, all the happy talk just seems like a con.

We need to have more reverence for the mundane and ordinary. For better or worse, it works and it’s what people know. To create genuine transformation we need to get out of the business of selling ideas and into the business of selling success. If we can help allies to make change successful, even on a small scale, they can bring in others who bring in others still.

That can’t be done through persuasion, we have to start by identifying people who are already enthusiastic about change. Change isn’t about communication, but empowerment.

— Article courtesy of the Digital Tonto blog
— Image credits: Pexels

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