Why? Three change bandits – “The Other Guy,” “Adversity,” and “Discomfort” – can be viewed as keeping even the best-intentioned leaders from being successful. It is important to consider that change is not a left-brain rational act, but a right-brain emotional choice. The ability to lead and influence change is based on how we feel and how we make others feel. It is these feelings and how we process them that ultimately allow for successful change leadership. So taking the Three Bandits of Change Leadership head-on is a critical component to successfully leading a team, or an organization, through a change that will result in a better business for all.
What are the change bandits doing to cause problems for the leaders of change? They’re feeding on the emotional conclusions that the “other guy” needs to change, “adversity” should be avoided, and “discomfort” is incompetence in disguise. Here is a more in-depth look at each.
THE OTHER GUY
His voice of fear and limitations can easily change a mindset focused on being better to one consumed with being bitter. “The other guy did this to me.” “The other guy needs to go first before I can do anything.” “The other guy is keeping me from being successful.”
A number of years ago, I worked with a psychologist and business coach who started working in prisons. He spoke to prisoners one on one, asking them the same question: How did you get here? In each cell, the prisoner would say, “It wasn’t me; it was the other guy.” They told him elaborate stories – “my friends took me along,” “my cousin looks just like me, and they got the wrong guy,” or “I had a terrible lawyer and was never defended properly.” The coach quickly concluded if we caught this illusive “other guy,” we could empty our prisons. When he began working in corporate America, he conducted interviews with executives on what was holding back their performance. Amazingly, the “other guy” showed up here too. Operations said Marketing and Sales were selling things they couldn’t produce, and Marketing claimed that operating processes were so complex that it took extraordinary human effort to get ordinary results. The notes from the interviews captured beliefs like, “the other guy’s new structure doesn’t set us up for success,” “the other guy doesn’t hold people accountable,” “the other guy needs to go first,” “the other guy doesn’t listen,” and “his ‘send’ button is stuck, and his ‘receive’ button is broken.” This “other guy” syndrome causes us to give away control of our future to others; the Other Guy Bandit must be sent off before he derails any change effort. When we keep control within ourselves, we can achieve our goals.
ADVERSITY
The #1 roadblock to change is not addressing the areas of conflict or adversity that are critical to success. I’ve found that teams have extreme difficulty separating issues from individuals and stepping into the areas they fear may offend others. This is especially true the higher you go in an organization where adversity-laced conflict is talked about in the hall or at the bar, instead of as a team that must change to truly address the challenge.
Research shows that adversity is one of the most critical ingredients for personal and team growth. As adversity and conflict go away, people stop growing and begin a slow decline in capability. The goal is to hug adversity and embrace conflict to promote true change leadership.
DISCOMFORT
You can’t lead if you are comfortable. Humility, vulnerability, and discomfort are the traits of change leadership. So how do we get comfortable with discomfort and realize that feeling like a dumbass can be the example of leading change? The secret is to create a new mindset that helps people feel and know they should not flee the discomfort, but see it as a sign of genuine leadership. Hug the indignity. Celebrate the clumsy. And remember the mindset that change is beginning again.
All three bandits – the “Other Guy,” “Adversity,” and “Discomfort” – must all be addressed in order to build and create a business for the future that is compelling and worth the risk.
About the Author
Jim Haudan is a different kind of CEO, with a passion that goes beyond leading Root to success. For more than 20 years, he has been helping organizations unleash hidden potential by fully engaging their people to deliver on the strategies of the business. With his background as a coach, it’s not a stretch that the company Jim co-founded focuses on tapping employees’ discretionary efforts – the kind that produces winning results.
Jim is a frequent speaker on leadership alignment, strategy execution, employee engagement, business transformation, change management, and accelerated learning. He has spoken at TEDx BGSU, the Conference Board events, and numerous client meetings. He also contributes regularly to business publications and blogs. He lives in Sylvania with his wife, Michelle. They have three children, Brad, Brooke, and Blake. When he’s not traveling the globe visiting clients, he enjoys relaxing with his family at their lake cottage, golfing, fishing, photography, and attending Jimmy Buffett concerts.
How Good Management Stifles Breakthrough Innovation
By Markus Lorenz
We hear a lot these days about how big companies fail to innovate, but the truth is more complicated. A lot of companies excel at developing better products, yet these improvements are incremental. They’re not the breakthrough offerings that can jump-start growth and profitability. And companies’ success at cranking out these enhancements hampers them from getting better at the radical projects.
If you closely analyze unsuccessful attempts at developing breakthrough products, perhaps the most common trouble you find is not one of the usual suspects, such as lack of top-management commitment. Instead, you’ll see that efficiency-minded project managers are inadvertently discouraging the explorations – and therefore the learning – that make radical ideas practical.
