Tag Archives: rhodes

Managing Change Successfully Means Changing Behavior Permanently Part 4 of 4

Kent Rhodes
Kent Rhodes

At the heart of a discussion about recognizing complexity and managing change in organizations is how to help people shift their behavior in positive ways – hopefully improving their own productivity and increasing the level of their own commitment as opposed to simply being compliant. This applies to everyone from line workers to CEO’s.

But achieving high levels of commitment from people is not always the simplest thing to accomplish. In fact, many otherwise successful business leaders wind up simply focusing much of their time and energy on a laundry list of activities around creating strategies and re-arranging structures because those activities tend to seem more tangible and easier to measure. While those tasks are certainly important within themselves, ignoring the human behavioral aspects of successful change management is a serious miscalculation for any business, whether family owned or not.

The good news is that family businesses are ahead of the game in many ways simply because of the old adage, “blood is thicker than water”: The commitment that comes naturally within families (with a few exceptions) makes for a business made up of committed individuals – of both family and non-family members. But that doesn’t mean that all family businesses are naturals at managing change effectively, particularly when that commitment translates into resistance to talk about difficult topics, like succession and death.

So, it comes back around to change in behavior as the primary key to successful organization change and leaders of even the most successful enterprises are not exempt. Business researchers and authors, Jim Kouzes and Barry Posner reinforce this concept as the first of their five identified practices of exemplary leaders in their book, The Leadership Challenge to “model the way”.

John Kotter puts this critical behavioral aspect of change management into perspective around his 8-step change model, (http://www.kotterinternational.com/our-principles/changesteps) “For change to be good, it’s got to be in a positive direction. Initial stages of transformation are usually positive, but the change effort gets perverted as it becomes successful and as executives become more arrogant. Change isn’t the issue; arrogance is. As some leaders start running into problems, in their arrogance they say, ‘No problem. We can handle all this. We can cut corners and make our own rules.’” (Kotter in Leadership Excellence at HR.com) It’s at this moment that commitment of most everyone else in the organization begins to fall apart, jeopardizing the success of the change.

Bottom line is that successful change isn’t primarily about structures and strategies, it’s about a permanent change in behavior from everyone in the organization.

 

Share

Managing Change Toolkit: Appreciative Inquiry Part 3 of 4

Kent Rhodes
Kent Rhodes

In keeping with the theme of change and complexity, it is well known that families who own and operate successful enterprises manage both of those at the same time and, it may seem, all the time. It isn’t enough to create both long and short-term strategic plans for the business: Family leaders must also balance family dynamics, family interests, family future engagement, and sometimes, family conflict. Of course, that doesn’t mean that managing the change that comes from those complexities are always quickly accomplished or immediately appreciated.

That’s where Dr. David Cooperrider’s development of an OD (Organizational Development) or change management tool called Appreciate Inquiry comes into the picture. This tool, or process, has gained a great deal of attention in recent years because it is based on the homespun notion that what we learn and know about, what truly works and “gives life”, is actually more effective and sustainable than what we learn from breakdowns, problems or pathologies. Most businesses are trained to focus on fixing the latter while taking for granted the wisdom that comes from the former.

Cooperrider’s basic philosophy in developing Appreciative Inquiry was that “organizations are heliotropic” – that is they are like a plant that leans toward the sun. He identified key assumptions about A.I. that can have significant influence on how change is experienced and managed: That every organization has at least some things that work well and that what we focus on becomes our reality.

This positive focus does not mean that problems do not exist or are to be denied or ignored but that they are purposefully just not the primary frame of reference in managing the results of large scale change. John McKnight in, Building Communities from the Inside Out, relays the story of a carpenter who lost a leg in an accident. According to McKnight, the carpenter can choose to focus on his capacity for woodworking, or on his deficiency due to his missing limb. The positive principle underlying Appreciative Inquiry says that by focusing on his capacity, the carpenter is more likely to sow the seeds for creating his desired and most productive future reality, even though it is through significant change.

Finally, according to Sue Annis Hammond, one of the key aspects of Appreciative Inquiry revolves around the idea that “if we carry parts of the past into the future, they should be what is best about the past”.  That seems to make good sense to me and is consistent with what I know about the best of the family enterprise.

