Recipe for Change

Along the journey, we all pick up some nuggets of knowledge that are absolute gold. Recently I was relaying one of those nuggets and the person I was talking to suggested I submit a post to LinkedIn. And after thinking about it, clearly, it would be incredibly selfish of me and others to not be putting these nuggets out there for others.

This particular one comes complements of Darren Jackson (https://www.dhirubhai.net/in/darren-jackson-803b909), former CEO of Advance Autoparts and CFO for Best Buy. Who knows...maybe Darren stole it or read it somewhere, but he is the one who gave the gift to me - so I credit him. Darren is a phenomenal leader and I had the privilege of working with him at Best Buy. One afternoon, and frankly I don't even remember the reason why, I ended up chatting in his office and we were discussing how to get a large organization to move and change.

Darren wrote 4 words on his whiteboard and said these are the steps for change. At first, I thought he was being overly simplistic and naive. But the more he talked and with my already ingrained respect for him, I took that recipe for change and tested it for myself and it has worked over and over again.

What are the four words???

Visibility: As Darren explained it, to make any organizational change, you have to create massive and significant visibility to the challenge. This is more than just sending an email to say "look at this issue". The issue must become visible and apparent frequently throughout the organization. I learned through my own journey that this visibility needs to occur without judgment. I found that negative context like "these numbers stink; I expect better" will only further demoralize a team that feels defeated. They know the numbers stink and if you have quality people they will feel bad enough.

Clarity: As visibility takes root, the organization is going to seek to understand it, debunk it, reject it, support it, and host of other motivations. Our job as leaders in this step of the process is to ensure a common and correct clarity is achieved. We need to carefully think how we communicate what this means to the organization, how this challenge / issue is created/formed, and most importantly, how each person/process connects to it.

Actionability: This is the one step in the process that I truly did not appreciate when Darren first articulated this formula. He said to me that big lofty transformation projects are okay, but they often fail to create the institutional change required to sustain change. Actionability is the key he said. What he meant was if the clarity was established correctly, the team will automatically begin taking actions (small and large) to move the organization the right direction whether or not they are on some massive project plan. People will naturally do the right things to move the needle and our job as leaders is to lift up those actions and highlight how they drive the cause. Simultaneously, we have to find and strike down those activities that are working against the transformation.

Predictability: This is the elusive final step in the process. IF the team reaches this step, the organization will begin to predict the relative value of their actions on the outcome. As a team they will evaluate, filter, and prioritize the actions that have the greatest impact on the whole business. And they will do it as a matter of normal business, not because the CEO directed a priority setting exercise.

Working Example:

Often I have seen articles espousing theory without real meaty examples. I have used this formula 3-4 times and drive major change. Here's one (and the first one I tried it with) to help you get your arms around how these steps can be applied.

A few years after that session with Darren, I was fortunate to be asked to lead Best Buy's Business to Business direct sales division. When I arrived, the organization was double digits negative EBITDA, on-time shipments was less than 20%, customer satisfaction was abysmal, and morale as bad as I have ever seen in any organization. We decided that a culture of success and service was necessary to turn this ship around.

For the first step of visibility, we started by putting the various KPIs of the organization in front of the masses. Customer service, sales, finance, HR, product management, etc. all got daily updates to the previous days sales, on-time shipping rates, etc. When P&L's came out we shared it with the whole team ever how painful that discussion may have been. We had all-hands meetings, team leadership discussions, department meetings which all included a healthy dose of performance. KPIs were put on digital screens everywhere. You couldn't go to the bathroom without getting a dose of our overall performance - literally.

As you can imagine, we were met with tons of questions and comments. How did you calculate that? It was this other department's fault. Why are you picking on us? There was a ton of blame. But at no point did we say "we are at X% and need to be at Y%." We just kept putting the numbers out there. And as the questions came, we answered them carefully making sure the team understood how the different processes impacted the numbers. Clarity was in full swing and we fed it every chance we got.

After about 45 days, the numbers started to move. Slowly at first and then more rapidly. By the 120 day mark there was a material movement afoot and the excitement was palpable. Without a single dollar of investment in IT or any major process re-engineering efforts, the team was beginning to collaborate and make decisions that positively impacted the business and not just their departments. Actionability became a force multiplier. In less than 180 days, our on-time shipping rates went from 20% to over 90% which caused our customer service phones to stop ringing off the hook. With the additional customer service bandwidth, we used it to proactively communicate with the stores about key accounts. Trust began to build between the teams and the other parts of Best Buy. Within 18 months, Dick Schultze (Founder of Best Buy and Chairman of the Board) paid a visit because he wanted to "see what the heck is going on there".

I left the organization to pursue a new opportunity 12 months later and I am not sure we ever fully reached the predictability phase. But there were definitely glimmers of it as team members contemplated process changes and the full impacts to the business. The P&L became high single digits profitable, revenues doubled over a 3 year period, and the morale of the team was probably the strongest I have ever been a part of.

I have my own company now and I am using this same technique to help us achieve our objectives. And sitting in my office the other day writing those same four words on a whiteboard, I transported back to that day in Darren's office when he took 15 minutes to share this formula with a young kid. Thanks Darren so very much. And to the readers, I hope this nugget of gold provides some value and the teams you serve.