In the corporate world, complacent companies run the risk of extinction. In this guide, James Belasco and Jerre Stead propose that management must identify and focus on long-term future goals to propel a business into the future.
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The Continually Renewing Phoenix:
The Herald of Revivolution
HEAVY HUMAN TRAFFIC: SEARCHING TO BE SOMETHING AND SOMEBODY
Once More, with Feeling: Rewind, Playback, Pump Up the Volume
It is darkwell past our 7:00 p.m. dinnertimeby the time I slip into my car to make my way home after another twelve-hour day. "This is Thursday, isn't it?" I ask myself. "No, it's only Wednesday." The days all run together. "It's been seven months since I signed on as plant manager. I've been hard at it, seven days a week, twelve hours a day. And what do I have to show for it?
"Why is this plant so tough to move?" I ask myself. The boss told me it was in bad shape, and everyone else seemed to agree. But it's been like moving through molasses. Everything is harder, takes longer, and gets less than enthusiastic execution. People smile a lot and agree in meetings, and then go back and do it the same old way.
I review today's events. I walk through the plant on my way in. The housekeeping is still poor, a sure sign of low morale. The on-time shipment chart that I insisted on is three days behind. "A good example of foot dragging when the boss insists upon something," I tell myself. I pass lots of people hard at work making parts. These are good people looking for good leadership.
I'm ten minutes late for my 8:00 a.m. operations meeting. The knot tightens in my stomach when I tune into the conversation. It's about our production planning system. Haven't we settled this issue already? It seems to me we've been talking about this topic forever. Everyone agrees about what we have to do. We just can't get on with doing it.
The second half of the meeting consists of each production line head presenting their three-year plans. The first one is a disaster. I wait for others to speak uphaving learned early in my career that I need to speak last to maximize the input from the group. Thirty agonizing minutes later we're still doing the corporate minuet. I ask a few sharp questions and others pick up the scent. "With some prompting these people are really good," I think. "How do I get them to prompt themselves?"
But the real issues don't ever get addressed. We're falling further and further behind in our manufacturing technology base. We tried a lean manufacturing approach and scrapped it before I came. Inventory is sky-high and the financial folks are screaming that we need to cut it in half. Whenever I mention the inventory concerns everyone just shrugs their shoulders and says, "It can't be done." Employee turnover is the highest in our industry. We're just not doing the right things to get and keep a high-quality workforce. I know these issues will get worse as the competition closes in on us. I just can't get anyone else to be concerned. The knot in my stomach tightens still more.
Beginning with a working brown bag lunch, my afternoon is bumper-to-bumper meetings. I spend one hour with the production staff of our chief component supplier and our own executive staff. Then I spend another hour with just the plant manager of that supplier. We go round and round the same issues. Talk seems to be the currency of choice in his organization and minenot action. Neither of us can get our people to face up to the serious issues confronting us.
Several managers drop by to discuss personnel issues. These conversations go well, but again, we tend to talk more than do. We've been talking about replacing one of the production line headsthe one who made such a poor presentation this morningfor almost five months.
My shoulders hurt. The pain in my lower back won't quit. And the knot in my stomach is a constant companion. Home is a safe haven. Hovering in the foyer is the savory aroma of dinner. I hear the kids arguing down the hall as a DJ babbles vacuously. My wife is talking on the phone as I enter the kitchen. Still in her company attire, she uses her free hand to take a dish from the microwavewaving at me with a smile. Things seem intact. No paramedics. No police. All is well. I thumb through the mail, nothing serious there, then pitch right in to move dinner along: set the table, round up the kids, help my wife get the food on the table and watch the minutes spin by.
Several roller-coaster conversations and verbal exchanges later, I have dined, relaxed, pontificated, warned and even apologized. I shake my head and ask myself, "Have I really done enough today?" Still, tomorrow is another day.
"Nuts," I think to myself. "Got to review those policy changes before I hit the hay." I wave good-night to the family as I trundle off to the den for what has become my daily after-dinner work session.
In Search of Meaningful Change: The Ethereal Golden Fleece
The day recounted above never exactly happened. But versions of it take place every day. Some days are better, many are worse. They're unfortunately too typical for those of us trying to create more productive, more satisfying offices, factories and living rooms.
From the workplace to the community to the family, we (Jerre and Jim) see real human issues to resolve, communications to improve and commitments to keep. Everywhere we look there are people with hopes and dreams, fears and anxieties. Real, earnest, authentic people with attitudes and stubbornness and nuttiness and affection who want to be "something" and "somebody" for other people. These personal human issues play out on the stage set by traumatic, dramatic changes in industry and business. The search to be something to somebody becomes even more complicated by the global business earthquake zone in which we all live.
NOW IS THE HOUR: HEED THE NEED FOR REVIVOLUTION
We live in an uncertain world. Old countries and political entities are breaking apart and new ones are forming. Industries are changing dramatically right before our very eyes. Jobs we thought were sacrosanct disappear in the twinkling of an eye. We confront a world in which personal and organizational change is revolutionary, not evolutionary. That is why we refer to the phenomenon as "revivolution": renewal through revolution (or rapid evolution that looks a lot like revolution).
Shopping malls morph into amusement parks. Amusement parks look like Jurassic Parks. The Web makes it possible to create multimillion-dollar businesses almost overnight. Corporate giants are spawned in home basements and garages. Rapid renewalor revivolutionis everywhere.
