Excelling in Transformation Leadership
In our third fireside chat, FlexPoint Consulting Founder & CEO Michael Daehne meets with Steve Abernathy, Vice President of Service Excellence and Advanced Analytics at Archrock. Steve shares wisdom on leadership, key differentiators in transformation, and change management.
You can learn more about Archrock at https://www.archrock.com/.
Opening
Producer: Welcome to the FlexPoint Fireside Chat, where we discuss navigating the critical inflection points of business and life. In this episode, Steve Abernathy and Michael Daehne share their wisdom on leadership, key differentiators in transformation, and change management.
Steve is the Vice President of Service Excellence & Advanced Analytics at Archrock and has worked with Michael and the FlexPoint team on major transformation efforts. Here’s more from Steve.
Great Leadership Traits
Vulnerability and Care
Steve Abernathy: In good leadership, you definitely need to be vulnerable in front of your people. They have to know that you’re a real human being and that you care, that you’ve got some humility. One of the things that’s important is making sure people know you care. You can show that in more ways than you’d think, but little things matter. To me, it’s always making sure I thank everybody, recognize people in the mornings when I walk in, and just go out of my way to learn something about somebody when I’m in the galley who I might not normally talk to. Those are all key things I make sure that I do.
Little things, I’ll just give a couple of quick examples. One: typically, all the people who work for me get a Christmas card from me. Two: whenever I give people their bonus letters or their merit letters, I don’t just give them the letter with my signature. I make sure that I tell them how much I care, how much they’ve done to make an impact to the company.
Those personalized letters, I’ve found out later, were very important to people. Very important. And they’d look forward to that recognition. And it’s deserved, and we need to be those kinds of leaders. I actually picked up on that letter writing habit from one of Lou Holtz’s books. He was – and may still be – a prolific recognition person and letter-writing person. And I thought, if he can do it, by gosh, that’s the kind of leader I want to be.
Michael Daehne: I think those things go such a long way. I’ve got a stack of stationery that I, once or twice a week, write on. I have terrible handwriting, it’s probably painful for people to look at it, but I think it means so much more when someone takes a minute to write something personal and specific about what you did versus just saying it in passing or an email.
The other thing that comes to mind as you were talking about both the vulnerability piece and getting to know folks on an individual personal level: those are great leadership qualities, at any time, but they’re especially important during times of change because that’s when folks naturally feel the most uncertainty and anxiety. So, knowing that their leader is with them on the journey is so meaningful.
Having Fun with Coworkers
SA: Yeah, and I think you have to, as a leader, have a little fun with and around the people in the office. If everything is serious all the time, good gosh, who wants to come to work in that every day? You can’t do these things in the office anymore. We used to do a lot of safe, practical jokes even when I was at Texas Tech and Halliburton. Things that make it fun. So, you can’t necessarily do that in today’s world, but you can still have fun and cut up and make fun of yourself. People really enjoy those things.
MD: Yeah, I agree.
Preparing Well for Transformation
MD: Well, we started going down this path and talking about some leadership practices.
When you think about the different transformation initiatives you’ve led and been a part of, you always joke you could write a book with all these lessons learned. What is another key lesson learned that jumps out at you as being really important in those times of change?
SA: When I think about change and leading these kind of change efforts, two things jump out immediately.
Identify Key Differentiators
SA: The first one is: you have to truly assess your processes and identify the differentiators in them. I say that to mean: are you really transforming this effort, or are you just doing process improvement? If you really want to transform the company, what are the things that are really going to differentiate you in this transformation? You need to rigorously and deeply assess that.
In a true transformation, you’re about to change a lot of the ways you do things, and behave differently, and expect people to behave differently. That’s a huge difference than, “let’s go do a kaizen event.” It’s a huge difference. So, you really need to be serious about it when you’re doing it. It’s a big investment, and you need to make sure you clearly understand what you’re doing and why you’re doing it. That’s the number one thing that I would do before I ever took off on any of it.
MD: Along those lines, we’ve talked about this in the past, in the same way you said, “is it just process improvement, or is it true transformation?” I think the other flavor of that is, “is it transformation, or is just modernizing some technology?” A lot of our clients right now aren’t trying to totally transform their business; rather, they’re saying, “how do I get off a thirty-year-old mainframe and onto a cloud ERP?” That’s still very hard, it’s a tough journey that requires a lot of these lessons, but it has a little different flavor than, “we want to create a new business line” or “we want to radically reinvent the way we serve our customers.” Those things are really transforming the model.
