orchestrating buy in

Orchestrating Buy-In

The DNA forSuccessful Change

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WHAT IS BUY-IN?

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Buy-In

• The alignment of thought to action.

“I am, buying into that idea!”“Count me in!”

“Yes, I agree, let’s get it done.”

“I understand.” “I get it.”

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Lao Tzu Tao Te Ching

“The way of subtle influence”Superior leaders are those whose existence is merely known;

The next best are loved and honored;The next best are ridiculed.

Those who lack beliefWill not in turn be believed

But when the command comes from afarAnd the work is done, the goal achieved

The people say, “We did it naturally.”

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Sixth Century Buy-In

• The best leaders are unknown, the people say they did it themselves naturally.– Conversely the leader did not seek fame– The leader did not seek acclaim– The leader lead others to accomplish the objective

as if it were their own natural way.

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The agenda

• Personal• 5 Ws• Avoiding failure• Winning• Success looks like• Case Studies (B2B)• Consumer (B2C)• Change review

• Board of Directors• The Toughest Buy-In• Back to Business

– Setting up for success

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PERSONAL LIFEGetting the Family, Spouse, Children to buy-in.

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Start with the end in mind.Who will benefit if you are successful.

How will they benefit if you are successful?

How will they acknowledge this benefit?

How will it be measured?

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Family

• Everyone with a family (that is all of us), have experienced the challenge of trying to get one member or an other of the family to buy-in.– Maybe it is the children– Maybe it’s a grandparent– Maybe it’s a in-law– Maybe it’s a spouse

• Regardless we have all shared the experience.

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Techniques

• The two most common techniques are– Persuasion– Edict

• Business reported these results from similar techniques:

– 81% used persuasion or edict. Persuasion failed 53% of the time , Edict failed 65% of the time.

• Informally, I have surveyed audiences for their results, the similarity of results is striking.

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What Works?

• Thinking about your own experience would you agree:– Seeing it from their point of view – helps– Talking about what good happens for them when

they buy-in – helps– Uncovering the risk as they see it – helps– Experiencing a small success at the change helps -

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Removing the Training Wheels

• 1st reaction – I can’t.• I will fall.• I will get hurt.• Someone will see me fall.• They will make fun of me.• I don’t know how.• You promise you won’t let go?

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Did YOU?

• Did you YELL?• Did you Demonstrate?• Did you Support?• Did you encourage

Failures? (fail fast, fail often, fail cheap)

• Did you stand by and watch as they got it wrong?

• Did you allow them unlimited Opportunities to get it Right?

• Were you the biggest FAN?

• Did you encourage every small success?

• So what is different NOW?

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The Wheels Came Off

• And they never looked back.• They found their own balance.• You never got the credit, nor did you try to

take it – it was always about them• You never reminded them of what they owe.• You encouraged them to take the next risk

– A ride to the end of block ~ alone.

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Orchestrating Buy-In

• Family • Board of Directors • B2C • B2B– Regardless of the stakeholder– The steps are the same

Start with the end in mind.How will they benefit from the success?How will they acknowledge the benefit?How will it be measured?

“When you help enough other people get what they want you get what you want.” ~ Zig Ziggler

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Why Buy-In?

• Most change initiatives fail –– From Buy-outs to – Cost reduction to– New incentive plans

Estimates vary from 70-80% of change initiatives fail to meet their expectations.

Most common reported cause – lack of buy-in.

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To avoid failure -

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Start with the end in mind.Who will benefit if you are successful.

How will they benefit if you are successful?

How will they acknowledge this benefit?

How will it be measured?

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The Reorg. is fairly straightforward.

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Success Rates Depend

• On the criteria used– Generally financial performance and shareholder

value issues are constructed to be successful– Behavioral change, like client satisfaction or

management behavior, has proven to be somewhat less successful

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Failure factors

• Half hearted or No Buy-In from stakeholders• Paralysis by analysis• Consultants silver bullet syndrome• Wrong measures

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Even good ideas fail

• By the time we finish this presentation, over 46 businesses will have ceased operations.

• 3 will have filed for bankruptcy• By the end of the day 2.1 million new

businesses will have followed their lead.

