Samstag, 8. März 2014

Chances And Challenges Of Change


Note: This is the script for a speech at the FESPA World Summit 2014 in Munich. It was directed at top executives of the print industry – but due to the nature of the subject, it will be interesting for other audiences as well.

For 20 years, I have been working for international advertising agencies like Ogilvy, Leo Burnett, and McCann. About half of those 20 years, I was working in management positions.

During these years, I have seen lots of things change. When I started, there was no internet. We were sitting in front of monochrome monitors, working with MS-DOS, and none of the art directors had a Mac. They didn’t have any kind of computer.

Like I said – really lots of changes. But what I have never actually witnessed in any of these companies was something that could rightfully be called a change initiative, or a change project. Not even in the most extreme cases.

Change Management?

We bought other companies – no change management. We lost big clients and plenty of people – no change management. Even when we successfully turned around pretty big agency offices, it wasn’t actually treated like a proper change project.

It made me think. Why is that? And I have come to the conclusion that there aren’t really many people around that truly understand change, and how to deal with it. It’s such a basic word, such a common thing, and we don’t need a definition of it, we all know what it is. But do we really?

What Is Change?

It’s not that easy. Yes, we know, if something is one way one day, and different another day, something has changed. And we can all say smart things about it, like change being the only constant in life, and things like that.

Most of these expressions reflect how we look at change quite well. A change is gonna come. Change is something that is inevitable. An outside force, something we can’t control, almost like the weather.

And it’s true. It’s a force of nature, in a way. But that’s not all, of course. Because we know – we all can change the world. Or at least part of it. There is that feeling of self-efficacy. As much as we all are forced to live with change – we’re also very much capable of changing just about anything we want to change.
 
Inside and outside

So there are two kinds of change. The change that comes and the change we bring about. We learned a lot of smart things in business school, but one of the smartest was this: If the rate of change on the outside exceeds the rate of change on the inside, the end is in sight.

Both forms of change are related to each other, of course – but not necessarily in a way that we need to react to the change coming from the outside with the change we bring about on the inside. We need to be quicker than that – and actually change on the inside before the change that comes from the outside actually affects us. So if we manage change well, both kinds of change are good.

And if it’s not good?

Now – we sometimes find ourselves in situations where change seems to be something really bad. Like for example when a new technology is giving us a hard time, maybe even threatening to put us out of business completely. Like for example the digital revolution.

But if we look at the subject closely and honestly, we will have to admit a few things. First of all: This didn’t happen overnight. As quickly as the world may be changing – the idea that the digital revolution might be changing the game for a lot of industries has always been pretty obvious.

Secondly: The digital revolution has opened up millions of business opportunities, and it still does, for everyone, including advertising, including printing – absolutely everyone can benefit from it.

So how come the changes of the digital era have turned into a problem for some people? We’ve heard it a moment ago. Because in those cases the rate of change on the inside must have been slower than that on the outside.

What do we do?

The question, obviously, is – well, how do we change? Sticking with the subject of the digital revolution, and looking at positive examples it is quickly obvious that some people have already taken advantage of it.

You will find examples in every single industry. Automotive: The first car manufacturers are teaming up with Google and Apple to get an advantage over competitors. Advertising: Some agencies have started to change their organizations as much as 15 years ago – and deliver a seamlessly integrated product today. And yes, of course, there are people in the printing business who are taking advantage of the new possibilities that have come up over the last decade or so.
 
What you really need: Honesty

There are two things you can’t do without if you want to manage change. Number 1: Honesty. Primarily regarding yourself and your company. It’s really hard. You’re proud of what you are doing, proud of what you have achieved, and we all know how it is – you like to see things in a positive light. We all do.

You can’t change anything if you are not able to analyze your current position honestly and objectively. Sometimes it’s very easy. On my last assignment, we had almost no senior management left, the agency had no digital strategy whatsoever, and no visible digital product, it had a structure that didn’t represent the size of the organization and didn’t give it a chance to answer the needs of the market. Sounds like a nightmare? Not if you have been sent in to change things.

It’s a lot more tricky if the need for change isn’t as dramatically obvious. It’s up to you to be honest to yourself, and to ask yourself: Do you have the right people? Do we have the right structure? Are we investing in the right technologies? Am I still the right guy to run this company? Are we still producing the right products? Are we selling our product the right way? Don’t paint it black, but don’t fool yourself either.

What need even more: Creativity

Crucial point number 2: Creativity. I really don’t know any industry that hasn’t been under intense pressure over the last two decades. Rounds and rounds of cost cutting, endless restructuring processes, and plenty of efficiency initiatives have been run. It is very exhausting. Today, we are working more and harder than ever, and we have become incredibly efficient.

