Shaking Off Change Fatigue

A large financial services company once called us in to discuss a pressing change communications challenge. What could they do to shake off Change Fatigue and get their organization inspired and motivated again? What a great question--many companies are facing the same challenge right now.

From the late 90's through early 2000, this company had benefited from growing revenues, and expanded their staff and facilities, benefits and outside resources. But going into 2004, they have worked through poor financial performance, massive layoffs, cutbacks of 401k contributions, facility closings, and outsourcing-even offshoring-of IT jobs. As a result, the morale of the remaining staff was terrible.

Now, every time the company announces a new initiative, the reaction is less than enthusiastic. Once, the mood of the company was positive, spirited, committed and enthusiastic. But now, the organization is tired after so much bad news, cynical about the future, distrustful of management, and wary of changing their habits. In a nutshell, the employees are taking a wait and see attitude, everyone still wondering if they will be the next to go. And, as the economy improves and more jobs become available, the risk grows that disillusioned employees will take off with the company's intellectual capital and know how, and create even more problems.

Is your organization also suffering from Change Fatigue? Is your company depressed? Are there pockets of unhappiness? Is a culture of skepticism taking hold and spreading? What can management do? How can you stop this from spiraling and paralyzing performance?

Obviously, economic recovery and improved financial performance will help. But apart from improving the bottom line, what else can management do? The first step is for senior management to seriously demonstrate commitment to their employees. They must show them that their morale is strategically important to the company's future, and that they are committed to improving the situation.

Some additional suggestions for effective change management communications and shaking off Change Fatigue:

- Be proactive. Develop a clear plan to communicate the status of the key issues that affect employee morale. Make it clear how positive behavior in support of the business objectives will improve the situation. Let employees know that they can help and enroll staff to contribute to the solution.

- Keep the lines of communications open, between the CEO and every employee, and between middle management and their staff. You need to convey a feeling that managers are really accessible, and that they care about their employees' feelings.

- Focus on issues that matter most. Explain the facts contributing to each problem, what options you had for resolving them, and how you reached your decisions. Most important, your communications should emphasize what actions and decisions mean to the employee, in a relevant and honest fashion. If you don't have an answer, say so. Never lie, never duck answering.

- Establish a regular, scheduled communications calendar that people can rely upon: for instance, an email from the CEO the first Tuesday of every month at 4:00, or a weekly Monday voice mail message. Name these events to lend them importance, so that people look forward to them and seek them out. The Ford Motor Company calls an important news announcement a "Blue Letter," while the President of the United States talks to the people every Saturday in radio "Fireside Chats."

- Use your regular communications sessions to provide updates and progress reports on each of the core topics that matter most. Remember to stay on point.

- Make sure the message and communications are meaningful and relevant, and conveyed them in a way that resonates with employees. Avoid premiums like t-shirts and hats, and don't go over the top with gimmicks like sky writers or parachutes dropping down with banners. Your medium should reflect your serious message: it's OK to have some fun, but you need to strike the right balance.

- If possible, encourage small CEO interactions and meetings. Employees should hear first hand what the company is doing, and learn why decisions are being made and how they will impact people as individuals. Prepare and rehearse key talking points and reinforce these points frequently during the sessions.

- Create a place on your intranet where people can retrieve factual information, and see what management has to say on the issues and what they are doing about them. Update it regularly. If you withhold honest, factual information the rumor mill will work overtime to fill in the gaps and create a new problem.

- Avoid unscheduled and untimely news jolts that scare the organization or can be taken out of context and misinterpreted. Manage the implications of the news, just as you would an external PR campaign.

- Conduct research and seek out employee feedback on the major issues that affect them, their attitudes and their behavior. The research should be hands on, conducted by senior people to demonstrate that they care about the situation and are committed to improving it.

If you would like to explore your specific Change Fatigue situation and how to address it, let me know. I personally will assist you. And if you know a company that would benefit from our help, please pass the link to this blog on to them and ask them to visit our web site at www.inwardconsulting.com

While I have your attention, do you have issues you would like me to address in the next blog posting? If so, please drop me a line and I'll be happy to share my ideas with you.

Meanwhile, here's to a productive 2008!