Monumental Change Drives the Need for Revivolution
Tomorrow arrives too quickly for most of us. Stuck in the mire of today's rules that no longer work, we flail around in our search for security. But the answer is right before our eyes. Invent a new tomorrow and change the rules! The January 1997 edition of Fast Company reports how Moses Znaimer, the owner of a start-up TV station in Toronto, Canada, called Citytv, created a whole new set of rules for television news broadcasting. He created local and interactive TV that was real-time with real people. Instead of talking-head news anchors who read TelePrompTers to audiences, Citytv offers television where the street is the studio and the real-time experience is the program. People love it. When the rules don't allow you to do what you think is best to do, change the rules. Moses Znaimer did!
And it's not just businesses that revivolute. Today, churches don't act like conventional churches in many places. They meet in huge community centersor drive-in movie locations. They provide a variety of creative enterprises where members participate, create, learn and meet others. They use the Internetand cruise the streets in vans to reach out in mobile high-tech and high-touch configurations to meet the needs of people who can't/won't come to them. If Muhammad won't come to the mountain, the mountain will come to Muhammad.
Jack Welch, chairman of General Electric Company, recently said: "If your change isn't big enough, revolutionary enough, the bureaucracy can beat you." He recognizes the need for monumental change that overrides our own mind-sets that cling to the security of today. Welch's monumental change, in turn, drives the need for revivolution.
Businesses regularly get blindsided by new competitors, new technology, new industries or a sudden shift in what customers value. Banksand bank tellersdisappear, new automobile nameplates emerge like weeds in a garden, plants open and then close again in the twinkling of an eye. Individuals are similarly surprised by radical changes in jobs and markets. We can be sure of only one thing. The head-spinning rate of global, technical, social and personal change will continue to accelerate. Incremental adjustments will never be enough.
Phone-Genesis: Revivoluting at the Speed of Sound and the Death of Distance
A September 1995 special supplement of The Economist pointed out that this is the best of times for telecommunications firms. Everywhere around the world people are scrambling to get a telephone. Millions of new subscribersboth wireless and wiredjoin the rate-payer rolls every year. Prices often rise faster than costs, yielding large profits for many telco firms.
Yet this is also the worst of times for telco organizations. Tomorrow is coming too fast for most of them. As the world telecommunications companies deregulate, there is a competitor hiding under every rock. Everyone wants a piece of the $500 billion global market. In the U.S., competition for the local franchise includes not only the local telcos, like Southwest Bell, and national telco firms, like AT&T, but also international telco firms, like British Telcom. And that's just counting telephone companies. To that witches' brew of competition across the world add cable companies (Time Warner and TCI), electric utility companies (Utilicorp), railroads (Deutsche Railroad), water companies, banks (Société Générale), software/hardware computer companies (Microsoft and Intel) and even chemical companies (Bayer). From a monopoly market, telecommunications is becoming a classic free-for-all market of which Adam Smith would be proud.
The increase in competitors fuels the switch from scarcity to glut in communications capacity. Counting the rapidly expanding wireless capacity, less than one fifth of the total global telecommunications capacity is currently utilized.
The telecommunications cost structures pose another strategic challenge. Operations costs continue to fall. Already the cost of a call from New York to New Delhi is about the same as a call to the neighborhood pizza place. When telephone costs are no longer distance-related, tariffs will inevitably change. The time-related, distance-related rate structure will likely disappear. You'll pay as much to call for that pizza delivery as you will to talk to Uncle Ivan ten time zones away across the pond and half a continent beyond.
All of these swirling changes pose the potential for a major price war in the telco business. The war is already underway. Consider what's happened in the long-distance business in America. Rates are cheaper now in real terms than they were in 1984. And mailboxes are filled with mail from AT&T, from MCI, from Sprint urging you to switch to them for your local service. Telemarketers call twice a week, offering free weekend calls and other incentives to switch local and long-distance service.
The old-line telcos who die by atrophy or as war casualties will do so because they were unable to revivolute themselves to create new organizational forms. Incremental change in service offerings and products will only work for so long. Without both organizational and individual monumental change from the inside, there will continue to be many résumés out on the street that list telco experience.
Metal-Genesis: Revivolution in the Big Steel Business
The steel business has been through the revivolution mill. Originally, the huge, integrated steel companies set up near the sources of their raw material. The plants turned out semifinished products that went to customers for finishing. Big steel was essentially in the commodity business. Managers ran tight, centrally managed hierarchical organizations.
Japan attacked first, using new and more efficient technology to produce the same commodity. Then Korea combined newer technology with cheaper labor. For a while, it looked as though the American steel industry was dead. But along came the new mini-mill industry, complete with a whole new way of doing business, characterized by a flat organization centered around the needs of the customers it served.
Mini-mill operators bought recycled scrap, used computer-aided design and computer-aided manufacturing, and produced finished products to customer specifications. Scrap steel was available almost everywhere, so they could move closer to their customers. They encouraged employee empowerment, which led to dramatic productivity improvements. Today, mini-mill operators, like Chaparral and Nucor, not only produce more steel than the integrated steel companies, they also rank high on the "Most Admired Corporation" lista feat never accomplished by US Steel and Bethlehem.
