Episode #120: Live Mentoring session #5

Episode #120 transcript

Marty: Hey there, and welcome to Episode #120 of the No Bullsh!t Leadership podcast. This week's episode, Live Mentoring Session #5: The Politics of Transformation. This week, we take an excerpt from a mentoring session I ran many months ago with a business transformation leader in one of Australia's top 50 listed companies. Vahid was born in Iran and immigrated first to the UK and later to Australia. An engineer by profession, he spent his early career in the automotive industry, and as since worked in other industries, such as mining and utilities. Vahid has worked in many countries, sometimes in remote locations, and grew into increasingly senior leadership roles. These days, Vahid's main focus is on fine tuning his leadership capability. He studied leadership at the Sloan School of Management at MIT, which is one of the world's top business schools, and is of course a graduate of our own Leadership Beyond the Theory program, which Vahid credits with giving him a completely different way of thinking about leadership.

So this story begins a few years ago when Vahid's business commissioned a study by one of the top tier global consulting firms to look for operational improvement opportunities. The report identified a potential $70 million value uplift and ongoing annual savings of around $20 million per annum. Now this was benchmarked against other similar power stations globally, and so it was a highly realistic target. As Head of Transformation for this business unit, Vahid made some critical decisions early on in the setup of the initiative. He didn't want an external consulting firm driving the project as he believed in the need for ownership of the outcomes within the business. So he decided to drive it internally. He broke the consultant's report findings into manageable chunks and gave individual units ownership of discreet improvement projects, convincing senior leaders to set each applicable team up with a "wildly important goal". And although Vahid and his small team drove, coordinated, and validated the improvements, he's the first to admit that the magic came from within the teams in the operational line, not from the transformation team per se.

This incredibly successful outcome relied on managing interdependencies, which Vahid facilitated through project meetings. We spoke about meetings in Episode 111. And the meetings Vahid ran sound like copybook examples of well-constructed forums. They were very targeted, short, and they provided a way of holding people to account for results. The data that drove the conversations was not up for debate, just the reasons for either meeting or missing the targets. Sounds like it was truly a no blame, no excuses culture. Two independent audits were conducted, each verifying the results that were claimed to have been achieved. We pick up the conversation where we begin to talk about what the next phase of transformation looks like. Now, the challenge for Vahid is how to take the results from the business unit, that he works in, and achieve similar outcomes across other business units in the broader organisation. But the sailing isn't always smooth when politics comes into play.

// SESSION STARTS

Marty: That's just the best story I've heard in a really long time, because as I said at the start, most transformations fail. The fact that you've done so well on that and it looks like those savings and particularly new ways of working, new ways of doing business because you've fundamentally got to change what happens on the ground level. Any idiot can cut costs. It takes no talent at all. But to embed genuine change in the way people do their work that leads to more efficient and more productive and more cost-effective outcomes, that takes real talent. So congratulations on that. But coming out the back end of it, what are the sorts of things that you'd like to discuss with me, in terms of where to now? So you've got this thing nailed down, and I did see some notes that you sent me beforehand. What's the biggest question you have now?

Vahid: So biggest question is, clearly, the bigger business, because my ambition is to do this across the whole group. I honestly believe we can do this across the whole group. But I've reached these, what are called "glass walls" that are stopping me and I'm saying 'Have I failed personally in the way I am communicating and trying to get this message across?' Because clearly they're not tapping into me to take this model and show it across site. And say, this is what we can do across group operations, so that's where I am.

Marty: Okay. So you've had enormous success where you are and you want to propagate that throughout the rest of the organisation. Just for the people who are going to listen to this podcast episode, Vahid works in an organisation which is one of Australia's largest energy providers. They've got an integrated end to end business that covers generation, retail and a bunch of other stuff. Very highly respected and competitive company that's been around for a very long time. And your domain, is the two power stations in New South Wales, where they were acquired five or so years ago, in an M&A transaction, and it's been kept a little bit separate from the rest of the business. But getting into the broader organisation is quite difficult. So let me just give you a couple of suggestions while I ask you some questions about it. First thing is, at the level you're at, which is a senior level, no doubt about it, at the level you're at though, you're going to need a champion above you. Have you identified a person above you who's going to champion this cause? And the answer to this will determine where we go next.

