by Randy Pennington

Winning, losing and how you approach change

Mar 25, 2019
Digital Transformation IT Leadership IT Strategy

Jack Welch was the rock star CEO of the 1990s, but are his ideas about change still relevant today? We’ve moved beyond simply adapting to change as it shows up. Find out how the approach successful leaders take with change has changed.

6 change instigator transformational leader
Credit: Getty Images

Jack Welch quotes were the rage among hard-charging business leaders of the 1990’s This is one of my favorites: “The difference between winning and losing is how the men and women of our company view change as it comes at them.” 

In 1997, Welch was referring to preparing for and responding to the anticipated radical changes on the horizon. Digital transformation had begun, but no one called it that. It was mainly about faster desktops and this new thing called the internet.

The aspiration of every future-focused leader could be summarized with the words my wife shared upon our marriage: “Randy, I’ll never ask you to change. I do expect that you will continually adapt.”

A few of you are going to write that one down for use later.

Does the current environment make simply adapting to change a quaint relic from a more relaxed time? Or, does how you view change still determine the difference between winning and losing?

The answer is an unqualified “It depends.”

The case for not waiting on change

It’s easy to look back on the days when our cheese was being moved and our icebergs were melting with nostalgia. Change was constant but manageable. A big year was a few major projects implemented while doing your “real job.”

Today, anticipating and adapting to change are the minimum expectations. Technology powers every aspect of the business. Waiting for change is now guarantees playing catch up with your competitor.

The best leaders don’t wait for change. They pursue it. Active innovation and improvement are the difference between excellence and irrelevance.

The mentality that winning and losing is about pursuing rather than merely adapting to change should be second nature at this point. Even Welch believed that simply adapting to change wasn’t enough back in 1997. The data shows that leaders are still waiting rather than taking the proactive approach of pursuit.

The 2018 Artificial Intelligence Technology Business Guide published by Globant shows that despite all the hype around Artificial Intelligence, less than half of CEOs are actually involved in conversations about how to use it. More important, only 22% of CIOs and 24% of CTOs are involved in those conversations.

Likewise, another 2018 Globant study reports that just 31% of senior-level staff uses voice-activated technology at work even though 45% of them do so in their personal lives. Voice-activated tech has completely transformed the customer experience. Doesn’t it make sense that companies would pursue this change to power the internal experience, too?

Louis Hernandez, CEO of the private equity firm Black Dragon Capital, explained to me that it is easy for companies and even entire industries to equate their current value to their past success. As he says, “The massive availability of information and choice create higher expectations for continuously pursuing change.”

Okay, that sounds great, but how?

This is a good time to mention that I have no financial relationship with either Black Dragon Capital or the company Hernandez led to a turnaround and resurgence, Avid Technology.

The biggest barrier to the active pursuit of change, according to Hernandez, is capturing the hearts and minds of employees.  To be successful, you have to convince them that their “value isn’t based on their heritage.”

Citing his experience at Avid, Hernandez explained that the company’s long-term success with legacy products resulted in devoting an inordinate amount of resources to products that were the least relevant to its customers.

CIOs and CTOs take the same approach with internal processes. Are you, for instance, continuing to support legacy email, CRM, or collaboration tools that require more work than they are worth for the benefit received? 

For Hernandez, the solution was to focus the energy outward. Avid talked with 200 of its largest clients to determine how their current products alleviated a pain point or provided a competitive advantage.

This exercise isn’t for the faint of heart. You are likely to find that your internal and external customers have a pain point that your traditional ways of operating don’t alleviate. It will feel like, as Hernandez points out, that they want a different type of transportation when you thought they simply needed better spark plugs to power their existing vehicle.

A marketing company’s reputation and livelihood depends on bringing new solutions to clients and not allowing their ideas to become stale or outdated.

In many ways, internal technology operations are no different. Your internal clients are looking for ways to make their jobs faster, better, cheaper, and/or friendlier. You become their strategic partner when you pursue change in the form of new solutions rather than waiting to adapt.