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The GAP

“91% of business people are as confident as ever in their ability to make decisions.” – Dr. P. Nutt (818 surveyed)

The book Business Think; p.16 & 17 outline why these decisions fail2/3 never explored alternatives81% used persuasion or edict. Persuasion failed 53% of the time , Edict failed 65% of the time.

7% considered long-term priorities

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Stinking Thinking

• Thinking is the nucleus of business ~ it drives not only what gets created and launched, but also what lives on. It’s the “big bang” that sets everything else in motion. If you want to change your results, you must first change your thinking.

~ Dave Marcum, Steve Smith & Mahan Khalsa from business THINK

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It is not always easy to seeWhat you need to see.

The old adage measure twiceCut once was sound advice.

When it comes to Orchestrating Buy-InDon’t leave stakeholders guessing.

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60% of Statistics are lies

• In a report on more than 40,000 organizations, Martin Smith reported in his book Success rates for different types of organizational change published success rates vary widely depending on the type of change.

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How to get off on the right foot.

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Silver Bullet

• The consultant Silver Bullet approach – The consultant is smart– Therefore if the consultant tells us what he knows

we become smart– Problem solved

• Not so fast – – Transfer of knowledge is not DOING– DOING something different is what counts.

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THE 5 WS

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Success is in the 5 Ws

• What• Why• Who• When• Where

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What?

• Starting with the end in mind – what needs to be different? (Be very specific)

• When you get what you want what will it look like? (seek specificity)

• Who will know? (exactly by name / title)• Why is it important? (To whom is it important?)• How will it be measured? (give me an example)• What will be result for the participants? (How do

they know this is meaningful work?)

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Why?

• Why does this particular thing need to change NOW?

• Who is being impacted by the lack of this change? (Specifically what is the impact?)

• Who will be impacted when the change in completed? (Besides you who else?)

• When does this need to be finished? • What is it costing us not to change?

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Who?

• Who made the decision to seek this change?• Who else was involved in the process?• How were they impacted?• Who needs to be involved in making the change

happen?• What is expected by this individual as a result of this

change?• How will it impact anyone involved or effected?

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When?

• When did you first notice the need for this change?

• How did that occur?• When does the change need to be in place?• Why is that the target date? Or Result?• Who will know? When will they know? How

will they know?

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Where?

• Where has the need become self evident?• Where shall we being?• Where shall we engage others? How shall we

engage others? What is in it for them?• Where will we first notice the change impact?

(LPI)• Where will we acknowledge the results?

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Using Questions

• The Socratic Method: Socrates used questions to get his students to see the lessons he wanted them to learn.

• This method works for all type of learning experiences.

• It is particularly powerful when employed within experiential learning opportunities.

• Often it is useful to gain clarification by asking example questions – like the ones that follow.

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Evidence Questions

• How will we know if we improve brand loyalty?

• How did we become convinced we were losing client trust?

• What specifically pointed out that quality was down?

• What will we observe to know business acumen has improved?

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Specificity

• Success or failure of your Orchestrated Buy-in may often be determined by the degree of specificity you were able to solicit during your step up, assessment or evaluation.

• Good beginning beget good endings.

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WINNING

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Winning

• Teams win when they work together.• It is easy to stop a single individual on a

mission.• It is more difficult to stop 100 people with a

passion for an objective.

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How does the Coach do it?

• Consider how the coach does it.– Explain the rules– Practice new things off the field– Encourage– Demonstrate– Re-think everything

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Another Voice – Dr. Paul Nutt

• Ohio State Unv., Fischer College of Business– 356 Companies studied– 19 years – “more than 50% of all decisions failed; they were

quickly abandoned, only partially implemented, or never were adopted at all. “

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Confidence UP Success DOWN

• If the numbers are statistically accurate – one major cause of failure in any change initiative is the decision makers unwillingness to seek advice, or question his/her decisions once made.

• Often the real challenge is WHY are we making this change?

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Hire the whole unit

• Jack Stack reported in his book The Great Game of Business that he learned the value of engaging the employee wholly.

• He asked the question, why just pay for the worker from the neck down?