Avoid the Quicksand of Incremental Improvement: Improving Today Almost Never Creates a Successful Tomorrow
Most organizations fail largely because they are focused on incremental improvements of the present, not a revivolution creation of the future. General Motors invested $121.8 billion in capital equipment and research and development during the 1980s, only to see its stock value fall $22.9 billion in the same period. We jokingly recall the picture of robots spray-painting other robots in Roger Smith's "Factory of the Future" as the classic example of misguided investments.
The General Motors experience exemplifies the need for revivolution and why investments in improving the present don't pay off. In the automobile business, as in many others, hectic speed and quantity of change create a deceptive illusion of dramatic improvement. Actually, most organizations are only making incremental changes at a whirlwind pace. The carousel whizzes by on spin cycle, and people think: "Wow. I'm really going places!" Not the case.
Revivolution spans the face of economic, political and organizational life. Everywhere we turn, every institution in our lives cries out for revivolutionnow.
THESE ARE THE BEST OF TIMESFOR REVIVOLUTING FUTURES!
We live in a time of unparalleled abundance and prosperity. A 1996 study by David W. Moon for Barron's reveals that Americans today enjoy not only the highest standard of living, but also more disposable income than any preceding generation. Family income, adjusted for inflation, grew steadily throughout the 1980s. Real disposable income per capita rose steadily throughout the past two decades.
America is the job creation envy of the world. We've created more than 70 million new jobs since 1970, at least 10 million of them in this last half decade alone. And these are not "hamburger-flipping" jobs, either. More than 60 percent of the new jobs are high-paying managerial and professional positions.
All of this job creation goes on despite headline-grabbing stories about "downsizing." A recent black-bordered Newsweek cover story "Job Killers" is just plain wrong. Announced downsizings totaled 3 million workers since 1989. Compared to the 10 million new jobs, that means a net gain of 7 million new jobs, better than all the countries in Europe combined in the same time period. For instance, former AT&T CEO Bob Allen announced 40,000 reductions (which later shrank to 24,000). However, in the last decade, in the same industry, MCI added 36,000 new jobs and Sprint 25,000. IBM cut 135,000 people during the 1990s. In 1996, they hired 10,000 new people. The bottom line: America's unemployment rateabout 5 percentis less than half that of the rest of the world. There are lots of high-paying jobs out there.
Americans are earning more, too. Real wages increased 9.3 percent since 1959, while wages as a percent of total income rose from 68.6 to 73.1 percent. So wage earners like you and me are getting a larger share of the economic pie these days. More important, real per capita personal income rose an average of 3.7 percent every year in the 1990s, enabling just about all of us to buy more of the things we like.
As a result of this economic prosperity, more and more poor people make it into the middle and upper class today than ever before. A University of Michigan study found that over a fifteen-year period (from 1974 to 1991) only one in twenty poor Americans stay poor, thirteen become middle-class, and six become rich. The U.S. Treasury found similar results. That's the best upward mobility rate ever.
But good-paying jobs rely upon education. The pay difference between those with and without college degrees continues to widen. In 1979, there was a 49 percent wage difference between college and noncollege wages. Today that difference is 89 percent. The message: if you want a brighter future, go to school. That's a good news message, though, because more educational opportunities exist in the United States than anywhere else in the world.
JOIN THE REVIVOLUTION: FOLLOW THE FOOTPRINTS OF OTHER REVIVOLUTING INDIVIDUALS
Many people are enlisting in the revivolutionary army. They are proactively, revolutionarily creating new futures for themselves. Are you ready to join up? Follow these footprints.
The Surplus Executive Finds a New Home
Imagine the challenge confronting Ned, a fifty-eight-year-old marketing executive laid off from a large company. Ned spent all of his thirty-six years of gainful employment with large organizations. He found that large organizations don't often hire people his age for executive positions.
He finally found a spot with a much smaller organization. He told us, "It's sort of like it used to be in my old organization, with one basic difference. I know now that every day I have to sell something, make something, ship something and collect somethingor I don't eat. There is no big Deep Pockets Daddy to finance me for a while or some assistant to make my calls or prepare my handouts. I've got to rely upon doing it myselfevery day." Ned revivoluted himself in order to create his future in the midst of continuous upheaval.
New Life Chasing White Balls on the Greens
Dan was forty-seven when we met hima senior vice president for information technology for a major money center bank. Dan had it all: a top job in a cutting-edge profession with a growing company, and a new beautiful wife and three wonderful children. Two years later we encountered Dan at an information technology conference. He still had the beautiful wife and family, but was now with another company. "My former company decided to outsource IT, so I became excess baggage. A great outplacement package enabled me to land with this smaller company, at just about what I was making, with a real opportunity to make a difference. My family loves the new location. I'm set for life."
Maybe. But "life" turned out to be a lot shorter than Dan was thinking about. We ran into him at a restaurant recently and got caught up on his activities. "I left that company within a year. They wanted ninety hours a week from me. It was too much. Talked it over with my wife and kids and decided that life was too short to invest that much in somebody else's future. Why not invest it in my own, we figured. I quit the job and went to golf school to become a pro golfer. At age fifty-one I decided to do what I've always wanted to doplay and teach golf. Cut back on our expenses and lived on our savings for the year I went to school. Now I'm the assistant pro at the big course in town and loving every minute. Come on out and play a few holes. Who knows what you might decide to do."
