MM: So when you looked at this visual depiction and then started to create an interim optimized workflow—at what point did you start applying activity-based costing to the workflow?

TM: Actually, the activity-based costing came after that. I’ll tell you why. It came when there was recognition of how much indeed the new process was going to be able to change the workflow.

MM: So let’s use this as an opportunity to shift into the optimized workflow.

TM: Sure.

MM: Over the course of nine months in this War Room, you developed a visual end-to-end depiction of the messy current-state operation.

TM: Yes.

MM: Out of this precipitated a number of interim changes that you could make, because they were easy, self-evident, and everyone said, “Let’s do it.”

TM: Yes.

MM: Then you developed a new workflow. An optimized workflow embracing some core principles—one of which you identified as, “Right upfront.” And enter data once and only once.

TM: Yes. Enter once, publish many times.

Getting the Right Job Done

MM: Yes. And “stay online.” So, as much as possible, keep the work online as opposed to going offline in an analogue or physical work activity. Is that right?

TM: Yes. Although I think you might cover accountability and enabling within the “right upfront,” the enabling thing was kind of a sticky point, there. It was important for people to do what we called, “Staying out of somebody else’s backyard.”

You can’t do their job for them. If they’re going to fail, they’re going to fail.

MM: So it’s kind of, “You’re accountable for your work, and you’re not your brother’s keeper.” Or—what’s the psychological term? “Enabler.” What do they call that when you enable somebody else’s addiction or bad behavior?”

TM: We call them “enablers.”

MM: Enablers. Okay. So, “Stand on your own two feet and get your job done,” is another core principle.

TM: Right. That doesn’t mean you can’t be helpful. But you can’t do somebody else’s job for them.

MM: Perfect. So that was your principle around enabling. No more enabling bad behavior or enabling shoddy work.

TM: Yes.

MM: You’re accountable for producing high-quality work now in this increasingly transparent self-evidently accountable workflow process.

TM: Right. Because people recognize that if nobody else is doing this…

MM: It ain’t gonna get done.

TM: Right. You can’t hide any more.

MM: So this has actually two dimensions to it. You just described the downside of it. That is fear of recrimination and ridicule and maybe some lost jobs.

But the upside of it is, I am now an acknowledged contributor. I’m needed. I make a difference. I contribute here in a very direct and now transparent and accountable way.

TM: Yes. We are dependent on you.

MM: Yes. And we are inter-dependent—that sense of being part of a team in and of itself provides a sustainable motivation for getting it right upfront.

TM: Yes.

MM: Now you’ve gotten to the root cause of why most change initiatives fail: distrust and the lack of transparency in overall process that reinforces distrust.

TM: Yes. And that’s why someone who has this change-management, psychological understanding and can facilitate is an important vehicle. He was able to identify those fears.

MM: Yes! Innovation leaders recognize the legitimate, fact-based, reference experiences that individuals project into the future, and assume will come about with a certain amount of cynical realism.

TM: Absolutely. ‘Cynical,’ is a very good word to use.

MM: Where “cynicism,” is simply the belief that the past will repeat itself.

TM: What’s past is prologue.

MM: Right. So effective change-management and innovation leadership must not start with the end-to-end visual depiction of the current big mess, project and executive leadership must address the deep-seated beliefs, “I don’t trust our workflow” and “I’m sure that I trust others to tell the real truth about what’s really going on around here.” The innovation-leadership process then entails building new trust in the proposed system.

TM: Building trust and—as this person used to always say—eliminating fears: It’s kind of the same thing, but… Fear-based activity is rampant during these processes.

Seeds of Failure Sown in Executing Well

MM: This gets to another underlying issue that you’ve set up beautifully, here.

After a while, most successful businesses become what I call, “execution systems.” From the annual strategic plan, most firms at the senior levels have well-defined goals, roles and responsibilities; everyone then supposedly “executes against plan.” There’s nothing wrong with that: companies must find and keep customers. However, in a larger context, executing against plan results in everyone keeping their heads down and getting their particular jobs done. Only, there’s no mental space to innovation, little or no freedom to change things for the better.