• When you get their head in the game everyone wins.

A believer in the power of buy-in.

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Are we fooling ourselves?

• Here is a question that should be asked by someone with every change initiative undertaken.

• Followed by – is this the right RISK to be taking now?– Well thought out answers to these two questions

can avoid many of the failures of other change projects.

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Ballpark to Boardroom

• When we examine the companies that win consistently we find many similarities to sport teams that win consistently.

• Why?– No “I” in team – Everyone knows how to keep score – Everyone knows what it takes to win all the time

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David Nadler

• Author of Champions of Change– Difficult to create value afresh– Corning – 150 yrs old

• Committed itself to innovation• Resisted defining itself by products• Defines itself by ways it develops products

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WHEN BUY-IN WORKSEveryone wins

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Innovation

• Statistically companies that innovate are 5X more successful than their competitors.

• Companies that learn to create patentable solutions are 20X more successful.

• It is not about the patent – it is about the process

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In every case BUY-IN WINS

• Examine any of these issues and you will find team effort, and employee buy-in.

• Ask people at Corning what they do…– Corning is the world leader in specialty glass and

ceramics• Jack Stack’s company

– Started with D/E 800:1 – share value $10– Today D/E 6:1 – share value $310

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More Buy-In Success

• Michelin – D/E 8.3:1– D/E 1.6:1

• Diesel Mechanic Shop (14 man)– Took 5 min. out an hr. effort – Added $4K a week to the net profit

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More Buy-In Success

• Bank – Trained employees – within a week– Existing customers brought in new customers

• Attorney– Trained employees and Partners– Referrals increased 30% the following month

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More Buy-In Success

• Professional Svc Firm– Held one meeting– A/R was reduced by 50% within 90 days

• Manufacturing Firm– Does Innovation Workshop– New product captures 90% market share

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Buy-In Works

• Our examples can continue – • The point – Buy-In Works• It works to create an unstoppable force • It works to get everyone understanding how

to win• People generally don’t come to work looking

to fail or be a problem – they want to make a contribution.

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Gung Ho!

• This Ken Blanchard book – tells us about the value of Meaningful Work

• People want to understand how their work makes the world a better place.

• If you don’t have employee buy-in, it would not be possible to understand “meaningful work”.

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Steven Covey

“Business basically is run by the economic rules of the marketplace, but organizations are run by the cultural rules of the workplace. They are often not in alignment.”

• Buy-in is about gaining alignment.

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Symptoms of Nonalignment

• General confusion about the Goals.

• People believe in the mission statement but don’t act like it in day – to – day activities.

• A gap exists between dreamers and implementers.

• Silos abound.• Right hand doesn’t

know what the left is doing.

Change is like a Slinky

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More warning signs

While hard data may inform our intellect, it is largely soft data that generates wisdom… Henry Mintzberg, The Rise and Fall of Strategic Planning.

Richard Neustadt, Harvard Unv. “It is not information of a general sort that helps. Not surveys, not the bland amalgams. It is the odds and ends of tangible detail that pieced together… illuminate the underside of issues.”

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Keeping Score

• Everyone knows how to keep score– How important is this?– 90% of surveyed employees believe their

company’s profit margins are greater than 70%.– DoC reports >80% of small business owners can

not properly interpret their own financial reports.– Winning is easy when you know how to keep

score.

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Business Score Card

• Finance is the way we keep Score in Business.

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Understanding the Language

• It is hard to do business when you don’t understand the language.

• The language of business is finance.• Therefore the more people who understand

the language of finance the better the performance of the business.

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CASE STUDIESB2B – getting on the same page = Buy-In

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Case Studies

• We will examine the use of buy-in to facilitate results over various industries and differing challenges. Success is do to the teams.

• Cross functional teams formed with assigned ownership

• These only work when you have orchestrated buy-in –

• When the team gets the 5 Ws and owns them.

