The Challenge of Change

Managing change—from business reinvention to daily operations—was one of the key themes of the 2005 American Gem Society Conclave, held April 13–16 in Hollywood, Calif.

Speakers who addressed the topic included Patrick Lencioni of the Table Group and author of The Five Dysfunctions of a Team, one of the event’s keynote speakers; William Boyajian, president of the Gemological Institute of America; Diane Warga-Arias, a noted industry trainer with the Diamond Promotion Service; and Matthew Stuller, chief executive officer of Stuller Inc., who gave the keynote address during the association’s annual Robert M. Shipley Award luncheon (see Upfront Spotlight, p. 54).

Trust Is Critical. Trust is the basis for all teamwork, Lencioni said, but it requires some vulnerability on the part of each team member. The leader must be vulnerable first, he said, because if the leader doesn’t show that he or she is human and fallible, no one else will.

He offered the example of a Fortune 500 CEO who reluctantly agreed to 360 degree reviews (where everyone is reviewed by superiors, subordinates, and peers), but who didn’t want to discuss the results with his team. He finally accepted that step, but in such a way that his team had no opportunity to speak freely.

Fear of conflict is another dysfunction of a team. Positive conflict is beneficial, but personal conflict is harmful. Look for unearthed conflict and drag it out. A relationship based on trust will survive, said Lencioni.

Accountability is essential. Not only must the leader hold him- or herself and the team accountable for results but team members must hold each other accountable for their part of the process. Nothing works like peer pressure, he said.

Paradigm Pioneering. Stuller described how he built his company into one of the industry’s most successful businesses by asking himself what he could do differently—and better—than the competition. He came up with three items: Say “thank you” for an order, send out items the same day they were ordered, and cultivate a desire to serve customers’ needs.

From his early experience as a trade shop owner, he knew that manufacturers sometimes took weeks to send findings to a jeweler for a “quick” repair. That’s when he got the idea to open a business that would ship out parts the same day the order came in.

Some of his success was fortuitous timing, he admitted. The timing for a just-in-time business model was perfect. He met with Fred Smith, the founder of Federal Express, and said, “If you give me good pricing, I will ship every package via Federal Express.”

Stuller advised his audience not to rest on their laurels. “As soon as you take the focus off reinventing yourself, you allow the competition room to come in and you’ll be picked off.”

Reinventing Your Business. Boyajian offered a 12-step program for successfully reinventing a business. First, he emphasized, a business owner or manager must budget time for planning. Change is never made without inconvenience, he said, but progress is only possible through innovation. Before beginning, the owner or manager must identify the need for change, then act to initiate the change, and finally see the process through to completion. The 12 steps to doing that successfully are:

  1. Be open to change. Some people are naturally resistant to change, whereas others are more accepting of it.

  2. Carve time in your life to think and plan. Book time for yourself like an appointment, and delegate as much as possible. Whatever someone else can do, give it to them. Also realize that you may have to cut something out to make time for yourself, but without these steps, that time will never happen.

  3. Decide who you are and who you want to become. Write out your core values, and keep them in front of you. Filter your new ideas and initiatives through these values, and rely on your key people to test your theories. Ask yourself, “What do I like or not like about my current situation? What do I want to become? What do I want my store or business to become, and why?”

  4. Be committed to the change process. It may involve some outside counsel, such as an executive coach or setting aside some time to work with a facilitator.

  5. Stay committed to people. You can design the perfect process, said Boyajian, but become confounded by problems when you insert people into the process. The best practices, he said, blend people into the process. Share your thoughts, ideas, and plans with the people who will be involved in the process; they will get behind it when they’re involved in creating it. And don’t forget that part of being committed to people is holding them accountable for their part of the process—and holding yourself accountable as well.

  6. Hold strong to your principles, but challenge the status quo. If you try to maintain the status quo, you will be left behind, he said. You can, however, make many changes without bending your core values, but it requires commitment and discipline.