Did that ease the pressure? Did that help us be more relaxed regarding our competitors? Of course not. It’s like the race between the rabbit and the hedgehog. Can’t be won. And for a lot of companies this has led to a situation where motivation is low and sinking, workload high and rising – with negative effects on corporate culture.

My answer, clearly, is to start getting creative about solving business challenges. You don’t want to run the efficiency race, the cost cutting race, the price slashing race – it’s a killer. To a certain extent you will probably have to, but you need to do more. Get creative. Open your mind. Creativity isn’t just something that goes into your products, it should be something that is part of every aspect of your business.

Look around

You can find inspiration everywhere – new ways of doing things, of looking at things, of managing things. Simply because everyone is basically facing the same challenges you are. One of the most interesting definitions of creativity, or of an idea, is “making connections between or among concepts that the thinker previously saw as separate and unrelated.”

So look, learn, and apply. Other industries are doing things differently – and often in ways that can help you at least take a critical look at how things are done in your company.
Example #1: Think about structure

Look at how the most creative companies in the world are structured, how they are organized. You will see that they look at structure in a very different way, and I bet there is something in there that can help improve how you work. Most companies that struggle with change have very rigid and hierarchical structures. There is a good chance that less formal structures could help, and that project based teams can solve problems better than fixed teams.

Example #2: Think about workflow

Take a really good look at how projects are managed in your company – and how other industries handle it. It’s really hard to get people to learn and apply a new way of organizing workflows, and it needs training, but it can make a huge difference. Look at Agile Project Management as an alternative. Yes, it’s a method that is applied in design agencies and in software development, but it is clearly not limited to it. People who work with Agile almost always say that they achieve better results in a more structured way and with much better use of the time that is available.

Example #3: Think about innovation

Almost every company is convinced that they are innovators, but the least of them are. Again, be honest about it. Understand that it takes more than just the will to innovate. You can’t just tell your employees to start inventing things. Innovation needs to be understood, and people need to know methods of innovation. Yes, do create an innovation spirit, but support it with innovation knowledge. Choose your most creative minds, teach them, create a skunkworks.

Example #4: Think about workspace

Even in industries that are centered around creativity, the workspace rarely is designed to inspire and to interact. Most of the time, even the meeting zones are terribly uninspiring, and they usually can’t be accessed for group work. You don’t even have to look at Google or Facebook to understand how companies enable creativity, new ideas, group dynamics. At Bloomberg for example, there are dozens of social zones where people meet, have a free snack, enjoy a free soda or juice, and talk about projects. It’s not a small investment, but it clearly pays off for them. Interaction creates opportunities.

Example #5: Think about technology

Even if you are working in a high tech industry like large format printing, it pays to try and find new ways of looking at it. Sure, it pays to invest in machines and systems that are designed to save time, money, resources, that are designed to give you the chance to produce something that others can’t deliver. But it doesn’t help so much if everybody else buys them too. Develop your own opinion and path regarding technology. Sometimes even looking back helps. If everybody is going digital, it might pay off to look the other way. Try to find a good letter press printer in Germany, for example. Difficult.
  
Example #6: Think about finance

Yes, finance and creativity. Not creative accounting, no – but it might pay off to look at finance critically and analyze if the way you are handling finance is actually helping your business – or if it is creating obstacles. Apple for example – it is fair to say that one of the reasons why they are creating better products than other companies is because they just have one bottom line, and not a dozen. No silos. No conflicting interests. If your company consists of several corporate entities, chances are that this is keeping you from getting better results.

Example #7: Human resources

Actually most of the six previous points automatically lead to changes in and around human resources. Which obviously is only possible if HR is a valuable part of your organization – and in a lot of companies it simply isn’t. A lot of companies rely on employees suggesting newhires – leading to organizations that are made up of homogenous circles of friends. This may result in a good atmosphere to work in, but usually not in a work force that is able to tackle a wide variety of challenges. Nothing is as dangerous as homogeneity in your work force. Your business is complex, no matter what your business may be – and you need a good variety of talents and characters to handle it.

What else?

And strategy? My advice would be to not get too complicated about it. Stick to the simple equation of defining where you are now, defining where you want to be in two, three years, and defining what it takes to get there. But do it thoroughly, with a good deal of research, analysis, and honesty.

And be sure to understand change management. If you don’t know John Kotter’s eight step change process yet, make sure you and your most important managers do. There are a million things you can do wrong in change projects, and most of your competitors will. It’s a big opportunity.


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