Archive for October, 2012

Thinking About Tomorrow

October 28th

In 2000, I was the leader of Strategic Planning at the USPS when the agency was required to write a Five Year Strategic Plan.  The Board of Governors was extremely interested in this requirement and I soon found that the effort to write the Strategic Plan at the height of the Internet Revolution was a controversial task that was debated at the highest levels of the organization.

For me, predicting a dramatic mail volume decline seemed to be a no brainer.  But there were many smart people who had seen predictions of mail volume decline before and they remembered that the earlier forecasts had all been proven to be wrong. I had a good deal of analytic support.  Focusing on the coming loss of First Class Business Mail (businesses sending one another bills and making payments) alone explained a good deal of of the pending loss of volume.

But the opposition view was strenuously held.  There were a significant number of individuals and businesses who had a lot at stake .  Private companies in the mailing industry who had to defend their businesses to Wall Street every 90 days clearly did not want to hear about the predictions of decline.

Postmaster General Bill Henderson wanted me to find a more persuasive basis for anchoring the Strategic Plan.  He directed me to go up to Harvard to meet with one of our advisors, Professor Anthony Oettinger, the well known Harvard Professor of Computer Science.

I laid out my case.  “OK,” Professor Oettinger responded, “But how do you know that this is going to happen? It’s the future.”

I recognized that he had a point and we put three alternative scenarios into the Strategic Plan.  The graphic to the left was presented to a conference of Mailers in 2009 by the former Chief Financial Officer and me.  The Red line represents our baseline.  The Green line was the worst case.  We left the optimistic case off of this chart when we presented it in 2009 because it seemed to be a distraction that increasing mail volume could have ever seemed to be a reasonable forecast.  The actual mail volume (Blue and Purple) showed that we had been pretty close in 2000.  We were correctly forecasting the decline.  (I still don’t believe that this was rocket science given what was happening in the world in 2000.)  The purple line shows that following the financial crisis, mail volume collapsed.

One of the problems with putting scenarios into the forecast was that everyone could find their favorite theory and it didn’t force anyone to act differently.  Acceptance of the baseline prediction of mail volume decline would have allowed the USPS to construct a far softer landing than it is struggling with today and to see transformation of the institution as much more of an imperative.

But i don’t think that those who continued to have faith in growth were Neanderthals.  What the curve that represents “actual” volume (Blue) shows is that after 9/11 there was a decline that was associated with the recession.   The recovery restored volume but it left open the question of whether to interpret the growth curve as a short term reprieve or sustaining a long term growth trend.  The pattern is clear today.  But to have understood the strategic framework sooner  would have been valuable and important to the future of the institution.

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Seeing the Whole Picture

October 27th

In an increasingly interactive marketplace, there will be a need to think about transformation in a holistic manner.  There are at least five classic stages to the process.  Defining the gameplan and launching transformation, centering the change process with innovation, defining a strategy that’s creatively balanced, implementing transformation dynamically and sustaining the gain even as the forces that compelled change erode and force a new transformation process.

What’s important about understanding that these stages interact with one another is to recognize that they each need to be considered at the same time and adjusted accordingly.  For example, the scope of the innovation that you will need will depend on how much time there is.

Likewise, you cannot wait until you are sure that there will be a decline in the traditional business.  You have to anticipate the decline and begin to invest in the innovation program while there is time.

In the interactive marketplace there is a need to see the entire panorama and the whole journey – the ascent, the second path and the turning point.

What’s more, the increasing activism of the constituencies of the traditional organization will ensure that the traditional sequential way of looking at a process like transformation will no longer be representative of the way in which organizations interact and consider the elements of transformation.

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Alignment

October 26th

The need to gain alignment among the members of the leadership team is a traditional refrain in discussions of strategy formulation and implementation.  There are few who would argue that it will be possible to be successful if the members of the team are not in agreement.

