Brian Klapper is the President and Founding Partner of The Klapper Institute. He is an internationally recognized expert in operational and cultural corporate transformation. Brian has worked with global companies in a variety of sectors including: financial services, consumer products, manufacturing, food service, utilities, retail, and healthcare. While Brian’s experience spans all elements of the value chain, as well as all customer touch points, his work primarily focuses on helping his clients create a culture of Execution Excellence.
Prior to founding The Klapper Institute, Brian was a Partner in the Financial Services practice of Oliver Wyman/Mercer Management Consulting (formerly Strategic Planning Associates). His clients have included: Bank of America, Avon Products, The Hartford Insurance Group, Bassett Furniture, Sun Life Financial, and Northeast Utilities.
Brian a recognized thought leader, speaker and writer. He co-authored a chapter in Redesigning Healthcare Delivery, “Applying Performance Engineering to Medical Care”, which has become an industry standard, is a regular contributor to Chief Learning Officer magazine and has contributed to the Harvard Business Review.com. Brian has been profiled in several publications including: The Wall Street Journal, Barron’s, Fortune, BusinessWeek, and The New York Times. Brian holds an MBA from The Wharton Graduate School of Business and a bachelor’s degree from Cornell University.
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Morris: Years ago, was there a turning point (if not an epiphany) that set you on the career course you continue to follow? Please explain.
Klapper: The year was 1997. The meeting was the culmination of 365 days of work—15 hours a day, six days a week. I had recently become a partner in the Financial Services practice of Mercer Management Consulting (now Oliver Wyman) and was given the honor of working for the firm’s largest client on the largest project in the history of the firm. Our task: “Tell us how to reinvent our company and rethink how we can shape our industry to win in the 21st century.” As a strategy consultant, it was as good as it gets—a blank slate, tremendous resources, and time.
We had over 30 consultants performing thousand pages of analysis, dozens of financial models, and hundreds of client interviews. As we finished our work, we presented to the CEO. Following the presentation, the CEO declared, “Congratulations to the team. This may be the most insightful, brilliant work I have ever seen.”
At that point, he took the deck, threw it against the wall of the conference room, and angrily declared, “I can barely understand half of the stuff in here! How are the 100,000 people in my firm supposed to understand it? What do I do with this?”
One of my partners replied that there was an entire chapter devoted to the Gantt charts, which outlined roles and responsibilities, time lines, activities.
The CEO replied, “I don’t care about all that! What are we supposed to do with this?!” Two days later I resigned.
I was professionally raised to believe that strategy consulting was the peak of the profession. Implementation was better left to those that did not make it as a strategist. Boy, was I wrong. Following that meeting, I resolved to get out of the “grand ideas” business and get dirty in the trenches where the real work is done to help organizations implement. What I came to realize is that, actually, very few companies are effective at really getting things done. So I resolved to work with companies to fix that. Quite simply, I wanted to help companies get stuff done.
Morris: Most change initiatives either fail or fall far short of original (perhaps unrealistic) expectations. More often than not, resistance is cultural in nature, the result of what James O’Toole so aptly characterizes as “the ideology of comfort and the tyranny of custom.”
Here’s my question: How best to avoid or overcome such resistance?
Klapper: Below are several methods I use with executives to help them overcome organizational resistance.
o Articulate a vision and develop a thorough plan that is easily understood. To do so, leadership must be fully immersed in the details of the plan and not delegate this step.
o Ensure alignment through one-on-one meetings, group discussions, a thorough data review, and fact-based analysis of the issues. To quote one of my clients, “Far too many of our key decisions are made in a data-free environment.”
o Establish for itself and all members of the organization appropriate expectations of what will happen, how all employees will fit in, and what can be achieved as a result of the change initiative.
o Create a genuine desire for change among the employees by rousing organizational energy, including collective motivation, enthusiasm, and intense commitment (more on this topic in upcoming chapters).
o Establish that the very top leaders, including the CEO, have passion for the change and also the ability to carry it out.
o Address both the behavioral and emotional components of change. Far too many change efforts focus solely on the tactical and operational aspects and neglect the human component.
o Get in the trenches to help and to role-model the desired mindset and behaviors.
o Build a culture of innovative thinking that promotes the freedom to experiment and ignore red tape.
o Trigger a sense of optimism around the change initiative. Change is often viewed as negative, yet most participants in the programs I help to orchestrate find it thrilling. According to one, the experience was “the most fun I have had in 20 years working for the company.”
o Expect and plan for resistance by identifying where in the organization the resistance might come from and how the resistance might manifest itself.
Morris: Now please shift your attention to The Q-Loop. When and why did you decide to write it?
