|
|
Executive Times |
||
|
|
|
||
|
|
|
||
|
|
2005 Book Reviews |
||
|
|
Confidence:
How Winning Streaks and Losing Streaks Begin and End by Rosabeth Moss Canter |
||
|
|
Rating: ••• (Recommended) |
||
|
|
|
||
|
|
Click on
title or picture to buy from amazon.com |
||
|
|
|
||
|
|
|
||
|
|
Cycles Many executives will especially enjoy Rosabeth Moss Canter’s latest book, Confidence:
How Winning Streaks and Losing Streaks Begin and End, because of the good
sports stories she presents. The main lesson of this book is that cycles
become self-reinforcing, so winners tend to win and losers tend to lose.
Therefore, try not to lose twice in a row. This lively and interesting book
will provide some tools for executives to use and practical ideas to think
about, especially about avoiding losing habits. Whether the tools and ideas
are useful or not will be up to you. Here’s an excerpt, from Chapter 7, “The
First Stone: Facing Facts and Reinforcing Responsibility,” pp. 190-201: Grooming
a New Culture For new presidents and
prime ministers, the first hundred days are often considered the critical
period in which an agenda is set and leadership established. For Jim Kilts, it was more like his first hundred
minutes. Kilts took charge on
February 12, 2001, a frigid winter day in His coat was barely off
before he convened his first meeting in the boardroom with the dozen men
holding the top executive positions. But if anyone thought the meeting would
consist of little more than polite introductions around the table, they were
immediately proved wrong. Straight
Talk: Naming the Problem, Establishing Expectations Kilts had a cordial and gracious manner, but
he wasn’t there to schmooze. He got right to the question of how Gillette
played the game and how that behavior would change. He turned on the overhead
projector and displayed a set of slides that detailed his style, management
philosophy, and expectations, and his analysis of Gillette strengths and
weaknesses from his month-long external review. The first shock was that
he put the facts on the table—right out there, with no spin and no ways for
people around the room to pretend he was talking about someone else. His own
thorough and detailed advance preparation was the first sign of the new
behavior he found essential to restoring responsibility and thus building
internal and external confidence. He presented his initial perspective on
Gillette from his month-long external review, including strengths,
weaknesses, and key issues—a fact-based analysis he would also present in
three days at his first board of directors meeting. Gillette had championship
assets, he said, but people were caught in bad habits, especially trade
loading, and had stopped taking responsibility for performance. He showed
them a drawing of the Circle of Doom and explained that Gillette was caught
in a self-perpetuating cycle that made losing inevitable. The Circle of Doom slide
caused a ripple of recognition. The new CEO had given a name to the problem
that everyone was experiencing but didn’t fully understand. He had discussed
the previously undiscussable. He had pointed out
that the emperor had no clothes. The second shock was that
he told people exactly what he expected of them in terms of new behavior. He
laid out a regimen of meetings, measurements, reports, and methods for
working together. He showed slides labeled “My Style” and “My Expectations
of You” and spoke about how to behave. Kilts described himself as open and straightforward—what you see is what
you get. He said he was action-oriented—fair but somewhat impatient. He
wanted outstanding performance. He wanted integrity. He didn’t want
competition between functions. Some of his words could become slogans: ·
Expect
excellence; reward the same. ·
Often
wrong, never uncertain. ·
Contribute
before decisions are made; support decisions once made. ·
Don’t
make dumb mistakes, don’t punish smart mistakes, don’t
make smart mistakes twice. ·
Never
overpromise, always overdeliver. ·
A
promise made is a promise kept. “If something bothers
you, I want open dialogue,” he said. “And I hate anyone saying: ‘Jim said’ or
‘Jim wants’ as the reason for doing or not doing something. Things are
done—or not—based on rigorous assessments and considered deliberation.” He expressed his
determination to set and achieve realistic targets. He outlined a
disciplined process for setting annual and quarterly objectives and
providing structured feedback, through weekly operating committee meetings,
quarterly two-day meetings away from the office, and weekly e-mail postings
from the next layers of management around the world. Meetings, he said, would
feature fact-based management, open communication, simplicity, and collaboration.
