Tinkering

When arriving at a company, one of the first things a leader or manager needs to do is learn who the workers are and what is important to them. This includes a close look at how things work, including processes for making and implementing decisions and strategic plans. In addition, it is necessary to discover the climate and culture of the business. What are the values of the business? What is important to the organization and its members? How comfortable or nervous are the people (climate)? Culture is one of the more difficult variables to learn because its discovery is inferred from observing behaviors. Finally, the customers of the business need to be understood. What do they care about? What do they like and dislike about the organization and its products?

The above research takes time but its value cannot be underestimated. For example, when Ron Johnson took the CEO spot at JCP in November 2011, within a few short months he installed a bold strategy that would take the company in a completely new direction.  From all outside appearances, it does not look like he spent the time conducting the investigation described. The new strategy is interesting (and perhaps exciting). JCP shifted its emphasis from competitive pricing toward differentiation; using a remade and refreshed merchandising approach and adding a “stores within the store” based on exclusive, private and popular brands, they hoped to transform the shopping experience. Simultaneously, Mr. Johnson decided to eliminate sales and coupons (recently reinstated) in favor of everyday low prices. Unfortunately, while strategy is about choice,¹ the jolt to the system repelled customers; one-third ($12.98B from $17.26B) of JCP’s net sales evaporated. Instead of testing his concept and rolling out the new pricing component gradually, the decision was to eliminate the items that customers liked the most –coupons and sales. This led to a predictable response by their customers and competitors (who offered more coupons and sales).

Granted, bold strategies are needed when a company is in crisis. JCP needed to make changes, but they were not classified as in crisis, at least not until they eliminated the fun for customers of perceiving that they were saving money with every purchase. Mr. Johnson’s actions were a miscalculation that may very well cost him his job but has also put the very survival of the company in question.

If bold moves are not needed, then how can companies move forward with changes without these sudden jolts? What can leaders and managers do to improve the business and its outcomes without big, dramatic moves? An alternative strategy might be called "tinkering."

It begins with the research identified earlier and then considering shifts that can be incorporated (with proper change process installed as described in earlier publications) that are not so dramatic but could still have large effects. An example could have been a change to how JCP moved forward. For example, my wife and I used to shop at JCP, especially in their home department (we still have curtains from JCP hanging in our foyer). But over the years we stopped shopping there; the stores started to look tired and when we visited the home department recently we found the area in disarray. Mr. Johnson's idea of making the stores more attractive would have been met positively by us. Therefore, the “store within a store” concept as a refresher of the look and feel of the store would have been a good start; however, they could have left the old pricing intact, at least at first.

Strategic options can be considered hypotheses that are targeted at fixing a business problem (e.g. sales).¹ Thus, one hypothesis is that the resulting increase in sales per square foot at JCP they received where they implemented the new look would have occurred by upgrading to the "store within a store” concept without the pricing adjustments. No, this is not spectacular and sexy but it could have reduced the pain and suffering now felt by the company’s owners. Of course, then the CEO and his or her team would not get the accolades associated with a remarkable shift, but frankly, leadership is not about accolades; it is about long-term sustainability and viability of the business.

JCP’s error is an error of execution. Executed more gradually, it may have obtained the same result…and maybe in the same time period. For example, consider the organization that has a similar problem executing work (something an astute leader or manager would uncover in an initial investigation). Let’s assume it impacts not just strategy but all projects of any size across the enterprise. One organization found a lever to help build the competency. They adopted a new policy that required that all projects be placed under “project control.” Project control requires the use of project management protocols (identification of tasks with reasonable granularity, assignment of delivery dates, and appointment of responsibilities) for projects of a certain size (e.g. more than two weeks). At first, employees found the change uncomfortable (no one likes change), but within a year the organization was able to execute projects more efficiently and effectively; the ongoing activity of developing and launching products accelerated from ideation to launch in half the time. This one change caused a big difference.

I have also watched organizations constantly shift their structure – no major shifts but little ones that made big differences. Structure (who reports to whom) often guides the organization to pay attention to some items and not others. A small reporting shift can noticeably increase the attention paid to a particular function. A new structure can also lead to new sales and more efficiency and effectiveness.

Something as mundane as the elimination of a problem employee can also have very positive effects. Take for example an employee who was only willing to do the minimal requirements of his or her job. In the example I witnessed, this person was a disruptive influence in the office and people did not want to speak with that individual let alone collaborate on assignments. I watched the leader hesitate to take action (who likes to do this stuff?) but eventually was left no choice. When a move was finally made to counsel the individual and fire them, there was a collective sigh of relief. What a difference it made in the climate and performance of the unit.

Tinkering is an interesting concept. I have worked for and consulted with many organizations that have found tinkering more beneficial than an ongoing strategy of large changes. Even adjusting or changing the rituals can be important. Something as small as celebrating small and large wins can go a long way in helping the organization improve.

Ultimately, large, magnificent adjustments – unless there is a crisis – are not always what is needed. Instead, small things can make big differences. A strategy of tinkering can go a long way to cause huge changes in organizations.

Please feel free to make comments.

 References

¹ Rumelt, R. (2011). Good Strategy/Bad Strategy: The Difference and Why it Matters. New York: Crown Business.