Simplify the Politics! The First Step of Corporate Renewal

Simplify the politics!

Simplify the politics!

I heard him use the term only twice: once, the first time we met, when he hired us to help with the turnaround of his company. He was the newly appointed CEO; his company was large, a household name, with tens of thousands of workers, faltering badly. He used this term to describe the essence of the philosophy he would use to stop the bleeding, to reverse the trends, the downward trajectory. It was the axiom around which he would base his work.

The second time was the last time we met: the project successfully over; the massive hemorrhage of value stopped; the company in the black, again making serious profits; more importantly, alive, vigorous, valuable, competing confidently in its marketplace, to be reckoned with again.

This second time he described it as the essential core of the management practices he had instilled, that would be used by all managers, from corporate officers to the front line supervisors, in good times and in bad.

He bade us use it in our work.

In between, though, I watched him live it. I heard it often in my head. The phrase had resonated with me powerfully the first time he said it, “Simplify the Politics!”. It made so much sense. I had seen its effects in action thousands of times in our practice – more often in the breach, though, than in the observance. – With a moral certainty, I knew it to be true. Though I needed him to articulate it for me.

I thought of him using it as a mantra, as he walked his rapid walk between his open office and the offices of his people, their plants, and their warehouses. I heard it whispering in the air as he listened to his workers, or picked up the phone, or wrote a memo. I felt in his meetings, where the past was being interred, where the future was being claimed.

We did use it in our work. We talked to every CEO we worked with about the concept. All agreed that it was true, that it made sense; once they had thought about it, they knew it to be true.

But we discovered something: few CEOs could actually do it – even with a financial crisis driving its acceptance; in good times, much fewer could do it. Many tried, many made serious and sustained efforts, but somehow they were rebuffed by the culture they inhabited.

The ability to cause this profound simplification seemed to be an innate gift of leadership.

Systemic Improvement

Though rare, it did happen from time to time and when it did, when the politics were simplified, we saw a surge in profits, in business performance – each and every time. A surge that was not dependent on strategic change or altered tactics. A surge that was independent of initial financial condition. A surge that was driven bySYSTEMIC improvement in everything that happened in the company.

The surge occurred very quickly. Systemic change, it seems, has an almost instantaneous effect on performance. It was independent of industry, too.

The Search

Because the potential benefits to our clients were so great, we kept trying, hoping to find a way that would let a CEO simplify the politics; let any CEO simplify the politics. Eventually, of course, we did. Over the last fifteen years that simplification has become the major focus of our practice.

Some people call what we do Turnaround and it is. But because we commonly use it much earlier in the downward slope, “Preemptive Turnaround” or “Early-Decline Turnaround” are better terms. When we use it in healthy companies where the results are even more remarkable – the majority of our clients – “Profit Improvement” and “Corporate Renewal” are better still.

But the name that is used does not matter. By one name or another the politics are simplified, profits improve and companies are strengthened.

The search was long, often disheartening, and when all came together finally it did so by a series of accidents, coincidences:

First, our office lease was up and we had to move. The files of some two hundred organizations, two hundred managing officers we had worked with, had to be moved or dumped. The latter was the sensible thing to do.

Second, I was in a compulsive, nostalgic mood that year and had to visit all the files again, just one last time – I had not realized just what a pack rat I had been. But visit them I did and for each one wrote down the core issues that had driven events both positive and negative in that organization. There was no theory driving my selection, merely memory. I could see the real issues, it seemed, better in hindsight than at the time.

Some of the issues were financial. Some were the early warning signs of corporate trouble. But the vast majority were the kinds of things that never appeared in the literature of business. A few were downright bizarre.

Third, we had just signed up a new client who wanted to try something different. The company was not in trouble; yet the CEO felt that a significant improvement in performance was achievable and would be needed too. He had a feeling. He had tried all the management programs he could think of and they had not worked.

The Program

So we put together a program that was different:

  1. The issues culled from our two hundred files were turned into a survey – never mind that most of them had never been considered before as having anything to do with business performance.
  2. All the managers and supervisors of the company were given this questionnaire and all responded. (This was in place of the traditional interviews consultants like to conduct; the cost to the client was much less – about a tenth, I think; from our point of view it promised to be less boring.)
  3. We held an open feedback session in which the senior managers did the analyses, not us.

In that first feedback day the entire methodology came together. We had found the way to simplify the politics!

We had known for years in our turnaround practice that the financial factors of a company could be ignored, and often were ignored, by management, by the CEO, by the board – until disaster struck. Even after that there would often be denial. That was why we were in business. It is as if financial factors have no power over people’s minds. It makes no sense, but that is reality.

We had also known from our due diligence work that the early warning signs are even more ignorable. But again that was why we were in business. What we found now, in that first feedback session, was that the factors we were asking the management team to confront, could not be ignored. The managers did not like the answers they were looking at, but they were fascinated by them. It was as if they were at once both repelled and attracted by them.

They were looking into the dark recesses of the corporate soul, that part of the company they as managers were uniquely responsible for, and were both disgusted and compelled to look. They were looking at that part of the soul that they knew they would have to change if they wanted anything to really change. They would not, could not walk away; though they must have felt a great desire to do so. It was as if the subject matter held its own fascination beyond both the banality of finance and the early warning signs.

