Have you ever faced a disruptive change at your organization and wondered, “How did we get here?”
I was recently in Chicago speaking to a group of Fortune 500 leaders about this very same topic. They were left having to pick up the pieces and lead their teams amidst a massive reorganization. And the company (as they knew it) no longer existed. Change can be a harsh reality and if you stay comfortable for too long it has the potential of stifling the growth of some of the greatest companies in the world.
During my time at Walmart, we were experiencing a time when some of the world’s largest retail giants — Sears, Montgomery Wards, KMart, etc. — were facing the very real reality of closing their doors. We understood that we were not immune to this industry pattern. We were hyper-aware that we must be on the watch for early signs of decline and irrelevancy. And we built in a strategic pulse for disruptive change in order for the organization to thrive.
One of the most difficult things to do in an organization is to convince people that they must change. But the best leaders know that change is the constant drumbeat of any successful company. It is inevitable and it must happen swiftly.
Is your organization making the changes it needs to thrive through innovation and change or is it waiting for the pendulum to swing? Here are some signs your company may be too complacent and how to take action.
SIGN #1: Flat or declining sales.
Flat or declining sales are one of the top metrics for measuring complacency. Having a growth mindset and is a baseline requirement for success. Sales trends are the best way to monitor the trust and preferences of your consumer base. ACTION STEP: Always know your ‘stock price’.
Do you know the value your organization delivers? One of the key indicators for knowing what fuels your organization is by always having your stock price in mind. Why? Because it’s the key metric that fully encompasses the value of your company. Although not every company is traded publicly, you can still create one by measuring the value being delivered by your organization.
Some basic metrics to consider are turnover, productivity, and market share. However, the core component of your company’s value should start with measuring employee engagement. Employee engagement is different (and more important) than employee satisfaction. Employees can be satisfied but not giving their best. What is your company doing to ensure your employees have what they need to deliver ‘best in class’ work? Are they clear about the mission of the organization? Are you cultivating a culture of trust and integrity?
SIGN #2: Unsinkable mentality.
It’s easy to think your ship won’t sink and that your business model has been perfected to stand the test of time. However, this mentality is the clearest sign of complacency. Nothing stays the same. If your stakeholders see that you’re not delivering the best value, that’s going to impact your growth. You have to strive for relevancy and foster it on a continual basis. Constantly seeking feedback from your stakeholders, whoever they are, and constantly reviewing the competitive landscape are essential for this step.
ACTION STEP: Create a sense of urgency to stay relevant.
You have to paint the scary picture. It’s easy to think your ship is unsinkable. However, the reality is that no matter the size of your organization, your department or function, anything is sinkable. According to John Kotter, over 50% of organizations fail at this stage. It’s the stage of combating complacency through creating an urgent need for change. There have been critical moments where we had to help the organization realize ‘We’re on a sinking ship.’ Many thought, We’ve been in business for 45 years — we’re successful! Why do we need to go through this painful process? You need your employees to acknowledge ‘OK, that’s a scary picture, I don’t want to stay here, in the status quo’. People will not take action unless they understand what’s really at stake. In our case, we were experiencing flat to declining comp sales performance. We had to break down the reasons for flat comp sales — understand the relationship between flat comp sales and the stock price.
This is one of the things Sam Walton did so well. He would tell us to go inside the stores of our competition even if we thought they were falling behind. It didn’t matter how bad the store looked. He wanted us to come out of that store with two exceptional ideas. We may have gone into that store and found it was just a trash heap but the way they merchandised their intimate apparel or socks and hosiery was remarkable. You’d walk away and say they have a display that was one of the most remarkable displays we’ve ever seen — let’s do that. You may look better than your competitors but don’t dwell in the negatives; find great ideas and best practices every time you benchmark your competition. This mentality kept us humble and always in pursuit of excellence.
SIGN #3: You have a ‘This is just the way it is’ culture.
This type of mentality is not only a sign of complacency but it can devastate your company culture. It’s easy to fall prey to the idea that things are fine just the way they are. However, you have to have the courage to see your company and its goals as they always could be better. ACTION STEP: Encourage, reward and celebrate new and different ideas.
Are you encouraging your people to think differently about the organization? Are you giving them stretch assignments and rewarding them when they discover new ideas and solutions to various challenges? Are you celebrating their success with others throughout the organization when it happens? Encouraging this behavior must start by setting an example from the top and instilling it throughout the rest of the organization.
SIGN #4: Quality of their work is declining.
When people aren’t giving their best, it typically ties to how well they are aligned with the mission and values of your organization. I once asked a client who felt like their team wasn’t giving their best and my first question was, ‘Do they know your organization’s values?’ She replied, ‘Well, we have them written down somewhere but they often end up collecting dust in our desk drawers.’
ACTION: Be a mission-driven organization.
Organizations that really don’t know how people feel about working here have blinders on. Do you have a mission, vision, and values? Are they visually displayed throughout your organization? Everybody has to know them and they have to matter. Otherwise, people will experience burnout and performance fatigue. Being a mission-driven organization is the goal.
When done well, leading through change can be worn as a badge of resilience and competitiveness. More importantly, when you learn to embrace it you find that both you and your organization will thrive. Don’t let complacency be what holds you back when change is required.