CompleteSpectrum, another company with which I have no financial connection, provides branding and marketing services to private equity portfolio companies. I spoke with Matt Stein, the company’s CMO, about how he keeps his team pursuing change.

Stein told me that he has worked to make pursuing change part of the company’s DNA. “You have to make this a core part of your company’s habits, just as you might do with providing employee feedback, regular team meetings, or anything else that is important to you.”

Stein does this by formally carving out time for key staff to explore what’s new and work through the benefits it can bring, as well as the cost equations that come with it.

“Essentially, you have to place time to pursue change on the schedule as a primary value driver,” says Stein.

This is where your leadership comes in. Your partners in the business—and the employees on your team—are looking for you to lead them to the next change that makes success easier. They need your courage to protect the space required to proactively pursue change.

The case for resisting change

The examples of companies waiting too long to change are endless. Blockbuster believed it didn’t need to move quicker toward offering DVDs by mail. Xerox didn’t change quickly enough to overcome the threat posed by Canon copiers. Motorola didn’t respond to Nokia’s advances in the mobile phone market until it was too late to catch up.

The list of failed change is equally impressive. Those stories, however, don’t readily support the current narrative that new ideas should be pursued in the name of innovation.

Steve Jobs once said, “Deciding what not to do is as important as deciding what to do.”

Even Jobs didn’t get it right all of the time. Does anyone remember the Apple Newton?

Therein lies the problem. For every Google Maps that creates positive change there is a Google Lively that should have never been pursued.

Yes, there are times when a change is simply ahead of its time or provides the foundation for something else. The Segway didn’t revolutionize personal travel as predicted, but the technology has made its way into some amazing upgrades for wheel chairs.

We have reached the point where the volume and velocity of new possibilities makes resisting—or at least temporarily ignoring—change a viable option. I asked Louis Hernandez and Matt Stein for their ideas on deciding when a potential change should be ignored.  They shared three questions that will help you decide.

1. Does the change move you toward your current strategic goals?

Stein pointed out that it is easy to be enamored by a new idea and lose sight of the size and impact of a change.

“Too many companies get excited about, pay for, implement, or even attempt to utilize new technology without understanding how it truly moves the needle on their strategic goals,” says Stein. “It’s not every day that new marketing technology, for instance, comes along that’s a game changer. Most new technology products are iterative versions of the same tried and true solutions.”

There is an expense of time, resources, and focus for even the smallest changes.  When you consider the total cost of a change, there are times when it makes business sense to say no.

Your IT governance process helps make decisions on the bigger and/or most visible changes. It is time to seek a greater level of strategic alignment for projects that typically don’t require governance approval, too. That means teaching and empowering your staff to say no to change when appropriate. Opportunity is everywhere at every level of the organization. Even a change that appears inconsequential requires resources that might be best used elsewhere.

2. Does the change solve an important problem for your customer?

On the surface, this is an extension of the previous point. You have to assume that your customer believes that a request is important at the time it is made. The decision then is based on who decides the definition of “important.” That’s where you have to be willing to listen, learn, and when necessary, say no to change that doesn’t move the organization forward.

Hernandez takes this question a step further. He believes that IT leaders should be proactive in understanding the business—Including its goals and challenges—and bringing solutions forward for consideration.

3. Is the change consistent with your guiding principles and values?

Facebook has been plagued with mishandled privacy issues for months. In December 2018, the company was found to be granting user-data access to companies such as Microsoft, Spotify, and Netflix.

This makes perfect sense from a purely financial perspective, and it is just one more action that creates mistrust and suspicion.

A solution to missteps like this, according to Hernandez, is to have a clear set of guidelines and values that provide the boundaries for what is and isn’t acceptable change. 

There are clear cut rules that provide obvious answers, and there are those changes that fall somewhere in the middle. He advocates for supporting the rules with guide posts that enable staff to surface difficult decisions for further analysis and discussion.

Change continues to be a priority for every future-focused leader. It’s just that change has changed in the 22 years since Jack Welch defined it as the key to winning and losing in the marketplace.  Adapting and anticipating are the minimum. Going forward you must consider two additional options when looking at change—pursuing and ignoring.