Friday, March 26, 2010

Rethinking Our Self-Perception

How we think and talk about ourselves truly defines what we are.

If, for instance, you see your business as that of a widget manufacturer, then it's likely that's how you present your company and, by extension, how your customers perceive you. That may seem obvious, but that kind of perception can also hem you in. And it might mean that you miss opportunities that you are capable of tackling.

Step back and think of what it is that you're truly selling your customers. Sure, you manufacture widgets for sale to a discrete target audience. In fact, you are helping them solve their unique challenges. Maybe your most valuable skills lie in your understanding of a customer's challenge and how a particular widget you make might solve that for them. So that makes you a solutions-based company.

The value you bring your customers goes beyond merely filling orders with the widgets you make; it's making their lives simpler by solving their problems. Allow customers to see you in that light - rather than simply as a maker of the products they buy from you - and a whole new world of opportunity opens up.

This is not a new idea. It's what countless companies have done, most notably, IBM, which more than 15 years shifted its focus from a maker of computer hardware to a service-oriented consulting firm.

It all starts with your own self-perception.

Think about Ford Motor Company for a moment. One of America's oldest companies, Ford makes cars and trucks, right? Think again. Sure, their factories crank out products that enable us to haul people and goods from Point A to Point B. But the people at Ford have a new understanding of and appreciation for what they do and what they are.

They've started thinking of themselves as a software company, according executive vice president and president for Americas, Mark Fields.

Huh? What happened to the "motor heads" that shaped and defined Detroit the past 100-plus years? What about the steel and rubber that built that industry?

In the kind of insightful article for which the magazine is known, Fast Company reveals the new Ford that is being created around the notion of keeping drivers in touch via 21st century technology: Bluetooth, smart phones, MP3 players, GPS, etc.

Ford is doing it with its own "Sync" on-board Bluetooth platform built on Microsoft's Windows CE operating system that allows a driver - without taking his/her hands off the steering wheel - to use voice commands to make phone calls, select radio stations, or choose music (by genre, artist, or song title).

And that's just the beginning. Soon, Ford owners will be able to navigate to their destination, locate a nearby McDonald's restaurant or Exxon service station, get a local weather forecast, and more, all with voice commands as they speed down the Interstate. Your Ford's Sync system is designed to learn your voice, your unique phrasing, your musical tastes, and begin to anticipate your commands.

Initially, Ford was hoping merely to create an on-board communications system that would compete with GM's hugely successful OnStar. In fact, they've leapfrogged their cross-town rival. But it didn't really happen until they thought of themselves as more than a carmaker. And then their thinking expanded beyond the cubical confines of a typical passenger car.

Unlike GM's static OnStar system, Ford's Sync platform is designed to evolve symbiotically with the handheld devices owners carry with them in their Ford vehicles, as well as how their use of those devices evolves.

As the Fast Company article notes, this is a huge marketing advantage for Ford: "The great thing for Ford, of course, is that the more Ford improves a customer's favorite handheld device, the more likely it is that people will want to carry their handheld devices into a Ford."

Ford CEO Alan Mulally cleverly links these new doings with the founder's vision. "We're committed to this thing," he said. "Look, this is part of Henry's [Ford] vision. 'Opening the highways to all mankind.' I think this is the way to do it."

It boggles the imagination to think that a car company could expand its thinking from between the shoulders of a paved road to the limitless frontiers of computer software and the Internet.

Frankly, in these times of profound change, companies that don't likewise rethink what they are and what they do will soon be left in the dust as their competitors evolve with the changing world and speed ahead into the future.

Think what's possible if you similarly rethink what you do.

Friday, March 19, 2010

Loyalty Lost

Walt, an old college friend, had worked for the same Oregon-based company since our graduation. The 85-year-old family-owned manufacturer had always treated its employees well. Walt worked his way up through the ranks on merit, dedication, and hard work.

Four years ago, he was promoted to be among the company's top four executives, reporting to the CEO, who admired his loyalty and knack for keeping key customers happy. But soon, everything would change.

A year later, a German-based company, a competitor in the European market, made an offer to the family owners that proved irresistible. The grandchildren of the late founder would become fabulously wealthy overnight. The third generation had never been directly involved in the business, so their decision to sell was easy.

When I talked to Walt after he'd visited the German headquarters of the new owners, he was encouraged. He thought there might be opportunities for further promotion within the parent organization. There had been a lot of talk about reinvesting in the business, taking it to a new level of excellence, he said.

That was then. Now, three years later, Walt is leaving for a comparable job with a competitor – something he had never before contemplated. In fact, he thought he would retire from his former employer. What changed?

Six months after the acquisition, the CEO who had overseen phenomenal growth the past 20 years was let go. The new owners sent in their own man – a German national – to run the North American operation. That's when everything started changing – for the worst, according to Walt.

The firm’s largest customer was headquartered in the Southeast. Walt had developed strong relationships with the key people there over the years, traveling cross-country frequently to meet them, as well as visiting their several manufacturing plants around the country. Like most of the firm's customers, Walt serviced this client well, solving its problems quickly through his close attention to details and first-hand awareness of how they used his company’s products. He knew how critical quality and on-time delivery were to this customer.

The changes at Walt’s company came slowly at first. Walt had previously been given a lot of leeway in how he operated, how he took care of the company's most important customers. Now, all his big and little decisions were being second-guessed by the new CEO. What had once been fun was now tedious and unnecessarily complicated.

His expense reports were being questioned as never before. His frequent travels to meet with clients were cut back in the interests of saving money. Cost cutting also negatively affected product quality and order fulfillment. Walt started getting a lot more complaints from his key customers. Parts did not meet spec. On-time delivery requirements were not being met. Soon, his best customers were bringing in second supply sources. Since his travel allowance had been cut, he was unable to visit to address customer concerns.

So when his firm’s top competitor came knocking, Walt was receptive. They made him a generous offer and he accepted. He will join them next month with comparable responsibilities, along with better remuneration, perks and incentives.

When people like Walt leave their long-time employers, the moves are indicative of significant internal change that their key people cannot tolerate. Talented contributors stay committed to their companies when they are given reason to be loyal, not only in how they are rewarded but also in the support they get in their respective jobs and the pride their companies instill in them.

Take that away and you take away the reason for their loyalty and commitment. It becomes just another job, interchangeable with any other job with a comparable paycheck.

Organizations must establish and then keep their eye on their own North Star to carry them and their people through times of challenge and difficult change, whether it’s an acquisition, management shake-up, or brutal market forces.

In the case of Walt’s company, its North Star was its unrelenting dedication to meeting customers’ needs by delivering top-notch quality and responsive service. When the new owners took over, though they likely never would have said so openly, their North Star was profitability through cost cutting. It was their actions – not their words – that demonstrated their true North Star.

We’ve seen it elsewhere, where an acquired company known for its entrepreneurial spirit became consumed and overwhelmed by its new parent’s obsession with process and procedure. The entrepreneurs in the acquired company were out the door within a year.

Acquiring companies may and often do speak to the concerns of their new employees coming to them through the acquisition. “Oh yes,” they may say, “we believe in an entrepreneurial approach to business, just like you.” But when actions contradict the words, the truth is out.

Walt was similarly excited about the words he heard from his company’s new owner, words about re-investing in the business to make it better at what it already did so well. But the ultimate actions of cost cutting bore out the truth. And the true nature of its future direction is not something he chose to be associated with.