Inside the heads of lean "change masters"

There's no greater constant than change; how you confront it will determine every outcome going forward. As W. Edwards Deming, godfather of lean, challenged: "Create constancy of purpose."

It's been more than a quarter century since Deming started his 14 key principles for management with those words. Today, his advice is as meaningful as it was in 1982 when we also were mired in the throws of a deep recession.

As a recruiter of senior management for lean companies and a long-time student of leadership, I've given a lot of thought to what kind of talent and standards will serve us best now and the future. I believe managing change in a leadership role dovetails with constancy of purpose.

Several speakers at the recent 2009 National Human Capital Summit in Scottsdale, Ariz. addressed change. Among them was Gary Hamel who spoke on "A Blueprint for 21st Century Leadership." In his book, The Future of Management, which he co-authored with Will Breen, Hamel nails the issue of the constancy of change: "If you accept the lessons gleaned from 700 years of military conflict and a century-plus of industrial competition, it is management innovation that yields the biggest, longest-lasting performance advantages... Hence, the most important question for any company is this: Are we changing as fast as the world around us?"

Here are six standards that will enable leaders to do just that:

1. Embrace change; it's inevitable. Too often, so-called leaders look change in the face and shrink from it. But truly successful individuals see change for what it really is – opportunity. Here's more from Hamel: "Turns out that in an age of wrenching change and hyper-competition, the most valuable human capabilities are precisely those that are least manageable – nerve, artistry, élan, originality, grit, non-conformity, valor and derring-do. These are the qualities that create value in the 21st century." They are also the characteristics that create the passion for winning in business.
   
   Another Human Capital Summit speaker, Tony Hsieh, CEO of online shoe retailer Zappos, is vocal about how Zappos core values impact its culture, brand and business strategy. "The company's No. 1 core value is to 'Deliver WOW through service,'" says Hsieh. "And second is, 'Embrace and drive change.'" Since 2000, Zappos revenues have risen to over a billion dollars annually and the company remains profitable even in today's difficult economic environment.
2. Assume nothing and question everything. Get everyone on your team to start thinking and remember that the right questions are just as important as the answers. Be certain that your questions aren't structured to lead to an expected response or you risk not getting the best answers.
   
   Shortly after taking over as Procter & Gamble chairman and CEO in 2000, A. G. Lafley announced that by the end of 2010, half of all new P&G products and technologies would come from outside the company. Far from doing away with the company's legendary R&D efforts, he wanted to supplement them. To do so, he urged everyone to rethink the process. Embracing the emerging concept of "crowd-sourcing," P&G approached global communities of talent and innovation such as NineSigma, Yet2.com, Innocentive and others to seek solutions to problems. A Knowledge@Wharton article in December 2007 advised that a third of the dozens of problems posed on Innocentive have been solved. And that P&G was deriving 35 percent of its ideas from outsiders. Meanwhile, P&G's R&D productivity soared 60 percent and 80 percent of its product launches are successful, compared to 30 percent for consumer products industry-wide.
3. Get down in the trenches. You won't find the answers sitting behind a desk in the corner office. Go out and talk to employees, customers and vendors. Lean executives understand the critical necessity for going to the gemba.
   
   As reported in a Wall Street Journal article in March, Subaru of Indiana has focused on green initiatives for 20 years: "With employees at every level of the plant looking for ways to save energy, reduce waste and generally make processes more efficient, one measure of its success is a 14% reduction in electricity consumption on a per-car basis since 2000. An even bigger achievement: It has not shipped any waste to a landfill since May 2004."
   
   More validation: One of this year's Shingo Prize for Operational Excellence winners, E-Z-Go (Textron), made massive improvements across the entire organization by examining the details of nearly every single process in its Augusta, Ga. manufacturing business. Since 2006, this effort has resulted in over 10% energy usage reduction, while plant water consumption decreased by more than 85% since 2003. Vice President of Quality/Six Sigma Westy Bowen credits E-Z-Go's enterprise-level transformation to the power of each team member's passion for persistently challenging the status quo at every level across the organization.
4. Show integrity, always. Integrity isn't measurable. Either you have it, or you don't. As a leader, you set the tone for the entire organization by establishing and maintaining a culture of integrity and trust. And it can be every bit as sustainable as any green initiative, even more so.
   
