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How to Lead an Organization Through an Inflection Point

HOW TO LEAD AN ORGANIZATION THROUGH AN INFLECTION POINT

I was recently at a conference with Curt Carlson, a brilliant leader of innovation who for many years ran SRI, the research organization responsible for the invention of Apple’s Siri and many other multi-billion dollar products. The SRI story is one of an astonishing turnaround—when he took over as CEO in 1998, the organization had been losing money for years and was on the brink of having to close its doors. Worse yet, the culture he inherited was described by many as toxic.

Carlson described the situation as going from a company (GE in this case) where he was given tens of millions of dollars to create new things, such as high definition television, to a situation in which, as he puts it, “We were going to be expected to earn tens of millions.” His best friend at the time, Norman Winarsky, summed up the challenge: “Like everything else we’ve ever done, we have to learn this.”

His inspiration for what became a fabled turnaround came from an unlikely place. At age 15, he was a professional violinist. While basic skills and practice mattered, gaining mastery involved being coached by a master teacher in an intensive class setting. As he says, “Everybody learns from each other, they watch each other play, and they share ideas. It’s a positive thing, a demanding thing, but it’s a powerful way to learn.” These master classes became the model for his system of driving innovation.

The approach was to hold a meeting from 5 p.m. to 9 p.m. every other Monday with the core leadership team, representing the teams working on important projects at SRI. At the meeting, each team had five minutes to discuss their projects, focusing on four questions: What is the important customer and market need? What is your approach to addressing this need? What are the benefits per costs of your approach? How do those benefits per costs compare with the competition and the alternatives? Carlson came to call this “NABC” for Need, Approach, Benefits per costs, and Competition. In the meetings, each presenter used the same framework and reported what they had learned for the benefit and critique of the other members. This allowed each of them to compare one project with another, and to watch the same project evolve over time. This proved a powerful accelerant to the learning process because it stripped the cognitive load on individual learners to the minimum necessary.

Carlson also makes the point that making the successful transition through any inflection also requires excellent partners. Norman Winarsky was one, who helped design the innovation methodology that not only saved SRI but led it to thrive. Another was Bill Wilmot, at the time a professor at the University of Montana, who had literally written the book on communications challenges. He was of utmost importance to what Carlson calls “the human stuff.”

One thing that is notable to me is that at SRI, innovation was not the result of a single creative genius, as many would say was the case at Apple during the Steve Jobs era. Nor was it a result of an entrepreneur breaking through barriers and bringing everyone along with him or her, as we might perhaps think of someone like Oprah Winfrey. Nor was it just one big hit—while Siri is SRI’s best-known innovation, there were many others during the Carlson years. From a personal point of view, his approach to being a change agent has valuable lessons for all of us.

Carlson summed up his approach to leading the organization through an inflection point as requiring seven essential steps.

1. Don’t go it alone—find partners who have the skills, values, and credibility.
As he says, “If you don’t have a partner, you just aren’t smart enough by yourself. You need ‘buddies’ to help you through all the challenges. The partners can be internal or external. I had both and that was ideal.”

2. Create the compelling need for change and the vision for the post-change situation.
A huge issue in navigating through an inflection point is to be very clear with yourself and with those around you on why a change is necessary. Even in an organization that is manifestly failing, it is entirely possible for people to reject the need to do things differently.

3. Now offer the plan.
As Carlson says, “It’s need, vision, and plan in that order. A lot of people jump to the plan before they have the need and the shared vision. That will always get you into trouble.”

4. Start your work with the enthusiastic early adopters.
In a major new step for any organization, the majority will be cautiously waiting to see where all this is heading before making a commitment. A big mistake many would-be change agents make is blowing your energy by trying to convert the entire organization to a new way of thinking all at once. Instead, find a group of true believers who are willing to make the change a reality—who become the role models and champions who can demonstrate success to the rest.

5. Use language deliberately.
Carlson emphasizes that using positive language and sticking to a few carefully chosen themes was at the center of his approach to communication. As he says, “You really don’t want to have more than three themes; otherwise people can’t hear you. Getting them understood is not done overnight. My themes included: a focus on important market and customer needs to make an impact, what I call now our Innovation for Impact (i4i) Playbook, and the essential role of intense, continuous team and customer iteration to learn fast and efficiently enough to succeed.”

