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Tripped Up in the Change Management Marathon

We’ve seen this movie before:  a company misses several forecasts, shareholders agitate for change, a new CEO is installed, grandiose initiatives are announced and … nothing happens.   The ballyhooed “new day” shimmering on the horizon quickly dissipates in the harsh glare of failed expectations and shoddy execution.   And those who do reach the “finish line” are often frustrated by the results.  Why is this?

More often than not, leaders naively believe that their own personal efforts to simply articulate the new vision can stand in for the work required of the broader organization to actually implement.  This phenomenon is what William Bridges described as “the marathon effect,”  (Managing Transitions:  Making the Most of Change). 

London Marathon

2013 London Marathon

In most professional marathons, organizers will place their elite runners at the very front so that they have the benefit of a “clean start.” Thus spared the inevitable elbow-jostling bottleneck at the race’s outset, they are free to navigate the course with relative ease.

Not surprisingly, these athletes will complete the event in just a few hours and may well be feasting on their post-race meal while the last of the participants have yet to reach the first mile marker.

Now consider this disconnect between the elite and the “stragglers” of a marathon within the context of change management.  The top runners (the C-suite) will often isolate themselves from the daily “bottleneck” to focus on the firm’s long-term plan, creating space for themselves to determine the need for a radical and fundamental shift in strategy or a “re-set” of the firm’s values and culture.

Over the course of several weeks, often with the aid of outside consultants and conducted at a remote location or retreat, they craft the plan, the new values, etc., and then return to the office in a self-congratulating manner. They are convinced that the hard work is now behind them and it is just a manner of communicating to the troops.  For them, their “marathon” was all about agreeing the strategy, the culmination of a long and hard debate to achieve consensus and “buy-in” with their C-suite peers, or perhaps their Board.

But they are about to be tripped up:  they have failed to recognize that their employees need time to disengage from the old ways, the status quo, so they can digest the new plan.  They have underestimated the effort involved to question and clarify the new values, to agree the best way forward, to internalize and adapt to the new behaviors and competencies expected in the changed and changing place they call work.

In short, they are unwilling or unable to see that the rest of the organization still needs to run the race.

Competitive distance running is hard work, and the marathons of successful organizational transformation require special “elite” attributes which go well beyond the baseline technical skills.  Companies that achieve this level of fitness typically have employees with deep reserves of:

Discipline –  the ability to stay focused amidst distractions and to adhere to standards where others might waver

Resilience – the ability to learn from set-backs and recover from defeat

Relentless Optimism – the ability to motivate oneself and others that success is within their grasp

Successful transformations are well-run marathons, where the vast majority of the company’s employees cross the “finish line” with a renewed sense of purpose and ready for the next set of challenges.

Richard Sambrook: When Journalists Are the Story

With the furor around security leaks and the controversial means of preventing them, journalists are now more likely to be the story as opposed to merely reporting on it. As the industry seeks to find a new equilibrium in this evolving landscape of social media and big data, Richard Sambrook offers his perspective on what it means for reporters who strive to remain relevant in the “fourth estate.”

Richard Sambrook, Director at Centre for Journalism, Cardiff University

Richard Sambrook is Professor of Journalism and Director of the Centre for Journalism which undertakes postgraduate vocational training. He is a former Director of Global News at the BBC where he worked as a journalist for 30 years as a producer, editor and manager.  From 2010 until 2012, he served as Global Vice Chairman and Chief Content Officer for Edelman, the global PR firm.

Sambrook was educated at Maidstone Technical High School, at the University of Reading (BA in English) and at Birkbeck College, University of London (MSc in politics). 

How has social media and the recent security controversies impacted the way you are training the next generation of journalists?

Social media is now core to all public communications, including journalism. All our students learn to blog, tweet, manage Facebook and more, because their employers see these as essential journalism skills. We spend time working through the ethical issues around social media so they are thoughtful and aware as they use these new tools. In terms of the security controversy – there have always been whistle blowers. Edward Snowden is not so different from Daniel Ellsberg.

