Drive dissatisfaction to deliver successful change

People and organisations will only change if they are dissatisfied with their current situation. An alcoholic will only seek help if the pain of their condition outweighs the pleasure of the alcohol. Similarly a company will only change its strategy and focus if it is truly unhappy with its performance.

The problem for many companies is that dissatisfaction only becomes widespread and deep-rooted when the company is in decline. This can lead to panic measures and a long, painful and often unsuccessful attempt to reverse their fortunes. For example, it has taken three major changes in senior executives and over 5 years of effort for M&S to respond effectively to the threat of reliable, cheap fashion from retailers such as Asda, Primark and Next.

So how do you ensure that dissatisfaction is embedded throughout your team or company, even when performance is strong? In this week’s newsletter, I propose 5 ways for you to create a thirst for change in your business and avoid organisational complacency. As Andy Grove, CEO of Intel, famously said, “Only the paranoid survive.”

  1. Set targets that demand real change. When Jack Welch became CEO of General Electric he famously set a goal for all GE’s business units: “Become number one or two in every market we serve.” For the management teams of business units that were “in the pack” you can be sure that their approach to performance changed from incremental improvement to dramatic change overnight.
  2. Spend more (much more!) time with dissatisfied customers. Talking solely to your best customers can lead you to believe that all is well. Your most difficult customers will give you a different story and perspective. Jim Collins, in his book Good to Great, notes how US company Granite Rock goes even further. They use a system called “short pay” whereby dissatisfied customers simply circle the offending item on an invoice, deduct it from the total and pay for the balance. As CEO Bruce Woolpert said, “You can get a lot of information from customer surveys, but there are always ways of explaining the data. With short pay, you absolutely have to pay attention to the data.”
  3. Ask questions, don’t give answers. Engaging your teams in dialogue and debate, rather than trying to have the answers requires your team to find the solutions themselves. Understanding performance issues without seeking blame enables everyone to try and find a better solution without defensiveness.
  4. Prioritise innovation ahead of customer feedback. For many successful companies the use of focus groups to test new ideas is the bedrock of decision making. Unfortunately focus groups do not tend to react positively to true breakthrough thinking – until it becomes embedded in the market (by your competitors!). Yet research shows that uniqueness is as important as customers’ purchase probability for the eventual success of any new business idea.
  5. Repeat daily in the mirror, “Nothing fails like success”. The one certainty of a successful strategy is that, at some point, it will fail. Of the 100 “best” companies of 1917, only 1 did better than average over the next 86 years. Changes in customer needs, technology advances and competitor approaches can all lead to dramatic changes in fortune. As technology advances gather pace so too the “life” of a successful strategy and business model shortens. Financial service giant, Charles Schwab, seek to change strategy every two years to stay ahead of the game!

The bottom line

Ensuring that there is real dissatisfaction across your business could be the key to your survival and ongoing success. Which of the five approaches will you adopt to raise break away from the status quo in your business?

 

To find out more contact Stuart by clicking here or call +44-(0)1636-526111.