Best Regards,

Allan

"It's My Way or The Highway" - An Inward Case Study

It's always at this time of the year where I reflect on the year's best examples of companies that have set (or tried to) implement strategies based around internal branding and team alignment. Even though this year we saw some big names take on tough internal branding issues, one of the best examples that keeps coming to my mind was one which we reported on 2 years back at Ford Motor Company. Although it involves the actions of a CEO who is no longer serving that role, the principles behind the story hold true for many companies today. In case you missed the original report, here's a copy below.

Also, I want to take this opportunity to wish everyone a very happy holiday from all of us at Inward Strategic Consulting. We wish you peace and prosperity in the New Year and hope to work with you soon.

-Allan Steinmetz

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An Inward Strategic Consulting Case Study Example:

"It's My Way or The Highway"

Ford Motor Company CEO Bill Clay Ford tells employees he's serious about changes, but is this the right strategy to get your employees enrolled and on board with a company's new vision? Inward Strategic Consulting takes a closer look at the actions and reactions of this aggressive strategy.

Last week, William Clay Ford Jr., sent a company wide email and voice mail to all employees stating that those who could not support the company's drive for innovation should find something else to do.

"Anyone who thinks or attempts to convince you that it's business as usual at Ford is wrong and would best serve us all by pursuing their interests elsewhere," Ford said in an audio e-mailed message. Ford continues in the email message, "Our heritage of innovation must be reclaimed and renewed or the greatness of our company will become part of our past. It's that simple."

According to Bryce G. Hoffman of The Detroit News, which first broke the story, Bill Ford has said he wants to marshal all of the automaker's manpower and resources to transform it into a more innovative and environmentally friendly company.

But will he encounter some skepticism from employees who have been through numerous restructuring efforts already?

Let's look at the premise, action and reactions of this aggressive strategy:

Premise:

• Ford Motor Company is going through a major restructuring, and they need to have everybody on board.
• Bill Ford's comments come as the automaker prepares to eliminate 4,000 salaried positions by the end of March.
• Mark Fields, recently promoted as head of Ford's Americas division, sent an internal message to employees calling on staff members to fall in line behind Bill Ford's banner of "innovation".
• In the accompanying e-mail, Bill Ford told employees Monday that the message was the first in what will be a series of less formal communications he has dubbed "Ford on Ford."
• In the message, Ford stressed that the company's efforts were not a case where it would "quickly declare victory and move on." Nor was the effort simply a marketing campaign, said Ford, who talks about the push to be innovative in the company's latest television ads.

Actions by management:

• "Getting the right people working together as a team will be one of my first priorities," according to Mark Fields. "The most successful businesses in the world have a group of individuals that know how to create as a team."
• Bill Ford also announced a new Web-based system that allows employees to submit ideas directly to his senior management team. It asks employees to classify their ideas as technical innovations, business improvements, operational efficiencies, competitive advantages or ways to improve relations between the company and its workers, suppliers or customers. Some industry insiders report that the Web site also asks employees to rate the potential impact of their ideas. Are they on par with the sort of innovations that made Ford great? Will they change the lives of consumers? Will they open new markets? Will they lead to industry-firsts or improve Ford's competitive position? Ultimately, employees reach a screen that lets them type in an outline of their proposal or submit a previously prepared document.

Reactions:

• According to David Cole, chairman of the Center for Automotive Research in Ann Arbor, these dispatches from the top are seen as "a renewed attempt by the great-grandson of Henry Ford to assert control over the company that bears his name."
• Creating a system that allows employees to directly submit ideas to senior management can have obstacles. "Sometimes our bureaucracy can be ponderous and not always receptive to a different approach," Bill Ford said.
• "The bureaucracy at any company is a tremendous challenge. You want to shake it to the roots in a period like this. That's what he's saying: We're going to change." said David Cole.

My question, "Is the Ford Motor Company doing and saying the right things?" A good part of my professional life was tied to the Ford Motor Company when I was a Senior Vice President at Y&R Detroit working on the Lincoln-Mercury and the Ford corporate advertising accounts. I have great affinity for their management and products and believe it is in our economy's interests for them to be successful.

So I decided to offer some observations, advice and insights from our seven years of change management experience to guide Ford go down this new path.

