mymm-feb-25-01

Making Your Mission Making Your Mission MeaningfulMeaningful

Sam Swaminathan

Sam Swaminathan

ChangeChange

• There was no change in global GDP for 1000 years, except during the last 100 years.

• Innovation came from the village blacksmith, baker, butcher, barber, and banker.

• Suddenly, the density of connections has grown and so the range of ideas has grown too.

Sam Swaminathan

Sam Swaminathan

Rhetoric Vs RealityRhetoric Vs Reality

• Layoffs during 1999 was the highest in the US [66,682 in Jan, 2001 among F-500 companies].

• Yet, corporations claim that employees are their greatest assets!

• Business leaders are trusted the least [Gallup Poll].

Sam Swaminathan

• Are corporations run like communist governments:– Over centralization– Controlled information dissemination– Bosses who are not accountable– Rigid hierarchies– Cronyism and sycophancy– Distortion of truth and reality– A few rich, vast numbers of poor– Disagreements are punishable– Your position determines your power

Corporations & CommunismCorporations & Communism

Sam Swaminathan

By:– Benchmarking with the world’s best– Learning from them– Developing revolutionary new

approaches to management– Never letting success get to its head

How does your company become great?How does your company become great?

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GE: The fastest elephant at the dance!

GE Leaders . . . Always with GE Leaders . . . Always with unyielding integrityunyielding integrity . . . . . .

Are Are passionately focusedpassionately focused on driving on driving customer success customer success

Live Six Sigma Quality . . . ensure that the Live Six Sigma Quality . . . ensure that the customer is always its first beneficiarycustomer is always its first beneficiary . . . . . .

and use it to accelerate growth and use it to accelerate growth Insist on excellence and are intolerant of Insist on excellence and are intolerant of

bureaucracy bureaucracy Act in a boundaryless fashion . . . always Act in a boundaryless fashion . . . always

search for and apply the search for and apply the best ideasbest ideas regardless of their source regardless of their source

Prize global intellectual capital and the Prize global intellectual capital and the peoplepeople that that provide it . . . build diverse teams to maximize it provide it . . . build diverse teams to maximize it

See change for the growth opportunities it brings . . . See change for the growth opportunities it brings . . . i.e., i.e., "e-Business""e-Business"

Create a clear, simple, Create a clear, simple, customer-centered visioncustomer-centered vision . . . . . . and continually renew and refresh its execution and continually renew and refresh its execution Create an environment of "stretch," excitement, Create an environment of "stretch," excitement,

informality and informality and trusttrust . . . reward improvements . . . . . . reward improvements . . . and celebrate results and celebrate results

Demonstrate . . . always with infectious enthusiasm Demonstrate . . . always with infectious enthusiasm for the customer . . . the "4-E's" of for the customer . . . the "4-E's" of GE leadershipGE leadership: : the personal the personal Energy Energy to welcome and deal with the to welcome and deal with the

speed of change . . . the ability to create an speed of change . . . the ability to create an atmosphere that atmosphere that EnergizesEnergizes others . . . the others . . . the EdgeEdge to to

make difficult decisions . . . and the ability to make difficult decisions . . . and the ability to consistently consistently ExecuteExecute

Sam Swaminathan

• Our heritage is no longer our destiny.

• The old economy has to synthesize with new economy capabilities to create the Post-Industrial Enterprise.

- Gary Hamel

Sam Swaminathan

ChangeChange

• Change is about abandoning your comfort zone far enough to reach the fringes of the changes surrounding you, challenging yourself again and again, and trying out things you never dreamt of trying before.

Sam Swaminathan

Mission and VisionMission and Vision

What’s wrong with them…

• They tell you what the score should look like when the game is over.

• They tell you nothing about what people should do to make that score.

Sam Swaminathan


What’s wrong with them…

• They sound the same

• It is hard to disagree with them

• Very few people in the company know how to achieve them

Sam Swaminathan


What’s wrong with them?

You’ll never know if you have truetrue buy-in or phonyphony buy-in.

Because…

… there’s no way to be against them.

Sam Swaminathan

• It is during periods of gut-wrenching change that we need faith. Mission statements can and do provide that faith.

• When developed and implemented properly, they transform organizations into communities of practice, that generate incredible and sustained profits while keeping their stakeholders happy.