For family businesses, this perspective is baked-in to the process of effective continuity planning, for example, for the next generation’s involvement in the enterprise. That process is underpinned with strong desires followed by clear plans to pass along the strengths of the organization’s most life-giving narrative and behaviors rather than it’s difficulties and potential dysfunctions.  Given these realities, family businesses are naturals to engage in Appreciative Inquiry as one of their primary change management tools.

References:

  • David L. Cooperrider (2000), “Positive Image, Positive Action,” in Appreciative Management and Leadership.
  • Sue Annis Hammond (1998), The Thin Book of Appreciative Inquiry, 2nd ed.
  • John McKnight (1993), Building Communities from the Inside Out.
Share

The Management of Change: Part 2 of 4

Kent Rhodes
Kent Rhodes

There seems to be so much written and discussed about change these days. From an increasing cultural acceptance of marriage equality to keeping up with the latest technology advances (that smart phone you bought last month is already outdated), change not only is a fact of life, it also challenges our thinking and sometimes our comfort level.

Even business schools are obsessed with trying to teach current and future managers about change – sometimes even with some success.  Interesting thing is, it’s not really the change itself that creates the need to talk about managing it, but the complexity that surrounds the change.

What is striking about all the hyped talk about change, is how most family businesses seem to most naturally thrive in it simply because of the complexities a multi-generational enterprise naturally bring to the table: Strategy certainly includes market considerations but in a family business will likely include a plan for how G3 will engaged in it’s implementation; Increasing shareholder value is still central, but the relationships across family branches of owners means a deeper set of goals and assumptions are likely in place.

This particular view of change and complexity is referred to, quite blandly, as organizational development.  OD, as it’s called, is a process to help organizations be more effective in everything from making profits to improving the quality of work life. “…the focus is on building the organization’s ability to assess its current functioning and to achieve its goals…in the context of the larger environment that affects them.”  – Cummings and Worley, (2001)

So, whether they realize it or not, many family businesses are naturals at OD thinking that might actually give them a “leg up” in effectively managing change and complexity.  That doesn’t mean that process will always easy, but it does mean that some of the best examples of successful OD in practice, happens to be the family enterprise.

Share

The Management of Change: Part 1 of 4

Kent Rhodes
Kent Rhodes

One of the fastest growing fields of study these days is the way Complexity Theory increasingly plays out in businesses and society. Originally, Complexity Theory was mostly used to describe mathematical problems according to their level of difficulty, which simply means that for some of us, Algebra II represented complexity theory in action back in high school!

But the conversation around Complexity Theory today is more about the pace, volume, and weight of change that leaders in business have to manage. Place those complexities in the middle of a multi-generational family business and complexity seems to multiply (and we’re back to the original mathematical use of the term!), requiring constant adjustment and change of its leaders.

And this is what successful family business leaders know: Balancing the key aspects of a successful enterprise may be made more complex by the need to manage all the inter-related relationships – both inside and outside of the family, and the need to leverage the multi-layers of legacy and continuity, are simply core requirements of family businesses. This means that family businesses may be the ultimate definition and example of change well managed.

With the reality of complexity theory at work in family businesses, I’ll be blogging about three change management tools and how they can best be applied in the complex world of family business.

Share

GROUPTHINK: Leads to poor decision-making.

Kent Rhodes
Kent Rhodes

I’ve been talking about how people make sense of the world and sometimes, as a result, align themselves with other people holding similar views. While this is simply a natural aspect of human relationships, in family businesses, this dynamic can either serve the family and its enterprise in some lasting and meaningful ways or can create rifts between family groups when views are driven by groupthink. This is important in family businesses because groupthink can occur within families as each family member defers to what they think another family member wants.

Bob was the founder of his family’s successful nursery and gardening business. His two sons had grown up in the business and now managed all operations involved in the enterprise. Bob didn’t talk much about retiring and loved coming to work everyday, but he had been increasingly thinking about retiring and the plan he had made with Sally, his wife, included that he would have stepped away from the day to day business to travel, spend more time with the grandchildren and friends. But that plan was five years past due.

Based on a couple of off-handed remarks the boys had made about around the lines of “we couldn’t do this without you, Dad”, Bob had developed the idea that his sons would not be happy if he wasn’t in the office. The boys, on the other hand, were concerned about helping their dad feel valued and needed. Even though they had the entire organization well under their control and they actually wanted him to enjoy a well deserved retirement.

