Leadership Lesson #4

Take The Quiz You Cannot Fail: Carl Frost

“No institution can possibly survive if it needs geniuses or supermen to manage it. It must be organized in such a way as to be able to get along under a leadership composed of average human beings.” 
—Peter Drucker

There aren’t many loners in the world. Frank Sinatra had his Rat Pack, Steve Jobs had Woz, Lucy had Desi, and even the so-called Lone Ranger rode the trails with Tonto. Almost all people enjoy being part of a team. Indeed, we have an innate need to be part of something larger than we are. A desire to participate in a collective effort, to do something big that we couldn’t possibly accomplish by ourselves, whether it’s winning a major service contract or a World Series. Yet, during times of change and uncertainty, great teams, like a good marriage, can fall apart. Contaminated with negative talk, less than optimistic outlooks, or deadly cynicism, teams can become white blood cells activated throughout the organization ready to stamp out the infectious agent of change. 

White Blood Cells of Change

For all of the rhetoric in corporate America about the need for change, it is our nature as human beings to fight it, whether the change is perceived as good or harmful. A gifted cardiologist who spends his life getting people to change to benefit their health, once told me that he believed people feared change more than their own deaths. Perhaps the first step for a leader who undertakes a change effort is awareness— of the thoughts and actions and feeling people have about change.

Many years ago, in the steelworker town of Lansing, Michigan I learned of perhaps the best change agent in the world. Carl Frost never wore an Armani suit, nor carried a McKinsey playbook, yet he has played a role in transformational efforts at many of the world’s most enduring brands. Carl pioneered the concept of open book management inside of American corporations and played an early role in the formation of teams in American manufacturing. Leading large-scale transformational change, which involved thousands of employees, Carl said that most organizational change fails because people working in the organization do not understand the reality of the business. This lack of reality pits people against transformational change. 

America’s Greatest Change Agent

Carl Frost worked with the Hush Puppy shoe manufacturing company to engineer a metamorphosis of the company and brand. He sent teams of employees equipped with cash — from the factory floor to the executive suite— and told them to buy the very best shoe they could find and bring them back to a conference room for a company wide meeting. Not one person brought back a Hush Puppy. Immediately, employees at all levels knew and understood why they had to change. They now understood the reality of the business and how the roles they played affected the organization’s success.

I remember a similar story that my business partner, Gary Heil tells. It is set in Biloxi Mississippi inside of a large restaurant chain. Gary requested that the manager of the short order cook and the wait staff ask each employee how much profit the company made from the $10 steak on the menu. The short order cook answered $5 dollars, the waitresses said $7. The boss was flabbergasted. He told them, “we make 50 cents in profit.” The short order cook burst into fits of laughter. 50 cents! 50 cents! You do all of this work for 50 cents? Yet for the first time, the team understood their role in the show. Each action that they took or didn’t take affected the bottom line, which effected their hours of employment, their paychecks. In that moment of understanding the realities of the business, things started to happen. The short order cook undertook an effort for improving processes. The waitresses looked at their jobs differently, one even said she saw herself as an ambassador of service, enticing people to come back frequently. Once people understood the realities of the business, they took it upon themselves to create necessary changes. 

Carl Frost’s change efforts would often call for bringing in bankers and investors to speak directly to teams of employees, educating them on how companies were valued on Wall Street and Main Street, enlightening them on the concept of shareholder value. In record time, employees at all levels were making changes that saved money, improved operations, and in some cases created entirely new services and product categories faster than at any time in the firms’ history. 

In every change effort he undertook Carl began by asking employees, to take The Quiz You Cannot Fail:

  1. Do you believe that change is inevitable and change is our only hope in a global world?
  2. Do you understand the realities of our business? Do you believe that educating those we employ is the best investment in achieving change?
  3. Do you believe that current employee behavior is a consequence of previous treatment?
  4. Do you believe that every person and the organization are in the state of becoming?
  5. Are you personally convinced that there are compelling reasons to change?
  6. Are there genuine opportunities for us to improve?
  7. Is there enough in it for you personally to change? (Write down three to four reasons for you.)
  8. Are you willing to elect an ad hoc committee of management and employees in developing a change process for our organization?

Carl used these questions as a barometer for whether an organization could even make it to the starting line in a change effort. If at least 90% of the leaders and employees could not answer the questions affirmatively, it had been his experience that change would prove quite difficult, if not impossible. Why? A 90% affirmative vote was proof to Frost that employees and leaders knew the competitive realities, understood the data supporting the facts, comprehended the personal and organizational consequences of those realities, and accepted personally and professionally the opportunity and responsibility for effecting the mandated changes. Where there was a passing grade in the quiz you could not fail—the organization was prepared to meet the future.

It has been my experience in assisting change efforts that employees, whether they are PhD’s or high school graduates, are capable of amazing feats if they are “competitively literate.” If they understand the marketplace, the financial realities of the company, and the role they play in the show, transformational change can occur rapidly
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