One of the things that we found at the USPS during years of intense change in the business environment, was that it’s exceptionally difficult to know whether you have alignment.  People won’t tell you.  It’s not that there is intentional deception.  Often leaders of businesses and functional leaders want to be loyal and they will say that they are aligned with the boss’s policy direction.

But there is value in probing to know what they understand.  If you don’t know whether you are aligned, you will inevitably communicate this to the enterprise whether by intention or not.  The trajectory of your strategic journey will be skewed.

Alignment 

Getting on the Same Page 

One way to explore the degree of alignment is one that we used with the senior leadership team.  Our analysis turned on the “radar chart” above.  What we did to start off involved choosing the salient features of the workplace environment.  (Here we show five key features.)

We developed a brief presentation that explored each of the variables – the regulatory environment, technology, the workplace and degree of change in human capital matters, changes in the marketplace, and changes involving the competition.

By interviewing each of the members of the team (see the red and blue lines in the graphic used as illustratioins) we were able to compare the ways in which different members of the team had a different profile from one another or an average of their estimates might agree with outside “experts”.  Creating a graphic like this one provides a way to communicate the areas of alignment back to the team.

What comes next may be the most difficult question of all.   Even when its clear that there are differences among parts of the leadership team and even when its clear that the differences involve specific questions such as estimating the speed with which technology change is forecast to impact the future of the enterprise, the second question is why?  Did the leaders learn the right lessons about the market?  Do they understand the implications of new technology?  Highlighting alignment is only a first step on the transformational path but its an important one.

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Transformational Leadership – The Framework*

October 20th

There is growing interest in how to lead transformational change.   Many people – from those in positions of formal authority to non-traditional players who are being given access to key decision-making and granted a seat at the table by emerging technologies – are increasingly interested in knowing how successful transformation works.

In part, this is because organizations in both the public and private sectors are being confronted by imperatives to change that have been driven by technology, financial crises, resource constraints and new conditions that are forcing them to address issues such as,

  • How do we change the services we deliver to our customers?
  • How should we change the business model of our organization? and
  • How do we change while retaining our essential character?

My work with leaders who are facing these questions reveals that there are seven basic elements that are present in every successful transformation – elements that are illustrated by fundamental questions that must be answered:

  • Why change?
  • Who is going to be involved in planning, executing and sustaining the transformation?
  • When to launch?
  • Where is the change going to lead?
  • How should the journey be structured to achieve creative balance?
  • …To be imlementated dynamically? and
  • …To sustain the gain?

Addressing these seven questions will be aided by building your own playbook and using it to create a gameplan that fits your context . Your playbook needs to address:

The two preliminaries:

  • Why change?
  • Who leads?  and

The five elements of transformation:

  • Timing
  • Innovation
  • Strategy
  • Implementation, and
  • Sustainability

This is the framework.  Effective transformation strategy will address each of these classic themes.

What makes this interesting today is that we have reached one of the great inflection points in history when new voices and new players have been empowered by technology change and are making the dynamics of transformation come alive.  Looking at the framework, some old hands will be tempted to say that they have seen it before.  After all, the essential elements of transformation have a timeless quality.  But historically, future directions were defined top down.  Since Ancient Greece, strategy has been the work of generals.  This this is in the process of changing.

If the moral of this story were “adapt to technology” there would be little news here.  This has been a common theme for nearly 20 years since the Internet became a mainstream communications channel.  But today, interactive technology and transparent enterprise are writing new rules for future leaders forcing traditional leadership to adjust to the force of the new players.  The dynamics of organizations in every sector of the economy are being changed.

Some will need to react and democratize their enterprise as quickly as possible; others have more time to choose their future path.  But everyone needs to understand the implications of the forces that are democratizing transformation.

 

* Preparing to teach seven classes on Transformational Leadership at the Georgetown Public Policy Institute, it became valuable to create a brief summary of the framework for the discussion.  Some of the discussion here has appeared in different forms in this blog and in the Working Papers on this Transformation Strategy site. Much of it is new.