Continuing from “taming the blue whale” post, I wanted to share couple of stories of radical thinking that saved companies and put them on a course of record growth.
No matter how well a company is growing, there will be challenges. Sometimes growing fast can be a challenge itself as well as it might take focus away from operations and profitability. One of the key issues often faced in turning around a company is how to deal with legacy – old timers in the company, existing processes, prevailing roles and structures, etc, etc. There’s too much to handle.
Irizar, a Spanish coach/vehicle body manufacturer was on the brink of bankruptcy in 1991. Needless to mention, employee morale was low and expenses were mounting. Their then CEO, Koldo Saratxaga did something very different. Instead of taking the typical cost cutting, find cash approach, he did something radically different. Koldo set out to change the culture of the company. By laying extremely high emphasis on customer satisfaction, he broke down the company hierarchy, created an environment of trust and transparency, involved employees in decision making and empowered them with high autonomy. By the time he left the company in 2005, Irizar had grown from 24 million euros to 310 million euros, expanded globally and cut production time for a coach from 38 days to 14 days !!
Another story of a company that went through the “Brown bear” phase is Dr.Reddy’s laboratories, a global pharmaceutical company head quartered in India. Their CEO G.V.Prasad had to deal with a siloed organization with myriad of policies and procedures that eventually slowed down the company. By reimagining the purpose of the company and involving employees in the process, he created not just momentum but a movement. By executing on the change initiatives in a few areas and proving the thesis right, Prasad had more people who believed in the new ways of working to create agility and innovation. By breaking existing rules and taking more ownership, a new product was now launched in 15 days flat !!
What can we learn from these leaders :
To make a change, leadership has to visualize what the future should look like and demonstrate Brave Leadership in creating and sustaining cultural change. Brave leadership leads to an environment that is incentivising for the employees to embrace. No change comes with easy decisions and a bitter pill has a better effect than a sugar coated half baked approach.
Leadership can’t be castled in their head quarters. They need to work with the teams, gaining their commitment and involving them in Participatory Org Design. When a decision is not thrust down their throat and better still, if the ideas are organically germinated from the teams, it has a better chance of success in implementation.
One size may not fit all and each initiative may need to be tweaked for each department. Identifying the right areas and conducting Pilots and Experiments is the best way to take learnings forward.
Does holocracy really work in corporate circles? If so, how? Watch this space for the next blog in couple of weeks
Reference: Corporate Rebels article on Irizar HBR article on Dr.Reddy's