What Have You Changed?

Tom Peters

Are your sales consistent with your forecast? Did you exceed budget? Are your projects on schedule? These are standard questions for performance appraisals or quarterly reviews. They deal, as the experts say they should, with results that presumably are under the manager’s control.

But I believe these are the wrong questions for the times. Perhaps we should ask something more fundamental: That is, “What have you changed?”

The question is deceptively simple, and most often goes unasked. Yet it may be the most crucial question we should ask all managers, at all levels, given today’s radically changing environment. A vice president of IBM suggests that it has become the most frequently asked question in all levels at his firm.

From computers to retailing to health care, managers of all functions are confronted with a drastic degree of turmoil. New competitors pop up daily. New arrangements are made between vendors and buyers. Joint ventures are launched to explore and exploit surprising new opportunities. Technology is altering every element of product or service design, manufacturing and delivery.

This new environment calls for new forms of evaluation. To be sure, making budget is a valid objective. But while it may be necessary condition for survival, it is no longer sufficient.

The IBM executive continues, “We must reexamine every relationship, every system and sub-system, and every element of doing business. The only plausible criterion for success is ‘are you changing enough and rapidly enough to successfully confront the future?'”

Are you looking for new opportunities to use technology—opportunities, for example, to link some of your databases electronically with those of your key suppliers and customers? Have you launched new training programs with new content aimed at preparing all hands for an altered future? It is no longer adequate to boast: “We processed 738 people in basic sales training.” It is better to ask: “How have you changed sales training to match possible future scenarios? How much material in the sales refresher course has been updated in the last six months? How many new case studies are you using? Why these cases? Have you asked anyone to advise you in course design whom you’ve never asked before? Are you sure your advisors have diverse enough backgrounds?”

I am impressed by the assiduous efforts of most American managers to grapple with their wildly oscillating world. But despite their best efforts, I despair at the pace of change. To compete with imports and take advantage of our onshore position, delivery cycles must be reduced by at least 90 percent. Product development cycles and inventories must be slashed by equal amounts. To achieve radical results, all systems and relationships must fundamentally be reassessed from the ground up—and changed.

The query “What have you changed?” must become a ritual. Begin each staff meeting by devoting 15 minutes to going around the table; posing the question to each colleague. Devote a special section of the company newsletter to a summary of changes—significant and not so significant—being made in every function. Be sure automatically to include a laundry list of things changed in the opening paragraphs of every internal speech and every informal talk. Make these simple questions the first element in your formal appraisal system: “What have you changed? How much have you changed? What are you planning to change next? What are your direct reports changing?”

The purpose of all this is to make change a routine part of doing business. The manager becomes, first and foremost, a manager of change—not a guardian of yesterday’s rules and regulations.

One side effect to encouraging change is that you will be making some mistakes. An acquaintance confronted with an inertial system in a fast-moving market says, “We need to make our mistakes faster.” Ceaseless delays in getting experiments off the ground and failure to take action are too often tolerated. Replace paralysis by analysis with purposeful impatience. That is, we need to stoke the pace of trying, testing, faltering, adjusting, and getting on with the new. Business Week recently described PepsiCo as a preeminent marketer because of its reliance on “gut feelings and quick reflexes.” President Wayne Calloway said that his company’s strategy could be summarized as “ready, fire, aim.”

My own assessment of PepsiCo, Citicorp and IBM, arguably the three fastest moving giant firms in the United States, is that they are, above all, impatient. They reorganize thousands of people in scores of operations on a dime, while others who barely have the energy to overcome political infighting make changes only once every half dozen years. These companies don’t stand on ceremony. They never stop exploring ways to get their act right. And while they don’t reward sloppy behavior, they do treat thoughtful tests that fail—and are fixed in a hurry—as an essential part of moving ahead. Above all, they perpetually move in tandem with their fast-paced markets.

Just what have you changed today?