That idea you said about which pieces are differentiating is so important, especially if you’re trying to slam any of that into a commercial off-the-shelf [COTS] solution. Figure out the processes that you can standardize that don’t matter; the other 20% of secret sauce stuff, that’s where you invest in building up your own way of doing it for competitive advantage.
SA: Absolutely, a big differentiator. In The Process Edge, by [Peter] Keen, one of the things he talks about is, “what is your identity process?” Those one or two or three processes that differentiate you from anybody else. How do you capitalize on that? A lot of times you do have to transform those things over time because the market changes, the world changes around you, and it does put you at a disadvantage.
MD: Yeah, no doubt.
SA: Today, with competitors that come in with technology and innovate over the top of you. It’s extremely important to make sure you’re always looking forward.
MD: Couldn’t have said it better myself. That’s a great one to start on: what your differentiators are.
Assess Leadership Capability for Change
MD: What’s another key lesson that jumps out at you?
SA: The second biggest lesson, and the thing that you’ve got to do, and this is probably harder than the first because this gets personal: you really have to assess your team and leadership capability for this level of change. It is tough because you have to assess up and down the chain.
If you’re the CEO, you’ve got to assess your executive team’s ability to change. If you’re a senior executive, you’ve got to look at the next level down: can your senior directors and VPs lead your organization through this kind of change? If they can’t, you’ve got to make a change. You’ve got to find somebody that can fulfill that. If you don’t, you’re going to be in trouble in this kind of change. And even if you’ve got the right people in your IT or operational leadership, that next level down is so important in making the change sticky, but also making it happen at that time. That’s a critical piece of the whole thing.
And some of those people you’ll be able to move, and some of those you won’t be able to move. That’s very, very tough. It’s hard to do because sometimes they’re great. Maybe they’re great at maintaining, but maybe they’re not great at growing. You need somebody that can transform. If you don’t have it, you have to make the move.
MD: Agree. And you hit the nail on the head. That’s the really tough part of it. Most organizations don’t start out saying, “I want to do a talent management assessment.” They start out saying, “I need to fix my processes” or “I need to increase my gross margin” or “I need to implement this new technology,” and it quickly becomes: to do that, you need to have the right team in place, at the highest level and driving it. I can say this as the consultant: no matter how good the consultants or partners you bring in are, if you don’t have the right core team internally, you’re not setting yourself up for success.
SA: Right. And you don’t have to go very far down this path to realize, “we don’t have the right person here. We don’t have the right person there.” Can you get somebody there? Sometimes you can but not always. Sometimes, maybe the challenge is just adapting to the change and you can help them move down that change curve. A lot of times, if they don’t come with the skill set and they don’t have that mental aptitude for what you’re really trying to do, they’re not going to get there. You’re never going to get them there.
MD: It’s an uphill climb, and the one other piece of this that we’ve seen – and your organization did this and has done this exceptionally well – not only do you have the right people, but are you willing to put some of your best people on the transformation project, instead of saying, “I have to protect them, I need them for the day job.” Really being able to say, “who are the right mix of folks to drive this change? We’ll backfill, we’ll find the right mix, but let’s take some high potential future leaders and folks that know the business really well and embed them in the change initiative.” That’s something that really was a differentiator in some of the wins as part of the work that you and Archrock have been doing over the last several years.
SA: Absolutely. We got early agreement from senior leadership of the company that we want to put our best people on this. It was obviously extremely important not just to the success of the program but to the success of the company. I did feel really good that we put some really good people out on that.
Invest in Change Management
Create an Innovative Change Strategy
MD: I love your first two. What’s your third big lesson, Steve?
SA: The third big lesson is a combination. You’ve got to really look at your change strategy. It goes into your whole communication plan and all that. Your change strategy sitting underneath this other big piece which is: “what’s your big picture view of this change? What does it look like? What’s this vision of the future look like?” You’ve got to sell that and sell it over and over and over. You need a good, innovative change strategy to support that.
That change strategy has to be comprehensive. I think the biggest thing that I see that we did invest well in was change management, really getting this vision out of the compelling change. I’ve seen other efforts fail over time. In talking to colleagues at other organizations, too often they fail because they redline change management. “We want to spend this, but we really don’t need to spend that much on change management. Let’s take that and cut it by 75%.” That’s probably one of the worst things you can do.
I’m not going to say you can’t overinvest in change management – you obviously could. But if you innovate, if you’re smart about how you go about doing it, and you invest in change management, the program will be better off. The training that comes away from it, as well as the ongoing change management, is huge if you’re going to move the needle and really get that to be a part of who you are going forward.