  7. Get some help. An outside facilitator can be a tremendous help, as can inside people who have a stake in the business. They, along with the people who actually participate in the workflow, make valuable advisors.

  8. Prioritize your thoughts and actions. Get everything down on paper, review it with your key staff, and ask for critical reflection. Make sure your whole team agrees on the priorities. “Be smart enough to know how smart they are so you don’t try to outsmart them,” he said.

  9. Communicate with your staff. Lack of communication is the biggest failure in business, he said. Allow people to feel “in” on the change process, give them recognition for helping, and show care and concern for the staff as you implement changes.

  10. Hold people accountable to standards. If you’re instituting a change, insist that everyone follow it and adhere to principles. Do a lot of work up-front so fewer problems arise later. Finally, if after your best efforts, someone still isn’t “getting with the program,” it’s time to cut him or her loose.

  11. Generate excitement and fun in the workplace. Do something significant every year, every season, or even every month, he said. Give everyone a role to play, and let everyone benefit from it.

  12. Walk the walk. Nothing breeds success like success, he said, and no one creates more success than a successful leader. If you’re an owner or a manager, your imprint is left on the people around you—make it a good one.

Transformations. Warga-Arias presented a class titled Retail Transformations: The Next Generation, which also discussed changing with the times and not relying on tradition and history to keep customers loyal.

“Change equals basics plus new research,” she said. Change is uncomfortable, she added. As people move from their comfort zone toward the competitive edge, they’re going to be uncomfortable. The challenge for retailers is not to let them fall into the bleeding edge, where the business has been derailed.

There are five stages of change: denial, anger, resistance, acceptance, and adaptation. People go through them at different rates, and managers must be sensitive to that. Acceptance, said Warga-Arias, is not the stage a manager wants employees to embrace—it’s passive and doesn’t represent true buy-in or participation in the new process. “Adaptation” should be the manager’s goal.

Coping with change requires resiliency. Any new hire will be resilient for a time, but the challenge is to find people whose fundamental character is resilient.

Transformational change is dramatic. It represents a complete shift of culture and systems, but Warga-Arias maintained it is easier for an organization to cope with one big change than lots of continuous little ones.

The retail transformation currently under way is about people, she said. It is critical to understand what a manager can and can’t control.

“You can’t manage people. You’re not a psychologist. You manage performance. It is easier to change a skill or behavior than a value, and you only get rid of people when their values aren’t compatible.”

Learning is the employee’s responsibility, she said. Providing the tools, means, and opportunities to learn are the employer’s responsibility. Sales associates, for example, need goals to establish, develop, and maintain a client base and to help generate store traffic. A sales staff’s relationships are as important to traffic-building as a store’s marketing.

“An average manager sees his employees as workers filling roles. An exceptional manager sees them as individuals to build roles around,” she said. A good manager doesn’t think of employees as a checkerboard—everyone the same—but rather as a chessboard, where each piece has specific moves. Play to your employees’ individual strengths, she said.

She suggested building learning goals for the staff that are tailored to the individual and go beyond the typical product/sales process. For example, an associate could join Toastmasters, become expert at public speaking, and be the store’s representative when asked to give presentations.

Build employees’ confidence and success by focusing on their strengths, setting stretch goals, encouraging persistence, assisting when needed, celebrating achievements (in front of an audience), and reinforcing behaviors you want to repeat.

Attribute your successes to strengths and strategies, and failure to lack of learning, she said. People fail for two reasons: lack of skills or lack of willingness. Always first assume it’s a lack of skills, she said. Strengthen weaknesses by providing the relevant training; offering team or partner support; having a technique for enforcing the discipline required; and finally, seeing if there’s a way to redesign or restructure the job to take advantage of the person’s strengths.

If, however, the problem proves to be a lack of willingness or a bad attitude on the employee’s part, then it’s time to let the person go.

Motivation comes from inside, she said. Inspire change with joy and fun, and for positive reasons. Negative reasons are not a motivator—even if they motivate in the short term, it’s seldom a long-term solution.