Klapper: I wrote The Q-Loop in 2012. Bookstore shelves are crowded with business books discussing change. On Amazon alone, there are more than eight thousand books on corporate change. So why do I think the world needs another book on the topic? Simple, really. Because a remarkable one-third of all change efforts fail to deliver their intended results, and because the phrase I hear more than any other from business leaders (despite having good people, great technology, and a sound strategy) is: “It’s so hard to get anything done around here!”
Although some existing books on change are filled with interesting stories and rich concepts, they are just not specific enough for readers to use in their day-to-day jobs to truly effect change. This book, on the other hand, offers interactive content, meaningful examples of real problems and real solutions, actionable steps and suggestions, samples of what does and doesn’t work, fresh insights, a new approach, and practical guidance for all types of organizations.
Most approaches to change rely on the same basic tenets, which are incredibly intuitive but virtually impossible to deliver. The list usually goes like this: develop a vision, build a strategy, communicate the vision, establish a sense of urgency, generate buy-in.
It all makes perfect sense. After all, a leader would never have gotten the job without a clear vision. There’s a tremendous amount of public data available to help develop a thoughtful strategy. Many effective communication models exist. And creating urgency is…. Well, it’s this last one that’s the problem. And solving
it is a true art.
The single greatest challenge that prevents leaders from getting things done is their inability to generate buy-in for the change across the organization. There are thousands of books on leadership and even more on change management. So what makes this book different? The Q-Loop is a field guide, taken not from abstract, academic research but from the results of real-world lessons I’ve learned working with my many clients in the trenches for more than twenty years. Although most of my work has focused on Fortune 1000 companies, I have successfully applied these lessons to organizations that have anywhere from 160 to 160,000 employees—in the private sector, for government organizations, and within not-for-profit organizations throughout the world.
Morris: For those who have not as yet read your book, what is a Q-Loop?
Klapper: The Q-Loop is a process that forms a complete circle—from ideation to complete implementation. It’s called the Q-Loop because, as the name suggests, it’s more robust than a simple circle. Far from going in circles, like so many strategies intended to implement change, the Q-Loop works every time. That’s because it relies on the real heroes in the trenches of your company, the ones who know how to get things done and to get people on board. Calling this process anything other than the Q-Loop simply wouldn’t capture the full measure of this sweeping system.
When you look at the illustration of the Q on the cover of this book, you see that it shows lines before they enter into a loop. This represents new ideas and initiatives as they are considered throughout the entirety of your organization. The Q illustration then shows the loop itself, as these ideas and initiatives are delivered to upper management to assess and prioritize in relation to your overall business objectives. Then these ideas and initiatives are delivered back down to front line employees for refinement and a revolutionary new way of implementation. Finally, and this is perhaps the most exciting part, these initiatives are delivered out from the loop to the rest of your organization and embraced by the front line because the idea was initially created by them.
Morris: How specifically does it work and what does it help to accomplish?
Klapper: The Q-Loop starts with a compelling story, one that originates with management but is written by employees. This approach enables employees to contribute mightily to the tale.
It also recognizes that employees are motivated by their impact on their customers, company, colleagues, and themselves, and it uses this motivation to help them lead the change. So instead of forcing the agenda on employees, the Q-Loop allows employees to drive the agenda.
It weaves together traditional problem-solving techniques using the scientific method and a constructionist element that lets employees dream and discover the art of the possible.
It teaches these newly motivated employees to take a mandate, validate and question it, and then develop a solution that they are excited to implement.
And it shows them how to do it again and again and again.
The most functional Q-Loop achieves the careful balance between intimate knowledge, organizational context, and the ability to direct resources. Specifically, the frontline employees have millions of contacts, translating into intimate knowledge of product, customer, and how the processes in the company really work. However, line employees often have a very focused knowledge base and limited, if any, ability to direct resources. By comparison, the executive suite has a tremendous ability to mobilize resources and great organizational context, but often limited intimate knowledge of specific products and customers and how operations really work.
Hence, a successful Q-Loop decision process is critically dependent on both the span of influence and the bottom-up input mechanisms that support the loop.
Keep in mind that the Q-Loop can be deployed at multiple levels within your organization to improve current operations, to create new products and services, and to capitalize on market opportunities. At the top of the organization, a large (or macro) Q-Loop spans many layers of the organization for processes such as strategic planning. A midsize Q-Loop is used for business process redesign and spans from frontline workers to senior executives. Multiple small Q-Loops can be used between frontline workers and department heads to create ideas for and to implement policy changes. This multitiered approach enables an organization to quickly mobilize Q-Loops to address specific projects and to pilot change.
