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Most of us “play it by ear” when it comes to the execution of a new concept. Our focus is on acquiring ideas or information—planning, reading, discussing, hearing or analyzing them. When it comes to execution, we rely on the same old tools we always used and settle for ad hoc activities and initiatives. Yet one cannot achieve systems-wide change by “understanding” the concept or generating detailed plans. What these require are fundamental changes in the way organizations think and behave.

It is the execution of change rather than the ideas, themselves, where the rubber meets the road. Paradoxically, however, there are no tools or systems approaches for “executing” innovation.

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Making innovation happen requires a shift in mindset. Case in point: Association for Financial Professionals. CEO Jim Kaitz approaches expansion by building organizational capabilities to constantly adapt to the
speed and nature of market change. Kaitz does not marginalize change by reducing it to new product launches or isolated initiatives outside of AFP’s core business. Instead, he lets small-scale successes and lessons learned catalyze broader changes to the association and disrupt business as usual.

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talk Can your employees (or for that matter, customers, partners, members etc.) speak freely? Do they often come up with new ideas, express criticism or suggest alternative ways for doing things? An article in the January-February 2016 issue of the Harvard Business Review reports that, in spite of employers’ stated intentions for openness, most employees are reluctant to freely voice concerns or opinions. In my interviews with employees on all levels in client universities and associations, I found many who had interesting solutions to problems that had perplexed their organizations. I was struck by how many front line employees offered truly fresh insights into how things might work better, what mattered to which customers or how a practice or program was missing the mark, alienating rather than attracting and helping customers.  However, whenever I brought together cross functional teams to address a problem, and these teams included senior executives, the creative, engaged employees of my interviews became inexplicably silent. They automatically fell into passive, acquiescent roles, refraining from contributing their experiences, observations, concerns and ideas to the discussion.  As a result, not only was there a tremendous waste of human and intellectual capital but the solutions that emerged were more of the same. Studies show that employee retention is much higher in companies in which employees can speak freely and voice their concerns.  Similarly, member retention is higher for associations in which members actively engage rather than passively consume.  Beyond retention, however, the need for continuous innovation and rapid reconfiguration in our changeable environment requires a continuous flow of new ideas and resources from all directions, rather than top down: from customers, employees, open source initiatives and networks within networks.  Why then is it rare for employees to feel empowered to voice opinions and express concerns? The writers list two reasons: “A fear of consequences (embarrassment, isolation, low performance ratings, lost promotions, and even firing) and a sense of futility (the belief that saying something won’t make a difference, so why bother?). The first, fear of consequences, is what I encountered in my cross-functional teams, especially when the CEO was present. The second, a sense of futility, however, is an even greater obstacle to growth and change. My experience is full of examples:
  • Passive members who feel no motivation to participate in impersonal surveys and mass calls for member input, certain that these will never be implemented
  • Disillusioned employees – cynical about investing hours or months in one more retreat, reorganization or change initiative in which their opinions are solicited and new plans are developed only to be shelved indefinitely
  • Chapter leaders, suspicious and unwilling to cooperate when told that the association is now interested in its chapters and wants to involved them in its design of a new chapters’ model.  “Why should we trust the association this time?” one chapter leader asked.  I know that if the CEO walked in the room right now she would not recognize me or know my name. Nothing changed as a result of their last redesign efforts.”
The article lists a number of suggestions for encouraging employee engagement and honest exchange:
  • Avoid sending signals that you’re in charge. “Whether you realize it or not, you’re probably conveying your power through subtle cues.”
  • Be clear about the type of input you want
  • Provide resources for acting on the input you get. As an example of the opposite, the authors cite clients from a number of industries “who spent thousands or millions of dollars collecting ideas but then didn’t allocate a single employee to read through the data, much less design a systematic evaluation process.”
  • Create a more vocal culture in which feedback and exchanges of opinion are regular practices.
  • Reach out to solicit others’ opinions and concerns.
So are you concerned that your employees do not speak freely or actively engage in advancing your organization’s goals? Do you feel that your members are not sufficiently invested and energetically involved? Before planning a new strategy, the real question to ask is whether you want them to do so and why. Do you truly need the input you are soliciting? Do you consider it essential, for example, for breaking out of stagnation, creating a collaborative silo-proof organization, tapping others’ talents or contacts to expand your own capabilities? If you clearly see the benefit of give-and-take to your ability to survive and compete, then your motives will be authentic and the opportunities you create for interaction genuine rather than perfunctory and, hence, far more likely to succeed. If, instead, you generate what the authors call “pseudoparticipation”, that is “going through the motions of listening, with little intention of following up,” the results can be more detrimental than even settling for fearful employees or passive, disengaged members because you will have raised expectations only to crash them. The point is, you cannot elicit open communication and exchange if you believe that you already have all the answers and the flow of information or products is top down: we decide/you comply; we make/you use.  To engage in value-generating dialogue with your customers or employees, your organization itself must be open, acknowledging a need for the input it gets, identifying processes for participation and conversion of feedback into action.  
