In this article I use some ideas from Jack Welch’s book Winning.
Javier is a young tour guide, Until recently, he had a lot of work. He speaks Spanish fluently, and as a result he had, among is other clients, many Birthright groups from South America.
And then came the Coronavirus, and Javier found himself without work, and with the realisation that life is unlikely to return to how it was anytime soon.
Javier is not the only one to have lost his livelihood following the financial crisis resulting from the pandemic. There are hundreds of thousands like him in Israel alone. Some are unemployed, some are officially furloughed, but unlikely to return to work.
In April 2020, there were 1.14 million unemployed and furloughed people in Israel. After those numbers were released, the state has kept unemployment data underwraps, but estimates range between 400,000 to 600,000, and this will likely remain the case for a long while.
In other words, about half a million people in Israel are out of work, and at some point will also run out of unemployment payments.
I wrote previously how furloughs can seem to be win-win situations for employers and employees alike. Many people enjoyed being furloughed for a while, forced to stay at home with the kids. Many likely believed they would return to work soon. They were comfortable to maintain, at least in their minds, the illusion of the familiar situation they wanted to believe will soon return.
Likewise, many tour guides and travel companies believed that the crisis was temporary, and soon things will go back to normal.
Who Moved Javier’s Cheese?
In his book, Winning, Jack Welch dedicates a whole chapter to the question, how to handle and lead change during normal times. He points to people's tendency to adhere to familiar things and patterns, so prevalent that it can even be considered human nature.
Unlike many others, Javier didn’t leave his fate up to chance, and didn’t expect things to return to how they were. He acted immediately, like Sniff and Scurry, the two mice from Spencer Johnson’s Who Moved My Cheese?.
In the book, Sniff and Scurry arrive one morning at their cheese station, previously filled with cheese, only to find it empty. The two mice immediately start looking for alternative sources of cheese, while their companions, Hem and Haw, continue coming to the same empty station every day, hoping the cheese supply will reappear.
Javier told me that when the borders closed and tourists stopped coming, he went online, and for two months searched high and low for a new way to provide for himself and his young family. He didn’t watch TV or read, or do anything else. In the end, he found a new field, new and close to his heart, studied it, and created a new product and business, Ya’ar Dome.
Javier started making terrariums, a unique decor item. A closed and near-autonomous ecological system, as you can see in these photos:
Unlike the thousands of business owners and freelancers who’ve lost their jobs, Javier saw immediately that the world changed. The business which previously provided comfortably for his family was now over, and he needed to change. To recreate himself.
Javier is a young man, with an entrepreneurial spirit, a millennial, and it was reasonable to expect that he will be quick to take the reins and look for new work.
Can Companies Change as Javier Has?
A few months ago, around the time the scale of the pandemic first became clear, but unrelated to it, I was connected by Eran, the owner and CEO of a small company. His company hasn’t been profitable for a while, and he wanted me to analyze the situation and determine if there’s a chance to turn things around, or if he should shut it down.
After going over several scenarios with Eran, we came to the conclusion that profit was possible, if he led a change in both sales, and costs management. We located the main costs for the company, and new sales’ directions, and set goals for each field.
The changes implemented by Eran were quick to show results, and after only two months the company went from loss to a balanced budget, and then to a small profit.
Some of Eran’s clients have yet to return to work, some may close for good, and he’s busy finding new clients. On the other hand, some of his competitors have also closed because of the economic downturn. Not all of them were able to initiate the necessary changes.
The lockdown, and the fact that some of his employees were furloughed, helped Eran lead changes to the company’s policies with less resistance. Operating under a feeling of imminent threat, and especially the growing concern caused by the Coronavirus, makes it easier for people to leave the familiar and comfortable, and accept change. Under such conditions, it’s easier for a CEO to lead changes.
How to Lead Changes?
In his book, Welch suggests four principles for change:
- The goal of any initiative should be clear. Change only for change’s sake is ridiculous and exhausting. He adds that people need to fully understand why a change is necessary, and where it’s taking them.
- You should recruit and promote people who really believe in change, “get it done” types. Welch estimates that “true agents” of change consist only about 10% of all businesspeople. 80% more won’t spearhead a change, but will support it once they’re convinced it’s necessary. The remaining 10% will resist change.