Attendance was required, meetings would start on time, there would be no
gossip, he wanted full attention and active listening, he strove for
consensus, and he expected preparation. Kilts made clear that he
had neither preconceived notions about people nor any plans to make sweeping
changes in management. Ed DeGraan would remain
president and COO, his positions before he became acting CEO for the six
months before Kilts arrived. While everyone would be evaluated, and many
people would see their roles change, people would not be cut unless they did
not perform. He also told the new
operating committee that jokes were acceptable. But it was highly unlikely
that anyone was in a mood for humor that day. Gillette executives hadn’t
heard quite that kind of speech before. The company had been a little like a
gentlemen’s club in which everyone knows the secret handshake and silently agrees
to pretend not to notice poor performance. Still, Kilts’s
presentation was just a bunch of words. The proof that he meant what he said
came over the following weeks and months. True Confessions: The Courage to Admit Responsibility Rebuilding confidence
requires acts of courage. To break with the past often involves admitting the
errors of the past. It takes courage to face facts that have long been
covered up, to voice truths that have been unspoken, or to apologize for past
wrongs. It takes courage to face people who have come to expect something and
tell them that the game has changed. Within a few days of
joining the company, Kilts went on the road with the sales force to visit
retail stores. Doing this so soon showed the emphasis he placed on customer
relationships, and it reflected
his interest in dialogue with the people who were in the field representing
Gillette. Kilts found one conversation with a young sales representative
particularly troubling and revealing. “He told me about the trade loading at
the end of every quarter, so I asked him why he did that,” Kilts recalled.
“I’ll never forget his response. He pointed his finger at me and said rather
harshly, ‘It’s you guys up in Kilts knew that there was
more to ending this practice than just shouting “Stop!” The pressure from the
top that perpetuated bad habits stemmed from the collision of overly
optimistic earnings forecasts and unrealistic sales targets. This false front
was causing everyone to lose confidence in Gillette. As CEO, Kilts reinforced
a giant step in saying, “We were wrong.” He reiterated the board’s earlier
decision to stop issuing earnings advisories before the end of a quarter, one
of the first This was the shot heard
round the world. Everyone talked about it. I was told about Kilts’s action in I think of trade loading
as the business equivalent of eating fast food: loading retail customers with
empty calories in the form of product they don’t yet need. Fast food is a
constant temptation on every street corner. It’s quick, it’s easy, no
preparation necessary. It’s filling and addictive. And it’s terrible for you.
Many people know that, yet they still flock to fast-food restaurants, just as
the Gillette sales force flocked to trade loading despite knowing it was bad
for the corporate body. “We hated trade loading,” a European executive
declared flatly. “How can you talk category management with a customer and
then three weeks later come in on your hands and knees and say to them, ‘Oh
please, here is 15 percent to buy more.’ But we’d been loading for six
years,” he said. A European colleague made a similar declaration. “I’m
absolutely certain there’s not one person in the whole company who for one
moment thought that we should do anything other than get out of trade
loading,” Chris Adcock said. Like most bad habits,
vowing to stop was easier than stopping. Expectations had to be changed.
Salespeople had to be reeducated. Customers had to be told. New ways to
stimulate market demand had to substitute for the lazy habit of discounting.
“It was a very tense time because people were pounding on other people to
meet their earlier (unrealistic) promises, and they were starting to get into
bad habits again,” Kilts recalled. “You could tell they wanted to load; they
were rationalizing why the trade really did need more inventory. Watching
them helped me evaluate how effective I was in changing things. There was
still a bit of the old culture in them saying, ‘This too will pass.’ They
did not believe I would follow through with the discipline.” Relationships with
customers had settled into a routine that some people found easier to live
with than to confront. Trade loading had been going on for so long that
customers had come to expect it. Some even built it into their budgets,
assuming that Gillette would somehow provide extra resources. And few
believed that Gillette would have the courage to stop, or that sales
personnel would be able to face their customers and tell them the truth. “We
had an issue of credibility,” a sales manager said. “We’d get into the last
month of a quarter, and they’d stop buying from us because they would say,
‘Well, we know you’re going to show up on the twenty-eighth of the month with
a deal.’ And we would say, ‘No, no, no, we’re not.’ They didn’t believe us.
