The Quantum Advantage
A Practical Leadership Guide for Middle Managers

Part 6
by Mark B. Stewart

A Transformation: Delivering a Return on Investment

"WHEN I heard the learned astronomer; when the proofs, the figures, were ranged in columns before me; when I was shown the charts and diagrams, to add, divide, and measure them; when I, sitting, heard the astronomer, when he lectured with much applause in the lecture room, how soon, unaccountable, I became tired and sick; 'till rising and gliding out, I wander'd off by myself, in the mystical moist night-air, and from time to time, looked up in perfect silence at the stars." (1.)

Overview

In today's economic state of affairs companies are pinching pennies harder then ever. To get budget money for restructuring, reengineering, training, or even value creation is like pulling teeth. Not only that, if you are spending any significant time on projects falling outside of the core business you are more than likely going to find yourself looking for a job.

The irony in all of this is that it is many of the items just identified (value creation, training, restructuring) that are the key to productivity and growth. Tying the value of the Quantum Organization to the corporate bottom line is essential to upper management support and to the assignment of budget dollars. Defining a very specific return on investment (ROI) from the Quantum Organization is sometimes difficult to quantify in traditional terms, nevertheless you will find most upper management teams require it.

Many Quantum Organization purists resist putting what they consider to be the customary restraints and blinders of metrics and measurements upon this new leadership style. Metrics tend to stifle spontaneity and creativity. In the quantum world matter can exist as either a particle or a wave. When you measure for the particle you miss the wave - when you measure for the wave you miss the particle. This line of thinking is easy to defend and a multitude of examples can be given that demonstrate the creative blackout that occurs when we create hard boundaries in our thinking by dictating process and measuring for a specific output.

If you remember our dialogue vs. debate discussion in part 3, we said that debate kills creativity because it makes no allowance for an alternative or better solution. In the process of debate you must have a winner and loser. In the Quantum Organization measurements and metrics take on many of the same characteristics of debate. Strict measurements cause one to seek the ideal process, ideal in the sense that the measurements come out the best - there must be a winner and loser. Essentially measuring makes no real allowance for radical deviation from that process - no substantial creative innovation.

Some might argue that process improvement engineers dedicate their very existence to tweaking the practice at every junction and joint - continuing to rummage around for that elusive morsel of incremental efficiency - Kaizen.

Kaizen is a word the Japanese use that describes a gradual and ordered, continuous improvement process. This concept embodies the notion of small steps - it assumes the foundation upon which the process is built is sound and merely needs to be squeezed and pinched on a continuous basis to reap great rewards-some certain improvements maybe-great rewards never.

A real-life example of Kaizen in action might help us visualize how this concept might work in our world.

As part of the Bell System pre-divesture I had much experience with a concept called the Bell System Practice. This was an enormous set of office procedures (OP) designed by efficiency experts after years of experience with continual improvement. Of course the focus was to create efficient workers and not necessarily to foster independence, creativity, innovation or breakthrough thinking.

One such OP described how to arrange a worker's desk for maximum efficiency in stapling papers and delivering them to the outbox for release to the next phase of the process. Detailed in this guide were recommended locations on the desktop for papers, stapler and outbox. There were layouts for left-handed people and right-handed people. The OP even went in to mind-numbing detail on the proper procedure for retrieving the papers from the paper pile, inserting them into the stapler, reminders to keep your fingers out from under the maw of the stapler, and finally steps for placing the stapled forms into the outbox.

Is this story a little outrageous? Maybe, but millions of Bell System employees from the pre-divesture era (pre-1984) aren't laughing. Regardless of what you might think of the story it does help to illustrate the creative collapse that occurs when a rigid process is substituted for free agency - when we allow process engineers to do our thinking for us.

To be fair to the principles of Kaizen we must disclose that Kaizen does make provisions for some innovation. However, it refers to those activities as initiated by senior management and including things like buying new machinery, opening new markets, and changing strategies.

So after all that has been said, how do we know the Quantum Organization is better? How do we satisfy the demand by senior management for a clear set of steps to a satisfactory return on investment?

Value Innovation

One of the tactics that helped us bring into view a ROI program was "Value Innovation". Value Innovation is a concept based on the notion of rendering the competition irrelevant to your business. In other words, using bursts of creative insight to leapfrog the competition by delivering products and services that are so superior to what exists on the market, you cause the competition to be of no consequence. It is a process that is completely foreign to most process improvement engineers and traditional competitive analysts.