Personally, I think they are on the right track. However, like any good change management initiative, they need a framework and process to manage this communications dilemma.

• First and foremost, Ford is correct in having their CEO, William Clay Ford Jr. lead the initiative and be the internal and external spokesman. This strategy demonstrates internally that the senior management is engaged, serious and involved in this change and has not abdicated or delegated the task to more junior executives. As a result, employees will view the change as more substantial, real and endorsed by management. However, sometime in the future Ford employees should take over from the CEO and become the spokespeople both internally and externally.
• It is not enough to simply inform employees that the company is going through change and is embracing a new strategy focused on innovation. The next step is for Ford to have a four step sequential communications plan and change process in place that goes from:

1. It starts with informing the employees (which they have already done), through effective internal communications. Basically, the CEO has went public first and told the employees second. If this is what he has done, it may have been a mistake. The CEO should have communicated to the staff first to tell them what the company was doing, why it was important to the company's future and what it means to the individual employee in broad terms. He should have gone public only after he has informed his own people. Going public first and then internally second generally causes mistrust and skepticism, that the change is just another marketing campaign. This may explain why his statements were so strong on Monday, perhaps to address some of that skepticism.
2. The next step of the process is educating employees as to why this change is important for the company and to them as individuals. This requires different communications techniques such as experiential communications, training/workshops and events. Often it takes time and is too slow which is why many corporations skip this step. It would appear that Ford has taken the quick route and may have skipped over this step too. We advise clients that sometimes you have to go slow, so that you can go fast later. That is what communications process and discipline bring to the table.
3. The third step in the process is motivating people to change their behavior and embrace new activities that support the change. This is achieved by articulating what you want them to do differently. After all, if you don't tell them how to change, people won't when left to their own volition. Bill Clay Ford Jr. has come out strongly in this regard by outlining the consequences of not changing. Public firings go a long way at demonstrating that the company means business. Also saying clearly what behavior/actions will not be accepted or tolerated makes it very clear what behavior is within the scope and which is outside of the scope. It also creates peer pressure momentum to act accordingly and do the right thing and be a team player.
4. The fourth step is to establish a program for reinforcement and recognition. As people embrace the change, adopt new behavior and contribute to the results the company aspires to, it is imperative that the company recognizes and rewards these individuals and results through celebratory encouraging communications. At Ford, that means changing the incentive compensation system to support innovation and new ideas, promotions and advancements should be based on performance and individuals contribution to innovation. Best performers should be recognized publicly with proclamations and spot bonuses. Recognition and rewards should not be done arbitrarily, but rather, in a systematic drive and communicated fashion so that people understand what they need to do to meet these new evaluation criteria.

• Next major area to consider is having a message architecture, which means saying the right thing to the right people at the right time. Anything the company says should be timed to the sequence of the overall framework. Here are the four types of messages:

1. Informing messaging should be general announcements such as what the company is planning and why and when the change will occur and end. (Value Message)
2. Educating messages should be thoughtful and provide explanations and details in regard to what is in store for the company, the group/division and for the individual. (Benefit Message)
3. Commitment messages should specifically tell people what behavior is expected to help contribute to the change and what behavior will not be tolerated or accepted. (Attribute/Action Messages)
4. Reinforcement/Reward Messages should be celebrations and demonstrate the logic and provide answers to why the company is doing this, why it is important to change, here is what people are doing to embrace the change and this is how we are recognizing people for their support. (Full statement messages)

• William Clay Ford Jr. and the management team can't achieve their goal on their own. They need to build an employee's movement that empowers peer pressure to support for his agenda. Establishing a change ambassador group that represents a cross section of people around the world that has the responsibility and authority to become champions of change do this. These are the people other employees come to get answers to their questions, who are opinion leaders and respected by their peers. The faces of these employee champions should be the ones delivering the message internally and externally after the CEO.
• Not so long ago, in 1980, Ford launched another major change initiative to improve quality of its vehicles, which were rated poorly in comparison to imports at that time. In fact, I remember hearing focus group respondents say that FORD was an acronym for Fix Or Repair Daily. The company launched a new mission to improve quality and make it their number one priority. They first met with employees, UAW representatives, suppliers and dealer groups to make them aware of the problem. Next, they had seminars and workshops with employees to instruct them on how to improve quality on the assembly line and at the dealership. They were made accountable with new metrics and quality performance standards.

