On Corporate Change

I’m told that in high performing organizations like Google, change is near constant, with roles changing weekly in certain groups. I believe it. In my last sixteen months as co-head of a now-thriving senior care technology company, only one thing has remained constant: change.

Managing a turnaround company implies change – oft forced and tumultuous change. ‘Force’ exits those who no longer have a place on the ship; ‘tumult’ sweeps out even those who are invited to stay.

Those who were asked to stay and have hung on – well, they are twice anointed, by skill and by perseverance both. The select few who are part of this group at my company evoke my fond admiration. They are, to paraphrase Darwin, the fittest. They have survived because they are most adaptive to change.

On the outside, the company my partner and I encountered was in good condition. Stable revenues and favorable demographics suggested imminent growth. On the inside, a byzantine organizational structure and convoluted processes revealed a tangled overgrowth that would not be easy to tame. But pruning was what we were hired to do, and pruning was necessary so the company could liberate its hidden profitability. The question was how.

The answer was not at all clear. In the final analysis, I’m not sure if there was a right way, nor what rightness holds dear. The way we proceeded was to examine the organization for a good month. Leveraging my background as a business casewriter and my partner’s background in general management and sales, we spent time meeting virtually everyone in the company, and understanding what they did.

The month of understanding might have been akin to Hillary Clinton’s listening tour of New York State before being elected its junior U.S. Senator. One our tour ended, we were overwhelmed: there was so much we wanted to change. Yet there would be no way we could undertake all at once. The question became refined: what mattered most? In what order would we proceed?

Roughly, what we chose to do followed this order. There was no grand strategy, though true to our MBA roots, we did try to build one. What we found when we did so is that we could not predict what each wave of change would bring, thereby rendering the plan useless. One messy wave begat the next.

1. Streamline the physical enterprise: It was coincidental that Marissa Mayer became CEO of the turnaround technology company Yahoo! at around the same time we stepped to the helm of our company. Her decision to end work-from-home and flextime arrangements was mirrored by our own similar decision to consolidate offices, close the company’s outposts, and largely end non-standard work arrangements.

The reasoning was simple: the company needed to pull together and reassess its people, its processes, and its culture in order to change its course. In this time, accommodating individual preferences meant that the greater agenda slowed to the pace of its most remote and least available members. A favorite quote from the series The West Wing is that “Decisions are made by those who show up.” This wave of change can be summarized as asking those who did not or could not show up (or showed up late) to step away from the proverbial table.

This first wave of change caused massive upheaval in the company, the depths of which I will not address here. Both major offices fell into tumult as the rumor mill went into hyperdrive. Reports of some departed employees whispering falsehoods by phone into the anxious ears of actual employees abounded. The game of telephone took hold. Prevailing wisdom held that the company would be shut down.

The PR battle was a difficult one to fight in that there was not an obvious thing to strike down. The rumors undermined our credibility and made us appear worthy of mistrust. In hindsight, I don’t blame anyone for believing this nonsense. In a hurricane, it must surely feel like the ship will go down.

2. No more I won’t dos. Once the first storm had more or less passed, we declared the remaining team the Go Forward Team. We felt some pressure to announce this, in an attempt to usher in some relief – a sense of calm and stability so everyone could focus on their jobs. We also wanted to believe it. But as soon as we said so, the next wave of needed change presented itself.

In the streamlined operation, four groups of people rather neatly emerged in a McKinseyan two-by-two matrix: on one axis, the Can Dos and Can’t Dos. On the other, the Will Dos and Won’t Dos. It was painfully obvious that growth required a certain set of skills that were not important in the previous organization, but were important now. It was also clear that no strong company could be built on a founding team of Can’t or Won’t Dos.

My partner was keen on asking the Won’t Dos to leave for better shores, as the Won’t Dos by definition won’t be governed. I was attuned to the implausibility of building a strong team around those who, by lack of training or smarts, could not do what we needed to accomplish. (As a sidenote, I am, after this experience, a strong believer in investing in STEM course education in the United States at the primary school level.)

The Won’t Do departures were, for me, emotionally easier to decide, though they were sometimes much harder to complete. The Can’t Do departures were, for my partner, very difficult. He invested considerable time and thought into converting those in this group to the Can Do camp. But as we both learned, decades of (un)learning is difficult to reverse in a matter of weeks. After a lot of effort tragically wasted, we were forced to give up and ask these folks to also move on. Many were wonderful and kind, and unfortunately left discouraged. I wish them well.

3. The Era of Role Definition. Let me start by saying that even if you have a team of excellent individuals who Can and Will do what the turnaround team needs, they will fail unless they know what their roles are and aren’t. Let me also add that it’s really hard to define the roles in a time of great change, because as soon as you define the role, it’s time to redefine it. It goes a little something like this:

When you step into a role in a company, the Job Description is a best attempt at putting some definition around what you should focus your energies on. The JD isn’t built with you in mind, so it can’t predict what you’ll end up really being good at, and what you’ll grow toward. You outgrow the JD almost as soon as you join the company. In a turnaround company, this is happening while the company’s needs are rapidly changing too. As soon as you show skill in a particular area, you might ‘win’ more work that is way outside of your original JD because the company now needs it to be done. If you fail at the job you were hired to do, you might be asked to take on something rather different – both because it turns out you’re not a fit for the original role and because the company needs you somewhere else. The tumult continues!

I have written and revamped dozens of JDs in the company so far, and I do it myself, with my partner’s help. A departed employee once remarked (rather haughtily) that as Co-CEO I really shouldn’t concern myself with such work. But in spite of the imminent obsolescence of the resulting JDs, the thinking behind the writing forms the backbone of the new organization. The thinking forces me to get clear on what I want someone to do. The writing is only printed expression of what each person is charged to do, so that my intentions are clear to them too. In a stable company, the JD is likely a formality, or perhaps a legal document. In a turnaround, it may be a source of stability in a sea of change.

(Process documents are in a similar bucket as JDs. As soon as they are defined, they may need to be redefined or thrown out. And yet they serve a valuable purpose.)

4. Performance Culture. This is where we are now – yet another wave of change. We need to tighten up our operations so we can deliver better results. This is probably like buying a ship and trying to make it hold more cargo and go faster: there are probably a million ways to go about it. On our ship, we now get to try things that have become possible with the team we have: cross-functional managers are dispatched to drive better performance throughout the organization, an employee committee gathers great ideas from the team at large and works to implement them, and several different sales techniques are yielding exciting and actionable results.

The Road Not Taken

I’m proud of the team we’ve got, and their ability to weather the current ripples of change. They are among the fittest colleagues I can hope for. And yet by my nostalgic nature, I sometimes contemplate the many departed faces from my partner’s and my team. I wonder if we could have stayed co-workers in a different company, at a different time.

It would likely surprise these former teammates that in most cases, my answer is yes. A high-performance company in stable times can accommodate organizational sprawl and flexible work arrangements. Cruising calm waters at a good clip allows for tightly defined roles that let people to do exactly what they want to do and are good at, and only that.

This company will achieve that stability someday. Right now, the company is focused on driving high performance. Change is the only way to achieve the goal of being fittest of them all.