Entrepreneurial MINDS: Organisational Transformation

We all have dreams, desires, passions and a general desire as ordinary people to do something extraordinary. However, sometimes those things take a little longer to happen than we had once hoped and sometimes they don’t happen at all.

There are many things I desire to do, but realistically, they may not happen in my lifetime. How I wish my fingers would be able to glide along the keys of a piano, moving with rhythmic precision, creating a tune that would sooth King Saul himself. Some may say it’s not too late to learn and perhaps it isn’t, but for now that hope remains deferred.

Then there are also times when we pursue a cause; undaunted though sometimes afraid, unwavering though sometimes weary and the fruits of our labour begin to show and perhaps even exceed what we had hoped for in the first place. The Entrepreneurial journey is much the same; you may not be where you want to be but the point is to keep trying.

Last week with the aim to remain current I attended the URA (Uganda Revenue Authority) leadership forum. As I sat listening to the now former Commissioner General of the URA, Allen Kagina, speak about the remarkable transformation that has happened in the Authority, largely under her leadership, my hope was rekindled. I glanced around the room to see if others were in agreement with my sentiment and their posture indicated a resounding yes. In honour of her service (or good leadership) I want to highlight some of the things she touched upon regarding organizational transformation – they are important.

– Restructuring

Have you ever been told by a teacher that ‘Your essay was good, but it was poorly structured’? In other words you perhaps had all the right content but what should have come last, came first and vice versa. Structure is important.

You may have all the right people in your business but are they doing what they should be doing? A good structure will often show you what is redundant and perhaps what or whom you need to bring in to fill a gap. Structures change overtime, and therefore a key question to answer is whether your current structure serves your target customers in the most efficient way possible while maintaining the highest standard of quality. Further, what is each person’s role in delivering your good or service – are they relevant? If so how? Remember that structures are there to serve you not the other way round.

– Re-engineering

The key idea here is changing culture. It’s now a word we hear often. Put simply it is the (often unwritten) code of conduct, beliefs and values that come to define people or organisaitons. Every business starts for a reason.

There are goals in mind, targets to achieve and customers to serve. There is also a way in which you intend to achieve those things. Some of the more common ones include with integrity and excellence. These values determine how you carry out your business and set the tone within your business and outside it. What culture have you set knowingly or unknowingly? From the small but important such as time keeping to the more fundamental such as remembering you are running a business and not a charity.

This also touches upon the way you brand yourself. What do people think of when they see your company logo, company name or slogan? Are there changes you need to make in this regard? Be sure to communicate those changes to staff and customers.

– Re-equipping

Do you remember when we talked about having the right people in the right jobs at the right time? Often an inherent requirement to achieving that is making sure that the people you have are equipped to do what they need to. This can range from training and skills development, providing necessary equipment or effective feedback about performance. Usually the best people to ask are the people who do the actual work.

– Relationships

In thinking about transforming your business, who do you need to help you do it? How can you build those relationships and how can both parties mutually benefit? The saying no man is an island was never a lie.

Real life brings things home. I shall end with some stories.


Starbucks and Ford

Both Starbucks and Ford Motor Company have undergone large-scale organizational renewal programs that have yielded impressive outcomes. But only a few years back, each enterprise was fighting for its life.

In late 2007, for example, Starbucks faced intensified competition, cautious consumers anxious about a deteriorating economy, declining store traffic, a falling stock price, and what CEO Howard Schultz later described as an arrogant culture that had lost its animating sense of collective identity. By mid 2008, things had reached a crisis. Fast forward four years: store traffic is growing at double-digit rates, employee engagement is strong and rising, revenue is on track to grow about 15% in fiscal to 2012 to more than $13 billion, and the company’s stock price recently hit a record high.

The turnaround at Ford was no less dramatic. In 2008, the company was losing more than $80 million a day when the bottom fell out of the global car market. At the end of the year, Ford’s stock price hit a nadir of $1.01. By 2011, however, the script had changed markedly. That year, the company earned a net profit of $20 billion on sales of $128 billion. It distributed profit-sharing payments of about $6,200 to each of its 41,600 employees. In early 2012, analysts targeted a $16 stock price for the company. It was a remarkable comeback, made more so by the fact that Ford was the only one of the Big Three not bailed out by taxpayer money.

Each of these turnarounds was led by a committed, clear-eyed chief executive—Howard Schultz at Starbucks and Alan Mulally at Ford. Both Schultz and Mulally worked hard to turn over every rock that covered a problem in their respective companies. Like physicians on the trail of an unknown illness, they did not flinch from what they discovered, but instead integrated this expanding knowledge into their vision for the company’s future and their roadmaps for change… As important, each leader kept the lines of communication open among his senior team, his rank-and-file employees, and other stakeholders. Schultz and Mulally each spent countless hours out in the field (and far from the corner office), pulling information from customers and employees throughout the organization. All this interaction also served to take the emotional pulse of those involved in the turnaround and to sustain collective motivation.

Organizational transformation almost always involves changing the existing culture.  At Ford, Mulally realized early on that he would have to break down the ego-driven and backbiting ethos among senior executives and replace this with greater transparency, accountability, and collaboration. To do this, he used every tool at his disposal—chance encounters with individuals, weekly business plan reviews, data-driven management, and carefully chosen language and gestures (For example, Mulally would say, “you have a problem” as he squeezed a senior manager’s arm. “You are not the problem.”) As trust and accountability increased among his senior team, so too, did collective efforts at fixing pressing problems.

Organization renewal involves more than saving the enterprise; it also means simultaneously rebuilding the institution on a more sustainable, successful basis. To make Ford globally competitive, for example, Mulally realized he had to simplify the carmaker’s product line, portfolio of brands and organizational structure. He and his team also had to cut operating costs, improve production efficiency, and introduce a few game-changing products. And they had to do all this while staunching the cash bleed in the midst of the financial crisis of 2008.

Each of these leaders anchored their strategy in their organization’s core identity. Yes, each recognized, the need for change was urgent and undeniable. But each also realized that successful transformation could only unfold on the foundation of each company’s broader purpose and demonstrated strengths

Organizational transformation does not happen over-night, Mrs Kagina will be the first to tell you that. However, by committing to be better, know better and do better, desires come to pass. The buck starts with you as the team leader. What are you hoping your business will look like and become? Make the necessary changes you need to, commit to them – everyday. Let your tree flourish.