Chapter 3
Step Three: Developing and Communicating a Clear and Compelling Vision of the Future
Once you have your leadership team in place, you and your team need to be ready to envision and communicate the future in such a vivid and irresistible way that everyone around you understands your vision and shares your passion for it. At this point, you've already seen and become convinced of the need for breakthrough change. But convincing others can be much more difficult and time consuming than you might first anticipate. Leading change has often been compared to preparing for and leading an expedition, and with good reason. You need to be sure that everyone can work together and that they all have the same goal in sight.
And “everyone” is not just the leadership team, but everyone around you. You won't accomplish this step in a conversation or two. You are going to have to deliver a carefully crafted message to every group of stakeholders, a message with a central core as well as add-ons that can be adapted for each unique audience. Your technology team will require a different emphasis from that of operations, which will be different still from that of frontline sales, marketing, human resources, and every other group of stakeholders. Perhaps you'll spend one morning explaining to one group of people how your vision of the future will increase profits, and the same afternoon telling another group how the proposed change will kick start operational efficiency or improve customer service. Each time you explain your vision is an important message to others and a useful process for you. By emphasizing different parts of your vision to different people, you can develop a more precise, more holistic picture of your proposed changes. All of your messages become part of your vision for a better, more successful future.
These concepts may seem very similar to those of Step One, establishing a need to change, and in some ways they are. Both of these steps are fundamentally about creating or revealing dissatisfaction with the way things are today. However, in the earlier step, we were simply attempting to convince others that the status quo is unacceptable and the way we are doing things today no longer works; we need to do something different as we move into the future. In Step Three, we develop and present a very specific idea of what that “something different” is. In most cases, this means comparing the present to a future that is very different. The challenges are to inspire people—many of whom have been comfortable where they are—and to get them excited and involved enough that they want to head into that future, that they become eager to participate in this expedition to the new.
Up until this point in the Stacking the Deck process, only a few people in the organization have heard your presentation on the need for urgent change. They're the ones with the authority to approve your initiative and those you've recruited to help you craft a vision for the future. After all, you can't go around the company telling layers of management and employees that prospects are dreadful, horrible threats loom, and change is urgently needed—but you don't yet have a clue as to what that change is, let alone how to implement it. To do so would create all kinds of chaos. Instead, you've talked about the need for change with a relatively small circle, many of whom will partner with you and own the task of crafting a breakthrough vision of the future and the plan to get there.
Heading into the Blue
Sometimes breakthrough change does not involve fixing or adapting an existing organization, but creating something entirely new and fresh. To do so, we must be willing to create a future out of nothing, much as airline JetBlue did in 1999. Mike and Dave Barger are two of JetBlue's founding team members. Mike is the former head of JetBlue Flight Operations and his brother, Dave, is the current CEO.
This low-cost airline emerged from a particularly vivid imagining of the future, fueled by dissatisfaction with the airline services that were then available. At the time, most airlines were not focused on the customer experience and cared little for employee morale. The JetBlue founders—mostly executives from other airlines—were drawn together by one central question: “What's wrong with airlines today?” A lot, as it turned out.
By clearly laying out what they didn't like about current airline operations, the leaders at JetBlue knew they could more accurately identify their own goals. Early on, the major players got together in New York City to focus on three questions:
- Is it possible to build an airline that people actually like?
- Is it possible to build a company that people like to work for?
- Is it possible to build a low-cost airline in a high-cost marketplace?
On the first day, they brainstormed and wrote down everything they disliked about the airline industry on a huge sheet of butcher paper. These included issues with customer relations, the treatment of employees and general operations, and anything else they found lacking. The homework for that first night was to take those problems and try to solve them.
The leaders soon discovered that they could solve nearly every one of these problems with what they began to call “the radical application of common sense.” Several individuals mentioned how frustrating it is for customers when they're waiting at the gate and the departure time comes and goes without anyone providing any information. The JetBlue founders decided that it would be their corporate policy to simply tell passengers what was happening when a plane missed its departure time. Today this seems like an obvious solution, but it wasn't common practice in the industry at the time.
