When Constant Improvement Isn’t Enough

Many, if not most organizations have processes and mission commitments around routine improvement. Often they are formalized, and labeled with titles like Continuous Improvement Program, Total Quality Improvement (TQM), Zero Defects, Business Process Re-Engineering (BPR) or perhaps variation of Kaizen, the Japanese philosophy espoused by Dr. W. Edwards Deming, under General MacArthur’s program to re-build Japan after World War ll. Kiazen, (改善) means "improvement". Kaizen strategy calls for never-ending improvement involving everyone in the organization – managers and workers alike. While making small but continuous improvement is surely a laudable goal, much like always increasing revenue while reducing expenses is a philosophy that should be embraced universally, there is another profound aspect to thriving as a business.

Successful leadership will additionally focus on transformation/innovation. If Henry Ford had been merely trying to achieve incremental improvement, he would have tried to breed a faster horse.

I’m reminded of a breakfast meeting I attended recently with Carly Fiorona, former CEO of Hewlett-Packard. While she took pride in being a good listener with all stakeholders, she knew her leadership group must be transformational in their thinking and lead the commitment to innovation. H-P has often commented publicly that a significant percentage of their revenue comes from products that simply didn’t exist 18 months earlier. A bit of Moore’s Law in practice!

She told a fascinating story of the development of the digital camera. It wasn’t demand from customers, who all seemed satisfied with the 100 year domination of the market by Kodak; and it wasn’t exotic research in some secret lab. It was transformational thinking that led to innovation at its best. In an H-P center scientists watched eight year olds learn to surf and master the web. Occasionally they would print a page. Each time they were asked why they printed a particular page they responded in way that made it quite clear the print function was a way of claiming ownership. Until they printed it, it was just information on the web, but once they printed it, it became theirs..

Next came brilliant leadership, fostering innovation and potential transformation. They needed to determine what the connection was between the web and the print function that H-P could leverage, creating a new product or service. They felt H-P possessed a clear advantage in digitizing data, and they were the leader in print technology. The concept of having images digitized, and then being able to deliver them anywhere on earth immediately after they were created, allowing the recipient to print, and thereby “own” them was the epiphany that conceptualized digital photography. Within just a few years, H-P had toppled the once mighty Kodak and was in the enviable position of being able to claim market leadership. And now, in just a few years, it is estimated that the vast majority, perhaps as many as 80% of all photos taken are taken with a cell phone, and are immediately ready to forward electronically.

But it’s not enough to invent something. The mere creation of a new product doesn’t really help anybody until it’s taken successfully into the market. You must produce! You must make the product and you must move it into the market effectively and efficiently.

While this may seem intuitive while thinking about products and markets, it is rarely practiced effectively when it comes to the sales arena where it is largely absent altogether. It’s a critically important part of a healthy sales process. Companies often tinker with quotas, assigned territories and commission/incentive plans, trying to make things just a bit better than they were the previous period. And yet we read in a recently published study that less than 10% of most company’s salespeople can effectively describe their core business. The ability to turn average sale people into a high performance team often requires transformation. It’s executive leadership that must recognize when small improvements are not the answer; rather the solution may very well be in recognizing when to pull the trigger on a transformation of the sale force. This is not to suggest a whole new staff. On the contrary, while occasionally some do need to replaced, the ability to think creatively and create a productive environment is what is called for in this case. I once thought of it as much like playing golf. If we ask a golfer who normally shoots in the nineties to shoot a par 72 and offer him a million dollars to do so, he’ll fail, so it’s not about the incentive. If we tell him we’ll fire him if he doesn’t shoot par, he’ll still fail, so it’s not about the threat. If we show him exactly what to do, and then tell him to go do exactly as demonstrated in order to shoot the desired par score, once again he’ll likely fail, so it s not about instruction. So what’s the answer? How do we get a 90’s golfer to shoot a par round? In golf the answer is a scramble. In scramble, all players work together to achieve the best possible score. Each contributes his best shot toward the goal of a lower score, and to be sure, when the round is over, the player who has never scored under 90, will have posted a par or better round. It happens every time. And it does in sales too. When we come together in an environment that allows the entire team to contribute their best effort, where all have a role and contribute to the victory that which they do best, the result will always be much better than the individual is able to accomplish by himself. We will have succeeded in transforming an average salesperson into a high performance, highly productive contributor.

The issue then is from whom we should expect the innovation and occasional transformation, such that we’re not relegated to the scrapheap of obsolescence. The answer is confident, skilled, visionary leadership. Employees can be empowered to recognize process deficiencies and recommend improvements; it’s a matter of the culture. But it’s the leadership that must find ways to pull themselves out of the trees and look candidly and critically at the forest, listening to all stakeholders, but relying on none exclusively. The role of transformation and the requirement for innovation are among the most important roles in managerial leadership today. Many leaders have come to rely on external interim skilled and experienced help to position them for success as these significant changes are sold to the employees, and embedded in the culture and processes. They realize that a fresh perspective based on years of experience removes the bias that often exists toward the status quo. And the ability to discern precisely when it needs to occur separates the well known successes from the mediocre. The desire and ability to predict, anticipate and foster a culture that craves innovation, and expects transformational creativity is the leadership we will be reading about in the chronicles of success.

-Michael Pearce