Talk about revivoluting. Dan seized the moment and created his own future.
Do I Have to Go Back and Sit in a Classroom Again?
We met Jonathan at a seminar some years ago. He was almost forty years old and had worked his way up to a mid-level management position at a large industrial naval installation in town. But he was unhappy. "I've been marking time for the past ten years. I've just got to do something else. There's talk of privatizing the base, or moving our work to some other location. I could be on the streetand not know what to do."
We urged him to consider one of several education programs that might give him a non-navy perspective and set of skills as well as getting him into a network of people working in the private sector.
"What, you want me to go back to school?" he exclaimed. "It's been eighteen years since I've sat in a classroom. I don't think I can do it." Much conversation later, Jonathan agreed to talk to an MBA admissions counselor.
Jonathan dropped off the radar screen for several years, until we ran into him in a shopping mall. We shared a cup of coffee and his revivolution story. He signed up for and completed the Executive Masters of Business Administration program. He applied a number of ideas to improve his section at the base that he developed as part of his master's, got recognized by the captain and then the admiral for his improvements and wound up leading the reinvention task force team.
"It was the biggest kick in my entire life. I got several offers from folks in private industry. One finally was too good to pass up. I'm leaving next weekend to begin my new life in Oklahoma."
We smiled as we went looking for our family members in the mall. We midwifed another successful revivoluteer.
So, You Think One Person Can't Make a Difference, eh? Ask Carol About That
Carol worked as a technical writer for a large engineering/architecture firm. She was good at what she did. But it didn't bring her much joy. Her boss was very supportive. "Why don't you try your hand at design," she suggested. Carol did a little design work on a project and liked it (as did the architect on the project).
Carol signed up to go to evening school to learn design. Six long years later, balancing night school, a day job and a growing family, Carol finally graduated and became state-certified. Just recently we saw an article in the local paper that Carol's firm won the "orchid of the year" award for the best-designed building, and Carol was mentioned as the project designer. Who says one person can't make a difference? Carol did!
Calling the Doctor: Information Please
Greg was an impressive figure sitting in the rear of the seminar room at the executive MBA class we recently taught. With a full head of silver hair, an easy smile and a soft and reassuring voice, it was easy to see why he ran one of the most successful gynecology practices in town. Why was he in this expensive, intensive, self-paid two-year education program?
He told us. "I've been delivering babies in this town for almost twenty years, and get Christmas cards from more than a thousand people every year. But I make less today to deliver a baby than I did twenty years ago, while my expenses are up more than 2,000 percent. Beyond the money, the practice has changed. People are less courteous, more demanding, less willing to listen to advice. It's just not as much fun anymore. I'm going to open a chain of stores providing products, services and information oriented toward middle-aged women. My wife and I researched the field and decided that there is a huge unmet need out there. More importantly though, this will give us a chance to recapture our life together. We're not getting any younger, and if we don't do it now I'm afraid that we'll be too locked into the practice to give it up. At forty-seven these flowers can still bloom in a new garden."
We'd wager that the fragrance from their revivoluting blossoms fills the air. By the way, he's one of six physicians in that class, all looking to use the lever of additional business education to revivolute themselves into new careers.
Pink Cadillacs and Green Dollars
Then there's the woman who took her life savings of $5,000 and renewed her personal and professional world. After working for years in direct sales, she launched a new life as an entrepreneur, opening a small storefront. She later became an author. She branched out into helping other women become financially independent and personally more fulfilled. Today, that little family business has grown to a nearly $2 billion cosmetics company with an international presence. Her name: Mary Kay Ash. Her company: Mary Kay Cosmetics. She is one of Forbes magazine's "Greatest Success Stories of All Time." She now devotes her time to helping other women become the beautiful living legends they deserve to be.
Right, I can hear you saying. That's just a once-in-a-blue-moon experience.
But think again. Today there are 3.5 million female-owned, home-based businesses in the United States, employing 14 million people on a full- or part-time basis. And they're making very good money.
Leading Active Revivoluteer Lives
WeJerre and Jimhave lived active revivoluteer lives ourselves. One of us started out in personnel in a large company. (Actually yearning to be a teacher, just like Dad, but didn't because of a severe stuttering problem.) Then revivoluted into a college professor (after taming the stuttering somewhat), researcher and writer. All the while maintaining a strong business connection, working as both a consultant and business owner. In retrospect, both of us have revolutionarily revived our careers at least half a dozen times in the course of forty-five years. For us, revivolution is a personal way of life.
THE PHOENIX METAPHOR FOR REVIVOLUTIONARY SELF-RENEWAL
"Okay, okay," you say. "I got it. I've got to revivolutechange dramatically. But I've tried that before and failed. I've quit smoking nineteen times. I've been on seventeen crash diets that only add inches to my waist line. How do I revivolute?"
Look around you for the answer. Self-renewal is the way. See self-renewal in living color blossoming before your eyes. From the ever-renewing sunrise to the season-changing colors on the trees, we live a life that continuously rejuvenates itselfand ourselves. Renewal is a natural and permanent part of life. Plants renew themselves. People renew themselves. Organizations renew themselves. Revivolute yourself through self-renewal.
