Inside Automotive with Jim Fitzpatrick, powered by CBT News

Stop Chasing Transformations And Start Realigning Your Business

• Jim Fitzpatrick • Season 1 • Episode 26

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We explore why big transformations often fail and how small, steady adjustments keep companies aligned with purpose. Geoff Tuff and Steven Goldbach show how CEOs act as chief system designers who shape behavior through management systems, not slogans.

• the honing metaphor and why realignment beats constant sharpening
• addiction to transformation and the cost of ignoring daily details
• challenging the orthodoxy of bold vision as the core of leadership
• CEO as chief system designer of incentives, metrics and decision rights
• behavior as the subatomic particle of business and culture
• working differently, not harder, to reduce fire drills and drift
• partnering with middle managers to co-design systems
• how honing evolves culture by changing what good looks like
• the one takeaway: change behavior to change outcomes
• when true transformations are necessary and how to avoid self-inflicted ones

Learn more about how everyday actions shape long-term success. Purchase “Hone: How Purposeful Leaders Defy Drift” today!

Inside Automotive with Jim Fitzpatrick is powered by CBT News, your go-to source for the latest news, trends, and insights in retail automotive. Subscribe for more interviews with top industry leaders, dealership innovators, and experts shaping the future of automotive.

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Jim Fitzpatrick:

Hey everyone, Jim Fitzpatrick. Thanks so much for joining us this morning. Instead of grand transformations within your organization, Geoff Tuff and Steven Goldbach say that effective leaders focus on small, deliberate adjustments to keep their organizations aligned. Today we are exploring the idea from their new book, Hone: How Purposeful Leaders Defy Drift. And you're probably going to want to make notes on this one because this is going to be a really good show. So, Steven and Geoff, thank you so much for joining me on the show today.

Geoff Tuff:

Thanks for having us.

Jim Fitzpatrick:

So, Jeff, let me start with you. Can you explain what honing looks like?

Geoff Tuff:

Well, so Steve and I originally got the inspiration for the name of the book, the notion of the book we've carried in our head for some time now. As many of your listeners and viewers may know, this is not our first book. We've been doing this for a little while, and this felt like an appropriate end to a trilogy that we've been writing. So the ideas behind Hone have been kind of bubbling around in our head since our first as since our last book came out about three and a half or so years ago. And the whole idea that we wanted to bring to our readers with this one was that instead of waiting to make big transformational moves that often fail or costly, um, sometimes actually cost people their jobs and what have you, it's better to just stay on top of the date details day in, day out. And I'm sure we'll talk in a lot more detail about what that looks like. But the real inspiration actually came from a conversation that Steve had with uh a chef friend of his. And um Steve talked to her. She was preparing to cook a meal, and Steve saw her sharpening the knife. And Steve said to Flannery, who actually is one of the uh people with the we profile in the book, you know, Flannery, do you really need to sharpen the knife after before every single time you cook? And Flannery said, No, no, no, Steve, you got it wrong. I'm not sharpening the knife, I'm honing the knife. Okay, and there is a critical difference because when you sharpen a knife, what you're actually doing technically is destroying the blade. You're taking steel off the blade to create a new sharp edge. Whereas with honing, what you're doing is you're leaving the steel intact, you're leaving it in there, but what you're doing is just realigning, I think what she called them is all the snaggly-toothed bits of the of the knife that have gotten um kind of snaggled by over but by using it. And so the idea that that occurred to Steve and me at that point is this is a great metaphor for business. We want to try to avoid doing uh unnecessary and sometimes unintentional harm to a business by going too hard at sharpening it or transforming it and instead hone the business day in, day out, and we think that will lead to better outcomes.

Jim Fitzpatrick:

Yeah, there's it makes sense, right? Steve, why do you think that uh so many organizations have become addicted to big transformations?

Steve Goldbach:

I mean, let's start with the fact that it sounds sexy, right? It sounds like this—

Geoff Tuff:

To some people, Steve. Maybe not actually to everyone, but yeah—

Steve Goldbach:

This is this is something that we want to do. This is and it's kind of de rigueur. Like it's like the the this is what leaders do. They transform a business, they give grand edicts, um, and they tell people to go and change. And um it's to some extent become the definition of of leadership, but really it's also become necessary because of the inattention to the small details of the day that lead up to big change. So I think part of the reason why businesses have become addicted to transformation is because they're not honing day in, day out. Geoff and I aren't uh anti-transformation. We think that in certain situations it's actually quite necessary. We just don't want transformation to have to be brought, you know, done to ourselves because of lack of attention to the details of how do we improve daily. We think that there is a place for it when it's necessary and when disruptive technologies happen fast or when competitors make move. But we'd rather transformation be necessary because of external events rather than because of letting the organization drift um away from its elemental purpose.

Jim Fitzpatrick:

It it seems to me, too, that uh you you you see these transformations in businesses, often in companies, when there's new leadership that's installed and they want to roll their shirt sleeves up and maybe even put their own brand, so to speak, on the leadership or the management or the company itself by saying, Okay, we're going to, we're going to have this big transformation. Is it is it some is it maybe even part ego of that of that leader to do that?