You could say that change and the special class of change—innovation—becomes sand in the gears of execution; that fundamentally most companies have constituted themselves as “change-resistant execution systems.”

TM: Not on purpose, I don’t think.

MM: That’s right. Not on purpose. But everyone got so focused and busy trying to survive, grow sales, and maintain profitability—all excecutional mindsets—that baby that got tossed out with the bathwater. We traded growth and security for our ability to change and adapt—we traded away our ability to innovate as a matter of daily habit.

We’re at the point now where the world continues to change so rapidly—because technologies and innovations change fundamentally how we find and serve customers—we now must bring into our execution system a new set of muscles: innovation leadership muscles.

Today everyone in an execution system knows—for the most part—to whom they contribute information or results in the workflow. Most everyone knows what outputs they owe to whom, and who owes me. What qualifies as good inputs and outputs.

TM: Right.

MM: But in the context of change, there’s no accountability. There isn’t any role clarity around “who owes what, delivered how, by what criteria of satisfaction or quality.”

I say the lack of accountability in the change context surfaces as the root cause of change resistance. No one knows what to produce, for whom, in a change context.

That was what was so brilliant about your end-to-end visual depiction of the catalog development and publishing process.

You made it clear exactly who does what for whom in the current state. The map also supported fact-based discussions, “In the future, interim or automated ideal, “Who should owes what to whom?”

You got everyone to agree, “Yes. That would actually work for me.” That really defines the art of futureproofing: getting everyone to accept a new set of accountabilities rooted in the holist improvement of the business as well as the improvement of individual productivity. Brilliant!

TM: Yes.

MM: So part of addressing fear-based behavior was replacing it with optimistic, forward-looking, pictures and images and experiences—as grounded by this visual depiction of the interim workflow, as well as the optimized workflow.

TM: Yes.

MM: Having repeated the process elsewhere with my clients, I am sure that your Hubert colleagues were aghast about how the big mess on their hands. That was the first thing. Right?

TM: Yes. They couldn’t believe it.

MM: That then gave rise to a collective rocket of desire to make it better—whatever that was going to be. And supporting that desire, you had this visual, persistent object on the wall demonstrating in black-and-white or full-color factual details of the big mess. Argument over. We’ve got mess. And that led to more meaningful, cogent, and effective conversations with all the stakeholders about how to facilitate the change.

TM: Correct.

MM: I love it. In essence your physical wall-mounted map began to future-proof a change without actually having to make the change. It got everyone thinking about how to make a holistic change instead of a tactical change to one piece that might result in unintended consequences elsewhere in the business or, worse, among customers.

TM: Correct. Now, we took some interim steps. First, when we saw all the errors of in the current process, we took action on those things that did not require automation or a new system. We just said, “Okay. We’ve identified it. Let’s change these.”

MM: So you identified where in the process a change should optimally occur. For example, who in the process would now be accountable for data entry, and the quality assurance for what got entered.

TM: Yes.

Drucker’s Theory of Knowledge Work Productivity

MM: As a general principle, this validate Peter Drucker’s notion of Knowledge Worker Productivity. He defined it as, “How quickly can I ask for information from another person?” And/or, “How quickly can I provide information to another person,” with a specified time, place and format?

So, your work demonstrates another principle of innovation leadership: you optimize the productivity of individuals in the workflow by—first of all—identifying my upstream (value chain) providers of information, and my downstream recipients of good, high-quality information for which I am responsible.

TM: Yes.

MM: So, as you begin to understand who contributes what, this produced many conversations or arguments about specific deliverables, hand-offs, and who is responsible for what—and what continues to drives the Internet revolution: transaction costs or the costs of communicating or delivering a unit of work to your downstream “customers”.