- Find the resistors, and remove them, even if their performance is adequate. Every organisation has a kernel of people who will never come to terms with changes, or who are so attached to the current situation, they can’t see a way to change. They'll usually have to leave the company. Welch cautions against keeping employees only because of long tenure, or a specific skill, if they resist change. As time goes by, they’ll only become more resistant, and will sow discontent.
- Look for junky cars. No one wants disaster to strike, but when it does, you should look for opportunities - new markets, cheaper materials, less competitors. The most successful companies know how to identify “junky cars” - those worst circumstances - and use them as opportunities.
How Eran Led Changes in His Company
Eran wasn’t familiar with Welch’s principles, but followed them in practice:
- Goals. The goal was very clear: to make a profit. We set concrete goals for the main issues, and monitored them using KPI’s and other measures.
- Recruit believers in change. Eran gathered a small group around himself, to lead the changes with him.
- Remove the resistors. Eran was worried he’ll have to say goodbye to some employees. But when the time came, only a few had to leave. The rest of the group Eran was worried about understood that in the current situation, change is necessary, and all got behind Eran’s initiative.
- “Junky cars”. This wasn’t the essence of the change Eran was working towards, but when it came to generating new sales - such opportunities were also looked at.
In order to succeed, Eran implemented Welch’s principles, even though he didn’t know them in that form. They are almost a necessary condition, and the need to turn the company profitable, during an economic crisis - allowed Eran to lead the changes he wanted.
Are Javier and Eran the Exception to the Rule?
Welch estimated only 10% of people are agents of change. I think the current economic reality, with hundreds of thousands of people out of work, and many businesses closing - pushes more people to initiate change and look for new revenue streams. But we’re still talking about a minority.
Many companies have “taken advantage” of the downturn, the lockdown, and furloughing employees, to change management, and lead changes and improvement measures. CEOs got a push to take long overdue steps, “thanks” to the new reality.
Even a strong company like Google is carrying out changes prompted by the crisis, though not necessarily as a result of it.
In a few years, when we look back, we’ll see the economy has changed. Some businesses will be gone, new ones will appear. Companies choosing change and efficiency will be stronger. Some companies will close. Employees will gain new skills and will change professions.
Without a doubt, the internet will play a bigger role in the economic field, and even companies and businesses which don’t yet have an online presence will build one.
But the road ahead, and the changes it entails, won’t be easy for many thousands of people. The only solution I can see is to initiate change. Like Javier, or like Eran, or person in their own way.
Microsoft - an Initiative to Help with Job Searches and Training
This is a WhatsApp message sent to me:
“For all those interested in new/additional ways to develop:
The crisis took away the livelihoods of millions worldwide. But everybody deserves a chance for a better future, a new beginning, a job. And we at Microsoft want to try and help.
We’re excited to tell you that Microsoft has started a new initiative, one of the largest we’ve had, to help millions of people all over the world learn, quickly and for free, skills which could help them get jobs in the technological field. As part of this initiative we’re openinga variety of free training courses from Microsoft, LinkedIn, and Github, as well as ten free courses allowing those interested to learn sought after professions like software engineering, project management, digital marketing, IT, sales, data analytics, financial analytics, graphic design, and more. Additionally, to assist the people completing these courses with their job search, Microsoft and LinkedIn will give official certificates for completing the course, as well as access to advanced job search tools, for free.
For details - news.microsoft.com/skills.”
I wonder how many people will take the opportunity offered by Microsoft to change their lives.
Summary and Recommendations
Jack Welch sees change as an essential part of business, and best done before you must.
Reality changes constantly, sometimes slowly, and sometimes, after a great crisis - in leaps and bounds. What was good before isn’t necessarily enough right now, nor will work at all in a few years. Any CEO who isn’t leading changes in the company’s business profile and strategy - signs its death certificate.
The current economic crisis has made the need for change ever greater, and sped up changes. Entrepreneurs like Javier will come out the other side stronger. But what about the hundreds of thousands of new unemployed people? What changes are they willing to make, and what initiatives will they lead?
I recommend CEOs put together a team dedicated to constantly looking for change initiatives. The changes already happening because of the Coronavirus shouldn’t be enough for you. It’s very likely that until the economic situation stabilizes in a few years - we’ll see much more frequent and rapid changes than we’re used to.
So you shouldn’t rest on your laurels.
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