Vahid: Yeah, my boss, who is one of the greatest advocates for me. He's a GM of both sites and he's the advocate. But for me, it's more the model that we've managed to establish here, and I think it's a very strong model that can be replicated across other parts of the business. And I want to make sure that it's not about me, it's about what we've managed to achieve because at the end of the day, I have an end of shelf life, that happens to all of us. It's what the legacy will be that you leave behind is what matters. And I just want to make sure that propagates.

Marty: Okay. So a GM who's part of your business, is not going to cut it. I think I know who you're talking about, great guy. Not going to cut it in terms of getting that broad organisational acceptance. So when I talk about someone above you, who is in love with this thing and is your greatest advocate and cheerleader, someone at the executive level who can go across those layers, for a start. Now it's complicated enormously by the fact that we're living in times where people are jockeying for position in almost every business. I'm glad you used the word jockeying, because, an old mate of mine, Robin Franklin says "In the race of life, you can always bet on self-interest to win by a short half head". The self interest thing is going to dominate a lot of people, particularly in these large organisations at the moment where politics and political manoeuvring can have a huge bearing on the outcomes at those more senior levels, huge bearing. So it's no surprise that people are distracted.

I think you've got to get someone who's willing to go to the top, to the Chief Executive of the group, and to say, "Here's something that we've piloted". Now this word's important. "Here's something we've piloted in these power stations. And we can take that to the rest of the group. That benefit that we've got here, here's the size of the prize if we can actually take that to the other power stations we own in the different states". So part of it's about painting the opportunity and making that really, really clear. Until you can sell the opportunity, the structure and who moves where, and everything else is sort of a moot point. So I'd be working with your boss to say, "How do we actually find someone, if you believe it's the very best thing for the group, which it clearly is, how do we find someone above us to take this and run with it?" Because that's what they have to do. Your organization's too big to just be able to go across the boundaries from where you are. That's just tricky. Why you wouldn't have people crawling all over it and wanting it, begging you to come in as your teams at your power stations did, once they saw what was going on and what the value was and what the potential benefit of the thing was. People outside your immediate silo aren't going to do that initially, because it took your guys a while to come around, it takes everyone a while to come around. And there's two problems they've got. The first one is, I don't want someone else telling me what to do. I know how to run my business, and I want to have the autonomy to run my business. And I don't want other people telling me what to do, even if that is helpful. I don't want to lose control. That's a really big driver for a lot of people at senior levels. I don't want lose control of what I've got. I want to have the autonomy to do what I do for better or for worse. Big driver.

Second thing is the 'not invented here' syndrome. If I didn't come up with it, then it's not that good an idea, because I can't take credit for it. I can take some credit, for having the idea to bring someone in to help me with it, but I can't take full credit for it. So I like to do things that I can take credit for, because that makes me look good and that puts me up for the next promotion. So this is all politics, right? Every part of this conversation we're having is politics, because if it was just about value, and if it was just about making a difference and improving an organisation, transformations everywhere would go a hell of a lot better, and you'd find it a lot easier to get your transformation methodology into other parts of the business.

So I just say first up, it's going to be working up the line from you to find someone who loves this as much as you do. This can be a little bit tricky as well, because someone above you might go, "This is making my portfolio look really good. And when we get to the end of the year and they try and map all of us executives on a normal distribution curve to work out where our bonus' fit, I'm going to be right up on the right end of that bell curve. And I'm going to be a big bonus because my performance has outstripped my peers". So sometimes you can run into a bit of that as well. Now I know this sounds a bit cynical and you'll know whether it applies in your circumstances, but these are just a couple of things that can go on, that makes something that looks like a no brainer, not actually be adopted. It looks like a no-brainer. If you can get 25% more tool time out of your people, because they found more efficient ways of doing things, or they've eliminated a bunch of bottlenecks or whatever else. That's awesome right. That is something you can take to the bank every day. So, I guess the question for you is how much do you want to fight that fight?

