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Defying Doom: Leading Urgent Large-Scale Transformations
This book is a call to action. If you need to know what it takes to break through to a new layer of oxygen in an organization that has been flying high in the past, you will find this both an inspiring and practical approach. Nothing will swoop down to remove your challenges, but the framework explained in this book carves a clear path toward transforming an organization, as opposed to sinking into decline. This framework is grouped around three simple steps: What's the story? Who is on board? Getting things done.
200 pages, Paperback
Published January 1, 2016
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February 12, 2016
Bernardo Quinn is the global HR director at Telefónica, the Spanish telecom giant. In January 2016, I met Mr. Quinn at an event at IE Business School in Madrid, where he gave a lecture that was at the same time a book-presentation for his book. Full disclosure: At that event, I received a free copy of ''Defying Doom''.
''Defying Doom'' is a book about change management, especially focused on how to manage change in large companies that require an urgent, large-scale transformation. While some of his recommendations are also applicable to change processes in general, others are only relevant to large-scale transformations in big companies.
Quinn proposes a 3 step framework for urgent, large-scale transformations:
1. What's the story?
2. Who's on board?
3. Getting things done.
STEP 1: WHAT'S THE STORY?
First step in any change process is to create awareness, a sense of urgency, and then to give direction, a vision of a future destination. These two elements, URGENCY and VISION, should be combined in a STORY that can be communicated to all stakeholders involved in an affected by the change process.
You need both elements, the story should be a blend of urgency and vision: A cautionary tale that lays out why remaining in the current situation is not an option, and a compelling and aspirational rally that must inspire us to embark on a quest together, an adventure to a better world.
Quinn notes that ''in any transformation, there is a need for urgency'' (pag 28), because ''if you keep saying everything is fine, people will not feel the need to change'' (pag 48). Managers should avoid picking only the good news in a transformation process. There are 2 downsides to only talking about the positive news and avoiding the bad news: ''The first, as mentioned above, is that many people will prefer to stay where that are if the danger is not made explicit, the second is that people will be subliminally aware of possible doom and the fact that we do not openly talk about it hurts our credibility as leaders'' (pag 100).
Although in all change processes the story needs to be a mix of urgency and vision, the exact balance between the two will depend on the circumstances: ''The lower the sense of urgency, the greater the need for a compelling vision in order to get people moving'' (pag 39). And vice versa, I would like to add.
Quinn has observed that often, in large companies, many people are not aware of the bad shape their company is in, even if facts and indications for that are all around. Quinn recommends that leaders communicate constantly to their teams about the state of the company as a first step to make people aware of what is going on. Additionally, he recommends everyone to ask themselves the following questions: ''When do you think? When do you look around? When was the last time you honestly discussed matters with someone who disagrees with you?'' (pag 43). We have to face the facts, listen to customers, shareholders and vendors, and make sure we get the best information, both from inside and outside the company.
To illustrate the above, Quinn tells the anecdote of Irigoyen's newspaper: Argentina's president in 1930, Irigoyen, was very sick and had to stay in bed. His subordinates didn't want to tire him with bad news, so they only gave him positive reports. Irigoyen became aware of their plot, and asked for newspapers instead of reports. His subordinates proceeded to print a special newspaper with only positive news exclusively for Irigoyen.
STEP 2: WHO'S ON BOARD?
Quinn argues that in crises and for urgent large-scale transformations, authoritarian top-down leadership is required. In order for this authoritarian leadership to work, and thus in order to make the large-scale transformation a success, the entire company must be aligned around the ''story for change'' that was developed in the first step.
According to Quinn, the role of the leader is paramount, both for the development of the story and the alignment of the organisation: ''A leader will set the right vision, will determine the direction, will align the team, and motivate and inspire others to follow'' (pag 72). The leader must first secure the alignment of the top team, and only then start to communicate the story to the entire organisation: ''Alignment requires a strong leader to get things going, requires clear channels of communication and basic agreement within the top team, and it requires reaching out to everyone else in the company, even related third parties who may be outside the organization'' (pag 71).
Important leadership characteristics: The leader must lead with actions, walk the talk. Also, a great leader acts as a coach: ''In doing so, the leader helps each individual to perform at his or best'' (pag 92). Also listing and building trust are key leadership skills.
A useful trick to establish alignment: Focus on the external enemy.
In the end, it may not be possible to get everybody on board. In such cases, what Scott McNealy used to say at Sun Microsystems applies: ''Agree and commit, disagree and commit, or get out''.