And when the twenty-eighth would come, they’d say, ‘Come on, where’s the
deal?’ And again we would explain we were not doing that anymore. This would
also happen on the twenty-ninth and thirtieth of the month. Eventually they
would realize we were serious.” It took Gillette nine
months—three rounds of quarterly performance—to back away from trade loading
sufficiently to make people feel confident that they could succeed without
falling back on it—that customers would still buy Gillette products, that the
business would be healthier, and that the money freed by ending discounting
could be invested in creative ways to grow the market. One of the side effects
of trade loading had been a proliferation of product and packaging
variations—colors, languages, sizes, seasonal promotions, or special bundles
created as a deal for a particular retail customer in order to make sales
targets. These variations added costs and consumed attention. They were like
extra calories that accumulated to create an overweight corporation whose
warehouses were stuffed with inventory, adding to the pressure to discount or
make deals to move it. There were 25,000 of these variations, each a separate
stock-keeping unit (SKU). Just 20 percent of them accounted for 99 percent of
Gillette’s sales. The rest were extra fat. Kilts asked for the elimination of
all obsolete SKUs, a cut of 20 percent of the remainder, and for each new one
added, an old one would have to be removed. But for each proposed cut, there
was a salesperson claiming business would be lost. Should the Oral B group
keep making a toothbrush for people with braces on their teeth, in order to
please orthodontists who could influence the sales of other Oral B
toothbrushes? And what about all the numerous package variations in obscure
local languages in small countries? What made it tricky was that each excuse
had a grain of truth. But Kilts kept putting the requirement in front of
people and coming back to it. The discipline eventually led to innovations.
Told they could not have so many different packages, the Duracell group
invented flexible packs that could be used many different ways. By the end of
Kilts’s first year, 17,000 SKUs had been
eliminated—a whopping number, yet they represented less than 1 percent of
sales. Hundreds of initiatives
like these to improve performance were cataloged in piles of loose-leaf binders
in Peter Klein’s office, each several feet high. Dialogue
and Widespread Communication Kilts wanted a new kind of conversation about how
to win. The mode was the give-and-take of dialogue. “Before Kilts, you went
to a meeting, you said your piece, and you went away. I felt I was not
growing enough,” a manager said. “Kilts asks questions—did you do this, did
you try this, has it been modeled, did you do research, did you run tests? He
brought a whole new lexicon.” In his first weeks, Kilts
met individually with each of his twelve reports, then with their reports,
and, within a month, with each of the top 100 managers, both in It was not surprising
that the first quarterly off-site meeting of the new top management in March
of 2001 was tension-ridden. As facts were put on the table and difficult
issues surfaced, there were some angry outbursts and sequences of
attack-and-defend. Having all key executives at the table helped Kilts end
the finger-pointing that had gone on in the past. If, for example, Manager X
said he had not reached a certain target because Manager Y did not do his
part, Kilts would turn to Manager Y and ask him what had happened. It was
hard to deny facts, make excuses, or shift blame when the leader wanted
everything discussed openly or, better yet, resolved in advance by each
person accepting his own piece of responsibility and getting together with
teammates to seek a new course of action. Gradually, as people became
accustomed to the new openness, they seemed to understand that their goal
was to solve problems, not to hurl accusations, and a focus on positive
actions reduced negativity. Kilts’s calm, matter-of-fact manner helped
create the positive emotional climate. He expressed confidence in people’s
ability to rise to the occasion and use the talent he believed they had. “We
have a very good cadre of people who want to do the right thing,” he
repeated. “When you look at their résumés, they are from excellent schools
with great backgrounds and good experience bases.” The problem was in the
weak system for accountability. “A lot of people did not know what their
specific job was, other than to show up and do some things and not
necessarily have accountability for anything,” he said. “They wanted to be
told how to do the right things and helped to accomplish this.” Kilts blamed
the culture, not the people: “Unfortunately, this was one of the more insular
cultures I had seen, and one where people did not always follow up on what
they promised.” Kilts’s message was that it was no
one’s fault, but that they each had to commit to their own share of
responsibility for winning performance going forward and communicate with
everyone else on the team. Gillette was not just a
single team, of course, but a web of many overlapping teams—a complex global
system in which people controlled only a portion of the actions required for
them to succeed. People heading each line of business—shaving, oral care,
Braun appliances, Duracell—were dependent on others in the technology and
manufacturing organizations to design and make the products, and on still
others in marketing and sales throughout the world to sell them. Each had
different priorities and was measured on different things; manufacturing
might want to keep inventory low, while sales might want to keep it high so
they could ship immediately to new customer orders. Accepting personal
responsibility meant working harder to influence other people to develop
joint plans. Kilts no longer allowed his key managers to use other people as
an excuse; he expected them all to work together to work it out, and, if
priorities conflicted, to find a compromise. An Italian executive told me he
was learning to do whatever it took to persuade his peers: “You explain, you
present, you have meetings, you beg, or you cry!” Communication increased
dramatically. Now people wanted to see one another’s priorities and numbers,
and to help them achieve goals so they could all win. Every week, managers
around the world circulated a summary of significant facts that it became
imperative for everyone to read. Kim Fa Loo, group business director for the Asia-Pacific region,
provided an example: “We might say in the weekly posting that ‘Advertising
approval for Duracell has yet to be received from Global Business Management.
