7 Focus Areas to Guarantee Lasting Results; Industrial is Dead; Long live The Experience Economy

During the greatest recession since the Great Depression, a company’s revenue & stock price have held up during the downturn. What do they know that we don’t know?

This post was inspired by McKinsey Quarterly’s interview with Bombardier CEO Pierre Beaudoin. He explains how his company, driven by engineering goals, learned to focus on customer expectations, teamwork, and continuous improvement to build world-class results.

Pierre Beaudoin, CEO and president since 2008, attributes the company’s resilience in large part to its culture. He led a complete transformation of that culture over much of the past decade, beginning as president of Bombardier Aerospace. The transformation changed Bombardier from a company driven by engineering and manufacturing goals, with deep cultural divisions, to one focused on customers, an engaged workforce, and continuous improvement.

Under the most challenging circumstances, whether it’s a shock to your industry when business slows down, incorporating acquisitions or doubling in size, ever more so in the midst expansion, this is where a lot of rocks come to the surface in terms of capabilities and structure that previously didn’t seem to impede your growth & success.

When the tides-are-high in your industry or business, how can you become more aware of the rocks that will one day surface & impede your success? How can you address these now before they become significant barriers when you least can afford them?

The end of the book

This is a longer post than usual, but worth it, so let’s jump straight to the last page to witness the outcome; The way I define success is that we have a much more engaged organization today, climbing more than 15 percent since 2004, with 85 percent of employees responding to our last survey. In past recessions, the first thing that fell was employee engagement, and this time it’s holding firm. This means that we have an organization that’s much more resilient to external shocks. In addition, we were recently named the third most admired and trusted brand in Canada in a survey of consumers; the survey also ranked our workplace second most admired. And we have good financial performance. We’re going through a storm like this industry has never seen, and we’re still achieving good results and meeting customer expectations with an engaged workforce.

What I like most, though, is that we now have an organization that wants to get better. And that’s the key. We always talk about why we’re not there yet; we’re on a journey—how close are we to those world-class metrics? We used to make excuses for why our performance was good enough. Today we say, “What will it take to get to world class?” That is what has changed.

Now let’s look at the 7 key focus areas that deliver world class engagement & the results you need.

Area 1; Focus on the Experience

One of the important initiatives that helped Bombardier understand how to address suspected problems was surveying their employees. “They were telling us that we’re very focused on hardware,  but I knew that the customer doesn’t really care about the hardware; he cares about his flight. We’re in the business (outcome) of flying people, not planes.”

What are the pulse-checks that you can take in your organization to identify the gaps, in perception or practice, that are impeding your pace to achieve desired results? How can you better detect when your teams are focusing on the “minutia”.. the process.. instead of “the customer”.. the outcome you require? Surveying “the masses” is definitely a best-practice, after-all, you’re team are the experts at what they do.

Area 2; Focus on culture

“Everyone in management recognized we had a problem but insisted it wasn’t in their department. It’s very hard to transform if we only focused on fixing this piece of hardware or fixing that system, because the people in the system thought that what they were doing themselves was working well.” How can you create an atmosphere where people aren’t afraid to expose their vulnerability? How do you get a team out of it’s comfort zone in order to stretch into the learning zone?

Area 3; Focus on Transparent & Transversal Communication

“Our employees also said it was very hard for them to support where the company was going because they didn’t know what we really valued as an organization. In fact, we’d asked our employees what objectives they thought we valued, and although we had very big strategic plans, nobody could answer the question. For any team to pull in the same direction, it has to know what you’re looking for and feel a connection. We achieved this by asking our 100 top leaders how they would approach the situation—who are we and who do we want to become?”

In order to grow from a factor of 12 to about 400 per year, in order to go from small player to leading your business segments, Bombardier had to reorganize as functions rather than business units. Responsibilities aren’t always clear across an organization, when you understand what the company desired outcomes are, and you can connect your own individual results toward influencing that outcome without loosing sight that the customer experience is your ultimate goal, then in addition to extreme focus, you will also ensure delivering a good customer experience overall.

Area 3; Resistance to change & start in small chunks

“At the management level, there were cultural problems too: the culture was about avoiding putting facts on the table. In addition, there were a lot of silos. People were focused on their own tasks. And it was a culture where we valued the “firefighter,” the person who would step on everybody but get the job done in a crisis. There was very little teamwork.”

Quick turn-arounds in companies can deliver good immediate results by doing some very drastic things. You can cut R&D, you can cut expenses, that’s easy. But when you’re building a “business”, which is all long-term stuff, if you cut corners then you’re going to pay for it later. A culture change takes a little bit more time up front, but, once it starts moving, then it gains momentum and moves even faster because more people are engaged. Engagement is the key KPI you want to be measuring early on.

In order to facilitate the change process.. coax your team out of the comfort zone & into a learning zone through addressing 2-3 specific priorities and leadership skills. You get there by setting the example from top dow, by looking in the mirror and acknowledging that in order to fix the organization, is that you, as a leader, have things to address.” Asking leaders to make themselves vulnerable is not that easy, but in addition to a stronger end-result leadership team, the process will also tell you very quickly which people should stay and which should decide it’s not for them. It’s not about making it personal, but if you want to make a change, you need the right people sitting in the right seats on your bus. You need the people who are willing to make themselves vulnerable, the people who are willing to learn, to work in teams, to promote the leadership skills deemed important.

Area 5; Focus on outcomes

At the beginning, there were a lot of people who resisted, who said this organization will never be successful again because there aren’t enough hard goals and there’s too much softness within the goals. But the whole idea was that while we focused on the soft stuff, we didn’t let go of the hard stuff. The performance objectives were really clear right from the start—going from an EBIT margin of 2 or 3 percent to 8 percent, a $500 million improvement. We made it very clear that that was where we wanted to go. And we achieved that goal.

The point is, you’re in business. Whatever you do, it’s about making the business more financially successful. We translated the soft goals into hard measurements too. The goal was to really enable the front line to take a lot more initiative. We didn’t get it done rapidly; you don’t change a culture rapidly, it takes time.

Area 6; Focus on People

Do you have an achieving-excellence system that helps employees progress from where they are today, wherever that is, to being part of a fully engaged, world-class company? Connecting goals to each person’s day-to-day work is mission critical. The first step isn’t even about trying to find the exact metrics that would lead to the ultimate goal of becoming world class; it’s just about setting any kind of goals. Getting your people to participate, in any capacity, from the outset is a key accelerator.

Area 7; Find the Quick Wins

On a plane, a sailboat or just running through the streets.. have you ever felt the affect of a tailwind? “We started by identifying discrete projects that were small enough to show the organization fairly quickly that if we accepted change, we could succeed.” In the same sense, smaller is better.. too many goals / KPI’s are a sure fire sign of lack of focus and or redundant data points.

Summary & Conclusions

In Bombardier’s case, what we’re seeing is corporate management better understanding their new role in a new economy / era. It’s no longer about command & control, today’s management layer needs to provide value by helping the cream raise to the top, by potentiating the talent pool of great ideas and solutions that already exist within their organizations. The management layer needs to leverage their experience in order to educate & make the decisions that will drive short, medium & long term results.. both on an individual, as well as a collective level.

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