A CFO's Strategy for the Human Side of Change

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

"Not only is this the normal approach to business, it is taught and reinforced everywhere, in every book and at every university," Tom clarified. "The pyramid is comprised of rules, incentives, performance standards, processes, policies, etc.; the list goes on and on.

"It's like asbestos. In the past, we used asbestos everywhere, not knowing that it was poisoning us in our own homes. In this case, this structure is killing our profits, competitiveness, and abilities to adapt - and don't take my word on this just look at the Economist graphic. Most of all, this operational approach separates us from our passion to do our jobs. Instead of connecting people to their jobs, we spend time and resources on building better and more dynamic pyramids because we believe in trusting numbers, not people. Unfortunately that has been our focus - an emphasis on numbers and not people."

"OK, you've convinced me that there is a germ of truth in all this. So, what's your solution?" asked Connie.

A New Way of Working With Customers

For the past several months, Tom worked with the designers in the graphics department to come up with a complete description in a graphic form of the pyramid, as well as an alternative approach to the existing problem of relying on programs, incentives, measurements, fear tactics, and supervision to connect people to their jobs.

"Connie, here is a model (see Figure 4) that I believe will help everyone see the present danger. It is based on a strategy that allows and invites responsibility and accountability on an individual level to blossom," Tom began.

"The three center columns of the model show what I've come to call the control-based approaches; to me, these mean trust the numbers, inspect the documents, and don't trust people. As harsh as that may sound, that's how I managed my portion of Applied's business over the years -I trusted the numbers not the people. Now I'm the first to admit I was wrong. You'll note that the three elements to these control-based approaches are structures, incentive systems, and performance standards-things that in the past we were told were the right approach. But the financial numbers in the past 50 years tell a different story-and none of these approaches require that we trust people to do their jobs or to take ownership for the results.

"Now take a minute and look at the left column of the model. You'll see the six key design areas of any operation: how the organization approaches trust, how the organization approaches responsibility, how the organization approaches accountability, how the organization approaches front-line workers, what defines the customer transAction, and what drives the transAction.

"At the bottom, on the left side, we discuss something that we call the TransAction Zone(TM). Remember, whether we work with internal or external customers, we all make transActions many times each day and the operative idea is to take action -that's why I capitalize the "A" in the word transAction. At the lower righthand side, we introduce a new metaphor or approach, where the customer, not the process or the system, drives the transAction...the customer-and that would be new for us at Applied!