W. Chan Kim and Renée Mauborgne of MIT developed the concept of Value Innovation. They help us understand the differences between typical competitive strategy and Value Innovation:

"Managers typically assess what competitors do and strive to do it better. Using this approach, companies expend tremendous effort and achieve only incremental improvement - imitation - not innovation. By focusing on the competition, companies tend to be reactive, and their understanding of emerging mass markets and changing customer demands becomes hazy."

This concept also parallels continuous improvement programs. When we only focus on doing what we are doing - doing what we have always done - we will never break out of our box and see the possibilities.

They go on to describe value innovation this way:

"To value innovate, managers must ask two questions: Is the firm offering customers radically superior value? And is the firm's price level accessible to the mass of buyers in the target market? A consequence of market insight gained from creative strategic thinking, value innovation focuses on redefining problems to shift the performance criteria that matter to customers." (2.)

Kim and Mauborgne give a very good example of how Callaway Golf used value innovation to transform the golf club market:

"Callaway Golf, the U.S. golf club manufacturer, launched its "Big Bertha" golf club in 1991. The product rapidly rose to dominate the market, wresting market share from its rivals and expanding the total golf club market. Despite intense competition, Callaway did not focus on its competitors. Rival golf clubs looked alike and featured sophisticated enhancements, a result of attentive benchmarking of the competitor's products."

Callaway spent time understanding why non-golfers do not play the game. They found that the thought of hitting a tiny ball with a little club head too intimidating for many people. The introduction of the Big Bertha golf club met a pent-up demand for a product that would make golf more fun for a large unserved segment of the market. As a result Callaway transformed the marketplace forever and literally rendered their competition irrelevant - at least for a time.

Value Innovation in the Quantum Organization delivers a significant return on investment. The Quantum Organization delivers many powerful tools to assist in the creative process as we have discussed. Value Innovation in the Quantum Organization is a combination of those creative tools and an emphasis on delivering value to the buyer vs. a myopic focus on out doing the competition.

Author's Note: As part of the creative and innovation process, a business must have the necessary skills, abilities, and infrastructure in place to execute on its business plan. This includes the core business functions as well as any new projects that may come up. The failure to build the supporting capabilities to support business plan is a sure recipe for disappointment.

The Importance of Job Satisfaction

This article has endeavored to show how employee job satisfaction is critical to business success. This discussion has taken on the form of increased self-esteem, self-fulfillment, and a balanced approach to life - all difficult concepts to build a ROI plan around - or are they?

Most recognized experts in human resource management continue to advocate the classic management and leadership rhetoric that many of us have heard time immemorial. These include the threadbare concepts of:

  1. Coaching
  2. Productive use of strengths
  3. Management by objective
  4. Process improvement
  5. Manage by walking around
  6. Dress for success
  7. Empowerment
  8. Total Quality Management
  9. Kaizen
  10. Measure, analyze, improve and control

One way to summarize these and many more of the classic management idiom is a pigeonhole for everyone and everyone in his or her pigeonhole. These concepts are the model of the machine - of a manageable and well-ordered universe where everything is predetermined; predestined to a foreordained outcome.

My job satisfaction does not stem from tucking me away in some well-ordered corner loaded with inveterate tasks that make productive use of my strengths. How and when do I get to learn something new - how do I test my wings - when do I create? Nor will I respond to being measured, analyzed, improved, and controlled. I know that my universe is not manageable using Newtonian mechanistic routines. The universe is not a thing to be tamed; it is living organism to be explored, to be appreciated, and to be experienced.

Job satisfaction is directly tied to individual self-image and self-esteem. The renowned expert Dr. Nathaniel Branden tells us this regarding self-esteem and its importance:

"Of all the judgments we pass in life, none is as important as the one we pass on ourselves. Nearly every psychological problem - from anxiety and depression to self-sabotage at work or at school, from fear of intimacy to chronic hostility - is traceable to low self-esteem. In the chaotic and competitive world we face today, both personal happiness and economic survival rest on how well we understand self-esteem and nurture it in ourselves and in others."

He goes on to say:

"While poor self-esteem often undercuts the capacity for real accomplishment, even among the most talented, it does not necessarily do so. What is far more certain is that it undercuts the capacity for satisfaction." (3.)

Dr. Branden also tells us that self-esteem is directly tied to accomplishment. He explains that a culture of self-esteem and personal accountability is essential to business success and perhaps even to business survival.

The satisfaction one gets from associations with co-workers and peers, relationships with superiors, having meaningful work, sharing responsibility, personal accountability, and accomplishment leads to increased self-esteem and self-image. Self-esteem, or a sense of accomplishment, personal growth, and integrity is directly related to productivity and the satisfaction one gets from work.