STEP 3: GETTING THINGS DONE.
In order to get things done, you need to FOCUS. ''You will not be able to affect a successful turnaround by trying to tackle too many things at the same time. Select a few key processes around which to FOCUS the whole of the company. Focusing on a few key issues requires STOPPING some things. STOP any existing projects that are distracting the impact of resources and energy from the crucial points'' (pag 116-117). Quinn suggest to not only make a to-do list, but also a list of things that you should stop doing.
In order to focus, you have to make choices. In deciding which projects to stop, often ''the question is not whether the project is good or bad, but whether it is a priority for the company at this time'' (pag 118).
Some general suggestions for the execution phase:
- Get the right mix of long-term projects and quick wins.
- Make sure rewards and KPIs are aligned.
- Monetary incentives are not the only way to motivate people.
- Walk the talk.
The book concludes with 3 case studies, about Telefónica, IBM and Apple.
MY OBSERVATIONS.
''Defying Doom'' is a useful book about change-management for companies in crises situations that need to make a fast turnaround. At the same time, many suggestions in this book, especially related to the creation of awareness and the development of a story that is a blend of urgency and vision, are also applicable to many other situations.
Therefore, the chapter on ''What's the story?'' is perhaps the most generally relevant. Unfortunately, this chapter is a bit lopsided: 26 pages deal with urgency and creating awareness, and only 4 with formulating the vision. And in those 4 pages, it is not even entirely clear where exactly the vision is supposed to come from. However, later in the book, Quinn states that ''A leader will set the right vision, will determine the direction'' (pag 72). This is in line with Quinn's general preference for a top-down leadership style in crisis situations and turnarounds.
The question is: Is this preference for a top-down approach correct? Are there also situations where an alternative approach may be feasible, even in crisis situations? The answer is yes, as is shown by 2 examples:
1. In the early 1980s, when it was mainly producing memory chips, Intel started to feel the competitive heat from Japanese firms entering the market. Without knowledge of the top leadership, a group of engineers, aware of the Japanese threat, decided to start experimenting with and producing microprocessors. Top leadership later caught on and went along (See also ''Contemporary Strategy Analysis'' by Robert Grant, 2010 edition, page 22: ''Intel's historic decision to abandon memory chips and concentrate on microprocessors was initiated by incremental decisions taken by business unit and plant managers that were subsequently promulgated by top management into strategy'').
2. In the 1990s, during IBM's times of crisis, a group of mid-level employees led by John Patrick and David Grossman, started to work on e-commerce and other internet related services. Top leadership later picked up on this and converted internet into the business area that was fundamental for IBM's turnaround (For a detailed account of this case study, see ''Leading the Revolution'' by Gary Hamel).
In general, several authors, such as Henry Mintzberg, propose ''emergent strategies'' as an alternative to top-down decisions.
Around pages 64 – 65, I was surprised to see that Quinn seems to promote a reactive approach to changes. First he states: ''If we thought the problems were solely the consequences of the macroeconomic context, we could just sit back and wait until the world economy entered a new growth period'' (pag 64). Assuming that macroeconomic issues are the only problem, can we even then sit back? What about competitors who are not sitting back but who are adapting and innovating? Won't we lose ground to them if we just sit back, waiting for better economic times?
Later, Quinn asks if you can be sure your company is working like a perfect Swiss watch with all the necessary processes and relationships in place. He recommends: ''If the company is now facing a real crisis, this probably the best time to take on internal issues and sort them out´´ (pag 65). Fair enough, but what about taking advantage of the crisis to develop a completely new business model, instead of just fixing the internal issues? To put it in another way: Is fixing the internal issues enough, especially in the tech sector, in a world that is constantly changing? Should we not be taking advantage of a crises and proactively be designing completely new strategies?
A final word on the cases. To be honest, the large case about Telefónica was a disappointment. It starts out well, with descriptions about the need for change and the efforts for alignment. However, the vision could have been explained better. On page 138, it is mentioned that Telefónica wants to become a ''Digital Telco''. A bit more detail about what this means exactly would have been great. Now, the only explanation that is given are the 12 points of the ''Be More'' program, which unfortunately contain the type of high-level statements (like ''Capture enterprise opportunity'') that Quinn on page 70 suggested you should avoid.
However, it is the execution section of the Telefónica case that really disappoints. This includes a long list of divestitures, which doesn't add much value. Even worse, each divestiture is described in detail in a repetitive way. First, a short description about the details of the particular divestiture, then a type of press release (called ''significant event'' or ''relevant fact'') stating the intention to divest with the same details, followed by another significant event or relevant fact that states the conclusion of the divestiture with, again, the same detailed facts.