You are referring to Ellsberg’s release of the infamous “Pentagon Papers” which revealed the US government’s systematic lying to the American people about its involvement in the Vietnam War — a controversy which led to Watergate.

That’s right.  As journalists we welcome the opportunity to shine a light into dark corners while recognizing and respecting there are legitimate issues of national security to take into account. Social Media will increasingly be the place stories are broken and whistle blowers choose to release documents and information – again, we teach the ethical issues around investigative journalism and whistle-blowing so our students are at least aware of the pitfalls as well as the opportunities.

How will your leadership of Cardiff’s Centre for Journalism be shaped by your many years at the BBC, and more recently at the global PR firm Edelman?

One of the things I learned as a Director of the BBC’s news operations was that talent needs support and time to develop. Sometimes, unlikely candidates when given confidence can turn out to be top performers. I see the same thing at the University:  the most confident and bullish on day one are not necessarily the ones who really develop and offer the most innovative or highest quality work. Moving from the BBC to Edelman confirmed the importance of a global outlook in work – and particularly in the media. All media are global now and we are all interconnected. Students and staff need to see past silos, boundaries and barriers and be able to work in a more networked, open, flexible way.

Do you share the view held by many business leaders that recent college graduates are ill-prepared to enter the workforce?

I’m not sure they are any less prepared than previous generations of college graduates. What has changed is expectation in the workplace. Today there is less time and space to carry new recruits and my sense is they are “thrown in the deep end” to sink or swim to a greater degree than in the past. Certainly in my area, many UK media organisations have reduced their commitment to training and development of new recruits, expecting universities and colleges to turn out graduates ready for the workplace.

With the UK unemployment rate approaching 8%, what advice can you offer to your students who are about to graduate?

We are lucky that the reputation of Cardiff, the UK’s first and biggest Journalism School, means more than 90 per cent of our graduates get jobs. But my advice is to be someone who “gets on and does” rather than sit back because you aren’t sure or aren’t keen on a particular task. It’s better to get pulled up for going too far or too fast rather than for not stepping forward at all. Also, think laterally about your skills. Most people’s skills, particularly in media, are applicable in many different roles and contexts. Try different things and build out your experience.

And what advice do you give to newly-minted journalists so that they don’t become “the story”?

I emphasize that journalism is not about them. There is a surfeit of opinion out there – and they have to earn the right for theirs to be heard or given any weight. What we lack however is evidence-led news-gathering – so I put a big emphasis on evidence gathering and analysis. I also believe diversity of opinion and voices is crucial to prevent the “echo chamber” effect where people only seek the opinions with which they already agree. It’s crucial in today’s world that we don’t take refuge in what’s comfortable:  journalism should be about challenge and sometimes making our readers or audience uncomfortable and forcing them to think. Focusing on the story, on other points of view and on evidence is what matters – and will help prevent you accidentally becoming the story.

The 60-Minute Development Workout

Imagine the following e-mail from your Company CEO:

“Effective immediately, the HR department no longer exists at our firm.  Payroll and benefits have been outsourced and can be completed via the employee self-service portal.

“You will be responsible for your own development, for which you will be allocated one hour per week to pursue.   The attached file provides additional details.

Good luck.”

You open the file and read:

WEEKLY DEVELOPMENT HOUR

The following, to be scheduled at appropriate times  after consulting with your supervisor, outlines the key elements of your personal development regimen.

Unplugged Reflection  (30 minutes) – in an environment devoid of all technology consider the following questions as they relate to the previous week’s “Hits” and “Misses”

* What skills, behaviors and conditions contributed to success and how can they be amplified and replicated?

* What behaviors and circumstances contributed to problems/failures and how can they be minimized or eliminated?

Targeted Feedback (30 minutes) in a casual setting meet with a direct report, colleague, customer or client and solicit responses to each of the following questions as they relate to the working relationship with the selected individual:

* What do I need to do more of?

* What do I need to do less of?

*  What should I start doing?