This is two weeks behind schedule.’ Everyone knows Jim sees this. So the
moment the global business head reads this, he goes to a subordinate to make
something happen.” Others convened weekly or monthly meetings of people from
across different areas to anticipate and solve problems. Peter Hoffman,
president of the Grooming business unit, invited representatives of all the
geographic regions and the people in technology and manufacturing concerned
with razors and blades. The agenda would involve specific problems in one
area—such as currency crises in Latin America or weak performance in
Australia—but the rest of the group pitched in. Kilts traveled everywhere
he could, and key managers worldwide gathered in Priorities:
Clear Focus and Attention to Details “With Jim, what you see
is what you get,” Ed DeGraan observed. “He does not
attempt to wrap himself or the company in any mystical qualities. He tries
to keep it as simple as possible.” This was clear in the company’s
straightforward new vision: “To build Total Brand Value by innovating to
deliver consumer value and customer leadership faster, better, and more
completely than our competitors.” Kilts was not looking for drama, he was
looking for delivery. Delivery required attention to details. He spent much
of his first eight months acting as “assistant to the chief financial officer”
to bolster financial disciplines and to guide strategy with real numbers. Many executives felt that
one of Kilts’s most important turnaround moves was
to set quarterly priorities (new behavior for Gillette) and to hold people
accountable by measuring and reporting very specific aspects of their
group’s performance. Individual managers developed objectives that were much
more detailed than in the past, based on a new strategic planning process
spearheaded by Kilts’s trusted sidekick, Peter
Klein. Management groups from each line of business were asked to focus on a
few broad priorities for future growth, but then dig into the details of
implementation. The process forced a deep review of each business, its
market, and its competition. In the past, people had
been able to achieve their overall targets by doing well in one area while
neglecting others. Kilts contrasted the old way with his way: “Take the guy
running Instead of letting people
hide behind grand generalizations (“great results—who
cares how we achieved them?”), Kilts wanted them to analyze all the details
that accumulated to produce winning performance. The analogy to the best
athletes and the best teams was clear: paying attention to discrete actions—a
turn of the shoulder here, a difference in the stance there—that could
provide the margin of victory. This was also Ivan Seidenberg’s emphasis at Verizon, as we saw in Chapter 2. Gillette managers were
asked to break down performance into specific elements, look at many details,
chart statistics, and analyze the patterns. People responsible for each line
of business in each region around the world completed a “business health
chart” tracking a variety of indicators. For example, shipments to retail
stores were compared with actual sales to consumers, which would help people
spot red flags, such as whether there was any end-of-quarter trade loading
(indicated by a spike in shipments in the last two weeks without accompanying
consumer purchases). It was a challenge to get people to look at so much
data and use the facts to guide actions. European managers tried to make this
more fun by emphasizing the similarity to sports scores. They created League
Tables for performance, mirroring those used in European professional
football, to show where each national “team” stood in the Gillette “league.”
For example, the table might show that 90 percent of Turnarounds are tough, and Kanter doesn’t minimize the challenges executives face in
changing cycles of performance. At the same time, building confidence through
success can be achieved realistically, and some of the tools and examples
that Kanter provides in Confidence
may be helpful to those executives who pay close attention to the way cycles
can transform organizations. Steve Hopkins,
December 20, 2004 |
||
|
|
|
||
|
Go to Executive Times
Archives |
|||
|
|
|
||
|
|
|
||
|
|
ã 2005 Hopkins and Company, LLC The recommendation rating for
this book appeared in the January 2005
issue of Executive Times URL for this review: http://www.hopkinsandcompany.com/Books/Confidence.htm For Reprint Permission,
Contact: Hopkins & Company, LLC • E-mail: books@hopkinsandcompany.com |
||
|
|
|
||
|
|
|
||
