July 2008: Changes

Back in the day, when I was in college, probably a sophomore, we were trying to be hippies. We were expanding our minds and our points of view. People, my peers, liked to be profound. We liked to “rap.” Rapping then was simply talking about things, discussing things in depth; it was even better if anyone could be profound or even pretend to be profound. Profundity, real or fake, would often evoke cool phrases like, “wow, man, that’s heavy” or “that’s some deep sh*t.” We like to be heavy and deep when we were sophomores.

I recall a conversation during a summer job between my freshman and sophomore years. I was working at a factory, a medium sized tool and dye shop, Forge Precision, run by three guys, two of them Armenian: John Kechikian, Don Arslanian, and Gordon Grossman. It was a great experience because after a kind of disastrous freshman year of “finding myself,” the honest, tough, and menial labor motivated me to want to do and be something more. I went back to school and excelled, never looking back except in reflection.

I had the conversation with a co-worker. I do not even recall his name. He had a bit of a southern drawl though I am betting that it was his parents that were born in Kentucky. This fellow was not going to college. I was nineteen and he was maybe 23 or 24. He liked to call me “college boy.” One day at lunch we were talking, no we were rapping. We were trying to be deep and profound. I said something like “nothing is constant, everything changes.” Yeah, baby, I was pretty deep with that. He countered with a word play that actually stopped me in my tracks and stuck with me all these years. He said, “one thing never changes… and that is change itself.” I wanted to say something smarter, more profound, and deeper. I knew even then that it was as much word play as it was philosophical. I paused for a pregnant moment and looked deep. I had nothing. I simply retorted, in the vernacular of those days, “that’s heavy.”

The year was 1972. We were probably using the word change maybe because things were changing or maybe because David Bowie had released a song entitled Changes in January of that same year. I Googled the lyrics of the song and read them. They are kind of lame, psychobabble at best. Maybe it is simply because I was coming of age then. But it seems that ever since then, there has been a lot of talk about change.

Everything changes except change itself. Is this true? While we are at it, why are we obsessed with change? We even try to “manage change” these days. Is that even possible?

Many business presentations advocating doing something new or different, beginning with the sentence: The pace of change is accelerating. They then proceed to give examples to illustrate this point and make the case for whatever it is they are advocating.

Can the pace of change… change? My theory is that the pace of change is unchanged. It is exponential, like population growth. The elbow of the curve when the curve changed from slow and steady to quite dramatic was arguably the Industrial Revolution. The theory is good but not quite original. Most people sense this. When my grandmother passed last year at the end of 100, I noted how much things changed from when she was born until she died. She saw and experienced more change in lifestyle, convenience, transportation, and, entertainment. Not surprisingly, this excludes the entire information boom of personal computers and the internet.

In 2001, the noted futurist Ray Kurzweil wrote an essay entitiled The Law of Accelerating Returns. He posted it on KurzweilAI.net, a kind of pre-blog. The essay opened with:

An analysis of the history of technology shows that technological change is exponential, contrary to the common-sense "intuitive linear" view. So we won't experience 100 years of progress in the 21st century -- it will be more like 20,000 years of progress (at today's rate).

How do people handle change? It certainly depends on what is changing and the kind of change. Some change, in the form of innovation, is most welcome. Consider the telegraph, the radio, television, video players, all the way to the current streaming video on demand available to many today. These entertainment and communication innovations have certainly made life more enjoyable. They have made breaking news events available to the entire world instantaneously.

Consider washing machines, dryers, dishwashers, refrigerators, microwave ovens, and every other home and personal convenience. Who today, certainly amongst those reading this letter, would consider wringing laundry by hand? These changes and innovations are welcome. They free us from time consuming and drudging tasks.

The airplane is or maybe was a good change. Military applications aside, the airplane allowed us to quickly move people and goods from point A to point B. It allowed for the expansion and globalization of business. It allowed for the making tourism accessible to many more. It both enables people to move where work opportunities are and then return back to visit family and friends.

Change in the workplace can be more daunting. There are two aspects to this one has both positives and negatives, while the second can cause a lot of angst.

First, technology enables us to save time and get more done. In most offices I see, everyone has a personal computer, many have laptops to giving us mobility to compute and communicate from wherever. Somewhat less have work cell phones or blackberries to facilitate communication to an even more granular level. The good part of this is that we can be in touch 24/7. The bad part is that we can be in touch 24/7. It is good because we can reach anyone, anytime, in almost any place when needed. The bad part is that this can easily eat into personal time. People complain they are always working, always on.

