A CFO's Strategy for the Human Side of Change

Journal for Quality and Participation, The, Fall 2005 by Lebow, Rob

"OK Connie, you're going to be my audience. First, get someone to cover the phones. I want to bounce some information around, and we are going to be awhile."

Tom took a sheet of paper from his special file, and the first thing he showed Connie was a graphic from The Economist magazine (see Figure 1).

"Connie, here's a graphic on business profits in the past SO years. What does it mean?" asked Tom.

"This is terrible. In the past 50 years the profitability of American organizations has dropped by two-thirds, from nearly 20% to under 5%. How do companies stay in business?" asked Connie.

"They don't!" said Tom. "And, that's why the plane crash over Narita keeps me up at night."

"OK, I understand the seriousness of this situation, but what can you do? After all, you are only one person," she commented.

"You're right in one respect, but wrong in another," Tom replied. "George Washington suggested that one person who knows he/she is right makes a majority. America is all about one person making a difference. This is not an American phenomenon; it is the same all over the world." Tom paused, "Connie, I believe and have for a long time that something is terribly wrong in how we conduct business. Consider that almost 90% of the Fortune 500 operations from the 1950s are gone, and the ones that are still with us are struggling."

Focusing on the Customer Experience

"In the relationship with our customers, it is our systems and our thoughts about people's true motives that cause a disconnect. In the JAL case, the customer was a 747 that was ignored."

Tom pointed to a diagram that he withdrew from his file (see Figure 2). "Look at this," he suggested to Connie.

As Connie looked at the pyramid in the diagram, she seemed puzzled. "Tom, I know this is a pyramid and I see the people standing around and crashing into the pyramid. I understand the words that label it, but I'm not sure what it all means."

Tom explained, "Imagine that this is any operation in any industry. see all the people trying to get into the pyramid? They're all customers, but they're running into a solid wall and are prevented from entry. The employee is trapped in the pyramid and is tied to managerial strings that cause him to be controlled like a puppet. In our case, internal customers must feel this way when trying to get in touch with our finance department."

Tom pulled out a second picture (see Figure 3) and said, "Whereas the first picture shows the customer relationship to the pyramid, this second picture portrays an internal picture of our operational relationships. These include finance, operations, quality, help desk, shipping, marketing, information technology, engineering, sales, etc. Each work group operates within its own pyramid and keeps other groups from entering its pyramid. As a customer, this also suggests that change is almost impossible and that politics is almost inevitable."

Connie said, "I can see that our present systems limit interaction between each internal pyramid because we're trying to protect our backs! So, what can we do about it? Isn't this a normal organizational approach to business?"