Breaking Through Gray-Flannel Barriers

It's almost axiomatic that business organizations create the world they perceive.

The executive who believes that unacceptable risks bedevil large opportunities is unlikely to build his business into a Fortune 500 corporation. By similar reasoning, the executive who disregards risks in the pursuit of opportunities will not be able to perceive those risks because he will not look for them.

The challenge, then, is to open our minds without losing them - to create a vision of a world that we do not yet perceive, grounded in the reality of the possible.

It was, after all, only by looking beyond the agricultural world that Adam Smith was able to conceive an economy in which manufacturing occupied a central role. And once such an economy developed a century later, it took yet another century for time-and-motion experts like Frederick W. Taylor to shake the work habits and haphazard methodology of craft-based, skill-intensive modes of production.

This mind-opening process entails questioning every boundary and principle by which we define our business. It also demands a total commitment to changing the organization should those boundaries erect barriers - or blind spots - to the imagination.

Breaking the Mold

Dr. Andrew Weil tells the story of a woman who could find four-leaf clovers in any clover patch. He witnessed several demonstrations of this ability even though he was unable to find any. Weil concludes that her success was due to her belief that in any patch of clover there was a four-leaf clover waiting to be found.

Dr. Weil's failure to find four-leaf clovers resulted from his belief that four-leaf clovers were hard to find. Great progress comes from the simple habit of breaking the preconceptions of the habitual self. In short, if we are to hope for a break through, we have to "break through" the way we perceive the world.

Break the mold - don't remold it. Don't seek answers. Ask questions. Business ideas, by their nature, tend to burst upon the business landscape with tremendous force. The sudden vogue of a grand idea, such as reengineering - crowding out everything else, including reality for awhile - is due to Spinoza's dictum that nature abhors a vacuum. Businessmen are comfortable with boundaries. They don't mind destroying assumptions, so long as they can embrace new ones. To break through is to dive into reality, not redefine it.

A business organization is a lot like a sailboat. It is a self-contained entity, afloat on a sea of possibilities, whose captain and crew must evaluate and leverage their environment. The crew must function as a team and move the boat toward a hoped-for destination. The boat needs three things to function: stability, direction and power.

The keel provides stability, which keeps the boat from drifting off course or tipping over. In a company, stability is the security of business as usual. It is the old world of finite possibilities, summed up by current infrastructure, customer relationships, product lines and other elements of the organization. It is also the principles under which you operate the core values that are part of your culture.

The rudder provides direction. In a business, direction is the vision that motivates and guides especially when things get choppy. It is a sense of shared purpose - the words and images that tell us who we are, what we want to become, and where we are going. It's what keeps the company on course.

What sense of direction put Disney World on its successful trajectory? To make $20 billion in profits? No! Numerical goals have nothing to do with direction. Walt Disney's vision was that parents and children should have a place where they can have fun together and learn together. The fulfillment of that vision is why people keep going back to Disney World. And paying premium prices to do so.

Sails harness the energy in the environment. They capture the prevailing power of the wind. In a business, employees act like sails by harnessing the chaotic currents of the marketplace. They propel the firm forward through the choppy waters of regulatory constraints, competitive activity, market trends, and technological developments - all the external strategic issues they must heed.

Breaking Out of the Box

The critical questions are: What gives employees the power? What enables them to change old habits and learn new skills and perspectives so they can deal with deregulation and new competitive challenges?

To become truly powerful - powerful enough to propel the firm forward through uncharted waters - employees have to push the limits of the organization.

At Finance One, for example, we saw similar opportunities with customers who had been turned down for loans at our parent company's banks. We wondered where the turn-downs went and thought maybe we could find a way to serve them profitably. We discovered that close to a billion dollars in loans - rejected applications from our own banks - were being booked by our competitors. So, we found a way to reclaim that business by teaming up with our banks, before they walked out the door.

Getting employees to break out of their mental boxes and overcome habits, traditional assumptions, and even the fears that hold them back, isn't easy. The best way to begin is through constant reinforcement of language.

At Finance One, we developed special language tools, a few key phrases that we use every day, to change the way people think and act. The process begins with simple optimism: changing the current view of the situation to make it better.

Here is a current view: New competitors are offering new products and services. Here is a better view: We will know our customers so well that we're able to give them the exact products and services they need, and leave our competition in the dust. The old language: Our people work hard but they can't keep up with changes in the market. The new language: Our people work hard, and we'll equip them with the equipment and training to make them more productive and responsive to customer needs.

Forgoing Fear of Failure

When someone says, "We don't do it that way," our comeback is "up till now, we haven't done it that way." We ask people to look forward, not backward. Don't just tell us what went wrong yesterday. Suggest what we can do tomorrow to make it right.

Failure is a stepping stone to success. We must give people permission to fail; otherwise they will never take the personal risks or the reasonable business risks necessary to achieving worthwhile goals. To reinforce this idea, we say: "People don't fail. Events fail."

To foster what I call "breakthrough thinking," the employees must risk failure and question everything. The questioning must become habitual. Breakthrough demands that everyone share their views of what the business could and should be like.

At Finance One, we insist that people speak for themselves, not for the anonymous "we." Regular meetings of 10 to 20 people open up a huge pool of ideas from those who deal with customers and suppliers every day. Everyone gets a chance to participate without the boss watching. The aim is to create an environment in which people aren't afraid to ask questions and hazard wild ideas. This approach is successful because we ask for candor and insist on the confidentiality that encourages it.

We continue to ask the fundamental questions. We've found that the simpler the questions, the bigger the breakthroughs.

Any company can do it. But convention is hard to break. The sad fact is, Corporate America still bears a strong resemblance to the gray-flannel world of the organization man.

The new economy, however, is forcing a lot of executives to rethink how they do business. Today, wealth in raw materials, the source of strength centuries ago, hardly matters. Raw materials are becoming a diminishing cost (the raw material in a computer chip is sand) in the value of finished goods. Proximity to rich markets matters less as transport costs fall. Technologies pass readily from company to company. Only that intangible, vital force - the alliance of active minds and productive skills - is non-transferable to global competitors and the source of competitive advantage.

Breakthrough thinking is that tangible force. It's the wind in the sails.

By permission of The Public Relations Strategist.
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