Can Mission and Vision help?

Sam Swaminathan


Seek Consensus…

… and then distrustdistrust it.

Sam Swaminathan


If it comes real easy, get nervous.

It means no one intends to It means no one intends to change their behavior.change their behavior.

Sam Swaminathan


Will your gardener, security guardgardener, security guard and receptionistreceptionist know what you are

talking about…

…and what they are supposed to do?

Sam Swaminathan


The job of the leader is to convince people that they are not doing lots of things – they are just 1 or 3. They help people understand how this ‘new thing’ integrates with everything else you are doing. If you can do that, you can make your org. receptive to lots of radical changes. Its capacity to absorb frequent wild changes goes up dramatically. If you can’t do that you are part of the problem. You are going to overload everybody.

Sam Swaminathan


Be nervous setting goals which only 8 or 10 people understand how they

can be achieved.

Sam Swaminathan


If your objectives deal with things like working capital or inventory turns, you have a pretty good idea who is going

to work on it.

The more vague the goals, the more difficult it gets.

Sam Swaminathan

ObjectivesObjectives

Make sure your goals are articulate and clear.

The higher you go, the more ambiguous will be your goals.

This is called COGNITIVE COMPLEXITY.COGNITIVE COMPLEXITY.

Sam Swaminathan


There are bosses like Gandhi who describe what they want in such

metaphysical terms, you don’t know what the hell they are talking about.

If you can’t handle that, you don’t deserve to get promoted.

Sam Swaminathan


You can tell everyone about actions and behaviors, not CONCEPTS.

Be empowering.empowering.

Be boundaryless.boundaryless.

Be integrated. integrated.

Sam Swaminathan


Your objectives should include the creation of processes and structures to

take vague concepts and make the gardener, security guard and

receptionist understand what actions and behaviors are expected of them.

Sam Swaminathan


This is called creating

LINE OF SIGHTLINE OF SIGHT

Sam Swaminathan


• Convert sweet words into actions and behaviors. These become the goals and objectives of people.Line of SightLine of Sight

• Measure the actions and behaviors you desire.Performance ManagementPerformance Management

• Align rewards with desired actions and behaviors.Compensation ManagementCompensation Management

Sam Swaminathan


A good system gives you what you want.

Don’t set up systems that give you what you don’tdon’t want.

Sam Swaminathan


If sharing best practices is important to your company, reward reward people who share them and punishpunish those who

don’t.

Otherwise it won’t happen.

Sam Swaminathan


There are two critical components of setting objectives.

OneOne is the idea of creating integrative mechanisms to help your people understand why what’s important is important, and connecting them with the rest of what you do.

Sam Swaminathan


TwoTwo is creating Line of Sight.You don’t just feed people information. Instead, you describe it in terms that help them understand what they can do to achieve corporate objectives.

Sam Swaminathan


Line of SightLine of Sight helps people understand that the new thing we are bringing in is not another attack on everything else.

It’s congruent.It’s congruent.

Then, help them understand how they can contribute and why they should.

Sam Swaminathan


SS - Stretch

MM - Measurable

AA - Agreed

RR - Realistic

TT - Time-Bound

Sam Swaminathan


• Is it challenging?

• How does it compare with previous ones?

• Are there any best practices?

• Are they specific at lower levels?

Sam Swaminathan


• How does it stack up qualitatively?

• Are there corporate standards?

• How does it stack up quantitatively?

• How much will it cost / earn?

• How long should it take?

• How much effort is required?

Sam Swaminathan


• Did we agree on the resources – what, how much?

• Are there any imponderables?

• Did we agree on standards of excellence?

Sam Swaminathan


• In all fairness, can this be done?

• Do you and the organization have the resources that this will require?

• Are we flying a kite?

• Can we draw experience from past objectives?

Sam Swaminathan


• What are the agreed timelines?

• Does each constituent know about these timelines and has he/she agreed to commit?

Sam Swaminathan


Great companies set objectives based upon two factors:

• What should performance look like?

• How should it be achieved?

Sam Swaminathan

GE’s Leadership GE’s Leadership Development ModelDevelopment Model

T3T3 T4T4

T1T1 T2T2

Low VALUESVALUES High

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Sam Swaminathan


T1 T1 – Say goodbye now

T2T2 – Coach, give a chance

T3T3 – Tyrant.Warn – if no change, get rid

T4T4 – Make them role models

T3T3 T4T4

T1T1 T2T2


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Sam Swaminathan

Tyranny is not leadership.