Morris: What are the defining characteristics of an organization’s collective IQ?
Klapper: Assume for a moment that an organization has 1000 workers and those workers have an average IQ of 110. The organization then has 110,000 IQ points available as a resource (1000 x 110). What percentage of this collective IQ effectively participates in market sensing and decision-making? In most organizations, it’s safe to assume less than 10%.
Clearly, not every brain within the organization has the same responsibility toward decision-making. Senior managers, after all, became senior leaders for a reason. Also, it’s impractical to create an environment where all brains have equal relevance across the totality of decisions a company makes.
In many organizations today, however, decision-making is concentrated in the hands of the people in corporate headquarters who are often farthest away from the market—often failing to leverage a gold mine of information to contribute to decision-making and a wellspring of resources to execute on decisions once made. Employees on the frontline, in fact, are the first, and best, filter to the market and product trends that they experience every day.
To gain the competitive edge from this heretofore untapped potential, you need to cultivate a culture in which staff at all levels can easily share solutions for improving the business. Empowered employees, after all, are more innovative and engaged because they have more of an emotional stake in the organization’s overall success. Offering evidence, data from Madison Performance Group indicates that 70% of employees who feel actively engaged by management deeply understand how to meet customer needs, whereas only 13% of employees who feel disengaged know how to meet customer needs.
When it comes to ideas, the biggest roadblock senior management often has to face is the widespread, deeply entrenched belief that ideas from the rank and file don’t matter. Where did they get this idea? In many companies, this wellspring of valuable insight simply isn’t encouraged, considered, or rewarded. Creating an infrastructure that changes this mindset will foster an environment where your frontline workers are passionately engaged with the ongoing strategy of improvement that your company is engaged in. Open up the discussion to everyone. You might be surprised by who has the best ideas. You might also be shocked by how it lubricates the gears to get major change initiatives moving along smoothly.
Morris: What do those change-adaptable organizations share in common?
Klapper: The ability to embrace industry changes, technological advancements, and evolving customer demands opens up an organization to opportunities that their competitors fail to see. Change-adaptable companies are able to:
o Recognize the need for change and overcome fear of it.
o Be scrupulously honest about their organization’s current shortcomings.
o Get everyone in the company to buy in to the leaders’ vision for the future.
o Offer the necessary tools to help deliver the vision.
Morris: What in your opinion, what are the most effective intrinsic motivations?
Klapper: An intrinsic reward is one that comes from within. It is an ideal trait in an employee in that it implies a sense of self-motivation. An employee’s innate sense of intrinsic motivation can sometimes be enhanced with praise and added attention from management. Aligning an employee’s values with the value behind a change initiative can also increase the likelihood that an employee will embrace the idea without added extrinsic inducements. If a person is interested in something, in other words, he or she will keep doing it even if it isn’t being overtly rewarded by the organization.
Types of intrinsic motivators include:
o A sense of pride
o The excitement that comes from learning something new
o The delight in accomplishing something difficult
o Interest in overcoming a challenge or making an improvement
o A desire to be seen as cooperative
Morris: What about the most effective extrinsic motivations?
Klapper: An extrinsic reward comes from an external source. This sort of inducement can be powerful, but it can also be more short-lived than an intrinsic motivator. When an extrinsic motivation such as monetary reward is removed, so is the enticement. Intrinsic motivation, on the other hand, is harder to smother.
Types of extrinsic motivators include:
• Praise from managers
• A chance to lead projects or task forces
• Cash bonuses
• Increased pay
• Stock or stock options
• Not getting fired
Morris: What is an “idea quest”? To what extent does it resemble a treasure hunt?
Klapper: While there is software that tries to solve at least some of the problem listed above—such as vetting bad and redundant ideas—in many cases the result is merely a suggestion box 2.0 solution, which might be an improvement but it’s not a solution. Instead, I have developed a better strategy that can be used in connection with other ideation processes to solicit the most fruitful, strategic, and relevant ideas from the collective intelligence of your organization. This approach uses another kind of IQ.
I call it Idea Quest.
The advantages of Idea Quest are numerous. First, it provides a formal, disciplined process into what is often a helter-skelter, shotgun approach. That way, you reduce redundancy and rework by providing transparency and providing a one-direction approach. Next, it sharply improves organizational focus by recognizing an opportunity to be acted on and quickly culling the best ideas from the worst to effectively manage resource allocation. It also increases the odds that the most promising ideas quickly receive attention and the resources needed to implement them. Finally, Idea Quest lets you evaluate the effectiveness of the ideation process based on the number of ideas per employee or team, participation percentage, collaboration percentage (including collaboration among people who normally would not work together), time spent on ideation, and the number of cross-functional ideas submitted. An Idea Quest has the following five steps:
1. Focus employees on a specific mandate
2. Engage employees in meaningful ways
3. Create an easy and transparent way to share
4. Require ideas be turned into a project plan
5. Evaluate each idea and respond promptly
Morris: What is the dominant characteristic of an organization that has low collective IQ?