It would have been far more interesting to read about how Telefónica intends to become a Digital Telco, and what it means by that, than to read through this long list of divestitures. Taking into account that this book was written by a Telefónica insider, the way the Telefónica case is set up is a missed opportunity to tell the true future story of that company.
''Defying Doom'' is a book about change management, especially focused on how to manage change in large companies that require an urgent, large-scale transformation. While some of his recommendations are also applicable to change processes in general, others are only relevant to large-scale transformations in big companies.
Quinn proposes a 3 step framework for urgent, large-scale transformations:
1. What's the story?
2. Who's on board?
3. Getting things done.
STEP 1: WHAT'S THE STORY?
First step in any change process is to create awareness, a sense of urgency, and then to give direction, a vision of a future destination. These two elements, URGENCY and VISION, should be combined in a STORY that can be communicated to all stakeholders involved in an affected by the change process.
You need both elements, the story should be a blend of urgency and vision: A cautionary tale that lays out why remaining in the current situation is not an option, and a compelling and aspirational rally that must inspire us to embark on a quest together, an adventure to a better world.
Quinn notes that ''in any transformation, there is a need for urgency'' (pag 28), because ''if you keep saying everything is fine, people will not feel the need to change'' (pag 48). Managers should avoid picking only the good news in a transformation process. There are 2 downsides to only talking about the positive news and avoiding the bad news: ''The first, as mentioned above, is that many people will prefer to stay where that are if the danger is not made explicit, the second is that people will be subliminally aware of possible doom and the fact that we do not openly talk about it hurts our credibility as leaders'' (pag 100).
Although in all change processes the story needs to be a mix of urgency and vision, the exact balance between the two will depend on the circumstances: ''The lower the sense of urgency, the greater the need for a compelling vision in order to get people moving'' (pag 39). And vice versa, I would like to add.
Quinn has observed that often, in large companies, many people are not aware of the bad shape their company is in, even if facts and indications for that are all around. Quinn recommends that leaders communicate constantly to their teams about the state of the company as a first step to make people aware of what is going on. Additionally, he recommends everyone to ask themselves the following questions: ''When do you think? When do you look around? When was the last time you honestly discussed matters with someone who disagrees with you?'' (pag 43). We have to face the facts, listen to customers, shareholders and vendors, and make sure we get the best information, both from inside and outside the company.
To illustrate the above, Quinn tells the anecdote of Irigoyen's newspaper: Argentina's president in 1930, Irigoyen, was very sick and had to stay in bed. His subordinates didn't want to tire him with bad news, so they only gave him positive reports. Irigoyen became aware of their plot, and asked for newspapers instead of reports. His subordinates proceeded to print a special newspaper with only positive news exclusively for Irigoyen.
STEP 2: WHO'S ON BOARD?
Quinn argues that in crises and for urgent large-scale transformations, authoritarian top-down leadership is required. In order for this authoritarian leadership to work, and thus in order to make the large-scale transformation a success, the entire company must be aligned around the ''story for change'' that was developed in the first step.
According to Quinn, the role of the leader is paramount, both for the development of the story and the alignment of the organisation: ''A leader will set the right vision, will determine the direction, will align the team, and motivate and inspire others to follow'' (pag 72). The leader must first secure the alignment of the top team, and only then start to communicate the story to the entire organisation: ''Alignment requires a strong leader to get things going, requires clear channels of communication and basic agreement within the top team, and it requires reaching out to everyone else in the company, even related third parties who may be outside the organization'' (pag 71).
Important leadership characteristics: The leader must lead with actions, walk the talk. Also, a great leader acts as a coach: ''In doing so, the leader helps each individual to perform at his or best'' (pag 92). Also listing and building trust are key leadership skills.
A useful trick to establish alignment: Focus on the external enemy.
In the end, it may not be possible to get everybody on board. In such cases, what Scott McNealy used to say at Sun Microsystems applies: ''Agree and commit, disagree and commit, or get out''.
STEP 3: GETTING THINGS DONE.
In order to get things done, you need to FOCUS. ''You will not be able to affect a successful turnaround by trying to tackle too many things at the same time. Select a few key processes around which to FOCUS the whole of the company. Focusing on a few key issues requires STOPPING some things. STOP any existing projects that are distracting the impact of resources and energy from the crucial points'' (pag 116-117). Quinn suggest to not only make a to-do list, but also a list of things that you should stop doing.