An effective ROI plan must include a component of job satisfaction. So how do we determine job satisfaction? Ask the people. Build comprehensive surveys - listen to what the employees are saying - use open-ended questions. Change the surveys and ask them again, and again, and again.

The Rewards of Job Satisfaction

The depth and quality of job satisfaction can determine whether an organization will lead its market - will value innovate, or merely trail the competition - continuing that incremental competitive squabble that nearly cost companies like Compaq their very existence.

A recent nationwide job satisfaction study conducted by Bavendam Research indicates that the number one driver for satisfaction in a job is opportunity. In other words, people derive satisfaction from their jobs when they have challenging prospects at work. This includes the possibility for additional responsibility - a sharing of authority and managerial power, participation in new and exciting projects, special assignments, and leadership opportunities. (4.)

So if a company takes the time and effort to provide opportunity for employees, what is the return on investment?

We can characterize the yield in terms of soft returns, things like loyalty, creativity, harmony in the workplace, service, sharing, etc. The hard returns are improved customer service ratings, sales and profits, reduced absenteeism, reduced complaints and grievances, headcount reductions, etc.

What are the Soft Returns?

The soft returns are the most difficult to quantify and generally are not enough to elicit budget dollars even from the most generous of keepers of the corporate purse. But anyone who has ever led a group of people knows how valuable and how tangible they are. Sometimes called soft skills or even people skills, affixing a value to these talents has eluded traditional organizations since that apple was eaten in a certain garden.

Let me by way of example show soft returns in an actual Quantum Organization - our Wholesale Strategy team. We have discussed this merry band before in part 3-the group of 20 or so marketing, training, financial, and forecasting professionals.

Let me begin with a small account of how this team was formed - how we came together in the first place. First let me say that the term strategy and wholesale operations were never mentioned in the same sentence before our team was created. This was a very traditional and core operation in the telecommunications industry; made up I might add of some very traditional thinkers. However, we were fortunate to have a few more open-minded sages sprinkled throughout the leadership team and within the ranks as well.

The strategy team coalesced as a product of splintered organizations, early retirements, and some reengineering within the wholesale operation. Simply put, we were a group of nomads and itinerant castoffs that were supposed to come together and drive the strategic vision of a $3 billion business unit. I don't want to give the impression that the individuals were not intelligent and promising souls without potential - ironically they were some of the best and brightest people I have ever worked with.

What made this group such a wonderful collection was its rich diversity of background, cultures, styles, and education. As I contemplated the paradox of how this group came together - some of the best and brightest viewed as hand-me-downs - given up to this new ethereal strategy organization without so much as a whimper of protest, it became clear to me that the larger organization suffered from a very myopic and filtered bias with regard to people. What made this moment all the more ironic is that the telecommunications industry was probably unparalleled in its support of governmental affirmative action programs.

The soft returns from the Quantum Organization were real, they energized our team, and they provided a spark that ignited a burst of curiosity and creativity throughout the entire organization. Though in the end new products, new revenues, and greater profits are the ultimate deliverable back to the company, we know that in order to achieve these hard returns people must be part of a respectful and nurturing environment - just like any living creature we are at our best when we are cared for and appreciated.

Building Loyalty

One of the principal drags on productivity is employee turnover - the constant expense and overhead of finding and training good people. While in the Quantum Organization a little planned chaos keeps us on our toes, the hemorrhaging of the best and brightest of our people is devastating. And as any manager knows it is never the more readily replaceable of the team that leaves - it is only the ones that can leave - the ones that other organizations and companies want - the ones you cannot afford to lose.

Now let me make myself perfectly clear on the subject of people and their various talents. In the Quantum Organization everyone plays an important role in weaving our diverse human tapestry so fundamental to true diversity. We have all been endowed with a unique variety of talents and gifts - each an important contribution to the greater good. Yet, some of these gifts are found in greater abundance in the world than others. Some talents are more difficult to cultivate and therefore are more rare and certainly harder to recruit and keep.

In our Quantum Organization not only did we never lose a single person to outside recruiting (internal or external to the company), we had an enormous number of requests to join our team - people when they truly understood what we were about were clamoring to be a part of it. This was not a loyalty to a dynamic leader but an allegiance to a belief - to a cause - to principles that rang true to the very souls of our humanity. What people were experiencing was just right and good; and the loyalty we experienced was a loyalty to ourselves - to our very nature.

Building Commitment

There is nothing more frustrating and less rewarding than working with uncommitted people. They do a great job of disguising themselves but you know of whom I speak - the ones that never volunteer for the tough assignment, rarely have a new and exciting idea, and are never around when the time-critical assignment comes in at 4:30 PM.