Geoff Tuff:

It it it it could be ego, and and um you know, for for me for some reason the the the word ego sounds like it's actually got a negative edge to it. We all have ego, we all like to see ourselves in the picture of doing something, but it it is understandable that someone comes into a situation where let's take a just a uh um fictional company where past senior executives have come in, they've offered a bold vision, and the orthodoxy around the company is that's what leaders do. They offer a bold vision and then they expect everyone else to go and execute on that vision. It's not surprising, therefore, that when a new executive comes in, they'll have a slightly different bold vision and go in a slightly different direction, expect everyone to execute. So, what Steve and I are arguing actually is that that's that orthodoxy needs to be challenged. It needs to be blown up. That's that's a job for a CEO and companies is to provide the bold vision, but we actually think it's much more important for them to be the ones who are hands-on day in, day out, adjusting the management systems to keep the company on track. I mean, you just imagine, uh and we can talk a little bit more about this if you're interested, but uh the whole notion of drift actually comes from um the metaphor of being on the water and trying to stay on track. And you imagine a company that's trying to stay on track, and one executive says that's the bold direction, the next one goes and says that's the bold direction. You can see how that could get very confusing and discombobulating for anyone at the company. And so ultimately um we would prefer it if the orthodoxy of companies is that the most senior person in the organization, whether she's the CEO or the CEO equivalent, um doesn't come in necessarily with the ego and the big pronouncements, but instead they see their job like their um predecessors as getting into the details and keeping the ship on track day in, day out. And we think ultimately that is going to lead to better outcomes.

Jim Fitzpatrick:

Uh Geoff, the uh the the CEO is described as the chief system designer. Talk to us about that.

Geoff Tuff:

Well, so I'd I'd happily talk about chief system designer, but I have to ask my friend Steve to talk about management systems to begin with, because I I will tell you the guy's a little bit obsessed with management systems, and he can probably explain to you. All right, you're you're on the side. Set the what those up, uh what those are. We can all talk about the Yeah.

Steve Goldbach:

So so so, in order to understand the chief system designer concept, the idea is really uh that what the subatomic particle that matters most in business is human behavior. And if you want to drive any type of change, whether it's transformational or honing, the unit of analysis has to be the management system. Lots of leaders like to talk about culture and so-called culture eat strategy for breakfast, but culture doesn't happen, you know, culture doesn't culture change doesn't happen by putting more posters up on the wall or leaders making grand speeches. Sure. Culture change happens because you change what good looks like at the organization. And management systems are to some extent the definition of success. It's things like your performance evaluation. You've probably had an end-of-year discussion with whoever supervises you that says, Did I do my job well? And if you're like literally almost everybody that we know, everybody wants to do their job well. No one wants to be useless. And management systems define what good looks like. They say these are the things that you need to do and this is the kind of bonus that you might get if you do them well. They offer also say these are the the decisions that you can make, and these are the the decisions that we you need to talk to your boss you know about making. And so all of those things collectively governor, you know, govern the behavior that goes on in an organization. Now, if you want to change the behavior that you're doing, you need to therefore change the management systems. And the the challenge is that in transformation, you need to change a lot of them at once. And so therefore, we say that the CEO needs to be the chief system designer because nobody else in the organization has the purview of designing the machine to get the outcomes that you want. And to get the outcomes that you want, it's the collective behavior of the organization. Yep. Yep.

Geoff Tuff:

And I will and I will say it's not an easy move to make. I mean, and and so the the way I I try to simplify this for myself is a management system is anything that will impact the behavior of someone within the organization. They can be used to impact the behavior of others as well. And so, as Steve gave some examples, it's things like performance reviews um uh systems, it's how budgets are allocated, it's the questions that the executive asks, the executives ask in the hallway or in meetings or what have you. There's there's dozens and dozens of them that show up in any sort of meeting. But just imagine if the mindset of a CEO is not just that they need to set the vision, but that they need to pay attention to those things that will drive the behavior of the people they're working with day in, day out. That's a very different mindset than than we tend to see it at the top of most organizations.

Jim Fitzpatrick:

Yeah, for sure. And does that doesn't that in and of itself though require more time and attention that the CEO uh of that company needs to allocate rather than just Yes. Yes, it does. It does.

Steve Goldbach:

It it yes, it does.

Jim Fitzpatrick:

But as you know, so many CEOs are they they they drop the bomb and then they're on to the next project. And they're like, okay, you guys work this out, and uh, I don't really have time to stick around to help you hone.