*  What should I stop doing?

Sequence these components for optimal effect:  the only requirement is that you spend 60 minutes each week in some combination of unplugged reflection and targeted feedback.

Maintain an on-line journal of your progress, which will serve as the basis for quarterly “check-ins” with your boss’s manager.

While most companies are unlikely to take such a radical step, organizations who embrace this simple, low-cost approach to development will quickly distance themselves from the competition. 

Court Cunningham: The Evolution of the Startup CEO

A startup faces longs odds to survive its infancy:  recent research suggests that the failure rate is more than 50% and possibly as high as 75%.  And while there are probably as many causes for failure as there are startups, a common theme among those who do beat the odds is having the right management in place to scale the business.  Court Cunningham offers insights into his own evolution as CEO of Yodle, a leader in on-line marketing for small businesses.

Court Cunningham

Court Cunningham, CEO of Yodle

Court Cunningham joined Yodle as CEO  in 2007 when it had 10 employees and 200 customers. Today, Yodle is generating more than $130 million in annual revenue, and has over 1,000 employees, 35,000+ local business customers and six offices across the United States.  

Cunningham was previously COO at Community Connect, a niche social networking company, and SVP & General Manager of the Marketing Automation group at DoubleClick, where he built DARTmail into a $60 million industry leading email marketing solution that was sold to Epsilon in 2005.

Cunningham received a BA in English from Princeton University and an MBA from Harvard Business School. He is also the co-author of Local Online Advertising for Dummies, the first ever comprehensive book covering online advertising for local businesses.

You’ve been CEO at Yodle since 2007.  How has your own leadership style evolved since then?

Catlin & Cookman Group identifies 4 levels of leadership as an early stage company evolves: doer, delegator, direction setter and coach.  In 2007, when I joined Yodle I was clearly a “doer.” As the company grew over the years my leadership style evolved to “delegator” before becoming a “direction setter.” With the current size of Yodle – we currently have more than 1,000 employees – I changed my approach again and now have a “coach” leadership style.

It’s critical to be a “doer” in the early days of a business when it has such a small number of employees. Any CEO in this position needs to roll up their sleeves and get the job done shoulder to shoulder with the team. I moved into the “delegator” phase when Yodle started hiring more people and stuck with that approach until we had approximately 75 employees. As a “delegator” you still need to keep tight control to make sure the product is evolving to meet customer needs but I recognized the need to increasingly focus on defining objectives and then delegating them for execution. I evolved into “direction setter” mode after we surpassed 75-100 employees. I now see my role as one of setting strategy and direction and having strong directors and VPs on board able to focus on execution.

And this shift presumably gives you the time you need to spend with customers. 

Exactly.  By getting out of project management and into direction-setting the CEO can stay focused on the customer.  It is also important to make this transition happen because at the 100 person stage you need to be hiring senior people who have drive, passion and judgement.  And these are individuals who do not want to be micromanaged:  the CEO needs to get out of the way to let those newly-hired stars shine and add all the value that they can.

You’ve characterized Yodle as being in its “adolescence” — no longer a start-up, not yet a fully-formed institution.  What is required of leadership for a company in this stage of its development?

As I mentioned above, I’d now classify my own leadership style as a “coach,” and it’s exactly this approach that I recommend CEOs take when a company reaches the stage that Yodle currently finds itself. With 1,000+ employees, $130+ million in annual revenue and six offices, we have numerous departments with leaders who have the judgment and experience to run their own business. A CEO in this position first and foremost needs to get the right people on board but then needs to coach them to greatness. Setting strategy is still a critical role for me but needs to be done in tight collaboration with the leadership team across the business.

Do you encounter any generational challenges in creating an on-line market presence for small, local business owners and how do you address this from a talent perspective?

Although it’s true that the average younger small business owner is generally more comfortable with self-service online marketing tools than their older contemporaries, they still understand and seek the value that Yodle delivers.  We are focused on the SMB owner who wants a full service marketing automation suite, so there are actually fewer differences than you might expect between different generations.

