February CLT Monthly Meeting Summary - "Navigating Innovation During Economic Uncertainty"
We opened by framing current economic uncertainty amidst conflicting forecasts over recession and economic growth. On the ‘glass half full’ side is robust GDP growth and low unemployment. On the ‘half empty’ side are rising credit card default rates, stubborn inflation, and slowing economic growth in China.
We then moved to member responses and best practices amidst uncertainty and change in our respective organizations. Some highlights from a rich and wide-ranging discussion:
The year of efficiency: We started with Jason Putnam whose company, Plum offers unique insights into talent acquisition trends. “We noticed a shift in buying patterns for non-tech sectors (banking, insurance, manufacturing) four months ago.” In his work with Plum and other Boards, he hears the call for efficiency. “Previously, there was a focus on talent acquisition, now shifting to talent management” …and “doing more with less.”
The “tempest of change” is different this time as some members are simultaneously navigating a turnover in senior leadership [demographics of our aging workforce suggest this will impact a majority of organizations soon], a raft of new initiatives driven by new leaders, new technology [such as generative AI], and new market opportunities. While cutting operating costs and headcount, see “year of efficiency” above!
Be ready to pivot: Jason cautions that there is always a significant lag between market data and corporate response rates, especially in larger organizations. At Plum, they devised an annual strategic plan with frequent check-in points to pivot as needed in response to changing markets. But be aware that not all decisions are equal. We fast-tracked easily reversible decisions, such as pricing or marketing pitches that “we can change in a day.” We take more time on decisions affecting jobs and layoffs.
Matching communications to an appetite for change: In prepping his org for change, “..the breadcrumbing that went into that was, ‘hey, based on the data we have, we believe this is true. If the data changes, we will make a change and everyone has to be OK with the change.’ …certain people are very adaptive..[some] aren't. So that breadcrumbing is very different for somebody with very low adaptation.”
Ty Smith adds on the art of “getting folks to think in new patterns” by “not being afraid to say, Okay, you may not understand this, but just let me flow with this for a little bit. And I think it drives those who are output-driven crazy because [Catalysts] always focus on the outcomes,” not the outputs.
Create a Sense of Urgency: Donna Flynn, who is re-reading John Kotter's seminal book, Leading Change, found the advice enormously helpful in impacting ‘maintenance-minded’ leaders. “The number one item on his list is to create a sense of urgency….And I do think that the way to create that urgency is by pointing to the customer and the market changes, as Jason was saying.”
Donna and others called out a renewed focus on explicitly defining processes, practices, mindsets, and behaviors that support flexibility and change. “... structured processes, decision rights, behaviors, practices, and mindset are all operating model elements. … We've been working on the behaviors and mindsets for six months, and now we're working on the structure pieces.”
Mindset change: “We are trying to create more discipline. So super basic stuff like more discipline in meetings, more discipline in hitting milestones and staying true to your commitments … And then having the mindset back to that sense of urgency, we are in a moment of massive transformation, and everyone needs to have their head in the game.”
How do you get everyone bought into the changes? “.. it just takes me back to storytelling and communication and Kotter's point that you can't under-communicate.. you have to communicate over and over and over again for probably years.”
Not everyone is resistant especially if you are solving their pain points! Chuck Patrick shares, “I'm running a transformation for our claims organization and interviewed probably 50 frontline claim examiners. I expected a lot of defensiveness. I expected, ‘this is how we've always done it,’ and they were really willing and enthusiastic about solving the problems they had.”
Express expectations in order to achieve accountability. Melanie Hilton discussed her focus on setting clear expectations in order to hold her team accountable, but also giving space for and even encouraging failure. People want empowerment but are also afraid of the consequences.
Return to core principles and mission. Ty, Dennis, and Katie all shared the importance of revising and anchoring on your organizational mission. From Dennis, “.. if you can go back to realign on the mission, is this really what we want to be doing? Do we still believe in this mission? And go really fast to first principles to present any change in the context of vectoring more towards that mission… I found that it's a very successful way to keep people.” Katie urges members to “connect the dots”: “I think there's a difference between saying this supports our mission and saying how it supports our mission.”