There’s a history behind this problem. Frustrated by inefficient R&D, companies in the 1980s started applying standard project-management techniques such as phase-gates and key performance indicators.
Textbooks on innovation advised them to allow some flexibility in the phase-gates. Yet control-minded project managers have tended to chart strongly linear paths that discourage distractions – depriving their teams of the agility and openness needed for new thinking. As development teams became more productive and their initiatives more predictable, incremental improvements soared, project managers got promoted – and radical innovation declined.
Companies soon began spending less and less time on breakthrough ideas. At BCG we’ve found that radical projects nowadays account for roughly 10% of an average company’s innovation portfolio, down from twice that in the early 1990s. (Josh Lerner cites the narrow focus of corporate R&D in his October HBR piece on corporate venturing.)
The lesson is clear. It’s not enough for executives to proclaim their commitment to innovation, develop an innovation mind-set, or even put more money into breakthroughs. Companies also need to make changes at the ground level.
They can start by treating radical projects differently, but it isn’t enough to just let these teams loose. Without some discipline, initiatives will become money pits, or nervous project managers will fall back on their conventional habits of control.
The solution is for project managers to devote less effort to predicting and directing innovation, and more effort to managing the inevitable uncertainties. They should worry less about the schedule and more about ways to reduce risk – by partnering with outside companies, say, or getting advance commitments from customers. Or they can invest in multiple options for the marketplace, rather than rushing through a single big bet.
They should certainly expand the key performance indicators to include vital insights on technology or customers, so that a worthwhile project can keep going even if it is far from a serviceable prototype. But like venture firms, they need to terminate projects that exceed a predetermined “affordable loss.” (For more on the framework BCG has developed, see this paper.)
Take, for example, a photo-technology company my colleagues and I worked wit
h. Digital printing promised to greatly expand the designs of ceramics, furniture, and other nonpaper products, and the company hoped to pioneer the sale of industrial printers in these sectors. Its first printer was a dud, so the company rethought its efforts, creating a new development team that included marketing people as well as engineers. With this broadened perspective – and the time to explore how customers would actually use this new technology – the team realized that usage would vary greatly across industries. The project manager recognized the insight and secured funding to develop multiple kinds of printheads and other functionality. Those steps improved the likelihood of marketplace acceptance, and the resulting printer quickly won over buyers.
The combination of flexible techniques and a manager who tolerates uncertainty created something that’s increasingly rare and valuable these days: a radically new product that creates a whole new market space.
About the Author
Markus Lorenz is a partner and managing director in the Munich office of the Boston Consulting Group.
* This article originally appeared on the Harvard Business Review.
Small Business Tips from a Successful Entrepreneur
By Lyve Alexis Pleshette
Ruth Ellen Miller, Co-Founder and President of NoUVIR Lighting https://www.nouvir.com based in Delaware, is a successful entrepreneur who saw her business grow out of her living room to become a million dollar enterprise.
Nouvir Lighting is a manufacturer of fiber optic lighting, producing pure-white fiber-optic light capable of minimizing photochemical damage. Nouvir’s lighting systems are used in museums including historic documents and memorabilia such as Thomas Jefferson’s handwritten draft of the Declaration of Independence to Abraham Lincoln’s Gettysburg Address, from the Bill of Rights to The Louisiana Purchase, the Magna Carta and hundreds of other priceless documents. Through Ruth Ellen’s leadership, Nouvir Lighting has become a booming business that embodies her passion and creativity.
As a testament to her contribution in the community and her business success, the Small Business Administration named Ruth Ellen as the Small Business Person of the Year for the State of Delaware in May 2000.
Here are her tips to would-be entrepreneurs, particularly small business manufacturers:
1. Plan Big.
“Entrepreneurs need to plan the manufacturing and marketing of profitable, proprietary products; not generic, me-too, low-bid business. Plan how you will market, how you will grow, how you will advertise and where you will be a year from now, three years and five years from now. Keep your goal worthy and in sight.”
“NoUVIR has 16 U.S. Patents protecting its proprietary products. Our fiber optic lighting has unmatched performance and is superior in technology. We win any head-to-head contest with any competitor no matter how big a conglomerate we face. They cannot imitate or copy us, because we planned big. The cash for the new computers was planned. We added a new building to make NoUVIR more responsive to customers; produce better products, and create a better quality of life. The cost of the new building was planned, and it was completed right on budget.”
2. Start Small.
“Live tactically on rabbits, while planning strategically to hunt elephants. Small sales build a company. Tiny offices, obsolete equipment, used furniture; temporary employees, small production spaces, etc. let you put dollars towards more important things like R&D that help you grow.”