In order to focus, you have to make choices. In deciding which projects to stop, often ''the question is not whether the project is good or bad, but whether it is a priority for the company at this time'' (pag 118).
Some general suggestions for the execution phase:
- Get the right mix of long-term projects and quick wins.
- Make sure rewards and KPIs are aligned.
- Monetary incentives are not the only way to motivate people.
- Walk the talk.
The book concludes with 3 case studies, about Telefónica, IBM and Apple.
MY OBSERVATIONS.
''Defying Doom'' is a useful book about change-management for companies in crises situations that need to make a fast turnaround. At the same time, many suggestions in this book, especially related to the creation of awareness and the development of a story that is a blend of urgency and vision, are also applicable to many other situations.
Therefore, the chapter on ''What's the story?'' is perhaps the most generally relevant. Unfortunately, this chapter is a bit lopsided: 26 pages deal with urgency and creating awareness, and only 4 with formulating the vision. And in those 4 pages, it is not even entirely clear where exactly the vision is supposed to come from. However, later in the book, Quinn states that ''A leader will set the right vision, will determine the direction'' (pag 72). This is in line with Quinn's general preference for a top-down leadership style in crisis situations and turnarounds.
The question is: Is this preference for a top-down approach correct? Are there also situations where an alternative approach may be feasible, even in crisis situations? The answer is yes, as is shown by 2 examples:
1. In the early 1980s, when it was mainly producing memory chips, Intel started to feel the competitive heat from Japanese firms entering the market. Without knowledge of the top leadership, a group of engineers, aware of the Japanese threat, decided to start experimenting with and producing microprocessors. Top leadership later caught on and went along (See also ''Contemporary Strategy Analysis'' by Robert Grant, 2010 edition, page 22: ''Intel's historic decision to abandon memory chips and concentrate on microprocessors was initiated by incremental decisions taken by business unit and plant managers that were subsequently promulgated by top management into strategy'').
2. In the 1990s, during IBM's times of crisis, a group of mid-level employees led by John Patrick and David Grossman, started to work on e-commerce and other internet related services. Top leadership later picked up on this and converted internet into the business area that was fundamental for IBM's turnaround (For a detailed account of this case study, see ''Leading the Revolution'' by Gary Hamel).
In general, several authors, such as Henry Mintzberg, propose ''emergent strategies'' as an alternative to top-down decisions.
Around pages 64 – 65, I was surprised to see that Quinn seems to promote a reactive approach to changes. First he states: ''If we thought the problems were solely the consequences of the macroeconomic context, we could just sit back and wait until the world economy entered a new growth period'' (pag 64). Assuming that macroeconomic issues are the only problem, can we even then sit back? What about competitors who are not sitting back but who are adapting and innovating? Won't we lose ground to them if we just sit back, waiting for better economic times?
Later, Quinn asks if you can be sure your company is working like a perfect Swiss watch with all the necessary processes and relationships in place. He recommends: ''If the company is now facing a real crisis, this probably the best time to take on internal issues and sort them out´´ (pag 65). Fair enough, but what about taking advantage of the crisis to develop a completely new business model, instead of just fixing the internal issues? To put it in another way: Is fixing the internal issues enough, especially in the tech sector, in a world that is constantly changing? Should we not be taking advantage of a crises and proactively be designing completely new strategies?
A final word on the cases. To be honest, the large case about Telefónica was a disappointment. It starts out well, with descriptions about the need for change and the efforts for alignment. However, the vision could have been explained better. On page 138, it is mentioned that Telefónica wants to become a ''Digital Telco''. A bit more detail about what this means exactly would have been great. Now, the only explanation that is given are the 12 points of the ''Be More'' program, which unfortunately contain the type of high-level statements (like ''Capture enterprise opportunity'') that Quinn on page 70 suggested you should avoid.
However, it is the execution section of the Telefónica case that really disappoints. This includes a long list of divestitures, which doesn't add much value. Even worse, each divestiture is described in detail in a repetitive way. First, a short description about the details of the particular divestiture, then a type of press release (called ''significant event'' or ''relevant fact'') stating the intention to divest with the same details, followed by another significant event or relevant fact that states the conclusion of the divestiture with, again, the same detailed facts.
It would have been far more interesting to read about how Telefónica intends to become a Digital Telco, and what it means by that, than to read through this long list of divestitures. Taking into account that this book was written by a Telefónica insider, the way the Telefónica case is set up is a missed opportunity to tell the true future story of that company.
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