Apply agile development to every aspect of business: Steven D. Goldstein
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Author and adviser Steven D. Goldstein says that oftentimes dysfunction comes down to a lack of engagement—leaders who are unable to see issues that are hidden in plain sight. In his latest book, Why Are There Snowblowers in Miami? Transform Your Business Using the Five Principles of Engagement, he addresses the problems caused by disengagement and pinpoints the common mistakes leaders make, including slow decision-making due to entrenched dysfunctional processes; lack of real connection with employees; ignorance of what customers really want and how they perceive the company; and lack of transparency of information.
Goldstein is chairman of car financing company US Auto Sales, and senior adviser to business management consulting firms Alvarez and Marsal and Milestone Partners. He has over 35 years of experience working as an operating executive at global Fortune 500 corporations (including as chairman and CEO of American Express Bank), midsize companies, as well as advising private equity firms. His special talent lies in unleashing companies’ hidden assets, transforming employee and customer engagement, and accelerating the pace of decision-making and change. Edited excerpts from an email interview:
Why did you choose the title Why are there Snowblowers in Miami? What does this mean and imply?
The title comes from an actual experience I had when I was the president of Sears Credit Card. In February, 20 years ago, I made a visit to our store in Miami, Florida, where I found four snowblowers in the lawn and garden centre, sitting next to lawnmowers, barbecue grills and patio furniture. On speaking with the salesman, I learnt that these snowblowers were shipped to Miami every year, for 30 years—in a city where it only snowed one time in the history of recorded weather. To me, this represented a metaphor for corporate dysfunction, and I realized this was not a unique occurrence for Sears but was true for most companies. This story seemed to me the only title that made sense for my book.
Corporate dysfunction within large organizations is so prevalent that most people accept it either as an inevitable fact of corporate life or they assume someone else will deal with it. Why does this happen?
I reject the notion that dysfunction is an inevitable fact of corporate life. There are several reasons to explain this. When serious, unavoidable problems surface in a company, most leaders tend to see them and attempt to fix them. But when companies are successful, a sense of complacency and laziness often sets in, enabling problems to hide in plain sight. Some leaders choose to ignore issues, assuming someone else will take care of them; others are unwilling to “untangle the spaghetti”, unsure as to what deeper issues they may uncover or whose toes they might step on; and others see it as a distraction from what they believe is their primary responsibility. These issues can become toxic, and in my opinion must be addressed.
You have developed what you refer to as the ‘five principles of engagement’ to combat dysfunction and help businesses become successful. What are these and how do they help?
Fresh eyes: Adopting an outsider’s perspective leads to creative insight and problem solving. One of the most difficult challenges for leaders is to learn how to look at things in a new light. When you are inside the system, doing the same thing day after day, year after year, it can be extremely hard to change your perception about how your company (and you) are operating. You actually, in some ways, have become part of the problem.
Connecting: Interacting with employees and customers on a regular basis is the key to success. Authentic communication at all levels and the encouragement of feedback is how you find out what’s really going on. The answer to unleashing the power of your team—and to delighting your customers—lies outside the conference room. It is astounding how much valuable information can be obtained by simply talking to the people who really know the everyday inner workings of the company.
Hot buttons: Focusing on two or three pertinent metrics in any situation facilitates action. It’s important to present simplified targets that every employee in the company can embrace and rally around. When beginning to engage with people, keeping it simple is the best course. The surest way to get everyone on the same page is to find the relevant numbers or facts that every employee in the company can quickly understand and act on. Unbundling projects into smaller elements—getting people to really understand what the most essential factors are—is crucial to motivating a team.
Transparency: The more people know, the better they can do their jobs. Knowledge is power, and good information flow is of the utmost importance. Too many companies employ tools and practices that serve to convolute rather than to clarify. Information that is relevant and timely needs to be shared as widely and efficiently as possible within a company. Targeted tracking of key performance indictors is also needed, along with an accurate evaluation and full dissemination of the results.
Speed: Whatever speed you are going is too slow. When people in a large organization are not fully engaged, it creates slowness. Time is the enemy in today’s global marketplace; in this fast-paced world, decisions need to be made more quickly and executed in shorter time cycles than they were in the past. It’s vital to get quick wins and learn from failures fast, and to learn to be comfortable with constant change. Like successful start-ups, you need to have the ability to shift almost instantly to meet changing demands. Waiting is never an option; companies cannot assume they have endless time to evaluate, plan and launch new initiatives.
These five principles are the building blocks for engagement and are the best tools a leader can have. They are the foundation of all my leadership techniques and strategies—from how to cure complacency to how to radically improve the never-ending stream of meetings that plague most large organizations.
In a world dominated by emails and texts, you refer to email and texting as the ‘illusion of efficiency’. Why?
I recently flew from New York to Atlanta, a two-hour and 10-minute flight. When the plane landed and I turned on my phone, I had received 85 texts and over 100 emails—this is insane. An enormous amount of time is spent with email and text. One email or text, sent to 10 people, can often generate hundreds of responses, most of which are out of sync. A consequence of this volume is that people are responding to these while they are in meetings, and as a result are not fully engaged in the meeting. I prefer short emails, and provide specific instructions like: this is for your information—do not respond (including saying thanks); indicate yes or no; provide the answer to the request, etc. You will be amazed at the amount of free time you will have that you can use more productively.
What are some of the lessons that can be learnt from what happened to companies like Volkswagen and Yahoo?
In both cases, the CEOs were disengaged and far removed from the action on the ground. With VW, the company decided to sell more fuel-efficient cars, and production targets and sales goals were set even before the technology was fully proven. Some managers in the trenches who were aware of these targets and deadlines were afraid to raise the flag while others did and were told to fix it anyway. Software workarounds were created to hide the problem, which ultimately were discovered. VW’s reputation has been severely damaged, it will incur billions of euros in fines, and just recently announced that it will be laying off almost 20,000 workers to cover this cost.
With Yahoo, a new CEO could not define the right vision for the company and made numerous acquisitions to redefine and reposition the company. Those deals did not work, many key leaders left the company, activist investors entered demanding changes and the entire situation unravelled. Neither company followed the five principles of engagement.
What advice would you give to leaders and managers in a world that is constantly being disrupted by technology?
Embrace and encourage it! In software development, there is a methodology called agile, which essentially gets teams to create small chunks of deliverables every few days. The benefit of this is that the teams are seeing results, making changes and driving towards the full product with confidence and conviction. This is very different from the typical software projects that often take years, and almost always are late and over budget.
Agile development can be applied to every aspect of business: launching new products, opening new markets, changing manufacturing processes, etc.
Of course, utilizing the tools of technology empower your employees to improve their performance. Allowing salespeople to check inventory and ring up sales on an iPad, checking dialling results on a salesforce app on your iPhone are just two examples of giving leaders and their workforce fantastic tools to better serve customers.