Randy Dobbs advocates that CEOs become “change monsters,” a mythical, business beast capable of transforming even the direst business. To rejuvenate and transform a company, you can’t be intimidated by change or what may be necessary to right the ship.
As the former president and CEO of U.S. Investigations Services Inc., Philips Medical Systems North America and GE Capital, IT Solutions, Dobbs, who is now a business leadership consultant, knows what it takes to transform a company.
“My view is that transformational leadership is the key ingredient for organizational success,” Dobbs says. “Most of the businesses that I’ve run have had two very common ingredients — the first one is they are missing their financial portfolio significantly; the second one is they’ve had organizational chaos.”
As the author of “Transformational Leadership: A Blue Print for Real Organization Change,” Dobbs recently spoke at the ASLON Leadership Forum in Cleveland where he discussed advice from his book and his career for best ways CEOs can be transformational leaders.
Find your success factors
To understand how to change your business, you have to know where your success factors lie. The inverted triangle is a great tool for understanding the value of the customer and how your company serves them.
“When I go in to talk to CEOs of $100 million, $500 million or $25 million companies, the first thing I ask them is, ‘What are your success factors in your business? What are your business objectives?’” Dobbs says. “They say, ‘Well, I want to grow revenue 10 percent this year. I want EBIDTA to grow faster than my revenue. I want to get my growth’s margin up three points.’
“I look at them and say, ‘That’s not a business objective. That’s an outcome.’ Your success factors in your business are those things you want to do to drive that outcome. It could be that I want to get premium price for my product in the market. I want to grow my market share, and I want to take a share within my geography. I want to go into adjacent markets. I want to leverage my existing assets. Those are success factors.”
When you define what that success factor is, you then have to look at your strategy for accomplishing that goal.
“Even if businesses have a success factor, what I find is they don’t have strategy,” he says. “At GE, we used to have five-year plans for strategy. Jack [Welch] came in and blew that up. He said, ‘Don’t have a strategy more than 18 months.’ The world changes too much in 18 months. As every business designs and defines its success factors, it needs to have an 18- to 24-month strategy.”
If you identify your success factors and develop the right strategy, you should find gaps within your business.
“There should be a gap between where you were and the strategy it takes to get there,” he says. “If you don’t have a gap when you get through that process, then you don’t have a good plan. You’re doing something that you really haven’t defined well enough in your business solution.”
To close this gap you have to use the sides of the inverted triangle — people and processes. Dobbs uses Southwest Airlines as an example to prove his point.
“They were trying to be the low-cost provider in air transportation and they were trying to be the fastest and the simplest,” he says. “They built a strategy that said, ‘We’ll have a spoke and a hub, we’ll use the same airlines, we’ll be very quick with maintenance, we’ll have a quick turnaround time, and we won’t assign seats.’
“With the right processes and the right people and through all this financial turmoil, they’re the only airline to remain profitable. They had good business success factors, they had a great strategy and they continue to work on processes and executing.”
Think about this relative to your business. This is where you have to be a change monster in order to truly make transformation happen.
“To close the gap you have to be a change monster, and that’s really what transformation is all about,” he says. “A good transformational leader is somebody that has overcome one failure and learned, one failure and learned and kept moving through life.”
You have to get people to a comfort level where if you’re going to transform, they believe in the leader to do the right thing.
“What really drives transformational leadership is that ability to never give up and to see where you’re going,” Dobbs says.
“And be that leader and take the organization there when everybody is standing against you and saying that it can’t be done and you have the belief that it can and you keep driving to that point and keep having that vision and keep overcoming those failures.”
Create a transformational environment
Dobbs notes that five key things are important to create a transformational leadership environment.
“No. 1 is building a culture of change,” Dobbs says. “Businesses fail for two reasons: They fail early on because they run out of cash or they fail long-term because of their inability to change. No. 2, you’ve got to improve and grow the spirit of the team or the esprit de corps.
“No. 3, you have to have very strong communications. No one wants to hear about what happened yesterday. They want to hear about where we were and where we’re going.
“No. 4 is you have to change the financial results. You can be a great speaker, you can build a great team, you can have a wonderful environment of change, but at the end of the day, the scoreboard is going to tell the real story about you and that’s how you’re going to get evaluated.
“The last thing is you’ve got to build a cadre of transformational leaders who can run that business when you’re gone.”
Building a culture of change starts with recognizing your current culture and communicating how you plan to change its structure and character.
“One of the critical things is to create a shared need,” he says. “That’s why communication is so important. Most of the people in your organization, until you explain to them why you need to change, don’t get it. When they start to get it, they’re afraid of it.
“You have to continually develop that movie in your head where this business is going. Know where you’re going to be in 18 months and start selling it every day. You have to keep selling it and selling it and selling it until, all of a sudden, people just get it.”
Driving transformation starts with people and processes on top of a vision, mission and supporting strategies. Being a change monster will help you close the gap of where you want to go.
“As a transformational leader you wear a lot of hats,” Dobbs says. “At the end of the day, your primary job as a transformational leader is to be a change agent. You are that change monster and that’s how people see you if you really want to transform.
“For me, there is no better feeling in the world for a true leader than to really try to change and see a business transform and see the people in it be successful and then see the financial results be successful.”
How to reach: Randy Dobbs, www.dobbsleadership.com or [email protected]