Cruelty is not edge.

- Jack Welch on Leadership

Sam Swaminathan

Backward ImagingBackward ImagingYou are at a party, end of year.

You are celebrating the achievement of your company’s objectives.

You are a substantially more integrated organization than before.

Sam Swaminathan

Backward ImagingBackward ImagingYou are looking back, and asking yourselves:What are our people doing now that they were not doing six months ago?

More ofMore of // Less ofLess ofStopped doing Stopped doing // Started doingStarted doing

Bull’s Eye Drill

Sam Swaminathan

Backward ImagingBackward ImagingWhat would we do that we are not doing now?

Any revolution must change the majority’s behavior.

If you are not going to act differently, you are not going to get different results.

Bull’s Eye Drill

Sam Swaminathan

Bull’s Eye DrillBull’s Eye Drill

The outputThe output from the from the Bull’s Eye Drill Bull’s Eye Drill

is the input is the input to everything else.to everything else.

Sam Swaminathan

What we should do What we do now


Share ideas

Cross-fn. sales teams

Build diversity

Sam Swaminathan


• Take every plank of your objectives and values, and run it as a separate exercise. Run it separately for senior people.

• Everything that is done must be connected.

• It doesn’t matter who is singing, it is the same song.

Sam Swaminathan


• Take the list of ‘more of’ and ‘less of’, mix them up, so you know which ones are where, but a more naive reader wouldn’t know. Put a box in the employee cafeteria, make it anonymous, give them the list of things and ask the question: “If you were to do each of the actions and behaviors described below, what would be the organization’s reaction?”

Sam Swaminathan


• Responses:– 1. I would expect to be rewarded or

approved– 2. I would expect to be punished or

disapproved– 3. There would be no reaction of any

kind till hell froze over

• Do a frequency count and locate the crossover items:

Sam Swaminathan


• 1. We have to do more of those seven things, but your people are saying that if they do those things, they would get killed around here

• 2. You are saying this has to stop, and I get paid handsomely to do it.

You are injecting dye into the bloodstream.

Sam Swaminathan

• It is often the case that senior managers have a good reward system, but middle and lower levels get punished for the very things that are required.

• So you change the rewards for middle managers and below. You next look at first-line supervisors.


Sam Swaminathan

• All your HR processes become your friends if you hit the Bull’s Eye.


Sam Swaminathan

Clean Sheet ExerciseClean Sheet Exercise

• This is how you change glop into tasks, roles, and responsibilities. Then you use the Clean Sheet Exercise to see if the measurements are lined up or screwy. Then you use the rewards system to see if they are lined up or screwy.

Sam Swaminathan


Imagine …• no measurements, • no controls, • no auditors, • no Mickey Mouse accountants who

haunt your lives, and make you miserable…

We would then be twice as productive.We would then be twice as productive.

Sam Swaminathan


Phone rings, secretary says…

“You better take this.”

You know this is an important call – who might it be that would cause your secretary to say “You’d better take this” ?

Sam Swaminathan

Clean Sheet ExerciseClean Sheet Exercise• Boss?• Senior management?• Important Customer?• Family situation?• Government regulator?• Important supplier to whom you are

vulnerable?

In 3 minutes, you have got in touch with In 3 minutes, you have got in touch with your stakeholders or constituencies.your stakeholders or constituencies.

Sam Swaminathan


Take them one at a time, and discover the dimensions in

which you are vulnerable.

CUSTOMERCUSTOMERDimensions:• Supplies• Price• Quality• Schedule• Responsiveness• Creativity

Sam Swaminathan


• If we had no measurements at all, what would we have to keep track of inside to keep that phone from ringing outside?

OROR

• What would we have to keep track of inside so that when the telephone did ring, it at least wouldn’t be the first time you heard about it?

Sam Swaminathan

Output of Output of Clean Sheet ExerciseClean Sheet Exercise

The CSE tells you the dimensions in The CSE tells you the dimensions in which you are vulnerable.which you are vulnerable.

Next Question:What do we measure now?

What do we keep track of now?

