Innovation during the Crisis

I never thought that I would be using The Tonight Show as an example of innovation.  My impression of Jimmy Fallon was that of a gifted, but relatively lightweight entertainer.  He has surprised me by embracing the changes brought about by the measures put in place to mitigate the effects of the COVID 19 pandemic.  In contrast, other late night hosts – e.g., Stephen Colbert and Seth Meyers – initially were unabashed in their aversion to the new format, which eliminated the studio audience, and made excuses that (and I paraphrase) their style didn’t translate to a world that largely depends on video conferencing.  And it really didn’t!

What has Jimmy Fallon done that his peers have not?  He adapted:

1. Even though he is doing his show, necessarily, in isolation, he decided to invite us into his home and his life.  He made his home the set and his family a (mostly) charming part of the show.  In some sense they are an alternative (not a substitute) for a studio audience.
2. I do not know if this was conscious or the result of the dynamics of video conference-based interviews, but my perception is that the quality of his interviews has improved measurably.  Mr. Fallon is not playing to the studio audience; he is paying attention to the conversation which is necessarily more focused.
3. He is observing others and is leveraging video conferencing technology in ways that allow him to replicate (and in some ways make it significantly more personal) the pre-COVID interaction he had with his band and guests.
4. He did something I have rarely heard a big-name star do, he asked his audience to provide feedback and let him know what they do and do not like.  That is amazing.  And, I do not know how (or if) he is processing the feedback, but I see ongoing experiments which indicate that he is interested in improving his product.

The bottom line is that he, more than the other late-night hosts that I watch regularly, has adapted to his new reality and is much better for it.  On the other hand, shows which I would have ranked better prior to the need to exit the studio and move home do not hold up as well, and are diminished because the hosts are less open to modifying their shtick to accommodate the changes that have been imposed upon them by the COVID crisis.

How does this apply to the business world?  Well, I spent most of my career helping companies adapt as the world changed around them.  And, the late-night show example demonstrates:

• That the most difficult step is understanding that the world has changed and that your well-being depends upon your adapting to the change.  For example, in the 1980s it became increasingly clear that the accounting function in large corporations, while essential, was not a competitive differentiator.  Companies (initially McCormick and Dodge) offered “packaged” software that could lower the cost of doing the accounting function while improving its overall quality.  It took a decade or more for this idea to become pervasive and it: 1) changed the way companies did accounting by providing greatly improved effectiveness and efficiency; and 2) laid the groundwork for later innovations like order to cash and supply chain management.
• Having an intellectual appreciation of the change and mustering the courage to take a risk is the next step.  And make no mistake about it, significant changes to a time-tested way of doing things is a risk.  Sometimes it takes a visionary chief executive, sometimes it is a convincing salesman, but as Lao Tzu said, and I paraphrase: The journey of a thousand miles begins with one step.
• You must continually reassess your progress.  This means understanding what your goals and objectives are and measuring the outcomes to ensure that you are gaining the benefits you expected.  At Textura our sales team used a tool that captured the steps (prior to implementing our software) necessary to pay their sub-contractors.  We also used the same process mapping technique to show how many steps (how much labor) would be eliminated by using our tool.  This gave our clients a clear understanding of what they were buying and a method (comparing before to after) of determining whether we had met our objectives.
  
  I note that when we founded Textura, none of our potential clients appreciated how inefficient the construction payment process was.  The “before and after” process mapping technique provided a quantitative method for assessing the effectiveness of the changes that Textura’s electronic payment process delivered.  And, referring back to the first bullet point above, it took some time (and a couple of courageous initial clients) for the understanding to become pervasive within the industry.
• It is essential to communicate clearly and get buy-in from the many stakeholders who are both involved the areas affected by the change and necessary to make the improved processes work.  Communication involves three things:
  1. Making sure that everyone involved knows what is going on, how it is going to affect them and why the change is happening.  That is done by giving people the time and opportunity to internalize the coming change.  Getting people involved is the best way to do this.
  2. Training is a big piece of communications and is essential to getting people involved.  This means understanding both the theory and the practice.  It seemed obvious to me that the accounting function could be standardized based on best practices and that there is not much reason to customize the process or the software to accommodate a specific installation.  But, then again, I had seen dozens of examples (which is one of the reasons to hire a consultant) which our client had not. 
     
     So, taking the time to explain the logic behind standardized processing and working that through with the client was imperative to delivering the best outcomes.  The process mapping discussed previous major bullet point is one step in the process of getting buy-in by explaining the logic behind the change.
  3. Getting people involved.  Early in my career, I did not take the time to explain what I knew, I just got to work.  And, I did not involve the client in the early stages of the implementation.  I figured that my team could do the heavy lifting and then hand it off to the client.  But by not involving the client early, I didn’t give them an appreciation of what was possible.  And, without understanding what we were doing or why, our clients just wanted things to work the way they always had.  They wanted to pave the cow path.  We were looking to put in a superhighway.
     
     Paving the cow path involved making major changes to the software (very costly) we were installing and would require major ongoing maintenance to the software as upgrades came from the vendor and it had to be adapted to the changes our client invariably wanted to implement.  Most of all, it did not take advantage of improvements to the processes that implementing best practices would bring.

The world changes.  Those that do not understand that get left behind.  Jimmy Fallon is not getting left behind.  He is seeing the future and embracing it.  Business (and political) leaders need to do the same.  I summarize:

1. Recognize the change;
2. Understand the change;
3. Communicate what you are going to do about the change and get your stakeholders on board;
4. Adapt to the change; and
5. Go back to point 1 (rinse, repeat) above.

It is that simple.  Actually, no it is not at all simple and that is what makes dealing with change both challenging and fun!

Copyright 2020 Howard Niden

— you can find this (days earlier) and other posts at www.niden.com.

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