Steve Goldbach:

That's the problem. That's the problem. They they they they the the that sort of management technique, which we highlight in the book, that running from problem to problem doesn't allow for a sufficient understanding of how things are happening on the ground. Like if you say, I want like Geoff and I worked with a um uh a leader once who was trying to drive uh you know commercial innovation, uh, you know, and what that means is innovation without touching the product. But in every meeting that we were in with this leader, you know, they would fawn over the the product innovation. And we took them aside and said, look, if you keep doing this, you're delivering the message that this is really important. So you have to change your own behavior, you have to make sure that you're uh creating this because that was some a behavior that they wanted to change. Um they it's not that they have to get into all the nitty-gritty details, but they have to see the system as a whole and and they they they have to know enough about the details to see not just you know make change happen, but how the all the different management systems are working together to collectively create that behavior because only the CEO has that purview. So yes, it's it's it's important and it does require some attention to detail that comes from other parts of their job.

Geoff Tuff:

Well, and that that was a critical thing that you said at the end there, Steve, because I don't I would not want it to be taken that we're advocating that CEOs just need to work harder. We think we're we're simply saying, and I I think we're as aware of anyone that CEOs probably have the most demanding calendars of anyone out there. We're just saying work differently. And so Steve characterized it at the beginning of his last answer as running from issue to issue. And I'll go back to my, you know, the the shift turning back and forth. If the shift didn't turn back and forth so often, there wouldn't be so much running around from issue to issue. It actually would free up time to be able to focus on the details and understanding the influence systems through the organization to impact the behaviors that they're looking for.

Jim Fitzpatrick:

Sure, sure. I I'm the kind of CEO that that runs from from project to project like that. So I'm definitely going to be reading this book right after right after this interview because I need it. And uh I'm but I also the other question that I have is am I um undermining the efforts of our middle managers in the companies that that say, well, wait a minute, Jim's hanging on this too long, and and we'll we'll take care of this. Go on and and put out either the next fire or come up with the next great idea.

Geoff Tuff:

I would argue actually, I would actually um argue it could be a more um engaging and more motivating way to work with middle management. So imagine if you're closer to the details of that, you as Jim as CEO are closer to the details of their job day in, day out, and you ask them questions, what are the what are the behaviors you're trying to drive? Who is it that you see that's exhibiting those behaviors well? What do you define as success? And the CEO then doesn't have to directly intervene and actually push the button to change the budgeting process, for example, him him or herself, but he does get he or uh she can give the latitude for others in the system to make those changes because they're so engaged with the middle management. So again, I go back to it just being a different way of working rather than a you know something that completely circumvents certain parts of the organization.

Jim Fitzpatrick:

Sure, sure. Um, and this is a perfect segue to what we were just talking about, but how does honing impact company culture over time?

Steve Goldbach:

Well, company culture is the sum of all the behaviors that exist in the organization. So as you're as you're honing, you are consistently evolving your culture. So if you're if you're changing your management systems, if you're changing what good looks like in an organization, then your culture is consistently evolving along with the objectives uh of the organization that you're trying to achieve. It's not like you're it's not that your culture is is static. Lots of people like to describe culture as we're an innovative culture or we're a traditional culture or this kind of culture, but really it's just about what you're behaving like. And so therefore, whatever you're doing to change your management systems will bring your culture along. And we just the reason why we're so uh insistent upon that that's the CEO's job is to design that set of that's that set of management systems is because that's their biggest that's their biggest lever of change. That's the thing that they can um that change the most. So that's the the job that they that they would say that they need to do is set organizational culture.

Jim Fitzpatrick:

For yeah, for sure. Um Geoff, if you had to pick one thing that you want the the reader to leave with after reading reading the book, what what would it be?

Geoff Tuff:

Um the most powerful opportunity for any or any executive um to stay on track and to exert change is understanding behaviors that matter. And this is a thread that is run through all the books that Steve and I have written over time. Things don't change unless people somewhere change their behavior. And so having a real uh really keen understanding as to what behaviors matter the most and how you can drive um change in those behaviors is uh the not so secret trick to winning in business.

Jim Fitzpatrick:

Right, right. And Steve, do you want to add to that?

Steve Goldbach:

Um the the thing I would say is that it's just we often hold our businesses to this very different standard than we do human beings. We were just using the metaphor of how many people try to go to the gym really regularly every January after they make their New Year's resolution, and then they're gone from the gym by February. And that that to me is the same as transformation. And the other thing that happens, you know, if you work out too much when you haven't been doing it, is you get yourself injured. And and the we just think that there there are better techniques that we know of, and we would like to see those applied in the world of business.

Jim Fitzpatrick:

Yep, for sure. Geoff Tuff, globally recognized thought leader, speaker, writer, and best-selling author, and Steven Goldbach, who is a strategist and executive advisor, best-selling author as well. I know this thing's gonna fly off the shelves, it's coming out soon. I have an advanced copy, so you can't have mine. We're gonna make a link right below the uh video that you're currently watching to get your copy, which I highly recommend if you lead people, you're running a business, large or small, great, phenomenal book for you to get your hands on. So, gentlemen, thank you so much for joining us on the show. Very much appreciate it. Love to do a follow up because I got about 12 more questions here that time does not permit me to ask. So, thank you so much for joining us. Really appreciate it.

Steve Goldbach:

Thanks for having us. Thanks for having us.

Jim Fitzpatrick:

Thanks for watching Inside Automotive with Jim Fitzpatrick.