Given that, the most important factor for us in hiring people is simple:  we want to find talented, dedicated and driven individuals who are committed to delivering the best possible results to our customers. One of Yodle’s key values is “Customers Rule,” something which is regularly reinforced across the company. All our customers are looking for quality service, ROI on their marketing investment, an increased online presence that results in quality calls and emails, and an effective outsourced marketing department that enables them to focus on other priorities – and that’s exactly what we’re invested in doing.

Any specific coaching tips you’d like to share?

Have a very precise answer to “who is my customer?”  This answer comes from the hard work of building and selling the product yourself in the early days.  For Yodle, a bad answer to that question is “the SMB (Small to Medium-Sized Business)” because there are so many use cases within the SMB universe  that that definition is too broad and shows a lack of customer focus.

For Yodle, the correct answer is: “the SMB with fewer than 10 employees that sells high values products or services.  These customers are primarily in 100 focused micro service segments.” With this focus we know we want to sell the 9M small businesses who fit that, not the 20M.  We know they will want a full service offering and not a self-service offering. We know that they do not have a lot of marketing expertise and therefore need things like websites as a core part of their marketing package.  The list of requirements goes on, but I am shocked when I ask people running businesses to describe their customer and they cannot.

Anything else?

Building a business is hard work.  It amazes me how many CEOs spend their first couple of years going to conferences and doing PR.  They haven’t built anything yet:  how can they be doing PR!?  You need to be focused on building a product that customers love and really DEEPLY understanding the customer problem you are trying to solve.  In Yodle’s case, I worked 6 days a week every week for my first two or three years.  Edison said: Genius is one percent inspiration and 99 percent perspiration – I really believe that.

The Next Bend in the River

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What lies ahead for your company?

Successful companies are relentlessly opportunistic.  Time and again they are first-movers, quickest to adapt to a new market, new legislation or a disruptive technology. They have an innate sense for emerging consumer trends and an uncanny ability to determine if that upstart competitor is just a flash in the pan or a serious threat.

Not surprisingly, these are firms which achieve sustained growth and deliver robust returns to shareholders.  They have proven to be best at navigating uncharted waters, where success lies in anticipating and responding to that next bend in the river.

While every company has its unique challenges and business drivers, the best share certain attributes which transcend geography and industry.  At every level of the organization they demonstrate skills and behaviors which set them apart from the competition:

Employees who move from reaction to reflection

Reactive employees repeat their mistakes; reflective ones learn from them.   Technical skills alone may suffice in familiar terrain but it will be those individuals with the self-confidence to probe and socialize their own weaknesses who will be best prepared for the unexpected.

Managers who move from answering questions to questioning answers

Managers who wean their staff from the passive dynamic (“I have a problem; please fix it for me”) to a more pro-active approach (“I have a problem; here’s how I intend to fix it”) will be rewarded with engaged employees demonstrating ever-increasing capability. Performance feedback shifts from the superficial “what” and “how” of task-completion to the underlying “why” of process and strategy.

Leaders who move from back office to front line

C-Suites deeply connected to their call center staff, field technicians, receptionists, shop stewards, and sales reps will have a much better read of both customer sentiment and employee engagement.  These executives embrace a leadership formula where Visibility (accessible to the troops) + Humility (being receptive to feedback) = Greater Agility (responding to change)

Mei-Mei Tuan: Finding the Right Talent for Private Equity

Private equity (PE)  investors seek profits across a wide spectrum of potential opportunities, ranging from successful middle-market firms looking for scale to financially distressed businesses requiring a life-line to avoid bankruptcy.  The one constant reflected in each instance — besides the injection of money — is the need for human capital:  executives with the skills and personality to execute the strategy and deliver.  Mei-Mei Tuan, Managing Partner and Co-Founder of Notch Partners, shares her views on what type of executives are best suited for this high-risk/high-reward work.