Now is the time for self-renewal. Robin Williams standing on desktops in Dead Poets Society shouting, "Carpe Diem"seize the day. There is no time like the present. We live in good timesgood economic times, and good times to move on to new lives. One executive we know told us recently, "I'm going to die in six months. Not a physical death. But my life in this job will end in six months. Once I complete the projects on which I'm workingand that will take about six monthsI will stop doing what I'm doing. I will have made the last big payment on my retirement annuity. The last child will be out of school. At fifty-two, it's time to think about what I want to do with the rest of my life. I may take on another role in this organization, may keep the same role but change the way I think and do this job. I may move on to another organization or change professions altogether. Whatever I do, it won't be what I'm doing now." The same "What do I want to do with the rest of my life" question resounds over and over again in executive suites, plant floors, classrooms and living rooms. The answer to the question will be found in the pages of this book.
The Phoenix is the mythical symbol of the continually renewing life force. Throughout history and across many different cultures, humans have told stories about, fantasized about and worshiped the forever-renewing Phoenix. Each culture paints a similar picture of the self-renewing Phoenix: beautiful sunrise-sunset gold and crimson feathers, a bird which renews itself, a soaring spirit that periodically emerges in newly re-created forms. The great scarlet and purple creature continually soars past its yesterdays on its way to brighter tomorrows. For all of humankind's history, the Phoenix embodied a core attribute of time and life itself: the renewal of all living things. The Phoenix is a symbol of hope for the futureand of our enduring capacity to create infinitely better tomorrows for ourselves and others.
The Roman poet Ovid wrote: "There is one bird which renews itself out of itself. The Assyrians call it the Phoenix." But there is no need to go back 2,000 years to see examples of the self-renewing Phoenix. Look at the sun every day or the changing colors of the leaves and the seasons to see renewal played out in living color. From the spring festivals of Easter and Passover to the fall and winter festivals of Thanksgiving, Christmas and Hanukkah, we order our lives, our work, and our celebrations around the recurring cycle of renewal.
The economist Joseph Schumpeter talked about the phoenix-like characteristics of our economic system that cyclically leaves the "old order" behind in order to create a better "new order." We believe that this same life cycle exists for organizations and individuals. In fact, we've seen it, and lived it.
Look around you today and see, feel and hear self-renewal taking place. Turn every page in this book and you'll read about self-renewal. It is a constant theme. It represents the overpowering reality with which we deal, day in and day out, minute in and minute out. In a world rent by change, Phoenix self-renewal is the path to a more secure future. Renew, revitalize and re-create yourself. Be a soaring Phoenix.
PREVIEW OF COMING ATTRACTIONS
To soar, the self-renewing Phoenix utilizes the five principles discussed on the following pages.
First, Renew Yourself: Create a Future That Makes a Difference and Leaves a Legacy
"Change an organization"now there's an oxymoron. Years of working to "change" organizationseither our own or othersconvince us that "change" is an elusive rare species, often talked about, seldom observed and rarely captured. Look around. Read the business press. Talk to your colleagues. The instances of successful long-term organizational change are as rare as polar bears in Peru.
Why the poor record? And, given the poor record, why the repeated efforts? The answer: each and every one of us shares the deep desire to learn, to grow, to make a difference. We are filled with the wonder and awe of what can bealong with the terror of what might be. The questions swirl through headsand heartsand dog our every step. Like a resounding bell in a endless series of valleys, they echo through waking and sleeping hours. Will tomorrow be better than today? Will I be better off tomorrow? Will my children? My grandchildren? Can I make a difference in my life and in the lives of those around me? What do I want the rest of my life to be like? What do I want my work environmentmy organizationto be like? Can I really make a difference?
In the answers to those questions lies the kernel of this book, and our promise of a better tomorrow. We're on a journeyan exciting adventure into tomorrow. We are optimists. We believe that earnest, hardworking folks can create their own future, make it better, leave a mark and help others. We know that one person with courage can make a revolution. It takes hard thinking and hard working. Sir Edmund Hillary didn't take a Sunday stroll and wind up at the top of Mount Everest. We are ready. Are you?
It Is Easier to Create Tomorrow than Change Today. Everywhere we look, there's a need to change: "The morning bathroom line is killing me: we need a bigger house. The car is rattling: time to trade in and up. Why can't the children get better grades in school and be better behaved? Got to change their attitude. The job looks dicey: better look into changing jobs before the reduction in force comes."
On and on it goes. Change rears its ugly head in every aspect of our lives.
We busy ourselves trying to "change things." Virtually every change effort begins with a simple assumption that colors everything: we can change what other people do. At home, we micromanage the kids, grounding them when they misbehave or get poor grades, and even do their homework with them to make certain it's correct and gets turned in on time. At work, we install customer service programs to change the way employees treat customers. We adopt simultaneous engineering to change the way engineers develop products. We establish lean manufacturing techniques to change the way production workers produce products. We reengineer systems to change the way people process the reams of data in our world. All these efforts rely upon the simple assumption that we can change the way people perform.
"Nonsense," shouts the more than a century of experience between us. Rather than attempting to change an ongoing situation, we've discovered that it is far easier to create a brand-new one. "Green field" organizations and situations almost invariably are more successful. Yet we go merrily on our way trying to "change things." "Insanity is doing the same things and expecting different outcomes," Einstein said. Judged by that standard, most of us are certifiably insane.