After Ford started seeing real improvements in quality and felt confident it would continue, they launched a very engaging corporate advertising campaign with a slogan "At Ford, Quality is Job1". It showed employees on the assembly line and dealerships saying that it was their responsibility to insure that quality was the company's top priority with the rallying cry, "Quality is Job1". The entire change effort worked. It improved quality in reality and perceptually. The lessons of the Job1 effort should be applied today to Ford's innovation mission. Start with your people, inform and educate them about the problem. Capture their hearts and commitment to change and reward them for their hard work. Then tell the public what you have achieved. You have to win your own people over, before you win the public over.

I can go on and on but time and space does afford me that luxury. If you would like to know more about what Ford or your company should be doing to drive a major change initiative, drop me a line or give me a call. I would be happy to give you some additional ideas and insights. I think the Ford Motor Company is trying to do the right thing to remain relevant to our lives and economy. It would be a shame if they failed because of ineffective internal support and adherence to the status quos. Let's hope that does not happen.

Learning From AdAge

Last year, I was leafing through Ad Age. Four stories grabbed me. There was enough content for me to pontificate on for a whole year. Beside the stories they told, the articles also revealed interesting themes. They all support the idea that our industry is in transition, and that ad agencies, PR agencies, marketing consulting firms and clients need a new way of thinking. I still think these ideas are very relevant today; Let me share with you some of what I wrote.

• Nike CEO William Perez (former CEO of SC Johnson) was fired after only thirteen months on the job. The headline read: "The CEO forgot: Ads Rule at Nike." The subhead explained:"...behind the scenes: Perez viewed ads as expense, and it cost him his job."

Here's my translation of this event...culture is everything. Perez failed to understand that ads had built the aura and the brand which Nike stands for. Phil Knight was not about to allow someone to play with his passion. This wasn't about money savings or efficiencies: At Nike it's about "doing it". Perez underestimated both the nature of the Nike culture and its power when he made his cost-cutting moves. At Nike, management is a team sport, and consensus, buy-in and enrollment are imperative if change is to happen.

The Second Story...

• "Ford Motor Company engaged the consulting firm Accenture to conduct a far reaching media optimization and media measurement program that could greatly influence its ad launches, spending and media mix. The program could potentially affect the type of work Ford's agencies do." (As it happens, I used to be the Director of Worldwide Marketing at Anderson Consulting, Accenture's predecessor).

I can see it now...Ford's ad agency staffers at Y&R, JWT and Ogilvy are probably panicking, running through their hallways shouting, "That isn't fair...we should be doing that work!" The fact is, they are right. Perhaps the ad agencies should get the work. But there's a good reason why they didn't. They just don't provide the same rigor and the same process methodology that a consulting firm does. Agencies should be asking themselves why they aren't getting opportunities like this. WPP's CEO, Martin Sorrell's nightmare, of agencies losing ground to consulting firms, is coming true and picking up momentum. I think it can only get worse for the agencies--unless they rethink what they do, what type of talent they hire and where they add value beyond creating advertising.

Now for the next story...

• "Jim Heekin, newly installed CEO of Grey Advertising, is dismantling Grey's old systems. He's installing critical account planning to be on par with creative and account management. This represents a marked change for Grey." Good for Jim! The article goes on to tell us how Grey's strategy had little clarity, how they would often waste the time of creative teams hunting for a creative strategy insight. Guess who paid for that wasted time?

I have always endorsed the idea that creatives should be focused on creative ideas not on the message or the strategy. Creatives just don't have the training for that; after all, they are art directors, writers and designers, not strategists, analysts or researchers. McDonald's calls it a "Framework for Freedom." They say, let the client management, researchers, and strategists come up with the key messages, target audiences and buyer motivators. Then let the creative teams get on with their job-creating the design, sound and motion around the idea. That way the creative output is more focused and compelling.

I would go one step further. I say that the agency should take the leadership role. Agencies need to become facilitators, working side by side with the client's management, marketing and sales teams, together with the ad agency's team of media, account management, creative, planning and production departments. Everyone should be collaborating, all together at one time at one table. This saves time, ensures buy-in and produces better ideas.

