Necessary Endings (10 page)

Seeing the Reality of a Needed Pruning

If you comb the leadership literature, one theme runs throughout everyone’s descriptions of the best leaders. The great ones have either a natural ability, or an acquired one, as Col ins says, to “confront the brutal facts.” This is especial y true when it comes to seeing a necessary ending.

Drucker scholar Jeffrey Krames puts it this way: “Some managers are able to let go of the past better than others.
Those that have the greatest
difficulty abandoning things are often those unable to face reality.
Dr. Sydney Finkelstein, author of
Why Smart Executives Fail
, conducted a six-year study and identified the two top causes of management failure. Both were directly related to the inability to face reality.

“According to the study, organizations make their greatest missteps when the senior managers’ mind-set throws off the firms’ perception of reality. The second most common contributor to executive failure involves ‘
delusional attitudes that keep this inaccurate reality in place
’

[emphasis added].

“Perhaps that explains why ‘face reality’ was Jack Welch’s first rule of business. At GE he repeated that mantra time and again and it helped him to make the tough decisions that garnered him such accolades as Manager of the Century by
Fortune
magazine.”

Finkelstein goes on to explain how facing those realities is a key ingredient to executing what Drucker referred to as “abandonment” of what was in the way of tomorrow. What a great way to describe a necessary ending.

Not only is facing reality one of the biggest requirements of success, it is also a significant step in arriving at the pruning moment. As Krames puts it, it’s “a key ingredient to executing.” Ful y embracing reality is not only the “Aha!” of the pruning moment, it is also the
fuel
that can give one the courage to execute the difficult decisions. It can empower you to do what is otherwise difficult.

Getting past denial to the “ful embrace of reality,” in Krames’s phrase, has enormous energy and power to move you into the actions you might have been avoiding, past the avoidance that might have been keeping you stuck. When you are driving down a road that feels wrong, you final y turn around when you clearly see that you have hit a dead end. After the initial shock and discouragement, seeing the bare truth that what we are doing is leading nowhere wil get us to change something.

But as Finkelstein’s study revealed, many people have a mind-set, or “delusional attitudes” that keep the old, inaccurate reality in place. As long as these attitudes are operative, it is difficult for the new, accurate reality to do its fueling work, to provide both the urgency and the motivation needed to execute a change. How to ful y grasp reality and get rid of these mind-sets and attitudes is the subject of this chapter.

The Old Way Must End

Welch Al yn, a ninety-five-year-old U.S. company, is a market leader in medical devices. The business has a long tradition of being an innovator in its field, from its earliest days when Dr. Francis Welch and Wil iam Noah Al yn invented the directly il uminated ophthalmoscope. Over the decades, the company has enjoyed employee and customer loyalty as a result of its values-driven culture, leveraging everything good about a family-owned firm. The company’s DNA, built around the core value of “be always kind and true,” has carried it to consistent growth since its inception. If you have ever been in a physician’s office, chances are you have been examined, measured, or monitored by a Welch Al yn instrument and would instantly recognize the familiar blue and green logo.

In that kind of business scenario—sustained growth and profits over decades, enjoyment of strong and stable market share, brand recognition and industry standing, happy and fulfil ed employees, and a forever loyal and wel -cared-for customer base, it is easy to feel the push to keep going just as you are. “Don’t change anything, just don’t screw it up.” Why in the world would you want to change anything when you have, in ever-increasing measure, what every business tries to accomplish?—being a market leader, having great profits, and being loved by everyone you touch?

You wouldn’t . . .
unless your worldview included life cycles and seasons
,
as well as an experience base that had trained you to know a pruning
moment when you saw one and got terrified by it.
That is what happened to Julie Shimer, Welch Al yn CEO.

When Shimer became CEO, she was selected from the board of directors, so she was familiar with the company and its business. But it was not her board experience that had led her to see the pruning moment needed at Welch Al yn. It was being an experienced technology executive who had witnessed and lived through what happens when leaders miss a necessary ending.

Shimer, an engineer by training, began her career at Bel Labs, learning the rigorous process of technology product development and the inherent business dynamics between development and bringing products to market, one of her key competencies. She went from there to Motorola, where she continued her career in overseeing product development and managing various P&Ls. As she explains, it was there that she got her real training in what happens when leaders miss necessary endings and what missing them can do to a company. It is that experience at Motorola and in the wireless industry that is driving what may prove to be Welch Al yn’s biggest innovation to date: the introduction of a single diagnostic platform for innovation across al Welch Al yn medical devices.

What does that mean? It means that Shimer is taking the company through a process of ending the practice of having each medical device run on its own operating system, and
creating a single platform for all of them
,
with one simple user interface.
Never done before, she is basical y undoing the technical side of the last 100 years of medical device design, and creating a necessary ending. The result of this change wil be that no matter what device a doctor or nurse is using, the interface wil look the same as al the other devices they use and wil run on the same operating system, or platform. Think iPod, iPhone, iTunes. And like the iPhone, this platform wil also include an open architecture available to an unlimited number of outside software developers. That means that software developers al over the world can create applications that wil make Welch Al yn devices the industry standard for virtual y every aspect of frontline medical diagnosis.

Just as an iPhone can do as many different jobs for you as you have applications for, Welch Al yn wil be in a position to drive most of the world of medical devices, a feat that no one else has seen the “moment” to seize. And in a climate in which more and more care is being driven toward the front lines and being delivered by people with lower levels of training, the practical medical need for this is great.