TM: One of our biggest discoveries was the level distrust. That was probably the largest obstacle we had. For so long, people had dealt with other peoples’ mistakes that they didn’t trust the other people to get things done right upfront.

Going back to the accountability issue, when the process was optimized, it was drilled into the people that—”If this is your only chance to do this, then you have to do it right. Because nobody’s going to be checking your work any longer.”

That’s where we came into some obstacles. Because people would say, “No. I have to see that again. I don’t trust that these people are going to do their jobs correctly.”

MM: Your work validates one of the emerging principles of an innovation culture or an ingenuity culture: you must have in place a change-management process that you invoke whenever you need to accommodate an innovation.

TM: Yes. That would be an excellent model for any company.

MM: I believe that a lot of people consider innovation as a top-down thing. Yet, the real innovators with whom I have interviewed consider innovation as bottom-up activity, from the actual users – the stakeholders in the workflow. The reason? Because the actual users are the one’s closest to what actually has to get done, and, specifically, the nature and likely root causes of the pain.

TM: That’s absolutely true. However, upper management—even though it’s not their idea—must actively support an innovation or change for it to happen.

MM: However, most change processes run into trouble when it simply becomes a top-down mandate, as opposed to a bottom-up collaboration and discovery of, “What’s the best way of doing this one piece?” Effective change processes maintain the context of business priorities and individual needs.

TM: Absolutely.

Value Chain Analysis

MM: You also did something else at Hubert that I consider most extraordinary: you had developed this end-to-end visual depiction of the entire catalog development and publishing process—in part, what Michael Porter of Harvard Business School calls value chain analysis. In your telling me of this, you tied together several principles that others could apply in achieving similar results. Let’s start with, “Get it right upfront.”

TM: Yes. That was a theme that became our mantra.

It means making sure that you do things right the first time, and therefore you don’t have to worry about it later. That lives in several different areas. It can live as a whole—meaning if we hadn’t done the research and the white paper and all that stuff upfront, would we’ve been as successful.

But you can take it down to the minutia, too. That is, we identified during the current process that there was a maximum of 7 times where a price could be entered into the system. Now, that 7 times didn’t happen all the time—but it wasn’t unusual for a price to be entered at least 4 times into the system at some point.

MM: That means manual data entry of a pricing data 4 or 5 times against 50,000 SKUs?

TM: More than that. Yes.

So if you think about the opportunity for error there, and we’re talking about entering where it could be somebody writing it down on a sheet of paper. That’s “entry.” Right? Or putting it into a spreadsheet and not into a database. That’s entry. Putting it into one database and then another database. That’s two entries.

That’s what I’m talking about—how that is looked at. The idea was, “Let’s find the point where it should be entered—the right point—upfront. Let’s find out where it should be entered, who’s responsible for that entry, and—when you enter it—make sure you do it right.”

MM: Let me unpack it a little bit. First, you had this wonderful, messy, warts-and-all visual depiction of the entire end-to-end process—to which all the involved parties contributed. Then, you got everyone to physically signed off on the visual depiction. In effect, your got everyone to, “Yes. That’s my contract with reality.”

TM: Yes.

MM: Just in that process of getting them to put their signatures to the visual end-to-end process map, you dissolved all or most resistance to change.

TM: Right. When we came out of that, everybody in that room was eager for the next step. Not afraid.

MM: So with the mindset of having the best-of-class system for your particular organization, what led to the need or idea of, “We’ve got to do something different?”

TM: Well, luckily, when I was hired at Hubert, actually in the interview process, I mentioned to them that I’d been looking at database publishing solutions for my previous job, which was with a centralized prepress group for newspaper circulars.

As it turned out, that company decided not to go down the road of database publishing. But I had already researched many solutions that would help production efficiencies.