Sam Swaminathan


Output of the CSE What we measure now

ROAROA EVA EVA

AbsenceAbsence Lateness Lateness

TurnoverTurnover Margins Margins

Sam Swaminathan


Output of the CSE What we measure now

ROAROA EVA EVA

AbsenceAbsence Lateness Lateness

TurnoverTurnover Margins Margins

Connect the stuff on the left with that on the rightConnect the stuff on the left with that on the right

Sam Swaminathan


Do we measure any of the dimensions in which we are vulnerable?

Sam Swaminathan


• If you find stuff on the left that doesn’t connect with stuff on the right, spend time answering the question –

‘How could we measure these things, so that at least when the phone rings, it wouldn’t be the first time I heard about it?’

Sam Swaminathan

Clean Sheet ExerciseClean Sheet Exercise• This becomes a realignment, a recalibration.

It’s a test of goodness of fit between what you are measuring and controlling and what you ought to be, to meet the needs, demands, requirements and expectations of your major constituents. This is a lens.This is a lens.

Create a hundred lenses.The questions are the lenses.

Sam Swaminathan


• This is a test of alignment between what you say you want, and what you say you are measuring.

• If you say one thing and measure something quite different, you set yourself up for failure.

Sam Swaminathan


• If you are not measuring what you want, how are you going to coach, mentor, and give feedback? How are you going to reward people who do it, and punish those who don’t?

• How are you going to act?

Sam Swaminathan


Guard against Middle Circles while setting

objectives and doing

performance appraisals.

Top CircleTop Circle

Middle CircleMiddle Circle

Sam Swaminathan

Middle CirclesMiddle CirclesIt’s the end of the year, you are having a

party, you have done it, what are you seeing more of ?

Answer:More respect for our More respect for our products and servicesproducts and services


Sam Swaminathan

Middle CirclesMiddle Circles

Great answer, but respectrespect is not an action.

It’s a thought word - it’s middle circle.

You can’t measuremeasure or rewardreward respect. It’s not useful.


Sam Swaminathan


Ask:

“Great, if your customers had more respect, what would they be doing

that they are not doing now?”


Sam Swaminathan


Next,

Ask what you should be doing to gain the respect of customers.


Sam Swaminathan


• Our quality standards meet the requirements of customers.

• Our customers are promptly and openly informed of any known actual or potential problems with our products or services.


Sam Swaminathan


It’s the end of the year…

You are an empowered organization, you are celebrating, what are you seeing lessless of?

Answer:

Less employee fearLess employee fear


Sam Swaminathan


Great example, but that’s middle circle.

FearFear is an emotionemotion, not a behavior.

Ask:

“So if the work force was less afraid, what would they do that they are not doing now because they are afraid?”


Sam Swaminathan

Middle CirclesMiddle CirclesThey speak up, they disagree,

they take more risk, etc.

Now you are talking actionsactions and and behaviors.behaviors.


Sam Swaminathan

Middle CirclesMiddle CirclesIt’s the end of the year…You are an empowered organization,

you are celebrating, what are you seeing moremore of?

Answer:Greater employee Greater employee

commitmentcommitment


Sam Swaminathan


That’s middle circle.CommitmentCommitment is an emotionemotion, not a

behavior.

Ask:“So if the work force is more committed,

what would they do that they are not doing now because they are not

committed?”


Sam Swaminathan


• They are reliable

• They deliver what they promise

• They put their company’s interests before their own

• They speak out when an individual or the company acts contrary to its values.


Sam Swaminathan


• I can never depend on you.• You don’t have integrity.• You are not responsible.

These are all examples of the middle circle. It is always resisted.

Convert the middle circle into actions.Convert the middle circle into actions.


Sam Swaminathan


Don’t say, “I can’t depend on you.”

Instead, you say, “Let me describe 3 actions that I noticed you take, and

you tell me how I can account for this.”


Sam Swaminathan

AlignmentAlignment

Check the objectives in your Performance Appraisal – look at the dimensions.

Identify items that are a hodge-podge of middle circles and behaviors. Rework them to hook to the left side of your CSE and your BED.

Sam Swaminathan

Fostering T4 TypesFostering T4 Types• You set objectives in order to meet the

performance requirements of your organization.

• But you also have to ensure that they are met while upholding the values of the organization.

• That’s what helps you develop and retain T4T4 staff, managers staff, managers and leaders.leaders.