Not so within the Quantum Organization. Our group assumed responsibility for the success of the company. Now some might say that in order to make any real difference on a company-wide scale significant authority and scope of responsibility is required. Perhaps there is some truth to that belief if taking a very narrow and mechanistic viewpoint. What we experienced was individuals taking a very holistic perspective regarding their jobs, their accountability, and the scope of their influence - we were casting a pretty wide net with regard to what we were committed to do to contribute to the success of the company - if we could help we got involved.

As a group we were an exciting and unpredictable bunch to be around. Many, many new ideas would spring-forth every time two or more of us gathered together.

Giving Service

One of the marvelous benefits - blessings really - was the commitment to serve one-another. It was a commitment to the welfare and benefit of each individual on the team. We were really able to glory in the successes of others and sorrow in their losses. Gone was the petty competitiveness that often invades more conventional organizations.

It was a moving sight to see the participation we all shared in each other's personal as well as professional lives (or again is it just life). We helped on projects at work, we help people move their homes, and we even stood by one of our own through a painful divorce. The thought of undermining a teammate in order to feather our own nest was offensive to us all. We shared our work as well as our rewards - we truly were a family.

Sharing With the Team

When I think of sharing my mind goes to a certain corporate executive strategist the company hired about the time our Wholesale strategy team came into being. As a team we watched this guy function with total awe and disbelief. What we were watching was the worst example of sharing and teamwork possible within the bounds of the law. The pattern was clear; this chap started out building plans and strategies while locked within the walls of his office on the 52nd floor. You could almost measure the brainwaves as they emanated from his better than average intellect. You could see it on his face every time he emerged from his office - he had all the answers - he knew what needed to be done.

As time goes by (we will call our chief strategist Rick), Rick entered into phase 2 of the standard Chief Strategy Officer progression (perhaps deterioration is a better word) - he started to produce thick white binders full of all of his good ideas. He had graphs and charts, quotes and references, he had primary research and secondary data; it was time to share all of his good thoughts with us and change our world for the better.

The hell of it all for this guy was none of us were interested - 60,000 employees and not a sole cared what he had in the binders. Of course not a sole was asked for any input into his work either - perhaps there is a correlation lurking here?

Well on the road he went. He hopped from city to city from corporate headquarters, to regional centers, to branch offices. He had a good story, his presentation skills were matchless - no one was listening. After a disappointing 6 weeks of road shows we find our hero back in his corner office, shades drawn, brain output a shadow of its former volume. It is beginning to dawn on him that he is in trouble. He is being paid a high salary and correspondingly the company's expectations are high - what is he to do?

We are now into phase 3 affectionately known as the hoarding phase. This is where Rick begins to fear for his job. It is a good job and he does not want to lose it. He reasons that there is power in the information and wisdom in his thick 3-ring binders. He comes to the conclusion that he will hoard the data and only share it in meetings with the boss and other movers and shakers of the company. Surely they will see how valuable he is - how wise and knowledgeable he is - how they cannot do without him. Four weeks later Rick is looking for work.

The moral of this sad but all too true story is that the power of knowledge / information / data is in the sharing. Data are like rabbits - you start with a little and eventually you get a lot. Rick's story is not an isolated or uncommon story. In fact in our case, Rick was the third such strategic savior the company had hired in as many years. Rick's problems did not start in phase three (the hoarding phase), they started at the beginning when Rick failed to share the potential rewards and recognition for the development of a corporate strategic plan, when he chose not to include the stakeholders from across the company, when he made the mistake of thinking that his intellect was greater than the group's.

Our thanks go to Rick for helping us clarifying our vision of sharing power, sharing data, and sharing rewards and recognition. Our own experience with dialogue, goal setting and metaphorming - giving service, being loyal and being committed to the common good cemented in our minds the power of sharing - the power of inclusion - the power of teams.

Engaging People in Meaningful Work

An important focus of the Quantum Organization is the assurance that everyone is engaged in meaningful work - work that contributes toward the shared goals of the team - labor that is challenging and vital. Also, these are endeavors that after all is said and done help to make the world a better place. This is the building of products and services that solve problems for people, that help to make their lives and environment better, and that contributes to the health and well being of the nation and perhaps even the world.

When people know that their work is worthwhile and that leaders and organizations are principled and guided by values, values like those that characterize the Quantum Organization, they are committed to the work and will do their best to insure that the interests of the company are a priority - that the company's priorities are the individual's priorities as well.