   A recent Thomas Friedman column in the New York Times quoted Dov Seidman, the CEO of LRN business consultants. "There is nothing more powerful than inspirational leadership that unleashes principled behavior for a great cause." What makes a company or a government "sustainable," Seidman said, "...is when it adds more coercive rules and when its employees or citizens are propelled by values and principles to do the right things, no matter how difficult the situation. Laws tell you what you can do. Values inspire in you what you should do. It's a leader's job to inspire in us those values."
   
   When new leadership was needed at then-struggling Nordstrom in 2000, the board withstood criticism in selecting several fourth-generation family members, including Blake Nordstrom as CEO. While he might have placed responsibility for the chain's problems on his predecessors, he told the Seattle Post-Intelligencer, "It was evident to my cousins and me that [our fall] was our fault – not the culture's fault." They then set out to turn around the company and reinstituted their traditions of making hiring decisions based on values and character. Online shoe retailer Zappos also recruits for cultural fit (values and character) first, and skill sets second. And in a May interview in the New York Times, Wal-Mart Vice Chairman Eduardo Castro-Wright says, "There's nothing that destroys credibility more than not being able to look someone in the eye and have them know that they can trust you. Leadership is about trust."
5. Be transparent. WYSIWYG (What You See Is What You Get) is a good motto when applied to leadership. Make sure that people can see you are genuine and that you aren't hiding behind a facade. A prime example of how this can work is on display every day at W. L. Gore & Associates. Best known for GoreTex, the company is a manufacturer of technology products for the electronics, industrial, fabrics and medical markets. In the Gore culture, traditional titles don't exist. There are no "employees," only thousands of "associates." Word has it that "leader" is a designation bestowed on certain associates when co-workers decide they have earned it by accomplishing what they set out to do. At Gore, you're only a leader if others are willing to follow you. And that won't happen if you're not what you purport to be.
6. Inspire and recognize leadership in others. Gamal Aziz, president of MGM Grand Hotel & Casino, credits his employees with sustaining MGM's standing as the second most profitable hotel on the strip, after the Bellagio. He told BusinessWeek (Jan. 16, 2009), "Employee engagement in times of difficulties and severe economic climate is far more profoundly important... it's their decisions, their actions, their attitude that really make the difference."
   
   Wal-Mart's Castro-Wright also said in the NY Times interview that he had read in his early career days: "...you can accomplish almost anything in life if you do not care who takes credit for it. So I've tried to do more of that." He does that by empowering customers and Wal-Mart associates to offer their recommendations on the practical, down-to-earth requirements that drive Wal-Mart's business success.
   
   Indeed, it is President Harry S. Truman who gets the credit for having said, "It is amazing what you can accomplish if you do not care who gets the credit." This from a man who had that famous sign on his desk in the Oval Office that read, "The buck stops here." Truman knew when to recognize the contributions of others, when to take responsibility for making the hard choices and, of course, when to "Give 'em hell."

Constancy of purpose; constancy of change

Recently, the White House announced the creation of a Chief Performance Officer position to monitor the impact of change and the people responsible for getting stuff done. I believe that this office could be a powerful, positive force by actually understanding what's working, what's not and why. I'm going to keep an eye on how Jeffrey Zients performs in this new role. (I encourage Mr. Obama to give me a call regarding finding a replacement if Jeff doesn't work out.) Maybe we need a Chief Performance Officer in every organization. What do you think?

In closing, here's a message from Winston Churchill, a master at confronting change and adversity, which I've always found inspirational: "Never give in. Never give in. Never, never, never, never – in nothing, great or small, large or petty – never give in, except to convictions of honor and good sense."

Change is not about giving in. It's about finding the way to win. Let's find it together.

About the author Adam Zak is founder and president of Adam Zak Executive Search. His firm helps companies connect with lean executive talent. He can be reached at 847.304.5301 or .