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Challenges Long engineering change cycle time

resulting in large backlog and poor on-time performance

Manufacturing cycle time and first pass yield severely affecting on-time delivery performance

High level of manufacturing rework Failure of previous self-medication

efforts

Leading manufacturer of business jets

On-time delivery and quality issues affecting levels of new business

Gaining employee buy-in ~ critical

Results Aircraft production cycle time reduced 32% Aircraft production first pass yield up 10X Engineering change cycle time down 74% Engineering change first pass yield up 3X Rework hours reduced 62% Overall labor hours per aircraft reduced 56% On-time delivery increased 28%

Business Jets Manufacturing

Case Study

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Results Aircraft production cycle time

reduced 32% Aircraft production first pass

yield up 10X Engineering change cycle time

down 74% Engineering change first pass

yield up 3X Rework hours reduced 62% Overall labor hours per aircraft

reduced 56% On-time delivery increased

28%

How Achieved Business Improvement Team “BIT” formed Focus on six high leverage processes – Engineering,

Production, Completions, Materials, Quality and Product Integrity, and Service

Customized architecture was developed that included a rollout plan prioritizing these key processes

Cross functional teams formed, assigned process ownership Engaged &trained line and staff personnel in methodology Mapped each process (“as-is” and “should be”) Established hierarchical measurement set and linked results to

confirm acceptable performance toward objectives Established and assisted teams at all levels in identifying and

removing prioritized barriers Metrics focused accountability Implemented drumbeat meetings leading and driving change Guided the internalization of the methodology and established

an environment of continual process improvement throughout the organization

Business Jets Manufacturing

Note how often the use of Team is used.

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Leading producer of static memory devices

Strong reputation for product innovation

Lacked employee ownership of challenges

“Something that would kill three-quarters of our competitors just gives us a bad cold” - COO

Results Reduced order to delivery cycle time by 57% Improved time to market cycle time by 79% Reduced inventory by 52% Increased productivity by 87% Boosted revenue by 43% Improved return on assets by 304%

Challenges Relentless global competitive price

pressures drives need for substantial year over year cost improvements

Desire to provide customers improved service levels while achieving improved return on assets

Semiconductor Manufacturer

Case Study

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Results Reduced order to delivery

cycle time by 57% Reduced inventory by 52% Increased productivity by

87%

How Achieved Orchestrated Employee Buy-In Established hierarchical measurement set from business level

to daily drumbeat metrics by operation group – ec, photo, etch Formed cross-functional teams for key operations – fab, probe,

packaging, test and production control Trained supervisors to dynamically adjust operator schedules

throughout shift to balance wip across multiple processes, equipment groups and masking layers

Paretos and root cause identification of defects in fab yield and defect densities

Reduced photo rework to zero Provided skills training for equipment maintenance

organization increasing overall uptime from 70% to 85% Improved furnace utilization by 30% Guided the internalization of methodology and established an

environment of continual process improvement throughout the organization

Semiconductor Manufacturer

Once again teams and buy-in are critical along with stepped measures of success.

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Challenges Could not reliably launch products to meet the

seasonal sales windows. Small market share in Cordless products, which

were the fastest growing market segment. Return-On-Investment for newly developed

products consistently missed goals.

Results Average Time to Market has been reduced by 35%,

and new product revenues have increased to 25% of total sales.

Return-On-Investment for newly developed products has improved over 30%.

Production start up time has been reduced by 80% and most new products are launched on time.

Launched entire line of new cordless products increasing market share.

Supplier of hand operated Power Tools

Global Operations and Development

World Wide Sales with significant local market differentiation

Seasonal markets – 50% Christmas, 15% Father’s day

Employee Buy-in , full engagement – drove results

Hand and Power Tools

Case StudyHOW? – Employee team meetings, training, process improvement with support.

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Case StudyGlobal Communications Manufacturer

Needs to create new demand pull Must Orchestrate Customer Buy-In Faces Major Competitor

Challenges

Face dominate competitor Poor Brand Recognition Increased sales in US

Results

$60 M in annual sales 50% Market Share won

How achieved

Comprehensive CRM program launched Extensive interviews Leverage technology & timing Trained sales and major customers Gained strategic partnership relations

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B2B Lessons Learned

• Participants must be actual stakeholders• Participants must commit to the team approach.• Participants must commit time, and resources for the

entire period the group remains active.• Participants must be representative of organized

groups that are capable of implementing agreed upon solutions.

