Corporate Turnaround

High Trust Organizations, Innovation & Performance, Humour & Leadership

Maybe he’s floating

In most of the turnarounds / ramp ups I do one of the major cultural shifts that holds companies back is the blame environment they foster. Management has to replace their outdated toxic behaviour (& harassment lawsuit liability) to build an environment where all employees & staff are comfortable and encouraged to be open about problems and ideas. While to many this is common sense, executives do not always make the connection; here are some stats from a fast co. article (link below) quantifying performance results in firms with safe environments, and some of the psychology behind it:

  • There is a wealth of research that links high-trust organizations to innovation and performance. The 2016 HOW Report, a comprehensive study of organizational effectiveness, concluded that employees who work in high-trust environments are 32 times more likely to take risks that might benefit the company.

  • They’re also 11 times more likely to see more innovation relative to competition,

and 6 times more likely to outperform others in their industry.

 

  • managers perceived to have a sense of humor are rated by subordinates as 23% more respected and 25% more pleasant to work with.

  • In contrast, a 2018 Gallup study found that nearly 50% of Americans have left a job to “get away” from a manager. Employee turnover has increased 88% over the last decade, costing companies billions.

  • Reorienting towards humor is a fundamentally profitable enterprise that today’s leaders can’t afford to miss. One study found that adding a lighthearted line at the end of a sales pitch—like “my final offer is X, and I’ll throw in my pet frog”—increases customers’ willingness to pay by 18%. Another set of studies found that employees who rate their leaders as having a sense of humor—any sense of humor—are 15% more satisfied with their jobs and rate their leaders at 27% more motivating. A set of studies run by Brad Bitterly, Allison Wood Brooks, and Maurice Schweitzer demonstrate that when people use humor at work, they’re attributed 37% higher status, and seen as more competent and more confident.

  • We can chalk this up to the (brain) cocktail these teams are serving up. When people laugh, a neuro-chemical response is activated: their brains flood with dopamine (which increases happiness), endorphins (which increases resilience), and oxytocin (the same “trust hormone” released during sex and childbirth—plus a way to do it that’s more HR-friendly). These hormones make us feel calmer, more confident, and more resourceful—which lowers stress and unlocks more creative thinking.

Humor is such an important leadership trait we teach it at Stanford’s business school

As trust in authority figures erodes, teams want leaders who are inspiring and relatable.

https://www.fastcompany.com/90597762/humor-is-such-an-important-leadership-trait-we-teach-it-at-the-stanford-b-school

the Lego Turnaround

For those who enjoy turnarounds as much as I do,

How Lego Went From Nearly Bankrupt to the Most Powerful Brand in the World

https://www.successagency.com/growth/2018/02/27/lego-bankrupt-powerful-brand

How Lego Became The Apple Of Toys

01-08-15

After a decade-long slump, Lego has rebuilt itself into a global juggernaut. An exclusive look inside the company’s top-secret Future Lab.

https://www.fastcompany.com/3040223/when-it-clicks-it-clicks

Results:

Lego is so popular, it can’t keep up with demand

The company has worked to reduce sales

By Andrew Liptak

Sep 7, 2016

https://www.theverge.com/2016/9/7/12829974/lego-sales-2016-growth-demand-factory-strain

“chart of the LEGO’s complete sales history from its founding in 1932 through its most recent year. LEGO faced bankruptcy in 2003, made some major internal changes, and in 2007 began a period of eight years of 21% annual sales growth and 36% annual profit growth. The streak slowed down in 2016”

https://theleadershipnetwork.com/article/lessons-from-lego-what-do-you-do-when-your-current-growth-phase-ends

Rebuilding Lego, Brick by Brick

How a supply chain transformation helped put the beloved toymaker back together again.

Aug 29, 2007 

Issue 48 (originally published by Booz & Company)

link below to full article, worth reading; also touches on how standardization drives creativity.

https://www.strategy-business.com/article/07306?gko=813c3

The LEGO Group spells its trademarked brand name and its company name in uppercase letters.

(If you want to know the Lego co.’s origins: https://www.history.com/news/the-disastrous-backstory-behind-the-invention-of-lego-bricks)

CEMEX’s Strategic Mix Business Turnaround:

Example how a commodity seller can become a solution provider growing market share.

CEMEX is one of the rare firms executing lean business strategy beyond the merger & acquisition stage.

Article here: https://www.strategy-business.com/article/00325

unedited notes, I HIGHLY recommend reading the article. Twice.

  • Also leveraged mergers & acquisitions including entering new businesses in ready-mix concrete and aggregates

Strategy

long track record in lean operations (“ruthless operating efficiency”) evolved to become one of the most successful companies from an emerging market, and developed a high level of customer responsiveness. It delivers cement within 20 minutes of receiving an order in many locales. Its international business strategy enabled CEMEX to grow rapidly during the 1990s and early 2000s, when it became one of the biggest cement companies in the world.

  • while maintaining consistently high profitability levels. (In 2014, the company reported US$2.7 billion EBITDA on revenues of $15.7 billion.)

 

get good at postmerger integration, and extract more value out of those assets than the former owners.

 

“Enforcing is really the right word. A good example is the emphasis we put on closing the books on the 1st or 2nd day of every month. A lot of managers initially wondered why it was so important to do this. They thought nothing would be lost if they did their closings on the seventh or eighth day. But we believed that having that information readily available would increase the likelihood that managers would make the right decisions. And the practice had a very high-level overseer: Mr. Zambrano himself, into whose email inbox all of these reports flowed. This was not subject to negotiation.”

 I have several key point & more notes, read the articles a few times and make your own

Optional change doesn’t deliver.

How 'They' Undermine Change

“Optional change doesn’t deliver. It takes longer, costs more and doesn’t provide the return on investment.”

As a senior manager you need to let that sink in. Read it again. Audit whether you are up to task. Your job & company depend on it.

*also falls into my required reading list for management

full article:

How 'They' Undermine Change

https://www.industryweek.com/leadership/article/22027259/how-they-undermine-change