Mei-Mei Tuan, Managing Partner and Co-Founder, Notch Partners

Notch Partners is  an innovative boutique human capital services firm that cultivates high-impact CEO relationships for private equity buyout clients.  Its mission is to maximize clients’ investment returns through the power of these relationships.

Tuan is a frequent speaker at events and on panels which promote and support women business leaders and managers. She serves on multiple boards, is fluent in Chinese and holds an MBA from Harvard Business School and a BA from Wellesley College.  She also holds a music degree from the Juilliard School of Music.

With the PE sector looking to recoup its investments made in 2007 and 2008, do you anticipate a lull in new investments and therefore less of a need to source talent?   

There is always a need to source talent in PE situations.  Since 2002, we have seen the full range of deal environments.  No matter the state of the economy or credit markets, PE investors are always looking to maximize value on their investments through strategic leadership and solid management.  I remember in 2009 when credit had all but disappeared, we were busier than ever, whether helping our clients identify CEO’s for work out situations or working with CEO’s to generate new deal ideas.  So bottom line: new investments are not the only driver for sourcing talent in PE.  In fact, one could argue that when times are tough, the need for exceptional management is more critical. That said, there is still a lot of capital out there looking for good deals, so I expect deal activity to continue.

Are there specific leadership competencies you look for when identifying executives to support a turnaround situation?

PE investors focus most on relevant experience and track record.  Therefore, what we look at first is demonstrated success in leading turnarounds, and also importantly, under private equity ownership. At a more granular level, we would examine the nature of the turnaround and envisioned solution(s).  For example, if the turnaround involves a plant consolidation or a brand re-positioning we look for specific experience in executing these initiatives.  If the company is in bankruptcy, we look for executives who understand the process and have successfully led companies out of bankruptcy and on a course to recovery.

Generally, executives in PE situations need to be financially savvy; they need to fully understand the P&L and feel comfortable operating in lean/cash-constrained environments.  This goes double for turnaround situations where covenants are often in the “danger zone”, and banks are watching closely.

Beyond the specific industry experience or technical skills, what else do you look for?

As with all PE situations (turnaround or not), we look for hands-on/roll-up-the-sleeves leaders: executives who walk the plant floor and go on sales calls.  Additionally, we look for leaders who are able to establish and articulate on a vision, and align a loyal team to execute.  Since time is of the essence in all private equity situations, we look for CEO’s who are not afraid to make tough and bold decisions, particularly if it means letting people go and requires building a new team.

In other words, someone who isn’t afraid to get into the weeds.

That’s right.  CEO’s who are perceived as “corporate” or “big company” whether it’s because they delegate from their corner offices or focus on making press appearances, are not actively sought by private equity.

To what degree is talent assessed during due diligence?

In some cases, the management team intends to exit the company post-sale, in which case, they are not assessed.  Should the team desire to remain, executive assessment can be delicate, as the investor would not want to jeopardize their chances of winning the deal. If the deal is secure, talent assessment tends to focus on the CEO and the CFO.

In these instances, there is a fair amount of interaction between the CEO, CFO and the PE investors, during which time the investors can informally assess management. Oftentimes, this interaction is adequate for the PE investors to develop an informed opinion, particularly on the CFO, who functions as the primary source of financial data and analysis.  Sometimes, the acquirers will retain a professional management assessment firm to evaluate the senior management team, though this typically happens after the deal is closed.

How has social media impacted the way you do your work?

Back in 2003, I joined LinkedIn because I was attracted to this new way of connecting people.  Initially, when you could only connect through other people, I used it minimally, as I found that process to be clumsy and indiscreet.  Over time, as critical mass grew, and it allowed for direct linkages, I used LinkedIn more extensively.  Today, everyone in my firm uses it to research, identify and connect to executives. LinkedIn has done a fantastic job of expanding their network and evolving their functionality, while remaining true to their positioning as a professional tool.  This is demonstrated by the fact that they are the networking site of choice for millions of executives – from Fortune 100 CEO’s down.

What about Facebook?