Self-renewal Is Job No. 1. Nothing is forever. Today's star is forgotten tomorrow. Today's market leaders become tomorrow's also-rans. Yakov Smirnoff is an example of successful self-renewal. The Russian comedian, of "Oh, What a Country!" fame, had a very successful career in the 1980sa weekly sitcom, parts in several movies and a highly visible Best Western commercial. His satirical way of looking at things Americans take for granted, combined with his trademark laughter, made Smirnoff a famous, successful celebrity.
But, as in all businesses, times changed. The Wall fell, the Soviet Union imploded and being a Russian comedian no longer had a mystique. The canceled TV show and diminished bookings convinced Smirnoff that he needed a new act. He moved to Branson, Missouri, renewed himself and relaunched his career. He's now a very successful theater operator/performer. Self-renewal was Job No. 1 for Yakovand it paid off.
Mother Earth's Self-renewal in Bright Red and Black. Visit the big island of Hawaii and watch the earth renew itself. On the southeastern side of the island, 3,000-degree lava spills out of Kilauea destroying tropical forests, covering the land with smoldering black lava and creating hundreds of acres of new land. Just thirty miles to the north up the coast, too-many-to-count waterfalls spill the two hundred or more inches of rainfall into the ocean carrying in their muddy waters the remnants of thousands-of-years-ago lava flows now softened into rich, fertile soil.
Self-renewal is Job No. 1 for the earth. Molten rock boils up from beneath the oceans and eventually forms land, hard crusts of moonscape-like barrenness. The wind, rain and sun weather the land, transforming the hard rock into fertile soil. Plants, animals, birds and insects populate the forest, taking it into another renewal stage. The wind and rain ceaselessly wash the now soft and fertile soil back into the ocean, causing yet another renewal phase. In time, the land will disappear again beneath the waves to be renewed in another place and time.
As it is with the earth, so it is with humans. In fact, our life's story is the story of continual renewal: from child to student to husband to parent to grandparent, from engineer to manager to executive to president to friend. And we're not done yet. We know the value of continual renewal. We know that we must continue to create our own futureseize the momentbe in charge. That's why we choose the Phoenix as the symbol for our book.
Create a Tomorrow That Makes a Difference and Leaves a Legacy of Which You Can Be Proud. But what kind of tomorrow is worth creating, worth spending the long hours toiling in the salt mines? What kind of "new order" do you want? It certainly isn't the "new order" of the dark ages where civilization almost disappeared. Neither for us is it the "new order" of fear for one's job that characterizes so much of the downsizing and right-sizing that passes for corporate revitalization these days.
What "new order" do we want? Hard question, easy answer. Like most of you, we yearn to leave a legacy, something that makes a difference in the world and makes our children proud to carry our name. We collect our children's prizes and prominently display them throughout our home and office. We are not unique. A neighbor's son is a very good soccer player. Soccer trophies decorate their fireplace. Pictures of their son in action on the soccer field, along with his numerous "My Child Was Citizen/Scholar of the Month" bumper stickers, line the guest bathroom walls. Part of their legacy is their award-winning soccer-playing son.
Our neighbors are no different than President Bill Clinton, who frets about his place in history, or Jack Welch, who wants to create a General Electric that continues to grow and prosper after he leaves. At the deepest point in our souls, each of us wants to leave something worthwhile behind. We "Soar with the Phoenix" when we keep creating new futures that will help us leave a legacy that truly makes a difference.
Second, Plug into Your Connections
Ah, What a Web of Business and Personal Connections We Weave. We are connected to many people: some we know, most we don't. Connections tie us together as members in the human family. Follow the connection lines for Sally, an engineer at Boeing Aircraft. Sally is connected to other Boeing employees: the eighteen members of her engine casing development team for the Boeing 747 airplane, the 2,400 members of Boeing's product development department who develop other components of the 747, the 6,200 product development employees working on other aircraft like the 737 and the 777, the other 12,400 members of Boeing's commercial aerospace division, and the balance of Boeing's 42,000 employees. She knows only 500 of her 42,000 Boeing connections, but she is intimately connected to them all. If one mechanic forgets to complete the solder on one rivet and that causes one Boeing 747 to fall out of the sky, Sally's job is at riskas are all 42,000 employees' jobs.
Sally is also connected to the thousands of suppliers who provide more than 60 percent of the components that compose the 747. And she's connected to the airlines who buy 747s and the airlines' customers (you and me) who occupy those jumbo jet seats. Sally also has many connections in her home community of Seattle, including neighbors, teachers, grocery clerks and insurance brokers. Many people across the world own shares in Boeing, and thus Sally is connected to all of them.
Sally also has a wide range of personal connections. She's connected with her primary and extended families. Friends are important to Sally. Her personal telephone book bulges with the names of hundreds of fellow MIT graduates. She's active in several professional associations and those names fill her book as well. Sally serves on a planning subcommittee in her community. Through that work she's met a number of the local officials and businesspeople.
Sally's connections are many and complex, numbering in the hundreds of thousands. She knows personally only a few of the many people who influence her life and whose lives she touches in one way or another. Sally is interconnected with others in the way the air molecules inside a balloon are connected to each other: push one side of the balloon in and it moves all the molecules around and changes the shape of the entire balloon. Sally lives in a connected world. We all do.
