Tour Notes 4 – Why Change?

by BILL WADDELL

There are a couple of messages I give to the folks who attend my seminars I think are necessary for everyone in a position to lead change in their company to hear:

After I have talked about some of the core principles and philosophies such as culture, commitment to stakeholders and a focus on value for customers I tell them that I have spoken to people from well over a thousand companies in the last year, and I think it is safe to say that every one of them has had the immediate reaction of thinking 'but we're different'.  Of course you are.  What matters is the 'so what?'

If you mean 'We're different, therefore we have to come up with a way to incorporate these principles into our organization in a manner that best leverages our unique situation, and gives us a unique advantage over the other guys' then you are right on the money.

On the other hand, if you mean 'We're different, therefore we should just keep doing things the way we always have – that because we are different we cannot or should not create a culture of inclusion and empowerment and become a value-driven company – that we should just keep beating on suppliers and direct labor in a race to be just another low cost producer' then you might as well pack it up and leave now.  You stand no chance of long term success and we are wasting each other's time.

Then about halfway through the seminar I break away from the presentation.  At this point we are talking about the specifics of value stream alignment and using a reconstructed accounting system to price strategically in order to integrate the entire company in achieving financial objectives, and I tell them, if you are sitting there thinking about all of the difficulties and challenges that will make it impossible for your company to do this, you are using the wrong prism. 

What you should be thinking about is what will happen to your company if you don't do this, and your closest competitor does.  How will you fare when you are still squabbling over internal departmental priorities and your competitor has aligned his entire company around delivering the maximum customer value?  And what will you do when you are still setting prices based on marking up standard costs while your competitor is undercutting you at every turn with prices set specifically to take market share from you and to best leverage his capacity and fixed cost base?

That scenario - not that a few apple carts might be upset back at the plant – should be the concern that is dominating your thinking at this point.  You can opt out of becoming a lean enterprise if you want to.  But you can't stop your competitors from doing so.  And that thought should keep you awake at night.