During my job interview with Hubert I mentioned my research of database publishing systems. That intrigued them. I believe that my research became one of the key reasons they hired me. Consequently, a couple of years later, they gave me the freedom to continue that research. That involved going to events like Seybold and Print and ACCM—looking into the providers of these types of automated database publishing solutions or content management systems and digital asset management, and coming up with a solution that was right for Hubert at that time.

When I came on board at Central Restaurant, it was very easy for me to jump back into research mode and take a look at all of the pieces. All of the different vendors who had been out there—many of whom were the same. That was reassuring. But also to take a look at some of the newer vendors out there, and to make a determination of whether or not those solutions might be a better fit for us.

MM: So, looking back, the idea of ‘investing yourself personally in research,’ and developing mental maps as well as thick folders of research, you were also really investing yourself in understanding the next technology wave in this case, the next generation of database publishing.

So, not only did you find it gratifying, but it became a differentiator in the job market, making your more attractive as a potential employee.

TM: Yes. And it’s ongoing, of course. Not only did it help me get the job at Hubert, but also Hubert then allowed me to continue my research, and to become basically an expert in the field while at Hubert. That then allowed me to broaden my wings and move on after Hubert. Although I must say, Hubert was a great place to work.

Innovation Leader

MM: So, the mindset of having a best-of-class system must also entailed hiring the best individuals who understood what it means to be best of class, and who—in your case—are real innovation leaders. So Hubert, had already invested in the idea database publishing as the “next wave” of innovation and productivity—and hired your to execute that idea. What happens next?

TM: Well, I think the key is to develop a systematic way to gain buy-in, so that the company can move forward with an innovation.

At Hubert this started with writing a white paper that depicted what database publishing could do for Hubert. It was fairly in-depth on how it would affect the organization—and in some ways, the hierarchy of the organization.

It basically outlined, “Here are the steps that we have to do.” It’s not just implementation. Part of the success of database publishing involves bringing in the key vendors that are involved – to have them methodically work through a process with you, and to show the company that they understood what you were doing. That way, they could present to you, based on what you wanted out of the software.

Even before there were presentations being done there was a lot of dialogue outlining how those presentations should be done for Hubert.

MM: I recall from our previous conversations that while at Hubert, you played an instrumental role in reworking their core catalog production processes, developing an integrated workflow for the print and online catalog. This entailed driving many internal changes around how to produce multichannel marketing communications and, specifically, big-book catalogs

TM: That’s correct. Something we did at Hubert—in 1998 and 1999—was to rework the flow of catalog production. That also then was in the early stages of getting the web online. So there were multiple reasons to do that.

Central went through a similar process. There were a few steps different, because it was 10 years later. But there are an awful lot of things that are very similar in how to approach this new, very integrated relational database situation.

I was basically the evangelist of the Hubert change, and I did that at Central. Along with that, I handled a lot of the database publishing duties for other K+K-America companies. Including C&H Distribution and Connie Safety, at the time. I was also highly involved in their integration into their publishing database, as well.

Change Process

MM: As we develop our master-class profile in this interview, detailing how to facilitate and drive these sorts of process transformations, perhaps we develop combined narrative from your experience with Central Restaurant and Hubert. So, let’s start with what typically kick-starts a change process: a catalytic event. What happened that required a change in workflows, either at Hubert or at Central Restaurant?

TM: ‘Require’ is a strong word. In both cases, the company saw itself as a business leader and having a best-in-class environment. While Hubert did not want to not have the best systems, Central was dead-set on having a best-in-class environment in all of their different technological pieces.

MM: Where did that notion arise in the organization?

TM: In 2006 by Johnson Ventures purchased Central.

As the owner, Rick Johnson just believes that having the best in class for anything—that’s where he wants to be. Now, the best in class doesn’t necessarily mean it’s going to be the best out there. It could mean it’s just the best for the environment for the company at its particular stage—and looking toward the future.

An example might be an Endeca solution, a guided navigation solution for a website that is best in class. But it’s best in class for the big boys, and maybe that’s not necessarily needed for a company of our size.