Technology
Stan Bentley
President, Diversified Systems
By Erik Cassano
Smart Business Indianapolis | September 2006
Change. Few words in business are more powerful or more intimidating, and change is one of the inevitable factors that evy business leader will have to deal with, says Stan Bentley, president of Diversified Systems. In his 34 years leading the privately owned, 400-employee printed circuit board manufacturer, he has had to adapt numerous times in an electronics business as notorious for breakneck-speed evolution as it is for its market volatility. Change has taught Bentley that a CEO needs to have the strength to lead change, and the stomach to make the tough decisions that come with it.
Smart Business spoke with Bentley about leading change and adapting to it.
Get everyone to buy in.
The way you get your factory side and your office professionals to buy in to change is radically different. When you’re dealing with the factory side, it is reduced to equations and very detailed statements of facts and numbers and quantitative things where people can look at the numbers and make a decision.
When you get to the professional side of the house, you get into qualitative and, in some cases, discretionary items that are open for discussion and debate. In that case, you can’t write as precise an equation of the anticipated result.
Consequently, it’s very difficult to sit down with a set of figures and show what should happen. You have to believe in the process and you have to believe in your tools, and our experience is that professional people don’t do this. As a result, you get a wait-and-see attitude from your professionals, which flies in the face of a team approach.
You must get them to buy into the process of change, which means you must get them to participate in the creation of the process, not hand them the process. So the most basic concept of, ‘Let’s send a team out to handle this problem’ and then have that core group tell a larger group, ‘Here’s what we’re going to do’ seems logical, but it is precisely the wrong approach with a professional work force.
In our case, we take a very small core team that thinks of the task in a global basis. The core group then looks at every step in the process and divides it into a series of very small increments, then involve the professional people in each of those areas, working on various increments while the top-level team tries to tie everything together.
Cut bureaucracy.
Some folks do two very human things when it comes to change. The first is they want to make it all about themselves. They want to take their small piece of the process and turn it into the most important piece of the process.
That, reduced to its essence, is bureaucracy. If each department does that, you have bureaucracy in an eyeblink.
What the company leaders have to do is continually evaluate the output of these departmental teams and look at it against the total objective. If those in the departments have added a process that makes no sense, we must find a way to get them to eliminate that step.
You must also face the very real possibility that there will be casualties during this process, that there will be people who simply cannot deal with this change. They might be very valuable people, but if you cannot get them to understand the need for the change and get them to sacrifice for the greater good, they will either leave the company or you will have to ask them to leave.
Once you start on this process of change, you must be committed to a successful conclusion. It can be hard and incredibly traumatic at times.
Keep communicating.
You must communicate constantly in a time of change. There has to be something that your employees see that convinces them that there is improvement happening, because they don’t always believe it.
The first element of change is chaos. Chaos, to a person who is resistant to change, is proof positive that change is a bad thing. So you have just written a prescription that seems to have no solution.
If chaos is the first and most necessary element of change, and yet a person who is resistant to change would use the chaos as an example of why the change is not good, how can you ever get past that?
It comes back to trust and communication. At the end of the day, those two tools are the things that will win or lose the battle. You must have both.
If there is mistrust, the communication is irrelevant. If the communication is not there, the trust will break down. Those two elements must be there to give you the highest probability of success in a time of change.
Know that you might lose customers.
There might very well be customers who will not make this transition with you. They may have liked it the way it was, but if you do the proper soul-searching, you have to come to the conclusion that if you are correct about the need to change the culture and the market of your company, and you have a customer that does not believe that is important, one of you is wrong.
If it’s you, obviously you’re going to take your company down the tubes. But if it’s your customer that is wrong, they won’t be around. So are you really losing a customer, or simply impacting the timing of losing them?
You have to be very pragmatic about determining where a customer is in their life cycle. If you’ve built the same component for a customer for 10 years and they build a standard product and this product is sold into a very stable industry that hasn’t changed in 10 years, I would contend that product is in the waning years of its life cycle. Projecting the next five years at the same revenue would be very foolish.
We look at where we think customers are in their life cycles, and it helps us determine if we think they’re going to be there as we move and change. We look at things in terms of a global market, and a mature product is probably not dealing with a global market.
You have to throw out a lot of the stuff that most of us were taught 20 or 30 years ago. One of the big terms was customer lifetime values, what the value of a customer will be over the lifetime you have them.
I don’t know if you can make that kind of analysis now, certainly in our business, because the market might change faster than they are able to. We might lose them for no reason within our control. They simply couldn’t adapt and survive in a changing market.
HOW TO REACH: Diversified Systems, www.divsys.com