Klapper: Organizations suffer from low collective IQ for several reasons, including:
Employees guard their own territory
Fix by creating a culture of trust among employees where transparent communications and the open exchange of ideas is praised.
Team size is too large
Fix by reversing the trend of increased team sizes to improve collaboration among employees.
Employees don’t know each other
Fix by creating meaningful ways for employees—who are sometimes from very different backgrounds—to socialize at and outside of work.
Departments don’t interact
Fix by promoting meetings between department managers, and invite people from other departments to sit in on meetings to provide an outside perspective.
Executive management fails to set a good example
Fix by signaling a desire for collaboration with open floor plans, by asking for feedback, and by modeling successful collaboration themselves.
Idea generation lacks incentive
Fix by tying bonuses and raises to real standards that demand and reward innovation and collaboration among employees.
Companies are increasingly global and partitioned
Fix by breaking down organizational silos by gathering teams of people from all levels, divisions, and locations who are committed to changing the way the organization operates.
Morris: What are the most valuable business lessons to be learned from Amazon’s Prime program?
Klapper: In late 2004, Amazon introduced a new service called Prime. It was a huge success. After signing up for the service, for example, Prime members increase their purchases on the site by about 150% and it may be responsible for as much as one-fifth of all U.S. sales by Amazon. Analysts consider Prime to be the main reason Amazon’s sales grew 30% during the recession while other retailers struggled.
Prime was no accidental discovery. Instead, it was a result of the company employing the full capacity of its collective IQ and an approach that is much like the Idea Quest process just described. Let me explain…
1. Focus employees on a specific mandate: For several years, Amazon was searching for the right loyalty program and asked employees to contribute ideas. The specific mandate was: Create an effective loyalty program that will grow sales and increase customer retention.
2. Engage employees in meaningful ways: Throughout the organization, creativity and inventiveness are part of Amazon’s culture. There were past examples of employee ideas being enacted so employees felt that their ideas were valued. Using a suggestion box feature on Amazon’s internal Web site, an Amazon software engineer named Charlie Ward was inspired to suggest the idea of a free shipping service.
3. Create a positive and transparent environment: The internal website was in place to capture many employee ideas. Employees knew that this particular mandate was an important one because it came from Amazon CEO Jeff Bezos himself. While the company could have had a traditional loyalty program up and running in no time, employees knew that the company was different and was looking for something truly groundbreaking, which energized them. The original idea was for a “free shipping service,” and this idea was applauded. Yet, through further consideration and analysis, company executives, including Bezos, transformed the idea into a flat-fee, two-day-shipping service for all you can buy, improving the original idea substantially. In addition, Bing Gordon, an Amazon board member and venture capitalist, came up with the name Prime.
4. Require ideas be turned into a project plan: Okay, so Amazon skipped an Idea Quest step. But they would have been even better off had they not! Writing out an idea as a project plan points out the shortcomings and risks and pushes people to refine the idea into one that is even more meaningful.
5. Evaluate each idea and respond promptly: The pace from original suggestion to launch was brisk. Bezos commissioned Prime at an unconventional Saturday meeting in the boathouse behind his home, telling a small team of employees that they should appropriate company engineers and resources to get Prime ready for the company’s fourth-quarter earnings report less than two months away.
Amazon Prime took a village to create—and in the end it helped to set Amazon distinctly apart from the pack.
Morris: Please explain what you mean by “mandate”?
Klapper: For any team to be successful, it must have a clearly defined sense of purpose. This purpose comes from a well-crafted mandate. The mandate should unambiguously state your team’s goals and why achievement of these goals is critical to the organization. The mandate needs to provide focus and should emphasize no more that two basic themes. It should also serve as a rallying cry and a basis for enthusiasm. Finally, the mandate should be brief, memorable, and in words meaningful to all members of the team. Think elevator pitch, not long-winded speech.