In the process of going through the list they had developed, the team broke down their “radical common sense” solutions to a series of ideas: safety, care, integrity, fun, and passion. These words represented a response to the dreary landscape of air travel as it existed and formed an ideological framework and a set of corporate values for the new company. Over the course of those days, the JetBlue team moved from the realization that the flaws in the existing airline business ran very deep to a vivid picture of a future airline that resolved those issues.
In this case, leadership wasn't faced with the challenge of making changes in an existing company; they were starting something entirely new. In time, the dramatic shifts they proposed and sought would affect the airline industry as a whole. Building the JetBlue future was a collaborative effort from the beginning. Any resistance or pushback the new airline would face would come primarily from the market, not from disgruntled employees or previously dissatisfied customers. Furthermore, the JetBlue leadership team came together out of a genuine desire to be part of something great. They did not need to be urged to upset the status quo; they had already chosen to be active agents of change.
Leaving the Status Quo and Creating the Future
You need not be part of a start-up to rethink your industry and create a compelling vision of the future. The brainstorming technique that JetBlue used, often called “blue-sky thinking,” can be used successfully in practically any business setting. You may encounter resistance if your stakeholders are already deeply invested in maintaining the status quo; but the mind-set of change can ultimately become unstoppable in any situation.
Whether you are starting anew or bringing change to an existing organization, you must give people a clear—and strongly compelling—vision of the future: where the organization is going and their role in the new future.
Momentum is critical in the early steps of breakthrough change. To begin building that momentum, you first need to start communicating the vision to everyone in your company. You must make your commitment to the vision of the future—the breakthrough change you are driving—real to your people and do everything possible to get everyone in the same state of mind. But no matter what your energy level may be, you can't do this alone. You must first get the entire leadership team fully on board so that they too are actively creating this future.
Clarifying the Vision
When Schwab undertook the pricing change for the Internet discussed in Chapter 1, the need for change wasn't obvious and immediate to everyone in the company. We didn't have a clear “burning platform” to urge people to adopt the change. We were enormously profitable at the time, and the proposed change would require us to take a big financial hit, at least in the short term.
How then to create a sense of urgency around this change and unite people, when we could have put it off until later? Yes, we had done the projections and knew that without the pricing change, our lead in the marketplace would soon evaporate. But numbers don't necessarily persuade and excite people. We needed something more, namely, to conjure two different visions of the future. To convince the team that Schwab's position wasn't as secure as some might think, I reached out to four of the disgruntled customers who had written me letters detailing their frustrations with the tiered Internet pricing system then in place. I asked them to meet with our leadership team and tell them about the grievances they'd cited.
With each of these high-revenue customers right in front of them, describing in detail how they felt the company was doing them a disservice and eroding their trust in the process, the problem became hard to ignore. These long-standing, high-caliber customers felt that the company was not meeting their needs and instead violating the customer compact. If we couldn't adjust, they were ready to take their business elsewhere. Conveying this information directly to the team was a critical part of establishing an urgent need to change. Our customers' testimonials demonstrated to the leadership team that this unappealing version of our future had already begun to take root. Their stories, delivered in person and with great passion, were far more persuasive than any tidy columns of numbers on a spreadsheet might have been.
We began to realize that acting quickly and decisively could halt this tide of customer dissatisfaction and reestablish ourselves as the responsive, customer-first company we had always been. Even if we did experience a temporary revenue or profit slump with this change (which would eliminate approximately 25 percent of Schwab's level of profitability at the time), our market share leadership of trades and accounts would actually skyrocket.
Since the Internet brokerage ecosystem was growing rapidly and becoming intensely more competitive every day, we knew that we needed to act. Just as we had predicted, the stock value went down promptly after we made the change, plummeting nearly 50 percent in days. We had anticipated this and were even prepared to weather a few years of poor stock performance. We had been honest with our board, analysts, and investors about this aspect of the change, never glossing over the risks. Everyone knew the change was going to seriously lower our profits for a time.
And then, also as we had predicted, the customers stopped trickling away. They began trading more and more often. By quickly adapting to fulfill customer desires, we had distinguished ourselves, reinforced our customer-first reputation, and positioned ourselves for a huge wave of volume growth eventually followed by a wave of revenue and profit growth as well. Prospective new customers began to show interest in the new pricing scheme. We recovered faster than even our most hopeful projections had suggested. Our stock climbed back to its pre-change value—and then doubled in worth by the end of the year. That same year, our stock valuation passed that of Merrill Lynch. In twelve months, we had gone from a crazy company tossing away our lead in the market to a bunch of geniuses who had done an end run around disaster.