Vahid: Yeah, that's what my question was. How ambitious should I be? Because it's a big question.

Marty: Yeah. And it's going to come back to what drives you. Now I think that being driven by having that impact and seeing the results that come from running a programme like that, if that drives you, you're going to want to do that, I'm sure, on a bigger stage.

Vahid: That's right. Yeah.

Marty: If you can do that in your neck of the woods here, which is not trivial at all, don't get me wrong, those power stations are big power stations and is critical in our infrastructure. And if you can make that work there, then how much could you do if you had a broader canvas to paint on and you could actually have that influence across the whole group?

Vahid: Indeed.

Marty: Try and get the back of the envelope to get some rough numbers sizes, if you can. And you might need some cooperation from people in other parts of the business. The other power stations they run, other parts of the operation, to see how that looks. You might need some cooperation just to get data out that's a bit more sensible. So for example, you probably won't be able to get data on tool time and productivity from the other power stations.

Vahid: I would have to start from scratch like we did.

Marty: Yeah exactly. So you sort of even need an exploratory mandate to even get the data, but you can probably find out, there's probably enough connections where you can just make the casual phone call, "Hey, what do you reckon about this? Here's the benchmark we've got. Have you guys ever looked at anything?" And so forth just to casually try and pick up some data. Or the other approach, which is easier for the start, is to make some assumptions about your operations, in those two power stations, and to just spread those or expand those across the whole group. So for example, a before and after shot. We managed to reduce our operating expenditure by 18% and next year it's going to be reduced by further 12%, or whatever the case may be, as you're trying to collect these benefits.

Marty: If we were to do that at this power station, which takes in X amount more revenue, or has X percent more capacity, then here's what that impact would be over here. So where we are, that's worth $20 million, but over here that could be worth $78 million. If it's just proportional apples for apples, and I know it's not exactly.

Vahid: But we can do something like that. Yes we can.

Marty: But for the back of a beer coaster, just to get it started, that might be a good place to start. At least to get the people upstairs from you really interested.

Vahid: Okay. Okay. Wow.

Marty: What do you think?

Vahid: I'm just trying to figure out the avenues I have and the people I need to connect with because one of the things I did at the start of transformation, I actually went and visited all key people within all the business units and made personal contacts and created relationships because I knew that was going to be important. So I've got those relationships, I'm just figuring out who I can go back to and build that up on. And there's avenues, definitely avenues.

Marty: Yeah, there'll be a few. So I think if you make some assumptions, it's good to have something more than a blank sheet of paper. So if you have some assumptions, for example, here's what we were able to do to decrease the number of external contractors we had to bring on a weekly or monthly basis. Here's what we did to decrease our contractor costs. Would that work the same way in your power station? So in other words, is this feasible there or have you guys already dealt with this issue or are there reasons why it wouldn't work because it worked for us and we're getting a huge benefit from it? Could it work the same way for you? So having sort of something you can put a talking point around makes the conversation bit better than going in and just saying, "Here's what we did. What can you do?"

Vahid: Yeah, I know. I get it. Yeah, absolutely.

Marty: But it does come down to that trust, doesn't it?

Vahid: Yeah. And the other probably facet to that is how do you actually show up, when you go to that individual? How do you show up? What's the premise of your showing up? How do you start the conversation? How do you pitch it? Because as you rightly said, some people could feel threatened and so how do you pitch it that they actually are curious and want to find out more?

Marty: So the biggest danger of just going to someone at your level or a Chief Engineer or something in one of those other sites, is they'll go, "Mate, stay in your own lane. It's not your business. How we run our plant has nothing to do with you". And that's understandable, which is, it comes back to the point about executive support. So if you've got someone very, very senior, so you've got a direct report to the CEO, who's coming downwards with a request and saying, "Please do this". People are much more likely to respond. If you're coming from across the silos, you'll run into some good people who are always interested and open to looking at better ways of doing things. You will run into those people, but that won't be the majority in an organisation of your size and structure.

