Keep it simple
Whether you’re new to a company or not, the first step to fix a problem is to understand it.
The answer will come from employees, but it may take a little prodding.
“Management has a vested interest in justifying the current state of affairs, which makes them less likely to volunteer radical change because they’re the source of the current solution — which is obviously not working,” Campbell says. “So the trick is to get them to acknowledge what they already know is true and do it in the open and then deal with it. I’m not an alcoholic, but it’s the same as with some kinds of addiction.”
The point is not to blame anyone but to make sure employees understand what they’re doing and why it’s not working. Otherwise, they’ll follow the same routine and get the same results.
“They’ve been doing it for 20 years,” Campbell says. “Then, a $2 billion loss later, they did all the things they were supposed to do. They paid attention to every detail. They knew a lot about the trees and not enough about the forest.”
Show them the forest by tying their efforts to the results. But keep it simple.
At his first board meeting, Campbell received three three-ring binders. Information about the company was buried in them somewhere, but the inaccessibility was proof that employees never looked at data to consider the effects of their work.
“You do have to get them out of their comfort zone because whatever they’ve done over the last three years didn’t work,” he says. “And part of that is changing the information that you look at and share with people.”
Ultimately, you want to reduce data to the pieces that have impacted the business the most. It’s not that smaller pieces don’t matter, but the big ones will make a bigger difference faster.
To simplify your data, start with broad measurements and work your way down.
“You start with revenue and profitability and ask what generates the revenue, what generates the profitability,” says Campbell, whose financial due diligence was built into MatlinPatterson’s investment process. “And then figure out what the pieces are and then what affects the pieces. It doesn’t take long before the eight or 10 things that really have an impact, you know what they are.”
Next, ask employees to explain those things. How do they perform the tasks that have the biggest impact? Are they just following a job description or is there a reason for each step?
That’s where Campbell’s lack of industry expertise came in handy. Similarly, you can admit you don’t know everything about the company and rely on your employees for the answers. Campbell assumes he’s wrong but doesn’t necessarily believe anyone else is right — unless they can explain it. Having employees simplify data is a doorway into that explanation.
“Although, ultimately, it’s all about the same thing — we’re tracking the sale and construction of homes, the purchase of land — because the reports are all done in different formats and are much simpler and reduced, they have to figure out how to address things in a different way, which forces them to be able to explain it,” Campbell says. “In other words, they can’t just go through the motions; they have to figure out: How does this work or why?”
Don’t accept their answers at face value, and be brave enough to ask the stupid questions. Put yourself in the student seat.
“The best way to learn something is to try to teach it to somebody else,” he says. “So I’ve turned them all into teachers. By forcing them to teach me, it forces them to challenge themselves. The only way I can be the coach is if I understand how the game is played.”
It’s not about making them justify their duties. It’s getting them to challenge the status quo so they can look for better methods.
“The trick is for them to take that and sort of push it down,” Campbell says. “Don’t accept looking at a spreadsheet as knowing what’s really going on. You have to get out there. Go to the site. Watch them deliver the wood and see if they really do count it, or whatever it is. Don’t just accept numbers on a page.
“If everybody challenges themselves all the time, … they’ll get better.”
With employees’ help, Campbell condensed those three binders into a 20-page PowerPoint presentation, giving them a clearer picture of how their jobs affect the business. That connection is crucial to getting them to try something new.