Nice going Jim. Keep stirring up the pot...change in the ad agency world is good. One caveat, one piece of advice...move the culture along with you...don't let it bite you in the rear the way it did Bill Perez at Nike. Win over the clients, and win over the internal agency staff. If you don't believe me just look what happened to your counterpart Ann Fudge at sister WPP agency Young & Rubicam. Internal politics, a strong insular culture, fear of change and being an agency outsider prevented her from being successful in the job.

• The last piece..."Ford is putting the consumer at the center of their rebirthing marketing program with hopes of turning around the company fortunes." Ford had no choice, we're told, but to change to meet the demands of the market rather than the other way around.

This is news? Where have they been for the last twenty years? The Ford Motor Company I knew and worked for from 1981-1991 (when I was a senior ad executive at Y&R) always put the customer first. It was about Quality is Job #1; Lincoln - What a Luxury Car Should Be; and Have You Driven a Ford Lately?Those were consumer insight campaigns. They answered consumer questions and they helped satisfy the buyers' needs and wants with products that they wanted to drive. Remember the Mark VI, the XR4Ti Merkur from Germany and the Mercury Sable and Ford Escort? Wonderful cars, terrific insights and great market successes. I'm glad to hear Ford is finding its way back to the insights that contributed to its most recent glory days. But, as the company has said, Ford must also win over its own people in order to lead the market. Ford's employees need to become educated, motivated, inspired, and enrolled to recognize what the pursuit of a consumer driven strategy can yield in the way of success and market leadership. I hope they get it straight. I want them to succeed.

So what's the common thread to these stories?? What key messages can we learn from them? I see many lessons here.

Sharing Strategic Marketing Responsibilities. The ad industry (and some clients) still doesn't recognize that marketing should not be centered just on the creative product. Focus should be the shared collective responsibility of the client, the agency, the sales channel and the customers. Together they can create products, marketing strategies and award winning advertising that will meet the needs and wants of the market and present the right message and image. No one group should abdicate its role to the other. This work needs to be done together.

Rigor, Process and Methodology. In a world of investment bankers, strategy consultants, and greater value accountability to shareholders, agencies have to step up to the plate and incorporate new rigor, methodology and process into their planning and accept their responsibility for results. The old way just doesn't work, and neither will moaning about the loss of consulting assignments and revenue. Agencies must go way beyond planning the new ad campaign and refashion themselves to gain deep analytical understanding of their client's business operations and challenges. They need to get themselves invited to the board room table out of respect for their strategic insights and counsel and the confidence they convey, not just to get approval for their new ad campaign.

Culture. Everyone involved in marketing has to recognize the power of culture and the power of the employees when it comes to embracing a new strategy or marketing initiative. Company culture does matter. Respect it, and make it work in your favor by helping the internal constituencies become educated and informed. Help them become motivated and inspired and--eventually--enrolled and engaged. This will take time, patience and process, and the knowledge to do it right. Don't leave this important task to chance. Deploy change management experts who have methodologies and processes that can help.

Abundant Mentality. Marketing people on both sides of the table need to embrace the notion that a great idea can come from anywhere. What's more, when everyone adds to an idea, it can only get better, brighter, more compelling. Every great idea is a shared responsibility based on an abundant mentality about solving consumer problems with compelling solutions that grab people's imagination and attention.

Leadership. Current advertising models fashioned back in the sixties and seventies are not relevant today. The marketing industry needs fresh ideas, new approaches and leadership to recognize that. The industry needs leadership that recognizes a need for new, outside-the-box business models. Marketing people need to rethink old management structures--incorporate new media, the internet, buzz marketing and 1to1 marketing--and establish new metrics and accountabilities so clients will value what they do. Leadership should come from both the clients and their agencies, both immersed in freshness and innovation, not stuck on a single idea. Leadership needs to re-examine everything: compensation, accountability, media optimization, market research methods and integrated strategies and costs.

So. What I garnered from reading my four Ad Age articles can be summed up this way: Our business is changing. We can react and let it change us, or we can take the lead and we can change it.

What do you think?

Happy Halloween!

-Allan