I was a relatively early “experimenter” with Facebook – joining back in 2007.  Given that I was evaluating so many consumer deals with my PE clients, I wanted to better understand social trends which were most relevant to consumers, and also how social media could impact branding and community building for various consumer products and services companies.  For that reason, I continue to stay current on various social media platforms.  It’s fascinating to see how consumers are self-segmenting through their selection of social media platforms, though there are way too many for me to follow today.

Finally:  why did you choose “Notch” as the name for your firm?

The product of insomnia!  We wanted a name that was punchy and memorable.  Notch has a lot of positive connotations – “Top-Notch”, “another Notch in your belt”, “a Notch up”, etc. , all of which reflect our positioning and the value we bring to our PE clients and executives.  Not surprisingly, our name has spawned a few jokes of the “Notch-o cheese” variety.  However on a positive note, our employees have coined a phrase “I’ve been NOTCHING since 6:00 this morning” (We like to hear that) and when our PE clients ask us to “NOTCH it!”,  we know exactly what they mean.

H.K. Hoejsgaard: Success is not how you start but how you finish

In their recent report, Bain & Company predicts worldwide luxury goods market revenues will grow as much as 50 percent faster than global GDP, on track to break the €250 billion sales threshold by mid-decade.  Bain believes luxury firms need to deliver on three key aspects:  superior customer service, flawless retail management, and people excellence.  Hans-Kristian Hoejsgaard, President and CEO of Oettinger Davidoff Group shares his views on the talent implications for his firm.

HK Hoejsgaard, President & CEO of Oettinger Davidoff Group, global manufacturer of premium cigars

Hoejsgaard is a global CEO and brand equity specialist in the consumer goods and retail industries, having held senior leadership positions with several global luxury brands, including Seagram’s, Coty, Guerlain, and Georg Jensen.

Danish-born and fluent in several languages, Hoejsgaard has lived in the US and Asia and is currently based at Davidoff’s global headquarters in Basel, Switzerland. 

What are Davidoff’s most pressing talent development challenges?

As we are in global expansion mode, we are recruiting a lot of talent, so a key challenge is to ensure the right on-boarding by providing newcomers with the right understanding of our culture, vision and values, as well as our past achievements and future ambitions.

Do you have a formal process for educating new staff on Davidoff’s culture and values?

We are just about to launch a global process focused on workshops in small groups.

What other challenges?

Right now we are setting up companies in new markets such as Russia and finding the right local talent is key.  More broadly, we have put a lot of pressure on our people, as we have so much going on across the globe.  We need to be conscious of and mitigate risks of stress and burnout.  It is key for my management to show true leadership in this respect.

Can you give an example of how they demonstrate this?

My Head of Corporate Development “dictated” 1 month vacation for an HR Leader who had worked unbelievable hours, not taking vacation and hardly seeing his family.   After a month in Australia this guy is back with new energy, reconnected to family and grateful to his leader.

Given your extensive experience working with luxury brands on a global basis, is there a particular set of skills and traits you are looking to build in your management team?

Yes, it is about the right values:  having a global mindset and an affinity for luxury;  understanding the value of brand equity and being truly dedicated to customer service; being both a team player and an entrepreneur; and, being a true motivator of teams, showing leadership and rallying the troops.

What leadership “lessons” have you learned that you can share with someone recently promoted to the executive level?

First, one needs to understand the pivotal importance of articulating a vision, communicating it again and again to the troops and be focused on aligning strategy and people behind that vision.  And always, always be available to people to discuss and explain.

Second, always remember that as as leader, success is not judged by what you start, but by what you finish.  You need to walk the talk.

Third, recognize your own weaknesses and surround yourself with great people who can cover for those weaknesses.

Can you give an example of someone on your team who compensates for one of your own weaknesses?

I searched long and hard to find a Head of Global Production who knew the ins and outs of tobacco growing  — someone who could deal with farmers and still align with corporate requirements far away from the tobacco fields in the Caribbean and Central America.    I found him and he is covering a weakness of mine every day.