• Participants must enjoy the support of the respective groups they represent.

US Corp of Engineers70

Lessons Learned

• Strategic Change, internally or externally, requires buy-in from the impacted parties to be successful.

• Today – with instant communications customers announce their position on your product, offering, or service to the world via blogs, Twitter, Facebook, and email.

• Employees demonstrate their support by voting with their engagement.

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CONSUMER (B2C) BUY-INLook for the hidden agenda

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What would your company do?

• If you had a product that was delivered in a box & new designs were under evaluation.

• Would your company:– Print up hundreds of versions and display them publically

and take a poll?– Ask the marketing people what they thought and then go

to market?– Review the designs with a management committee who

votes?

Which of these creates buy-in?

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Consumer Products

• Even CiCi’s Pizza has grasp the value of experiential marketing.– Everyone entering was asked to choose from 9

different delivery boxes– Each box had a different design– Choose the design you like best

This is the most basic of marketing getting the customer to tell you what they like.

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CiCi’s Results

• The jury is still out.• Not all votes have been counted.• What happened when customers were asked

about a delivery box?• Most of them never get their pizza delivered.• Was this a waste of time and money?

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What were the results we wanted?

• When marketing asked the question, what was the answer?– Create awareness of our delivery service!– Engage the customers, show them they are

important to us.– Demonstrate our willingness to listen to any

customer. – Oh, buy the way pick a new box design.

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Alternatives

• CiCi’s could have run an internet poll.• They could have run a major TV ad campaign.• They could have let the marketing research

team decide. • They could have let a management team

decide.

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Outcomes

• CiCi’s is running a promotion $3.99 buffet lunch M-F.

• This brings in customers.• Customers are engage in box survey.• Customers talk about box survey at lunch and

with others. (ads are true, food is ok, place is clean, service is fast & friendly – good value)

• New customers! Oh yea new delivery box design.

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Would you pay $1

• In order for CiCi’s to have this promo work they discounted their buffet $1.

• Look at what they got for their $1 per customer.

• Would your company be willing to get similar results for $1 per customer?– Key is customer – not prospect – these are proven

buyers of the product – THAT IS BUY IN!!!

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Your Challenge

• Not B2C.• You are all about B2B.• Does this still work?

– Remember the case studies. – All of them were B2B. – Would you accept those results?

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Change in Business

• Typically the financial issues have models and metrics that keep them on track.

• Softer issues are more challenging.• Regardless some lessons to avoid failure and

insure success can be gained.• When gathering team members regardless of

their role:

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How do you insure

• The nature of the participant?– Test– Interview– Experience– Strong facilitation skills – with barrier removal

agreement in place with top management.

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Key to success

• Top line leadership– The slightest waver here

and you are swimming up stream, chance of success below 50%.

– Facilitates/ Supports barrier removal committee.

• Clear objectives• Clear metrics• Deliver clear results

Measurable results

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The Process of Change

Get everyone engaged.84

Orchestrating Buy-In

• When everyone understands– The rules– How to keep score– What good looks like– What is in it for them– Have some idea about what to expect– Have a hand in the processIT CREATES BUY-IN ~ WHICH DRIVES SUCCESS

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Let’s examine a successful approach to change

• LEAN Manufacturing has made significant impacts on manufacturing profitability.

• LEAN is taught through simulations and modeling.

• Why?– Adults learn and retain what they learn when:

• They can see the results• Participant in the learning• Get to ask questions

= Buy-In86

Start with the end in mind.Who will benefit if you are successful.

How will they benefit if you are successful?

How will they acknowledge this benefit?

How will it be measured?

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THE BOARD OF DIRECTORSThe toughest buy-in.

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Board Buy-In

• Boards should ask the tough questions.• They should challenge

– The idea– The timing– The resources– The results– The NEED

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Gaining Buy-In

• Understand the audience• Address the easy stuff in the documentation• Discuss the reasoning with the thought

leadership• Prepare your evidence

– Answer the 5 Ws• See it from their point of view• Now prepare to fully engage them in

experiential learning90

Educating the Board

• Sometimes what is needed is an educational experience.

