Focus/Activity in Internal Disruption
The following is an excerpt from Seasons in Leadership, Chapter 3 on Internal Disruption:
In December 1992, I graduated from the University of Arkansas with a degree in chemical engineering. Earlier in that semester, I had told my best friend that I’d had my first interview with what would be my future employer, Kimberly-Clark, to which he inquired, “Was she nice?”
That’s kind of funny, and if you knew my friend, you’d probably just roll your eyes, but in the coming years I always had to qualify who I worked for with some version of “You know their brands: Kleenex, Huggies, Depend, Kotex.” The quizzical looks would change to “Oh, got it.” My twelve years at K-C were entirely in the personal-care products supporting the feminine, adult, and baby-care businesses. As an integrated company, I also got a lot of firsthand exposure to our nonwovens business and pulp mills.
At that time, K-C was pretty diversified in its holdings. The nonwovens business supplied our personal-care businesses with raw materials in addition to selling on the open market. It was also a strategic competitive supplier to our professional health-care business. I often tell people, open up a supply closet in any hospital in the country, and you’re bound to see a ton of K-C products in surgical masks, gowns, sheets, etc.
As a paper company, we had our own pulp mills. I got to visit one in Coosa Pines, Alabama, and was struck by the image of a truck of pine trunks that I’d seen on the highway. I distinctly remember a big crane with jaws that could take those logs in one chomp and deposit them on a pile so big they looked like matchsticks.
A company with an integrated supply chain really isn’t that uncommon. Again, it gave us a competitive edge in product development and shelterable technology but also in our supply chain. What was a little less expected is that we had our own trucking company. One could argue this was just another form of integration in hauling our own product. Sure, but it wasn’t dedicated, and we still had plenty of other haulers.
What about an airline? K-C owned Milwaukee-based Midwest Express Airlines, where every seat was a first-class seat, real meals were served, and they baked chocolate-chip cookies on board every flight (yes, you could smell them in the oven and had to make sure you didn’t get melted chocolate all over your business attire).
Fast-forward a few years, and Jim Collins released his iconic Good to Great in 2001. I was then working in the diaper business at our headquarters in Neenah, Wisconsin. The book was quite the buzz, and K-C was among the fifteen featured companies that Collins had studied. He credited CEO Darwin Smith for leading the transformation from K-C being a paper company to a consumer products company. Smith retired in 1991, so I never got to sit under his leadership. I can say that a number of company veterans I worked with early in my career who had seen Smith in action thought he hung the moon.
Wayne Sanders succeeded Smith as CEO and carried on the remaining parts of the plan of company makeover initiated by Smith, selling the pulp mills, the paper company, the trucking company, and the airline. Exiting those businesses allowed the company to refocus its investments into its consumer brands. I had a front-row seat for that as a young leader, by then leading capital projects in our Huggies business.
It was reassuring to feel like we had a plan. Granted, I was in the most profitable business in the company at the time and could feel the swell of support we were getting. Clearly, I was on the right side of that Internal Disruption. I also had access to the “why” behind the moves and understood how we planned to win in this new era of the company—and I really liked knowing how we were going to win.
While this is not the place to dissect the various moves by the company in this period, it is a terrific case of understanding that by saying “no” to one thing, it allows one to say “yes” to something else. The company saw many of these assets as nonstrategic. Most can probably see that was true of the airline, but even the pulp mills, while producing a key raw material in absorbent products, became nonstrategic. Yes, we’d still use pulp, but we didn’t need to own the pulp mills that were capital intensive and producing a commodity.
Zooming way out, this was all about becoming a company that investors saw differently. Instead of being compared with a peer group of International Paper and Georgia-Pacific, K-C wanted its peer group to be Unilever, Procter & Gamble, and Colgate-Palmolive—and in doing so, it became great.
Focus/Activity in Internal Disruption
One of my favorite models around Internal Disruption is the sigmoid curve. A sigmoid curve is simply a mathematical function that takes the shape of an S. Organizational psychologist Charles Handy is credited with transferring this mathematical function to change theory. In short, if a company’s growth is headed up and to the right as we would hope over time, the trick is knowing when to jump to a new curve before the current one hits maturity, levels off, and ultimately goes into decline.
Short term, the performance is likely to drop until a new mastery occurs and growth resumes that surpasses the former paradigm and what it could have produced. This new curve should inevitably, in turn, be replaced by a subsequent curve, and so on. The trick is twofold:
• Timing the jump.
• Having the courage to make it.
In employing this model, the focus and activity should be about the new curve and the jump that the organization needs to make. Once you have answered “why,” this is about defining the new curve. People will work most effectively when provided with clarity about the new direction, what’s expected, and what others are counting on them to deliver, both at the end and in the transition. This includes the preparatory work of getting ready to make the jump as well as what to expect once the new curve is the norm. Most of us, when provided with that clarity, can get on board with where the leader is convinced we need to go.
For Reflection
1. What compelling story of your shared future have you shared recently with your people? Have you given them a reason to want to go there with you?
2. Who are the change agents in your organization that you can count on to help bring other people along? How are you purposefully investing in them? How are you positioning them to bring others along?
Find out more about Seasons in Leadership.