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Bad companies From my many years of work helping organizations reverse stagnation and decline, one thing became clear. It wasn’t lack of effort or, in many cases, vision that prevented growth. In fact, these organizations had made considerable investments in their improvement and had escalated activities across the board—from new product development, to marketing campaigns and strategic planning. Yet this flurry of activity was frequently counterproductive. Leaders were spread so thin with endless initiatives and busy work that they were unable to do what it would take to turn things around: take the time to think strategically, deconstruct the assumptions that drove them and truly re-think the core foundations of their business and formulas for success.  In a 1999 Harvard Business Review article, Donald Sull calls this state of frantic activity “active inertia” and considers it the reason “good companies go bad.” “The problem is not an inability to take action,” he says, “but an inability to take appropriate action.”   His examples of “inappropriate” action are companies which, while recognizing threats and mapping the right strategies, were unable to break out of the old ways of thinking and doing things. As a result, the flurry of activities they unleashed drained resources without bringing about effective results. This is what he calls “active inertia:” …an organization’s tendency to follow established patterns of behavior—even in response to dramatic environmental shifts. Stuck in the modes of thinking and working that brought success in the past, market leaders simply accelerate all their tried-and-true activities. In trying to dig themselves out of a hole, they just deepen it. Take Firestone as an example, a company that had “enjoyed seven decades of uninterrupted growth” until the 70s when Michelin, introduced the radial tire to the U.S. market. While Firestone assessed the threat correctly and began producing radial tires in a timely fashion, it was caught in the old ways of working and thinking. For example: Rather than redesign its production processes, it just tinkered with them—even though the manufacture of radial tires required much higher quality standards. In addition, the company delayed closing many of its factories that produced bias tires, despite clear indications of their impending obsolescence. Active inertia had taken hold.  In 1988, the company was acquired by Bridgestone, a Japanese company.    The article lists 4 “transitions” by which once successful formulas harden into dogmas that are too inflexible to adapt to changing environments and, hence, hinder growth and renewal. If they ring a bell for you, it’s great news. There is something you can do to stem and reverse the process of active inertia. Strategic frames become blinders. Strategic frames are the mental models through which we see the world—our view of what business we are in; who our customers are; and how we create value for them.  How many opportunities are lost on a daily basis because of mental models for what an association is or does that are frozen in time: “We are supposed to have this bundle of benefits. We are an association.” “We can’t respond to members’ need for consultative-type solutions. We are an association and not a consulting firm (or for-profit or educational institution or peer collaborative etc.)”. In my book the Demand Perspective there is an entire chapter on the mental models that prevent growth and renewal in associations.  Processes harden into routines.  Sull cites McDonald’s as an example. In the 1990’s, when consumers demanded healthier food, competitors, such as Burger King, were able to quickly respond to the demand through expanded and flexible menus. McDonald’s was slow to respond. Up to this point, its strength was its ability to refine its mass-production processes. But this process, which required decisions to get approval from headquarters, became a detriment to the speed, flexibility and adaptability required in constantly introducing and testing new menu items. The new products McDonald’s introduced through the old process failed.  Come on! Surely this rings a bell! How effectively can associations, with their layered approval processes, respond to fast moving markets; markets that require speedy responses and learning by “doing” through constant market testing and adjustment rather than the formal, strategic planning and internal design processes associations use?   Attachment to existing “ways of doing things,” has been perhaps the greatest obstacle I have encountered in helping associations re-invent themselves and grow. In spite of embracing a new vision and longing for change, most are unwilling to replace routines with new ways of doing business to get there. Relationships become shackles. Relationships of course are the heart of a business but they can sometimes become “shackles” when they blind an organization to the changing value of existing relationships and needs for expanding beyond them. “The need to maintain existing relationships with customers can hinder companies in developing new products or focusing on new markets,”  Sull warns.  For many associations, their attachment to a winning formula that worked in the past—product mix, membership model, assumptions of value—is reinforced by a core membership that is already sold on this formula. In other words, rather than adapt to changing customer needs, it is tempting to cater to customers whose needs and preferences fit your existing products.  The problem is that by focusing on this rapidly decreasing segment, you ignore the margins of professions and industries where innovation takes place and which are rapidly becoming their present and future.     Values harden into dogmas.  Values and beliefs drive a company’s culture and orientation and can become sources of inspiration and identity.  Yet when they become unexamined dogmas, they pose formidable obstacles to adaptability, innovation and change. One such value for association is the non-profit status that most enjoy.  Instead of viewing it simply as a tax category, it has become a badge of honor and an important part of the definition of “association.”  It fuels an unhealthy and arbitrary differentiation – non-profits are inherently noble and superior to business that is inherently ignoble; and brings about isolation. Instead of looking at patterns in the knowledge service industry, technology and consumer behavior across sectors, many associations look to each other for best practices and view members as a distinct breed of humans, unaffected by the market forces that apply to other consumers.    The author’s conclusion is especially useful to leaders as they contemplate how to lead to address challenges and drive to a next phase of growth: They need to realize that action alone solves nothing. In fact, it often makes matters worse. Instead of rushing to ask, “What should we do?” managers should pause to ask, “What hinders us?” That question focuses attention on the proper things: the strategic frames, processes, relationships, and values that can subvert action by channeling it in the wrong direction.  
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