John Donne, the famous English poet, articulated connectedness four hundred years ago when he wrote, "No man is an island." The Internet is today's manifestations of Donne's poem, where everything is connected to everything and everyone is connected to everyone. You can't see the Internet, you can't touch it. Yet the Internet, like the personal and business network connections in which we all participate, is one of life's most fundamental facts.
All Business Connections Are Personal, and Personal Connections Are Another Form of Business. People don't buy from a business. They buy from a person. We buy a car from a salesperson, not a dealership. After all, there are lots of dealerships selling identical automobiles. Walk down the street and listen to the pitchmen. Pick out one you can trust and that's whom you'll do business with. That's true buying cars, homes and components for 747s. Sally will tell you that. She works hard to build trust with her customers and her teammates. She delivers what she promises and works to only promise what she can deliver. Business is relationships, and all relationships are personal.
"Balance" is a popular word these days: balance between family and work, between work and exercise, between career and personal development, according to Sue Schellenberger in the Wall Street Journal. She cites the example of Randall Tobias, chairman and CEO of the large pharmaceutical company Eli Lilly, who says: "I don't want to be defined solely by the boxes I happen to occupy on organization charts. I also want to be defined as the father of my children." J. Michael Cook, CEO of Deloitte Touche Tohmatsu, a large accounting and consulting firm, said, "I wish that over the years I had more control over my time and more opportunities to be involved in family things. I wish I'd understood the importance of that Thursday afternoon soccer game. . . . At Deloitte we say to people, 'Though client demands drive our days, we have the flexibility of having multiple clients and the freedom to make our own schedule and to decide how and where to spend our time. Take advantage of that flexibility.'"
Those words strike a chord with us. We understand the importance of balance between personal and business life all too well. Some years ago we lost our top financial person because his wife died and he just fell apart. His personal life so impacted his business life that he lost both. Every day we encounter people struggling with personal issues that affect their business day. Tobias's words ring true for us. We, too, want to be more than a box on an organization chart. Don't we all? We've said words similar to Cook's to ourselves and the folks with whom we work. As the leaders of our organizations we know that we must be concerned with the personal as well as the business life of our teammates. As we'll say repeatedly throughout this book, "You can't hire a hand, or a brain. You hire the whole person and all of that person's business and personal connections."
Recognize and Honor Your Connections. Connectedness and interdependency are not new concepts. We borrow them from our colleagues in biology and in physics. We see them today, in living color, as the Internet, read about them as the "network organization" or the "virtual organization." It's a popular topic, because beyond the hype, this vital interconnectedness drives a great deal of our behavior.
Each of uslike Sallyhas many connections that are like ever-widening ripples caused by a stone in a calm lake. Our point: we live lives connected to many others. These connections form the framework within which each of us plays our part. Identify your connections and the role you play in their lives and the complementary role they play in yours. Leverage these connections to create a future that leaves a legacy that makes a difference.
Third, Create Success for All Your Connections
Hands need bodies. People need communities, nations and this planet. We are all interconnectedand interdependent. A healthy hand depends on a healthy body. A healthy person depends upon a healthy community, a healthy nation and a healthy planet. Since we're all connected, my health depends upon your health. My success, therefore, depends upon your success. I am as committed to helping you succeed as I am to helping me to succeed. Isn't that logical? Of course.
That's why good "capitalists" are concerned about the health and success of employees and community membersas well as shareholders. James Gwarty, Robert Lawson and Walter Bark of the Cato Institute point out that free market activities exist within a democratic context. Research clearly supports the reality of this interdependence. On the most macro level, economic freedom produces national prosperity. Political freedom is a necessary prerequisite to economic freedom. Democracy fosters a market economy that, in turn, creates prosperity. Political democracy in a community, then, is the driving force that enables economic prosperity for any given organization within that community.
Freedom creates the opportunity for people to generate innovative ways to help customers succeed, while a totalitarian state limits both the range of options available to create customer success and the sole customer for whom success must be created: the state. Successful American business organizations today can thank the framers of the Constitution two hundred years ago. To ensure their future success, organizations today must work to strengthen political freedom and the long-term viability of the market economy.
Take the "create success for others" mandate to the more personal level. Teaching is the best way to learn. Medical training is based on the "see one, do one, teach one" philosophy, where the doctor-in-training sees a procedure done, does the procedure himself, and then, to reinforce the knowledge, teaches the procedure to the next group of doctors-to-be. We've learned a lot about life teaching scouting to our kids. Our wives learned a lot about faith teaching Sunday school. Helping others learn helps the teacher learn. What a win-win deal. And a great example of how our "create success for others" philosophy helps create success for you.
Fourth, Learn More in Order to Contribute More to Others' Success
"How Safe Is Your Job?" the headline agonizes from the cover of Fortune magazine. "Job Killers," the cover of Time wails in angst above the scapegoated "Rogues Gallery" of corporate presidents who announced substantial job reductions. From the six o'clock news, to the drive-time talk shows, to the business press, the media howl of economic instability reverberates.
Those misleading headlines do, however, present truth in one regard: gone is the idea that organizations create job security. Writers of every stripe, from the union press to the "Capitalist Tool" Forbes, convinced us for years that "The Company" or "The Union" or "The Government" would take care of us. Recall the words of Tennessee Ernie Ford's song "Sixteen Tons": "He mined sixteen tons of Number Nine coal . . . but he owed his soul to the company store." Is that the job security we want? Obviously not.