A well-crafted mandate provide the team with:
• A clear understanding of the problem
• Direct linkage between the organization’s strategy and the mission for the team
• Key metrics related to the problem
• The expected time commitment for each of the team members
• A vision of how the sponsor defines success with clear output-based goals
These output-based goals have five primary criteria. They are:
• Specific—the more specific a goal is, the more likely it will motivate people to work toward it
• Meaningful—the team must believe that their work will have a significant impact on the organization
• Measurable—the mandate must make it easy to determine how well the task was achieved
• Ambitious yet attainable—goals that are impossible to achieve will frustrate, not motivate, but if the bar is not raised high enough, the team will not move outside of their current paradigms to consider breakthrough solutions
• Timely—the mandate should be appropriately focused to enable the team to achieve prototype results within 30 days
I have witnessed many excellent mandates, including the need to increase profitability of a service division, optimize the client-facing organizational structure, right-size the service offering across an organization, create a process that does not currently exist, and take cost or time out of a current process. Here are a couple of detailed examples:
o Develop a “game changing” customer service model that will enable the company to develop a reputation as the customer service leader.
o Improve sales force productivity by 30% for global sales operations.
Morris: You recommend creating a “team of heroes.” By which criteria will they be selected? To do what?
Klapper: Your company is full of heroes. You know the ones I mean… the ones who know how to get things done in your organization, even if they don’t always work according to the organization’s manual; those who have been consistently more effective than their peers; those most eager to look for a better way to accomplish tasks; your long-term employees who often know as much about the business as the executive management team and, in some areas, maybe even more.
These heroes are your influencers, most capable of leading any transformation toward excellence, and these superstars must be the primary agents of change. If you can identify, train, and galvanize these key influencers, you will release tremendous organizational energy.
Look for heroes out in the field and as far away from headquarters as possible. Heroes generally spend most of their time with the customers. And be sure to seek out the most eager change leaders. Keep in mind that these workers may not be those who are formally recognized by the company, but rather are sought out by peers for answers. These are the employees who know which documented procedures don’t work.
Be sure to have a good mixture of people from different areas and different level within your organization.
Ideal team member characteristics:
They must be well-respected thought leaders within the organization
They should “live” in the process on a daily basis and have a thorough understanding of how the process really works, not what is documented on the wall or in the system
They should be passionate about change and be open to new ideas
They must possess the ability to see the big picture
They must work well in a collaborative team environment and willingly commit to team goals
They must be able to make original contributions to team issues as well as build upon others’ contribution.
They must volunteer to execute commitment items and perform all assignments on time
They need to positively question and challenge others as well as utilize conflicting views in a constructive manner
They must act to create and promote team cohesiveness
They must help maintain team spirit if things are going poorly
They must offer to relieve a team member’s heavy workload
Morris: Why is a “corporate lab not a simulation”? So what? Please explain.
Klapper: When the uninitiated hear about The Corporate Lab and assume that it’s a simulation, I bristle. A simulation it is not—at least not in any way that people commonly think of the term.
Other firms have indeed created business simulators to attempt to help organizations accelerate the pace of achieving initiatives. In some cases, they claim to have created accurate representations of reality. Yet, in the firms’ descriptions of these simulations, they repeatedly use the descriptor “game” or “game-like environment” to describe the simulation.
I have studied these simulations/games and they, in fact, feel very much like the adventure games my son sometimes plays on his (highly regulated) Xbox or like the board game Monopoly that my family plays together on our game nights. As such, the experience of these business simulations feels radically different from the day-to-day realities of any organization I have ever worked with. And I doubt very much that they accurately capture the complexity of your organization. True simulators, on the other hand—the kinds used for operating room procedures or for training nuclear power plant operators—are so fundamentally realistic down to the most minute detail that you can’t tell the different between them and the real thing.
In the end, most simulator-based training efforts fail because they don’t reproduce the organization’s intricacies, which prevents employees from easily applying the learning to on-the-job applications that can generate the rapid results necessary to sustain the initiative. Unless the experience allows participants to declare this is us!, the ability to drive behavioral change is minimal.
Morris: How best to determine whether or not a process adds [begin italics] sufficient [end italics] value?
Klapper: The definition I use to determine if a process is value-added is whether it meets all three of the following criteria:
1. The activity results in a change in form or function
2. The customer wants and is willing to pay for the activity
3. It is the first time that the activity is being performed (if the activity is performed multiple times, I call that rework)
Morris: Let’s say that a CEO has read and then (hopefully) re-read The Q-Loop and is now determined to improve decision-making capabilities at all levels and in all areas of the given enterprise. Where to begin?
Klapper: Begin with a single initiative – do not wave the transformation banner – and to paraphrase Steve Jobs, challenge a dedicated team with a specific, quantitative mandate that will accomplish something insanely great. That initial success will spawn other initiatives and word will quickly spread that something positive is underway.
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Brian cordially invites you to check out the resources at these websites:
The Klapper Institute home page
The Klapper Institute blog
Brian’s Amazon page
Bibliomotion link
LinkedIn link
Twitter link