Leading Change at the Speed of Electrons (Part I)
In an economy that travels at the speed of electrons, organizations that can respond to market changes faster than their competitors have a distinct advantage. How do you get to be that organization?
The short answer: Train & Delegate. When change occurs, the closer to the point where the change is discovered that a gooddecision can be made, the faster your organization can respond.
How’s that different from the norm? Most command and control companies offer very little opportunity for those close to the action to change things. Let me give you an example.
Picture one of your lowest tier employee’s having an idea that will save $200,000 a year; cost to implement is $20,000. ROI = 1,000% with a return in 1.2 months. Worth pursuing?
Knowing nothing more, what probability would you assign to the implementation of the idea?
Let me say, most would guess way too high. After all, what authority does the employee have to Implement the idea?
ANSWER: None. As it turns out, the critical question is: “at what level of your organization does that authority exist?” The probability of implementation is inversely proportional to how far up the hierarchy one needs to go to get funding approved. Let me use an example.
Understanding that the only way for that idea to get implemented is that:
A. The idea be escalated to the management level with the authority to spend $20,000; AND,
B. Everyone along the way says “Yes.”
Simple probability theory says that, for each level the idea has to go up the chain, the probability of it being implemented is reduced by 50%.
Until the approval level is reached, each level can only promote the idea upward, or squelch it. I call these outcomes “Up Arrow” and “No.”
Two outcomes. With no other knowledge, we assign each a 50/50 chance of success. Remember: Only the “Up Arrow” leads to the potential of implementation.
So, if the employee agrees to promote the idea upward, they choose the “Up Arrow”, which has a 50% probability. To get past the 2nd level (the employee’s boss), the probability drops another 50% (50% x 50% = 25%). To get from the 2nd to the 3rd level, it drops another 50% (50% x 50% x 50% = 12.5%), and so on.
Think about that. In most organizations, that means that, by the time the idea even gets to the Manager level, the probability of it being implemented has been reduced to 12.5%.
Few managers I know have the authority to spend $20,000. So, in your organization, at what level does that authority exist? What’s yourprobability of success?
Before moving on, let me ask you, how many of your employees have been told “No” enough times that they no longer wait to be told? They no longer even suggest improvements. The probability of success for the ideas of those employees is 0%, because they choose “No,” right out of the gate.
How many of your employees have grown skeptical of a system that rarely even pays them the courtesy of a response? In those cases, the employees stop having good ideas. They see themselves as being hired for their hands. They put in their time and go home. As W. Edwards Deming would say, “What a waste.”
Is all lost? Hardly, but you’ve got some work ahead. What would you have to do? Ah, that will have to wait until my next post.
Questions or comments? Contact me at: robert@gettingtolean.com