6. Use the power of symbolism.
An often overlooked source of executive influence is symbolism. These are the words, actions, and behaviors that people use to make meaning of what you do as a leader or a change agent. How you spend your time, what your non-verbal cues are saying, and what you pay attention to are all critical to consider if others are to really believe you mean what you say. As Carlson says, “People can immediately see what you actually believe through your actions. Any lack of belief, commitment, or cynicism is deadly. I said in every way I could, ‘Yes, I am serious. We are going to achieve big things. I want you and SRI to have an even bigger impact. Together we are going to change the world for the better.’ I had those conversations all the time.”

7. Support from the board (or other key governance entities).
Carlson had the advantage of coming into the role with enormous credibility from his earlier technical successes. In his case, he was given enough time for his process to start to show results. As it did, the early successes built on one another and the board backed his initiatives.

These are useful general principles for acting as a change agent, whatever your organizational level.

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Top 10 Trends your Chief Strategy Officer Should Be Thinking About in 2019

Top 10 Trends your Chief Strategy Officer Should Be Thinking About in 2019

The future matters. Just ask anyone, or any organization, who thinks they don’t have one. All of your greatness today – your people, products, partnerships, brands, operations, capabilities, culture, customers – will not matter for long unless they are working together, as part of a strategy, to create your future.

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Moving Beyond Your Hierarchy

Moving Beyond Your Hierarchy

For years I’ve sat on the opposing side of hierarchy. That rigid concept in which orders are barked down from above and complied to from below has robbed our corporations, governments, and social institutions of freedom. Many of the management thought-leaders we, at Outthinker, admire argue the same. Gary Hamel, for example, wrote “The real damper on employee engagement is the soggy, cold blanket of centralized authority.”

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There is Such a Thing as a Repeatable Startup Methodology

There is Such a Thing as a Repeatable Startup Methodology

Among the many myths that corporate types have about startups (whether standalone or of the corporate variety) is that there is some kind of alchemy involved.  Sort of “Steve Jobs arrives on a clamshell and the world is changed forever!”  They think growing new businesses requires some instinctive DNA that founders are born with and that other mere mortals will never possess.

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Fear of Self-Cannibalization, Facebook Early Warning

Fear of Self-Cannibalization, Facebook Early Warning

In this insightful article, Kara Swisher notes that one big reason that Instagram’s co-founders, Kevin Systrom and Mike Krieger, decided to leave was that the popular site was pulling users away from the “big blue” platform that is the core Facebook product.  Clanging sounds of early warnings of early-stage fading of advantage!

Leaders can respond two ways when one of their businesses threatens to outshine another.  They can be curious as to why customers are finding one offering more attractive than another and take those lessons to heart (hello, iPhone, bye bye iPod).  Or they can try to build a moat around the older business, essentially hoping to keep customers hostage.  Hostages may stay with you for a very long time, but eventually someone will show them the escape hatch and they will flee.

An even bigger issue with this situation is another motif that plays out in competitive dynamics.  By losing those now-wealthy Instagram founders, Facebook has just unleashed two demonstrably capable and social-network savvy entrepreneurs into the wild.  They’re young.  They’re disappointed with their treatment at the hands of their former employer.  They know the business.  And they are highly likely to become tomorrow’s most relevant Facebook competitor, particularly now that the negatives of Facebook’s “we sell ads” business model are growing in the eyes of the public.

Why do I think so?  Well, the history of Marc Lore, Amazon and Wal-Mart is illustrative.  Lore co-founded a company, Quidsi (famous for its diapers.com brand) that Amazon eventually bought for some $550 million.  After an acrimonious couple of  years under Jeff Bezos’ thumb (sound familiar?), Lore went out on his own with a new startup, Jet.com, motivated, some observers say, by a thirst for revenge.

Today, Lore is gunning for his ex-employer, big-time, with some reported success.

I won’t be the least bit surprised if the next big thing in social media is introduced by Systrom and Krieger.