In truth, there never was security in any jobexcept the security of indentured servitude that Tennessee Ernie Ford sang about. Union or nonunionit never mattered much. There were jobs in good times and no jobs in bad times. And the bad times came frequently.
"Okay, okay," you say. "I see what you mean. I've got to create my own job security. But how do I do that? It sounds like an impossible task." Make no mistake. It isn't easy. But it is doable. The solution is simple to articulate, and hard to do: keep learning more so you can create more value for others.
In the 1960s Sonny Werblin, owner of the AFL New York Jets, paid an astronomical $400,000 to Joe Namath, a gimpy-kneed quarterback from Alabama. He was vilified in the press for spending ten times what other leading quarterbacks were receiving at that time. Yet, using the draw of Joe Namath's name, Werblin increased season ticket sales by more than $2 million. What would you do if someone offered to give you $2 million tomorrow if you could scrape up $400,000 today? You'd mortgage the house and everything you owned to the max. A 500 percent return in one year is better than the tables at Vegas. Was Namath worth $400,000? Absolutely. He created value five times his cost for his "customers"the owners who paid him and the fans in the seats.
The Namath principle applies in organizations as well. The best job security in any organization is to create so much value for others that they see you as essential to their own success. How do you do that? By learning more. Joe Namath not only had a strong arm, he also worked hard studying defenses. He worked hard learningand it paid off for himself, Sonny Werblin and the millions of football fans he entertained every Sunday afternoon. Use his lessonlearn moreto create success for everyone in your networkincluding yourself. We will talk about how to do these easy-sounding but difficult-to-execute activities in later chapters.
Fifth, Take Ownership of Your Company and Your Life
We hear it all the time. "That's all well and good for you to say take ownership. After all, you're the CEO. But I'm a middle manager. I work for a Neanderthal. We just announced a 12 percent reduction in force and I'm not certain I'll make the cut. Look, I need this job. I've got a mortgage to pay and hungry mouths to feed. I'd better keep my nose clean and not make waves." Or, "Me? A leader? I'm just a machinist around here. I just do what they tell me to do. 'Leave the engineering to the engineers. Just do what you're told,' the foreman told me last week after chewing me out for making a small adjustment in my machine to make it easier to use and faster."
Yet who gets hurt when the business goes south and customers tell us to get lost? Look in the mirror for the answer. If each and every one of us does not assume responsibility for making tomorrow different, none of us has a place there.
The old movie High Noon says it best. In that movie a bunch of bad guys ride into town and cow the merchants. There are more merchants than bad guys. The merchants have more guns than the bad guys. But the merchants cannot get themselves together. Along comes the hero, Gary Cooper. The merchants talk him into saving them. Though he tries mightily to get them involved in the fight, at high noon there he is, on that dusty street, packing iron, facing the bad guys alone as the merchants hide behind their counters.
Of course, Coop the hero wins and the merchants come out of hiding and cheer him. In a moving ceremony, they offer him their sheriff's badge. He throws the badge in the dirt. He knows that without the merchants' taking responsibility for their own protection, it is only a matter of time until he winds up in a wooden box. The message of the movie is clear: everyone must assume responsibility for his or her own success. How to do that is found in the chapters that follow.
The message is very important. Each and every one of us can make a difference. You are responsible for your life and your career success just like each of usJerre and Jimis responsible for his life. One person canand willmake a revivolution. Are you ready?
THE ROAD MAP
The self-renewing Phoenix soars, renewing its vision, revitalizing its spirit and re-creating its success when it spreads its leadership wings and takes charge. The self-renewing Phoenix leads his or her network of interconnected people to create another symbol of the legacy of continuing success: the Pyramid, itself a symbol of enduring greatness and creativity. We've divided our book, like ancient Gaul, into three parts.
Part 1: Introduction to Phoenix Principles. In this section we spell out the basic principles for becoming a soaring Phoenix: renewal is the natural way to create a future, we are all interconnected and interdependent, and creating success for others is the best way to create success for yourself. The Phoenix soars utilizing these principles.
Part 2: Phoenix Leadership. We soar like the Phoenix when we take ownership of our organization and our lives and become a leader. A soaring Phoenix seizes the moment, takes charge and helps everyone with whom he is connected achieve their dreams and aspirations. Phoenix leaders make five critical contributions to the success of their interdependent, interconnected people: they surface issues, engage the people, prioritize resources, unleash ownership and energize learning.
Part 3: The Phoenix Pyramid. The Phoenix leader then creates the new foundation for future success. That solid new foundation is represented by a Pyramid, itself a symbol of strength and creativity. We'll lay out the systematic way a Phoenix leader builds that solid Pyramid base for the future success of vision, mission, values, goals, strategies, disciplined management infrastructures, business processes and communication systems.
Throughout, we'll challenge you to renew yourself, develop your leadership skills and build your strong Pyramid base for future success.
Do What Actually Works, Do What's Really Right
Just so you know. We are primarily businesspeople. Our focus is: "Does it work?" We are practical folk, more impressed with the elegance of work ability than the elaborate articulation of philosophy.
We are also emotional people. We think with our hearts as well as our heads. We are more concerned with the question "Is it the right thing to do?" than "Are we doing it right?" We have often walked away from "good" business deals because there were "bad" strings attached.
And we are doers. We believe that people learn by doing, not talking. So, let's get on with the doing.