“Those small sales of one fiber optic lighting system have grown into lighting whole galleries and floors. The tiny single ad is now a modest ad campaign. We continue to work on a small scale, prove it, keep the process efficient and then grow according to the plan into bigger things.”
3. Don’t Borrow.
“Monitor cash flow so your profits build your new building, not your bank’s.”
“There is no trouble in spending extra if there is a need to correct something. I have the financial freedom to give a customer little extra something extra as a customer service. Many big companies can’t say that.”
About the Author
Lyve Alexis Pleshette is a writer for PowerHomebiz.com. She writes on various topics pertaining home businesses, from startup to managing a home-based business. For a step-by-step guide to starting a business, order the downloadable ebook “Checklist for Starting a Small Business” from PowerHomebiz.com
Think You Know What Venture Capitalists Look For In New Start-Ups? Think Again
By Patrick Hanlon
Everyone talks about how entrepreneurs and innovators get their famous “aha!” moments.
But no one really talks about when the VCs who fund them get their big idea to finance fledgling entrepreneurs with the capital that turns ideas into industry and headlines.
Silicon Valley venture capitalist Chi-Hua Chien has had a long career investing in Silicon Valley companies including Spotify, Twitter, and Facebook. When his firm Goodwater Capital was looking at a new investment in the Imoji app, all their financial research was boiled down into a human moment.
“My 5-year old daughter wanted to play with Imoji rather than have her bedtime story,” laughs Chien.
Not every investment is so close to home.
Eurie Kim is a principal at Forerunner Ventures, the company that has helped bring us Warby Parker, Bonobos and Birchbox.
“Often, we see several similar ideas come to us all around the same time. Sometimes it’s two or three of the same general concept, sometimes even five or six,” says Kim.
“We are always doing our own research to explore categories and themes we think are interesting and have pain points that, if addressed, could open up big new market opportunities. But the ‘aha!’ moment happens when a founder comes in to pitch and every aspect of their approach seems to addresses all question marks in our minds.
“Every time we invest, it’s a ‘zing’ moment,” Kim continues. “The stars seem to align with a stellar team that has great chemistry and relevant experience, a unique brand that has potential to inspire consumers, a differentiated product that stands to disrupt existing options—and that unmistakable connection we feel when we just have to be in business with someone.”
“I think back to 1994,” says Stuart Rudick of Mindfull Investors. “When Sky Dayton had the idea of creating an Internet service provider. (I didn’t know what an ISP was at that moment.) I said ‘no’ during the first round of investment.
“My ‘aha!’ moment was when he came back three months later and showed me the growth of the business—which was 3X what he showed me the first time,” says Rudick. “He was getting traction, the number of users, and he had beat what his projections were.”
The company back in 1994, of course, was called Earthlink.
Rudick’s latest pick is Atheer Labs. Atheer has technology imbedded in glasswear for augmented reality. The Atheer software development kit allows developers to create fully immersive and interactive 3D enterprise apps on the Android platform.
“When I saw the power and ability to do it in real life and real applications in medical, entertainment, auto industry,” says Rudick, “it really made me think this is something that will truly change our lives.”
What venture partners look for is part economics, part science, and part gut instinct. Generally, every firm begins with a robust decision framework that includes key ingredients.
The founder is passionate about their idea.
They have past experience that makes them credible.
The world is dying for their idea, even if they don’t know it yet.
The founder has an unfair advantage.
FOMO. The investor has a fear of missing out on something big.
And finally, what will the exit be? When does the investor get their money back—hopefully several times the size of their original investment.
It is the purpose of all brands—especially those in the fledgling, start-up stage—to surround themselves with a community of fans. At first, that community lives on the inside, the nucleu
s of founder(s) and Employee #2. Over time, the tenets of community expand, spread, and embrace the world at large. In order for the brand to survive and become a Brand (capital B), the essentials of community must be communicated, differentiated, and spread across a diverse set of media from packaging, point of purchase, out-of-home, experience, home page, social media and (yes) the pitch deck.
The beliefs of the Brand must seep into the world of venture capitalism where, hopefully, the idea is transformed from another meaningless pitch, into a product enriched with enough purpose and meaning for someone to click the “Like” button.
Mark Goldstein of Camiolog has funded dozens of Silicon Valley ventures. He admits that while the business fundamentals must be in place, sometimes that “aha!” moment is already staring you in the face.
An instance. A few years ago, Goldstein found himself sitting in a bar. The bar was full, but he noticed something peculiar. “I looked up,” he says, “and no one was talking. Instead, everyone was on their cell phone. So I dove in and funded only mobile-first companies!”