• The board needs to learn something new or different about the business, the market or the rules of governance. – Without this new knowledge they

are under prepared to make decisions on change issues.

OK I Get It Now!

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Buy-in results

• Family felt included and educated• The risk was clearly addressed • Everyone was convinced the decisions were

right• Support from Customers, Vendors, Lenders,

and Leadership –joined into one voice

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Board as Stakeholders

• Board members are included in the list of stakeholders

• Even if they don’t own stock • Stakeholders will be impacted by the decisions

and directions of the enterprise.• When we think of the board as a subset of

stakeholders we have a better approach to orchestrating their buy-in.

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Cash is King

• “Businesspeople never let cash out the door that doesn’t strictly, ultimately, bring more cash back.” - business THINK

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Case Study

Challenge Sales off Profits off A/R slow Reluctant to add $

Closely held job shop manufacturing

Family Business 30 years same location 3rd Generation leadership

Solution New business plan New innovations introduced Board Engaged in ERM workshop

Results Sales up 20% in 90 days Profits recovering A/R reduced 3.5%

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The Buy-in an ERM Workshop

• How did an ERM Workshop convince the board to add more equity to the business?

• 1st Gen relies on profits for retirement income• 2nd Gen relies of profits for expenditures• 3rd Gen struggled to make goals

– ERM defined and quantified the risk that needed to be taken.

– The ERM addressed the unknowns.– The ERM revealed vendor partnership opportunity.

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One Corporate Vision

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Stakeholder Engagement/ Buy-In

Stakeholder engagement - one of the objectives that supports our Mission - happens when a company engages in dialogue on issues of mutual concern.

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FULL CIRCLE – TAKING THE KEYSThe toughest buy-in ever.

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Start with the end in mind.Who will benefit if you are successful.

How will they benefit if you are successful?

How will they acknowledge this benefit?

How will it be measured?

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Starting with the end in mind.

• This can be the most challenging buy-in ever.• Children taking responsibility for their parents.• How difficult is it to consider how your parents

might actually benefit if they relinquish the keys to the car.

• Where your parents live can influence your approach.

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Who will benefit?

• Parents– No more car insurance– Reduced risk of liability from accidents– Drawing closer to those that love you– Reduce fear of injury – self & others

• The Children– Reduced fear of the unknown– Closer relationship

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How will they benefit?

• We answered a few of these previously – in fairness what will be the challenges? Seeing it from the stakeholders point of view:– Loss of Independence– Loss of control– Acknowledgement of diminished capacity– Challenge of getting around

• More difficult in rural areas than in urban• Taxi, Bus, Children, Neighbors, Friends, Family

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How will they acknowledge benefit?

• This depends on their condition– Folks that are ill have less difficulty – Folk that live in isolated areas have more difficulty

• Farm folks and Seniors in small towns with no public transportation can be challenged.

• Similarly small town and farm communities come together in support of their senior citizens with informal networking to insure everyone is covered.

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Acknowledge the Benefit

• Once they accept the need –– They acknowledge the need and their challenges

• Eventually they begin to tell stories that of close calls that will curl your hair.

– They grow closer to friends and neighbors as they come to rely upon them from time to time.

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Measurement

• Eventually your parents are still just as smart and they love you.

• They come to accept the necessity and acknowledge the love you displayed in making the tough call and getting them to buy-in.

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BACK TO BUSINESSThe DNS of success

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Start with the end in mind.Who will benefit if you are successful.

How will they benefit if you are successful?

How will they acknowledge this benefit?

How will it be measured? DNA of Success

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7 Step Measurement Process

• Business Unit Signoff• Performance Consulting• Pre-Assessment• Evaluation 1 for learner• Evaluation 1 for

manager• Follow up evaluation

with learner• Follow up evaluation

with manager

• The Training Measurement Book –Josh Bersin

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Examples

• Here I will insert success stories from others that prove the format we outlined

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Closing

• Review the DNA of Success• Review the 5 Ws• Highlight the lessons learned• Point to the opportunity to win• Provide contact information and outline some

of the workshops we offer to Orchestrate Buy-In

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