Now to the pruning-moment discussion.
Why did Shimer get it when others had not?
What drove her to the pruning moment where, in Drucker’s words, she decided to “abandon the past,” and create a necessary ending to ninety-five years of how the company made products? In short,
she
lost hope in the old way
,
even when it was succeeding.
To understand that, you have to go back to the point where she learned to recognize life cycles and seasons and learned to see that if she didn’t recognize them, she could lose everything. I asked her that question, and this is what she told me:

The real learning moment came when Motorola missed the coming of digital cel ular technology. In the midnineties, AT&T asked Motorola to develop a digital phone. Motorola thought that customers would not accept digital because of the poor voice quality. They had the attitude that they were the market leader, they were doing great, and if they refused, it would not happen. So, AT&T went to Nokia instead, and Nokia got it.

They said, “We’l do it for you.” Brand-new in the business, Nokia led the way, ending the era of analog and beginning the new digital era.

Nokia took market leadership from Motorola.
Missing the ending of analog in cell phones was a big mistake. I learned through that
experience to pay attention when something is over and it is time to create urgency around the new
.

So, when I got to Welch Al yn, I saw the lack of an overal platform strategy. Their strategy was to continue to make more great products with great features. And they did. And Welch Al yn was profitable, year after year. But I could see an end in sight as other parts of the technology world were migrating to platform approaches. RIM was doing it, Apple was doing it, and it was clear everywhere but in medical devices. So,
I
began to feel uneasy about the future
, seeing that Welch Al yn was heading down a path that had been successful for a long time but might not be forever. I had seen that happen before and had learned the lesson.

At that point, I hired a strategic planning consultant, and we went into a planning process. We began with an assessment of the market environment, the job we were doing for our customers, our strengths and weaknesses, threats and opportunities. At one point, the consultant asked about the team’s
sense of urgency to change as opposed to keeping it going like it was
. We did not yet know what we needed to do, but everyone scored themselves 8 out of 10 or higher on an “urgency about need for change” scale. New product introduction and innovation was stuck, we felt, without a strategic plan, and we had not become opportunistic. Our resources were not aligned with a particular strategy, and we were getting an increasing sense of urgency to have a clear vision of where we were going and get resources aligned.

The breakthrough and the pruning moment came when we did an exercise where we were to picture an ideal future. We were asked to describe the “desirable future.” We started with the customer—the doctor or the nurse. We saw that in their future, they were going to be asked to do more and more, get paid less and less for every visit, have sicker patients, less highly trained staff, fewer nurses to help, et cetera, et cetera.
We asked ourselves how to make that future desirable for the doctors and nurses whom we serve. “How can we make it ideal for
them?”

What we came up with was a diagnostic platform that could meet the current and emerging needs of frontline care practitioners. We envisioned a future of health care where a physician could have a Welch Al yn device or application, with a common look and feel, that could gather data, move it, present it to others easily, send it to electronic medical records. We wanted it to be easy to use for clinicians who are not IT people. We code-named this scenario WAPPLE—Welch Al yn Apple . . . Apple for doctors.
That was the moment
I saw that a platform
approach would help us reach our ideal future. It was a clear reality from which I could not go back
.
I saw that the way we were doing it could
not bring about the future reality that we wanted. We had to change.

Al I could see was how Motorola had missed the digital transition in phones and lost the lead. I was determined that that would not happen at Welch Al yn. For nearly a century, Welch Al yn has been a leader in innovation, and now was the time to real y innovate. But it would involve a huge change, ending our entire existing product line platform, and moving every Welch Al yn product to our new single diagnostic platform for innovation. It would be a very big ending, but if we didn’t do it, I knew what the future held. I had seen it in the phone industry, and did not want it to happen here. To continue our legacy of being a leading innovator, we had to change to a new and much bigger chapter in Welch Al yn’s history. But even though it is new, it is also consistent with the DNA of the company as an innovator, and if we did not change, I knew that the innovative DNA was at risk. I could not let that happen. It meant we needed to change to keep the innovative spirit we always had.

Shimer saw the reality that was staring her in the face:
change or die
. And she had a lot of reasons readily available to delude herself if she wanted to use them. After al , Welch Al yn enjoys great market share in many product areas. They have had sustained profits and growth for a long time. The industry loves them for good reasons. That can make you pretty comfortable, unless your understanding of the world includes a realization that no matter how comfortable you are in the fruitfulness of autumn, a harsh winter can, and wil , come. She was not afraid of that reality and had seen it happen to Motorola and others. She has chosen reality over comfort. She looked at the world and saw the reality of what platforms are doing, and how Welch Al yn needed to be aligned with that reality. So the pruning moment was right in front of her.

Shimer’s leadership is an example of clearly grasping reality and making the necessary ending. Fearlessly. How do you do that?

By getting hopeless about what is not going to work.

The first step that wil motivate you to do what is necessary is to see that what you are doing has no hope of getting what you want. When that happens, you wil instantly feel an epiphany. You realize that to get where you want to get, you
must
make a change. You real y get it that to continue to do what you are doing is hopeless, and then you wil begin to see motivation to make a change appear. So hopelessness can bring us closer to fearlessness, as
it does not take courage to stop doing what you know is not going to work.
When you see a train coming, you have fear working for you, motivating you to get out of the way. It just takes a clear dose of the reality, over and over, to confirm that you are going nowhere. It creates its own discomfort, which motivates us to action. It is sometimes the most important step you can take, as it wil fuel you to make a move.