MD: Well said. I may have told you this before, but I use the analogy: a couple of years ago I was buying a new car. They said, “if you want the blind spot warning and the rearview camera, that’s an add-on package.” And I said, “what do you mean it’s an add-on package? That’s core to what I want. I’ve been driving a fifteen-year-old car. The whole reason I want a new car is for some of the safety features. That’s core.”
I think that’s how change management gets treated, like it’s an add-on package. No, it’s core to the success and safety of the program. To really think about, “how are you enabling and empowering your team members, your customers, whomever, to come along for that journey?”
SA: For sure.
Recognize Change Champions
SA: I also think recognition along the way is crucial. I’ve always been a strong believer, when you’re going through change, that people are always talking about the fence-sitters and the nay-sayers, and they want to go over and spend all their time with nay-sayers.
I say no.
Go spend your time with the champions. Put them up on a pedestal. Recognize them. Reward them. And when they’re up on the pedestal, other folks are going to start moving off the fence. That’s what you’ve got to do. You can waste so much energy on nay-sayers. If you know where they’re at, you start recognizing and rewarding champions, other people will start moving because they say, “that’s where the north star is now. We’ve got to move.” And that’s what’s going to happen.
Don’t overly invest in trying to convince nay-sayers. Move them in one direction or the other.
MD: That is spot on. It’s all human nature. I always joke that if I weren’t doing this, I might have ended up as a psychology major diagnosing why people do and act and think the way they think. I think that’s all true in this kind of work, too. Everyone is human and trying to navigate change on their own and figure out what it means for them – the good, the bad, the ugly of it – and I think sometimes we lose sight of that when we’re so focused on a project plan or the technology or whatever may mask that underlying piece.
SA: Yup, for sure.
Choose Your Partners Wisely
MD: Any other big lessons you wanted to highlight?
SA: I think the last big one that I would highlight is around choosing the right partners to work with. There’s no science to that in some ways. Historically we’ve gone through some rigorous assessments and ways to think about choosing the right partners. But part of it is also gut feel – if you don’t feel, as you’re going through the scientific assessment of it, that you have chemistry, you should run and go look for that organization that can be there for you from the chemistry standpoint. Especially if you’re not talking to the program leaders. If you don’t feel chemistry with this organization, run.
Too often organizations also look at [the vendor list] and say, “they’re right near the bottom, and I think they can do this on price and everything else.” It’s just so tempting to just jump right in. But you really didn’t feel the chemistry, you didn’t feel like it was there, but it was tempting that they had just checked all the boxes.
Choosing your partners wisely is so, so important. I cannot overemphasize that. You’re about to hang your organization on with these partners. Also make sure you’ve got higher-level eyes on the decision, as everybody else is digging into the technical aspect of the selection. There are a lot of lessons learned inside there, choosing these partners and systems and all of that. You’ve got to peel that onion back with them and dig deeper.
Based on what I’ve seen and lessons learned, if we had known this when we walked in, I would have asked these questions, we would have looked at this, we would have talked more about this particular aspect. It’s expensive when you choose wrong.
MD: It is. There’s a layer on that, too, we experienced this in working together: you’re not just choosing one partner. On some of these large transformative efforts, you might have an ecosystem of four or five or ten different partners between general contractor and system integrators and software partners. It gets very messy very quickly.
Choosing each of them wisely, with the chemistry, skills, and experience, and also – and you helped us do this really well at Archrock – being thoughtful about roles and responsibilities and clarifying between all the partners and the internal team who’s doing what. Otherwise, it can get into turf wars and finger-pointing.
SA: It’s not your traditional RASCI chart [framework to show who is working on a specific area: Responsible, Accountable, Supporting, Consulted, Informed], for sure. Especially when you get into governance, everyone gets on the playing field, so to say, but how well are they going to play together when they’re really under pressure. It’s a different thing when you’re working with that many partners at one time.
Closing
MD: If you’re really working on a book on all these lessons learned, we might have just scratched the surface of chapter one. But I think we’ve covered so much ground in a short time today, and I know that those that are listening are learning and jotting down notes. I really appreciate you taking the time and looking forward to continuing to partner with you and help drive change.
SA: Thanks so much. I appreciate the opportunity to spend a little time with you and with some of your customers and others who can maybe learn a little bit of the pain we’ve gone through. But there’ve been some good things, too, that came out the end of the pipeline, so to say.
MD: No doubt. The road goes on forever, as we like to say.
SA: Amen to that.
MD: Thanks so much, Steve.