Hence, no one actually examined the assumptions each were making about the other or bothered to be honest about their thinking because they were deferring to what they each thought to be the other’s wishes. Bob and his sons have been participants in groupthink.

Groupthink occurs when individuals make decisions by going along with what they think others want to do without sharing differences of opinion, vetting other options, or exploring alternative outcomes. It creates a group mindset that is based on a limited view of important issues combined with a low commitment to bring in as much available information as possible. This leads to poor decision-making and can breed an environment ripe for misunderstanding and conflict.

In a family business, the fact that differences are not talked about opens the door to misunderstanding of individual goals and wishes and can escalate conflict between people by leaving individual assumptions about those differences in those individual goals and wishes unchallenged and left to become “well-known-facts”.

Share

Same Family, Different World Views

Kent Rhodes
Kent Rhodes

One of the most basic dynamics we see in working with family owned enterprises is how people engage in similar process of making meaning of the world in similar ways. We each take in information, organizing into our own unique observations informed by our beliefs and experiences in a way that helps us make sense of the world. However, even though the process is the same for each of us, we are likely to wind up with varying differences of opinions on our individual “takes” to the same set of circumstances. Even though this is a normal process, it can result in conflict between family members.

But it doesn’t always stop there. People are prone to organize their individually constructed perspectives around others’ similarly held beliefs or actions: We tend to associate with the people around us that we perceive to be interpreting the world like we do. Being from West Texas, one of my favorite (and perhaps most extreme) examples of this dynamic was the creation of a community in West Texas designed expressly for supporters of the politician, Ron Paul. The goal of Paulville is “to establish gated communities containing 100% Ron Paul supporters and/or people that live by the ideals of freedom and liberty.” In 2008, the New York Times reported, “For now, the town is little more than an idea and a title deed…” and that is how it remains today.

In larger families – sometimes branches of the family or even just a couple of siblings – can come together with similar perspectives. This innocent, harmless and natural way of organizing can become detrimental when the notions around which these sub-groups of the family have formed are counter to the overall mission or vision of the enterprise or the family. These kinds of intragroup conflicts tend to be more complex and present a unique challenge to manage so they don’t become detrimental to the enterprise or, more importantly, to the family.

In the next blog, we’ll look at some examples…

Share

Factors that Form Culture in the Family Enterprise: Part II Family Habits

Kent Rhodes
Kent Rhodes

There’s been a lot written and said about the link between the culture of an organization and the extent to which it performs well or is effective.  This link is even more impactful in a family owned business since part of that culture involves the relationship of owning family members with the business, employees, board members and with each other.

As I have said in earlier blogs, a family business’s culture is certainly unique to the family that owns and operates it. But it also can make the difference between the ordinary and extraordinary as it relates to excellence, employee engagement, trust within the community and reputation for “doing good”. I talked about how values make up the foundation of a culture, but another factor that influences culture is way a family relates to each other.

For example, sibling and/or cousin teams working together in a family enterprise can influence the culture of the place just based on their life long habits of interacting with each other. Whether they are combative around decision-making or wind up laughing as much as getting any work done, they influence the overall culture of the enterprise in ways that seem quite natural to them, their employees and even customers.

But like most factors that create or influence culture, the impact of relationship and communication habits among family members on the culture of their business may not be readily obvious.

Take the family that is generally combative in decision-making. Over time, employees and managers may develop attitudes and plans of “workarounds” in order to more efficiently complete work. While this may carry an element of creativity, the price may also include a reduced sense of respect and trust of some owning family members with workarounds seen as a necessary way to avoid the family confrontations to complete basic work. The end result may not impact the “success” of the business per se, but it could be impacting the extent of the business success – both in the short and long term – if all that is getting done is the bare minimum. That could have a cascading effect that impacts the company’s ability to retain the very best talent and even the reputation of the family in the community.

Share

Factors that Form Culture in the Family Enterprise: Part I Family Values

By Kent Rhodes

Kent Rhodes
Kent Rhodes

According to Edgar Schein – a leading thinker about culture in organizations – culture is the invisible, consistent environment that influences how people think, feel and act. But he also admits that culture in a business is an abstract concept and likens it to what personality or character is to an individual: We can see the behavior that results, but it’s harder to see the forces underneath that cause those behaviors.