Marty: So definitely won't be the majority. So that's why the executive support is so critical because you want them to know that their boss knows that you're doing this. There's got to be some sort of entree. But the entree is only going to take you so far. That'll get you in the door. But your question about how you show up, you can be a little bit too, well not you, people in this position, can be a little bit too enthusiastic. So if you were to go in and say, "Look at this awesome job we did in our plant. This is fantastic. These are the results. I want to know how we can do that for you as well." They'll just go "Piss off, Mate. Don't tell me how to do my stuff". But if you go in and you say, "Look, we've managed to get some real benefit out here. And the guys that are working on our plant are so happy to have implemented these changes because it makes their life so much easier. I'd really like to explore if there's any way that you'd be interested in taking some of the stuff that we've done? I'm not coming in to take over your world, but pick some of the stuff that we've done and see if you can use it here". So you're sharing, as opposed to asking a favour.

Vahid: Yeah. Okay. Yeah.

Marty: And because that tone makes a difference. It's much more about tone than it is communication. So you've got English, not as a first language. That's irrelevant. Your English is plenty good enough. Right. That's not a problem. It's never going to be an impediment. You speak perfect English. All you need to do is make sure that they understand your tone as you come in. All about the tone.

Vahid: One of the things I've been investing a lot on is communication and connecting with hearts and mind, rather than just the mind. So I'm working on that quite a bit myself.

Marty: Yeah, absolutely. And it sort of underpins everything in leadership, doesn't it? That connectedness and relationship that's what gives you the ticket to play. That's what gives you the licence and the permission to have conversations that are sometimes quite difficult because you have the relationship there where they will sit and listen, and not just go, "Mate, who are you? What are you doing telling me this, right? It's none of your business". It gives you that licence to operate, which is good. So how ambitious should you be, Vahid? I mean mate, I think most people in most organisations of that size are a lot less ambitious than they need to be, and I'm not talking about ambitious about promotion, because I know that's not what you mean. It's about setting up really, really significant worthwhile goals that can make a big difference to the people and the organisation. That's what true leadership is about. So, be twice as ambitious as you think, and you can always dial it back.

Vahid: Okay. All right.

Marty: If you start by dialling it back, you'll never get there. Right.

Vahid: That's true, thank you.

Marty: So if I were you, the one thing I'd say is, it's really important that you want the CEO, the Group CEO of the organisation, to think that this is a 'must do'. That should be your first goal. How do I get that guy in the corner office that runs this massive organisation to see that doing this is the next step in taking the organisation to a better place.

// SESSION ENDS

Any of you who've taken on transformations over the years, will realise that sometimes the biggest obstacle is a lack of willing commitment from the senior leadership of the organisation. However, most of us don't know where to start to address this challenge. Without support from the top, any broad transformation initiative is like herding cats. To add to these woes, too often I've seen an initiative labelled as a transformation, being "dumbed down" into a cost cutting exercise. That's a fairly blunt instrument and it can have detrimental long-term effects on staff commitment and morale. Today we have a happy ending. There is actually a silver lining on the COVID-19 pandemic cloud. It created a sense of urgency for operational reform and put a spotlight on the success that Vahid's transformation had achieved in his part of the business. The desire to tap into this experience, in order to gain rapid benefits across the whole organisation, is now in full swing. Like any major change programme it's never really finished. But using the template for change that Vahid's team led their line leaders to deliver, is now bringing massive benefits to the whole organisation.

All right, so that brings us to the end of Episode 120. Thanks so much for joining us. And remember, at Your CEO Mentor, our purpose is to improve the quality of leaders globally. So please take a few moments to share this with your leadership network. I look forward to next week's episode where we do the best 5 episodes from 2020.

Until then, I know you'll take every opportunity you can to be a no bullsh!t leader.

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