Sam Swaminathan


T1T1 – Say goodbye now

T2T2 – Coach, give a chance

T3T3 – Tyrant.Warn – if no change, get rid

T4T4 – Make them role models

T3T3 T4T4

T1T1 T2T2


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Developing PeopleDeveloping People

Punishing mistakes severely don’t prevent them; they simply get driven underground. Now people won’t admit them. So you learn about them late, and don’t have time to set them right.

Case Study - ICase Study - I

A Multinational Company

Sam Swaminathan

A CULTURAL JOURNEYA CULTURAL JOURNEY• Care more than others think

wise.• Risk more than others think

safe.• Dream more than others think

practical.• Expect more than others

think possible.

STARBUCKS

Sam Swaminathan

MISSION STATEMENTSMISSION STATEMENTS

"Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow. The following five guiding principles will help us measure the appropriateness of our decisions:

Sam Swaminathan

1) Provide a great work environment and treat each other with respect and dignity.

2) Apply the highest standards of excellence to the purchasing, roasting, and fresh delivery of our coffee.

3) Develop enthusiastically satisfied customers all of the time.

4) Contribute positively to our communities and our environment.

5) Recognize that profitability is essential to our future success."

STARBUCKSSTARBUCKS

Sam Swaminathan

STARBUCKSSTARBUCKS• Employer of choice

– Higher pay than the market– benefits not available elsewhere– A group of investors and managers should

not win at the expense of employees

• Health-care to include 20 hour a week employees

• Treat people like family and they will give their all

Sam Swaminathan

STARBUCKSSTARBUCKS

• Investors asked, “how can you be so extravagant with our money?”– Reduced recruitment and training costs– Low turnover increases customer loyalty– Part-timers make up 2/3 of the work force– Their contribution should be valued– 75 percent is covered, including AIDS

• Does this work?

Sam Swaminathan

STARBUCKSSTARBUCKS

• Nationwide front-line turnover rate is 150 to 400%; here it is 60 to 65%

• Store managers - 50% Vs 25%• More importantly, the real benefit

has been in the attitude of employees

• Bill Clinton recognized Starbucks in April ‘94 for its health-care program

Sam Swaminathan

STARBUCKSSTARBUCKS

• The mission statement is not a trophy to decorate the office walls, but an organic body of beliefs, a foundation of guiding principles held in common.

• A Mission Review team receives a comment card from employees who see decisions/actions that do not

support the Mission Statement. • Response within 2 weeks

Sam Swaminathan

STARBUCKSSTARBUCKS• Bean Stock - stock options to all, in

proportion to the level of base pay [started at 12% - now 14%].

• Investors might hold a slightly smaller percentage of the company, but the value of their holdings would grow faster and more surely.

• A special exemption from the SEC was required.

Sam Swaminathan

STARBUCKSSTARBUCKS

• Since that day, no one is called an employee. Everyone is called a partner.

• A partner earning $20,000 would be given $2,400 of stock options. He could cash in one-fifth of the amount each year after that, simultaneously buying at the first year’s low price and selling at the current price, keeping the difference.

Case Study - IICase Study - II

A Local Company

One Company’s One Company’s ExperienceExperience

Presented by:

Captain Ole H. Wang

Managing Director,

International Tanker Management, Holding Ltd.

Dubai

Sam Swaminathan

Mission statementMission statement

“To be a leading tanker manager and preferred partner to the global shipping industry, by ensuring customer satisfaction through quality service provided by a team of dynamic professionals”

Sam Swaminathan

Company values.Company values.

• Integrity• Working as a team• People are the source of our strength,

show respect and concern.• Continues improvement and innovation• Every employee is equally important• Encourage individual initiative and

personal growth

Sam Swaminathan

The proof of the puddingThe proof of the pudding

Financial result 1999

Financial result 2000

Financial result (2001)

Corrective action request 1999/2000

Undesired events 1999

Undesired events 2000

» A» 2.1 X A» 3 X A» Ship/year» 6.2 / 3.4» 11/ship/year» 4/ship/year

Brought to you by

Sam SwaminathanSam SwaminathanCenter for Creative Thinking

http://www.ccthinking.com

HELPING YOU THINK DIFFERENTLY

Sam Swaminathan

Thank you

mymm-feb-25-01

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