Nobody liked what he or she saw. Certainly not the managers. Certainly not the supervisors. The workforce was saying exactly the same – everyone knew that.

Everyone in the room with us was responsible for the behaviors. Everyone had kept on doing them – being them really. Everyone knew that if they could only stop behaving that way, things could be better for them all.

Everyone blamed everyone else – especially those higher up, or over there, or in that other business unit, even the customers. The things they said about each other! Justifiable too, some of them.

The Business Performance Drivers

Later, we were to call these factors the Business Performance Drivers: because they are indeed the cause, the wellspring, and the roots of corporate behavior – the attributes that generate performance. There are more than a hundred of them, each able to impel or retard – depending on its value – organizational performance.

But it also turned out that these drivers have within them the seeds of their own change. They even have within them the motivation for their own transformation.

In the process, the management team viscerally confronting these drivers and in evoking their own emotional responses, in evoking the emotional spirit of the company – they caused the politics to be simplified.

Within a year, in what turned out to a recession for their industry, that company increased its profits by 10%. More importantly, the very operating dynamic of the company was changed.

What were they, what are they, these Performance Drivers? There are more than a hundred, but here I will mention just a few. The most obvious of course is morale, though that is not really important, more a symptom than a driver. Much more important are Corporate (in)Decisiveness, Acknowledgement of Work, Communication of Vision, Integrity of Management, Relationships of Managers. (A fuller list is available through our website

The Process Of Simplification

That first day it was our client who created the process, not us. It is as if the process was there, implicit in the questions and the responses, waiting to be uncovered. Since then we have improved and modified it. Technology has made everything happen faster, better, cheaper, as it should. But the process that came together then, is still recognizably the same.

What was the process? Simply stated, the CEO and the management team looked at their own responses and the responses of their people, and on each and every issue, asked themselves these questions:

  • What is the real answer?
  • How do we FEEL about this?
  • What should we be?
  • What do we commit to do to achieve it?
  • What will I (by name) do? When? Who will check it?

At first there was a sense of helplessness and hopelessness that pervaded everything and everybody. Nobody knew how to break through. Individually they had all known what the matter was, and what the results could be. Everyone had said so to everyone else, one-on-one. But it was as if the collective, the entity personified by the management team, had not heard, and so was condemned to going on as if it were deaf, unknowing – in a corporate trance.

But the corporate entity, the spirit of the company, was now confronting the issues. We were merely the process catalysts. We watched the transformations happen. Because that was what was happening: Transformation!

The mechanics of the process are easy to describe. They consist of the survey instrument and responses and the questions asked of the managers that appear above.

What happens within the process is very difficult to explain to those who have not undertaken it, because feelings are what drive it – not the action steps themselves.

We did not have words for it then, but later we were told that the classic process of human spiritual-emotional transformation had been applied to a corporate entity:

First there was revulsion, collective revulsion, at what they were seeing – denial was not possible, nor wanted.

Then there was an emotional discharge: Catharsis.

Then an immediate investment/commitment of that same energy into a new vision of the company, a new way of being: Cathexis.

The room was filled with energy that had to be channeled, that was being channeled. We were out of the business of cerebral consulting into renewal of the corporate spirit.

Then something else began to happen. Quite spontaneously, the team began to take on the early warning signs that no one had wanted to address before.

Everyone in the business world knows that the entire management team of a company must be as one on each of the warning signs. Early Warning Signs are leading and collateral expressions of performance. If the team members are not together, they will be making conflicting decisions, or worse, bad decisions. Think of the disparate decisions that can be made from conflicting views of the cash flow position. Cash flow is just one. There are fifty other warning signs.

It turned out the managers were all over the board on these. They had not understood the financials all that well either, but no one had wanted to admit it until then.

Actions were accepted, in writing, by each and every manager, by name, so that each and every issue of consequence would be taken into final resolution.

The energy invested into the new beginning, the cathexis, had come initially from the revulsion with the old. It was coming out of the politics that were getting simpler.

Soon energy was creating itself from sheer delight with the vision of the new that was being generated. That was being invested too, creating still more ideas. Action steps were accepted, written down, and committed to, to implement these new ideas too.

Then it was over. The company was different. It was different in a most profound way: the misunderstandings, the animosities, the lies, the reluctancies were gone, burned out in the fire of the process.

The politics were simplified; in over a hundred different ways they were simplified.

The management team was together; the company was as one.

It is not really hard to do, this simplifying of politics – once you know it can be done, certainly not after you have seen it done.

It makes money for the company like nothing else that we have seen, and quickly. Costs, even when using facilitators, are minimal; a first year ROI of 20:1 or better should be expected.

It leaves the company stronger, always stronger, healthier, more assertive. A better place in which to work and lead.

All it takes is a CEO with the desire to make things sharply better, a CEO with the courage to make the managers look deep into the soul of their company and not flinch away, a CEO who will say, quietly, day after day:

Simplify the politics!

Simplify the politics!

And do so.