Strengthening the Leadership Team with Constructive Debate
Facing the facts and debating the alternatives turned out to be an extremely healthy team-building activity for our leadership. At the beginning, not everyone was convinced this change was necessary. But as we dug into our customer metrics and explored our trends, and analyzed financial projections of how the change process would unfold, the team gelled around the need and we all came to own the vision for where we were going: one Charles Schwab with a highly competitive pricing structure for our online trades. Our depth of understanding and our combined passion about the need for the change enabled us to sell the need for a pricing change to the next layer of leadership, to the hundreds of managers who ran all parts of the company, and ultimately to all 11,500 employees. It was very clear to all of us—those who carried the message and those who heard it—that this change was urgent, necessary, and connected to the mission of our company, and would lead to an exciting future for Charles Schwab.
Showing Your Passion
Whether it's creating a better airline or a new pricing structure, you have to believe in the change passionately—and share that passion over the long haul. Intel's Renée James feels strongly that transformational change hinges on belief in a mission: “In technology, you have to invent the future. You have to imagine what could be—and then what has to happen in order for that to be true.”
Renée describes the role of personal character and personal passion in making change a reality: “People judge the reality of a vision and the possibility of its truth by the passion of the leader. The words you choose are important and your actions, on a daily basis, even more so.” People won't follow leaders who say all the right things but don't act according to what they claim they believe. They want to see their leaders making personal commitments and taking personal risks. Leaders have to be willing to publicly stake their reputations on the ideas they are advocating.
Passion is something that you can't teach and that you have to keep in full supply. As Renée explains, “You spend all your time operating in the change state, which requires a lot of energy and a lot of repetition. You must always put your conversations into the strategic context. You've got to keep it up until the job is done.” No matter how many times you've said it or in how many venues, you have to be consistent—“to help people see concretely what they could only understand abstractly before.” Then, “once they see it, once the lightbulb goes off, they've got it. They understand; they say, ‘We can do this!’”
That lightbulb moment is part of what keeps Renée going. But for Larry Baer, whose vision of a new stadium and a top-ranked team in San Francisco, which was “not a baseball town,” explaining the vision wasn't enough. Instead of talking nonstop, the leadership team effectively went dark while they developed their plan and their vision. Then, when it was time to build support, they found a very tangible way to test their concept and share the vision.
As Larry told me, “Probably the best $50,000 we ever spent was to build a model of our new ballpark. We took it to the commuter train stations and lobbies of downtown high rises and office buildings and showed it to people. And people bought into that vision. We even built a full-scale model of a luxury box to get reactions. And it was clear people were buying into our vision.”
Buy into it they did. Baer and his leadership team had displayed and promoted the model at the right moment; the model drew positive attention and transformed into reality as the team took new shape. When the new ballpark opened to sellout crowds in 2000, it quickly became a record-setting ballpark, against the odds.
There were two recurring themes in all of the interviews I conducted for this book:
- The critical need to communicate a compelling vision of the future
- The critical need to communicate that message over and over
Leaders need to spread the message to different groups and at multiple times to the same group, in different ways and in various situations. The ability to lead change rests on the leader's character and skills as a communicator. Developing yourself in these areas is an immersive process, as deep as it is rewarding. It is vital to each of the Stacking the Deck steps and transcends all of them. Developing your communication skills should be at the top of your list.
In this chapter, we have discussed what you need to communicate to the organization. Chapter 11 spends more time on the how of that communication effort. This is likely to be just the beginning of your development in this arena.
In a sense, communicating the vision behind the breakthrough change effort is never over; it's something you must repeat and constantly reinforce. To do this well requires passion, patience, and understanding. You will need to develop and practice your communication skills and your listening skills, all along the way. A healthy dose of curiosity is invaluable, both to be open to the new and to continue learning at every opportunity. With curiosity, you may see that any opposition or resistance you encounter can also reveal the problems you'll have to solve. Recognizing the issues early gives you a huge advantage. What to do when you spot them is the subject of Chapter 4.