In our team many of us were astounded on a daily basis at the transformation of people from self-centered corporate climbers doing what it takes to get ahead, to owners of the business, holistic business managers always at the ready to improve, support, and to lead. This transformation wholly brought about by living quantum principles

The Setting and Achieving of Goals

We became a goal setting people. We knew that every act, great or small, taken up by men and women began first as a thought, then a goal, and finally action. We remembered again the words of Dr. Dennis R. Deaton:

"We think, and with those thoughts, we create. We create the world we live in … We harvest in life, only and exactly, what we sow in our minds."

We set team goals. We set individual goals. We rehearsed in our minds who we wanted to be, what we wanted to accomplish and how we wanted to achieve our goals. The outcome was startling. We had created a team that was focused and in lock step one with another. It was almost as if conversations between two people instantly propagated throughout the team. There was absolutely no doubt in anyone's mind about what was to be done-the effort was now in creating ways to accomplish the work at hand. If any of you have been in organizations that are not in step and synchronized you know of the vast amounts of wasted time and energies doing rework or hashing out in meetings what to do next. What would you give to have that time and energy returned to you for more productive work?

What are the Hard Returns?

Now we are at the part where we get to count the money. As usual it always boils down to money in the end. In business that is as it should be. Businesses are in place to generate revenues, jobs, products and services, and hopefully to contribute to the greater good of the community, the nation, and even the world.

The hard returns derived from the quantum principles outlined in this article can be measured from the perspective of job satisfaction and its correlation to the following components:

  1. Customer Retention
  2. Employee Retention
  3. Sales and Profits
  4. Productivity / Accuracy
  5. Absenteeism

In the beginning establish a baseline of appropriate hard returns such as sales revenues, customer satisfaction, profits, absenteeism, personnel turnover, and an appropriate measure of productivity for your business (i.e. number of widgets, new product ideas, etc.). To establish your baseline of job satisfaction construct a meaningful survey and ask employees to rate several aspects of job satisfaction on a five-point scale. Ask some open-ended questions to capture the more qualitative aspects of how they feel as well.

If you are attempting to get up-front funding for your quantum reorganization you will have to take some risk and make some predictions regarding ROI and the various hard returns you expect to see. The best approach to establishing expected results is to go with your instincts. You are the best source to evaluate the loss of productivity in your workgroup due to poor job satisfaction. You are also the best one positioned to estimate the benefits of improved morale.

Actual results may vary, but a good rule of thumb is that you can expect at a minimum a ten percent improvement across the board. In terms of employee retention you can expect very little if any turnover after 3 months of operating as a true Quantum Organization.

The more sure way is to implement quantum principles in your workgroup and measure actual results. In this way you can establish an accurate and credible comparison between job satisfaction and hard returns and also reduce your risk. The beauty of all of this is that in terms of job satisfaction you will see benefits almost immediately. It will take some time to be able to correlate job satisfaction and a hard return on investment (probably 6 months).

One more thing to keep in mind; quantum principles do not have to be implemented on some broad and expensive scale. You can make a huge difference within very small workgroups. You will be able to make a marked difference in your own satisfaction and self-esteem by adhering to quantum principles as an individual. I guarantee you that once anyone is exposed to quantum principles, even on a small scale, they will want - no demand - more.

Thank you for taking this journey with me. I hope you enjoyed it. Perhaps a small seed of interest has been planted in your heart. As that seed grows you will know with sure conviction as I know that these are true principles - principles that are meant for us - eternal principles that transcend industry, vocation, avocation, and virtually all of life.

References:

  1. Walt Whitman
  2. Strategy, Value Innovation, and the Knowledge Economy, W. Chan Kim and Renée Mauborgne, MIT, 1999
  3. Nathaniel Branden, Six Pillars of Self-Esteem, 1994
  4. Bavendam Research Incorporated, Managing Job Satisfaction, 2000


Mark B. Stewart has spent the last 28 years as a corporate executive leader. Currently, he is the CEO of iAccess Communications, a start-up telecommunications services company in Denver, Colorado that provides technical telecommunications services and advanced leadership consulting. He was formerly Vice President of Business Development at Lucent Technologies where he worked to create new opportunities for the Qwest account team, and an executive at US WEST, Inc. Throughout his career Stewart has focused on creating leadership models that create value for the company with a focus on people. Contact Mark by telephone: 303.909.6804 and e-mail: mbstewa3@attbi.com .

The Quantum Advantage - Part 1 | Part 2 | Part 3 | Part 4 | Part 5 | Many more articles on Creative Leadership, Leading Change, Performance Improvement and Executive Performance in The CEO Refresher Archives

   


Copyright 2002 by Mark B. Stewart. All rights reserved.

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