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: As you had developed the organizational strategy for how Hubert might benefit from database publishing, one of the major efforts that you undertook entailed developing an internal white paper. The preparation of the paper allowed you to put into cogent, logical order, an organizational change—an organizational transformation story.

As you began to circulate the white paper, it served as a persistent messaging object—a framework—for structuring and guiding internal conversations around how affected stakeholders could come up-to-speed with the new system.

TM: Absolutely.

MM: As I recall for our previous conversations, your process of bringing stakeholders up-to-speed revealed new adoption criteria and business requirements that subsequently you wove back into the next version of the white paper. So the white paper was a living document that continued not only the conversation, but also the coalescence of, “Yes. This makes sense for us a firm.”

With internal consensus, you built a nice platform by which to start engaging vendors in terms of what you need from them. I find absolutely fascinating. As I recall in ’98 or ’99—when all of this took place—your were in a lot conversations such as, “Maybe we ought to get a DAM.” But you came back with, “Let’s figure out exactly how we produce our big-book 900-page catalog, and understand if there are any other inefficiencies we should work out before we actually start looking at DAMs.” Would you take us through that process?

TM: Absolutely. That was the fun part, really.

What was intriguing was that it was apparent that all of the people involved in producing the catalog had probably never been in the same room at the same time, before. Therefore, there were lots of big revelations once we sat down together.

We got 15 stakeholders in a meeting—people from groups that touched the catalog to people who participated in the production of the catalog—everyone from merchandisers to graphic artists to IT people. Also, we had some fairly significant shareholders, like a VP of Marketing who was there for many of the meetings.

Basically we had 15 people that met twice a week for half a day over a 9-month period, Initially we defined the workflow that was currently in place. The direction of the meeting was very specific. We were not there to change anything at that point. We were only there to identify and to bring artifacts. To make sure that everyone understood exactly what was being done now. We met in what we called the ‘War Room.’ It was a fairly big conference room that had windows—over half of it that we actually covered up at one point, because we simply needed more room to put stuff on the walls.

Workflow Model in the War Room

MM: As I recall, you physically mocked up each step of the workflow associated with publishing a 1,000-page big-book catalog and a website. Is that right?

TM: Yes. Absolutely.

MM: If someone had the printouts from your mainframe—then you physically tacked a piece of green bar up on the wall which somebody then transcribed that into a spreadsheet.

TM: And if an artifact like that didn’t work well, then we took a picture of it. Remember when you were moving paper around, a lot of times it was, “Put something in a bin,” or, “Take it to this location.” If we felt it couldn’t be described very well, we’d take a picture of it and put the picture up on the wall, too.

MM: If “sneakerware” was involved, where someone had to physically move a file from one person to another, you had photographs of the individuals and a string connecting the two individuals?

TM: We had yarn. We had different types of colored tape that we would use. We had different colored starbursts that meant different things. We identified pain points, as well, during this process. And, a big red star meant, ‘Here’s an issue.’—a real Pain Point.

MM: How did you call out defects or mistakes?

TM: In much the same way: remember, we were not trying to solve any problems, yet. We were only identifying them.

MM: I can’t overstate the importance of what you just said. Many people make the mistake of going in to an organization with a change mindset: “Here’s how we’re going to change this. Here’s how we’re going to change that.” That naturally produces all kinds of pushback and resistance among stakeholders.

TM: And resentment.