When Should a CEO ‘Blow Up’ Best Practices?
Geoff Tuff and Steven Goldbach, Authors, Detonate: Why – and How – Corporations Must Blow up Best Practices (and Bring a Beginner’s Mind) to Survive
There aren’t many successful CEOs in the world who feel frozen when they need to take action. But there is one choice that can feel paralyzing: when the time comes to blow up a part of the business that is working today but is unlikely to work in the future. Making this decision can be especially challenging when a leader is replacing something that works, with a new thing that has never been done before or never proven to work. While the need to address long-term capability may seem obvious, the need to “deliver the business” creates an urgent and important dilemma.
Businesses need to balance the risk of changing too much at any given time with the need to make enough change to sustain their business in the long run. The needle to a thread is not to change so fast, so quickly that the business dies in the process, but to address it aggressively enough that it flourishes.
The Case for Detonation
To survive disruption, corporations must begin examining their best practices and dated orthodoxy. Companies with successful legacy business models have invested enormous amounts of time and money institutionalizing the infrastructure that underpin these models. They capture tried and true methods into processes and sometimes even playbooks. They teach new generations the secrets of the business and what it looks like to follow best practices. They reward – sometimes subtly and sometimes overtly – the employees who best adhere to company orthodoxy. This all worked fine in a world of gradual, linear change and predictable drivers of industry structure and company success.
But rapid technological advances are dramatically changing that reality. Increasingly, we live in a world dominated by exponential change and surprise. Competitors seemingly appear out of nowhere (increasingly from different industries), our customers’ expressed needs seem to shift on a whim, and the tools we have at our disposal to respond have multiplied to a point where it’s impossible to keep track of them.
In this world, blindly following “best practices” is not just slow and misguided; it’s downright dangerous. There’s ample evidence in recent history that some of the best-known corporate flameouts have occurred at least in part because those companies didn’t challenge their standard operating procedures early enough or aggressively enough.
So, our advice, paradoxically: blow up procedures that have enabled past success before it’s too late.
The Case for Controlled Demolition
Of course, we would sound – and be – a bit foolish if we were to suggest outright destruction through a detonation that is everywhere all at once, at scale.
Instead, to steal a concept from the world of explosives management, we believe in controlled demolition: carefully and decisively bringing down crumbling or defunct infrastructure so that what lasts ends up being healthier. Where and how you “plant the powder” will ultimately determine whether you are left with something fit for long-term success … or riddled with destabilizing cracks from the aftereffects.
Acting on First Principle(s)
There are four core principles to the Detonate mindset that will help executives overcome paralysis. They also allow employees to challenge why they are doing what they are doing, to ensure that playbooks do not ossify again, and to get the most out of every action and interaction. Two of the principles have to do with thinking differently: Bring a Beginner’s Mind and Focus on Human Behavior. And two have to do with acting differently: Make Minimally Viable Moves and Embrace Impermanence.
When CEOs ask us which of these is most important to start with, we almost always advise to immediately start asking questions about the human behaviors they are trying to impact instead of focusing on “the numbers.” This tends to fall into two important categories related to the behaviors of our customers: how is behavior changing and how can the right behaviors be effectively influenced to adopt change.
Customer behavior is the most basic driver of winning or losing in the marketplace. Importantly, CEOs also need to focus internally on the behavior of the people in their organizations. The biggest barrier to “transforming” an organization is motivating large numbers of people to do different, often uncomfortable things. The best transformations require a “culture shift” which is not achieved by declaration but through small ways of driving behavior change that are carefully designed to create the desired outcome (e.g. rewards, training, executive questions, etc.)
Focusing the efforts of businesses against changing behavior can have massive economic and motivational potential. If we can change planning conversations from whether we completed a business process “by the book” to what behaviors we are trying to enable and why (i.e. how we are going to make people’s lives better) we automatically bring laser focus to what actually drives value while making “business” a lot more fun to boot.
Identifying the Demolition Site and Team
Where in the organization you start to apply Detonate principles is a critical choice. Despite (correct) innovation lore that the ‘edge’ is the place to play, if we are to enact long-term change, our detonation has to start in the core. Only in proving that the principles work in the heart of the business can you convince skeptics who will reject “proof” due to anomalous conditions. But to target the blast in the stable of cash cows is typically foolhardy.
Ideally, you will start the detonation in a strong or durable business or function whose performance has recently been lacking. Pair that with a progressive leader who others see as a role model or ‘up-and-comer’ and you can set up a move that will have lasting positive shock waves through the organization and in the marketplace.
Just Do Something
Above all else, make a move. Ask a different question. Promote a challenger. Retire an old process. The world will never know just how powerful an act of detonation might be by a leader until she takes the first, small step. By making minimally viable moves, leaders can reduce risk to irrelevance. To survive disruption, CEOs must be willing to take a little step, learn, and then take another, course-correcting as necessary. Do that and you just might use the tricks of disruption to your own advantage.
About the Author
Geoff Tuff is a principal at Deloitte and a senior leader of the firm’s Innovation and Applied Design practices.
Steven Goldbach is a principal at Deloitte and serves as the organization’s chief strategy officer. He is also a member of the Deloitte U.S. executive leadership team.
Together they are the authors of Detonate: Why – and How – Corporations Must Blow up Best Practices (and Bring a Beginner’s Mind) to Survive (Wiley; May 2018).