So, while family enterprise culture is certainly unique to the families that own and operate them, it also can be the difference between the ordinary and extraordinary as it relates to excellence, employee engagement, trust within the community and reputation for “doing good”.  One way to make a culture’s foundation or source more visible is to identify the values that are widely held and deeply shared by owning family members – including the founders – and long-term non-family managers and employees. These aren’t just the values that show up on a poster in the lobby, but the ones that people working in the place, are actually committed to and live by.

So, the 100 year-old family owned lumber yard and home improvement store values “customer service”, but what they really mean is that they know that personal relationships with contractors of all sizes keeps them close to the work happening in the community and everyone is committed to building and deepening those kinds of relationships: They can quickly anticipate what contractors need and supply them with high quality goods “just in time” and they do much of that work over a cup of coffee with their customers. This deeply held value of doing things via close relationship with customers may show up as “just the way we are around here”, but it is a culture that means the big box stores in the same city can’t even begin to compete with them.

Share

HEB Founder Culture 107 Years On

Kent Rhodes

On November 26, 1905, Mrs. Florence Butt took out a $60 bank loan to open the first H-E-B store in Kerrville, Texas. The store was run on the ground floor of the Butt’s house and was named C.C. Butt in honor of Florence’s husband, Charles.

Now being run by a third generation H-E-B has grown from a single local grocery store into a chain of nearly 400 stores generating annual sales in excess of $18 billion, currently operating in two countries. This company is another prime example of how a founder’s values, translates into a culture that informs every aspect of the successful family enterprise.

In the early 1900’s, groceries were traditionally delivered to a customer’s home and for Florence’s three sons, this meant delivering groceries to those customers using the boys’ outgrown baby carriage until the family was able to save up enough money to purchase a little red wagon to serve the purpose. Florence created an environment that supported, and in fact relied on, family participation, which has translated into a culture that views participation as a family privilege that is extended to employees today.

As the first store became a hit in the community, the family hired their first non-family employee, G. Leland Richeson, to assist with the growing demand and in 1919, 22 year old Howard Butts returned from serving in World War I and took over running the day to day operations of his mother’s store.

From the beginning, Howard was keen on upholding his mother’s notions of customer service, treating employees as extended family members and giving back to the community, even as the company continued to grow. He was invested in the success of the family’s business and was highly motivated to grow it. By the early 1920s, stores were added in the towns of Junction and Del Rio, Texas. Howard also expanded the selection of products offered, tailoring the inventory to consumer preferences.

One of the strongest cultural artifacts of this famous Texas family enterprise is a commitment to charitable giving, both corporately and through employee involvement. The H-E-B Excellence in Education Awards celebrates public school professionals whose leadership and dedication inspire a love of learning in students of all backgrounds and abilities. In addition, H-E-B donates 5% of its pretax profits to charity.

While Florence could not have imagined the eventual impact her approach to running her business would have, it is her direct influence that still drives the company and its fierce employee and customer loyalty today.

Share

A Founder’s Profound Influence on Business Culture

Kent Rhodes

Ikea is a Swedish family owned and operated enterprise in the home furnishings retail space.  Broadly known as the world leader for designing, manufacturing and selling modernly designed and cheap functional furniture, first generation founder, Ingvar Kamprad originally started out as a “one-man mail” company in 1943. Today the firm counts approximately 70,000 co-workers and realizes over $33 Billion turnover through 332 stores and 30 franchises spread in 38 countries.

Ingvar Kamprad’s personality had a major influence in shaping the company’s organizational culture, which was informed by his core values of cost-consciousness, simplicity and efficiency. They have also tangibly translated into Ikea’s recipe for success: Selling good quality practical furniture’s at cheap prices. The multinational founder nourished the company’s commitment to cost saving long before he first introduced the ‘self-assembling’ Ikea-way.

Anders Dahlvis, Ikea’s former CEO from 1999 to 2009, describes the firm’s culture as informal, cost-consciousness, and with a “down-to-earth approach”.  It has been famously reported that when IKEA management organized a gathering buffet-dinner for employees several years ago, Ingvar served himself last and made sure to shake hand with every worker before they left. Through this genuine and authentic action, the culture of IKEA was further solidified simply because this humble interaction with employees demonstrated the culture at work in the bones of the organization.

We’ve been blogging a lot recently about culture and the unique role is plays in the family enterprise – whether the size of an Ikea or the local hardware store down the street. IKEA’s story is likely not too different from those of other business owning families or even of your own. What stories come to mind of founder’s deeply influencing culture?

Share