Second, is the change in economic conditions and re-organization both of which are part of the a company’s struggle to survive and prosper. Technology certainly plays a part here. Consider the number of secretaries working in any office today. When I first started working, the ratio was probably 1 secretary for every 10 employees. With the advent of personal computers and cell phones, that ratio is probably like 1:25 or 1:30 with most employees having little or no access to any of their time.

Consider the way companies are born and die. We tend to think these big enterprises are everlasting. Yet, they are not forever e.g. Enron. The Dow Jones Industrial Average was first published on May 26, 1896. It was then and has remained the most quoted stock market index. It is based on the largest and most widely held public companies. Thirty companies make up the list today. All are names you would easily recognize, especially if you live in the US or read any US financial magazines.

In 1896, there were only 12 companies on the list. What are the original companies? Not names you might easily recognize:

1. American Cotton Oil
2. American Sugar
3. American Tobacco
4. Chicago Gas
5. Distilling & Cattle Feeding
6. General Electric
7. Laclede Gas
8. National Lead
9. North American
10. Tennessee Coal & Iron
11. US Leather
12. US Rubber

Only General Electric is still a Dow Jones company. One is outright out of business. Two were broken up in anti-trust actions. The remaining eight have been bought and incorporated into other companies. There has been a lot of change.

When we look at the original Dow 12 vs the 30 companies that are in the index today and we certainly recognize that there has been change. The change has taken place over time and in retrospect it looks smooth and natural. Companies enter and leave the index every year or so. No big deal in the large scheme of things.

The same applies when I look at an organizational photo of my current department. The photo was taken at a management meeting in August of 2007, just one year ago. There are 29 people in the photo. Of the 29, 9 are no longer with the company. Most left on their own, a few were let go. That is 28.5% turnover. The change has taken place since the full year. If I polled our team without giving them time to think, I think most would have guessed 10-15% turnover.

The livelihoods of the employees are so dependent and intertwined with the enterprise that we have to believe our employers are here to stay. Any change, especially abrupt, re-organizational changes can stun people and hence the organization into what can be several months of people worrying more about what will happen to them rather than focusing entirely on their jobs. If in our team of 29 we experience the mass exodus of 9 people one day, it would have certainly had this stunning effect. Gradual or steady change is more easily tolerated. Abrupt changes are the things that throw us into chaos.

We live in the short term. As managers and leaders, we react in the short term. I wrote in the Food Shortage letter a bit about this. Are the external, business and environmental changes we are experiencing more dramatic and significant than our ability of to change with our myopic quarterly operating mindset? People refer to these kinds of futile too little too late actions as being as useful as rearranging the deck chairs on the Titanic after it iceberg.

Often time the reactive actions we take to adapt to change are less benign than rearranging the deck chairs on the Titanic. We cut staff, squeeze suppliers, and other things to dramatically reduce the cost side of profit equation. By only focusing on the cost in a quick as you can reactive way, we often cut deeper than necessary and end up stressing the remaining workforce in terms of hours and workflow. You tend to cut the folks that are the poorer performers. This makes life more complicated on the really valued people that you retained. This can result in a general malaise and an increased turnover. This is a very real problem I am dealing with on a day to day basis.

So, why am I writing about this? Look at the six letters I have written in this Fifth Volume of this letter. Half of them are concerning and trying to cope with the general economic conditions and how it is affecting my work life. I wrote about Recession in March, Food Shortage in May, Laughter is the Best Medicine last month, and now Change Management. It is really all about trying to make sense and cope with the whirlwind of changes both in general and in my workplace in specific.

The workplace challenges are pretty significant. We are definitely not the Titanic but there seems to be too much deck chair re-arranging. This is not only our company but many other companies that I read and hear about.

As a manager, as a leader, I have always struggled with what seems to make sense in the long term getting traded off for the short term need to deliver results. I am sure I will address this topic in some form again but hopefully not the remainder of this year. I prefer to have a Monthly Letter of Musings & Meanderings rather than a My Obsessive Reacting to the Chaos and Economic Doom & Gloom Surrounding Us All.

To keep with the spirit of the June letter, I will close with this very old and groaner of a joke:

After a long grueling two day march through swamps and dense jungle, the soldiers were both filthy and exhausted, their sergeant said,

“Great job men! It has been tough and I know you are tired and dirty. Good News. You will get a change of underwear.”

The troops were happy with this news. The sergeant continued.

“OK. Kelly you change with Manetti.
Kowolski you change with Johnson…”