Change Adoption Among a Geographically Diverse Group of Stakeholders
4/20/2020
As far as change projects go, transitioning to new standards can be a challenging experience for those for whom the standards are written. This can be especially true when those affected are in geographically diverse environments. In other words, there may be increased strain when those affected do not have the benefit of working in a collective environment, such as a single organization. In the following paragraphs, I will illustrate a case study from personal experience where I was tasked with implementing a standardized knowledge test platform across the United States that included testing room layout, administration of the knowledge test, and document retention/recordkeeping.
Some background. There have always been four major components to the Federal Aviation Administration (FAA) airman knowledge testing program; the FAA sponsor, the designee organization with the computer testing system, the network of test sites that administer the test, and the airman candidates that sit for the test. Standards had been published by the FAA for computer-based knowledge testing centers as early as 1992. The FAA has always operated their knowledge testing program professionally and effectively, however, the universe of testing centers eventually became cumbersome for the FAA to monitor because the FAA did not have the resources to fulfill their monitoring responsibilities when free-market rapid growth was factored in. By 2008, the body of sites had grown to 1100 testing centers across the United States as well as at military bases in Europe, Asia, and the Middle East. There perhaps were twice as many test sites as was needed to offer adequate coverage. Generally, there were multiple flight schools and Fixed-base Operators (FBO) in competition with one another at general aviation airports, and one way to get a leg up on the others was to offer airman knowledge testing. Subsequently, the desire for a testing center was in high demand.
In 2009, I was Vice-President of one of the two designee organizations that provided FAA computer-based testing. Our company, Computer Assisted Testing Service, Inc. (CATS) acquired by PSI Services LLC (PSI) in 2016, delivered FAA testing to approximately 500 aviation testing centers. Also, in 2009 the FAA had announced that it was changing the existing designation to a new delegation-based designation that required us, among other things, to write a procedures manual, inspect all of our testing centers annually, and give face to face training to all proctors. CATS’ procedures manual was approved in 2010.
The most important change project that resulted from new designation was to implement the new procedures at the testing centers. We developed a web-based training program for all proctors as well as partnered with our competitor designee, PSI, to form an internal inspection program where we shared contract inspectors. It was the inspectors’ role to report areas where testing centers were out of compliance. We used the data collected at the testing centers to conduct post-inspection training by telephone to the testing centers. Post-inspection training functioned as the primary change communication plan. Some testing centers did not embrace the change to the new standards and subsequently dropped out of the testing program, eventually bringing CATS’ testing center network down to approximately 350 sites. After a year, the change management processes were having a moderate effect, but not nearly the effect that was needed. Something more had to be done.
In 2011, CATS purchased at 2010 Cirrus SR22T, a single engine, 4-seat aircraft. It is a beautiful airplane capable of flying all over the United States. As ninety percent of the testing centers are at small general aviation airports, this plane made them easily accessible. For the purpose of fostering greater change adoption, I embarked on a series of three-week missions, five per year, that followed the same general meandering circle around the US. We were based in northern California, so the pilot and I would head south to southern California, then east through the Southwest, Midwest, South, and Florida. Next, north up the East Coast, next to the Great Lakes, and back to California. Depending on the density of the airports, we might stop at three or four testing centers per day, inspecting and giving training to new testing center applicants, conducting testing centers annual inspections, or giving training to new testing center proctors. I have included a photo above that shows the aggregate of general aviation airport visits.
I used the forum of the annual inspection to sit with each testing center administrator and conduct training. The testing center administrators and I exhaustively went through each testing record from the previous year and corrected errors where we could. The FAA provides strict corrective actions for those proctors whose testing records are out of compliance; usually a suspension of testing privileges for ten to ninety days. However, through being there, meeting the testing center staff, working with them, and training them I most often gained a high level of confidence in them. Subsequently, I was able to go to bat for them and for the most part find other methods for corrective actions. The face to face visits allowed a bond to form between myself and the testing centers, and the resulting gained mutual trust and respect went a long way toward adoption of the new standards.
I have found that communication programs are the make or break for change projects and that there is no substitute for face to face communication, especially with geographically far-reaching change projects. It was the face to face connections that made all the difference in the world when it came to adoption of this change. And, I would not have been successful in my forward position had I not had excellent, dedicated people handling the day to day at the home office.
Mark Dennehy has managed top-level departments in major North American companies and is a leading Consultant who will bring fresh ideas and acuity to your organization.
Connect with Mark Dennehy and discuss your situation in confidence. He can be reached at [email protected].
Investing in Change Management May be the Best Decision a Business Makes in 2020
4/13/2020
When we consider the concept of a temporary economic suspension, it may be initially tempting to envision it as a pause; such as when watching a movie our neighbor unexpectedly rings our doorbell. We hear the doorbell, pick up the remote and press pause, visit with our neighbor, then afterward press play. The movie picks up right where it left off with the exact same tempo as when it was paused. If this were only the case, the economy was opened it would be in the same shape as it was when the suspension of the economy occurred. Regrettably, a suspension of economic activity must be seen in terms of loss of blood supply to members of a body. If the blood supply is paused long enough, the result will be necrosis, and some members of the economic body may cease to exist. If this should occur to a large enough degree, then major economic changes are on the way.
Many aspects of the world economy are presently adversely affected by economic suspensions, but two sectors of the US economy stand out as beginning to experience some level of necrotic response to the COVID-19 suspension of economy. And what I mean by necrotic response is that these economic sectors would not recover as they were prior to the suspension. Two examples are discussed in the following paragraphs; brick and mortar retail and small business, especially small business with ten or fewer employees.
The most visible and widespread impact will be seen in brick and mortar retail. Granted this aspect of the economy has been struggling for years due to over-leveraging and the presence of online retailers such as Amazon. Now, many brick and mortal retail stores are shuttered or have their ability to interface with their customers severely limited, and the social distancing guidelines that forced this will be in place for at least 45 days. The unplanned loss of revenue for this length of time may cause permanent layoffs in this industry, as more people shift to purchase through online retailers. Prior to the shutdown, the retail sector employed 52 million people. The ripple effect is unnerving. Fewer products being sold means fewer products being shipped, affecting distribution centers nationwide. Unlike standard 40-hour week, fixed-schedule jobs, retail employment has historically been a flexible employment opportunity; perfect for many different life situations. Some of these jobs were the second income in a two-income household which sustained the livelihood of a middle-class family. Some of these jobs were held by single parents doing their best to raise their children and subsequently may be forced onto welfare.
Possibly the impact with the greatest effect on the heart of our economy will be seen in the small business sector. And I specifically refer to small business employing ten or fewer persons. These small businesses are generally not well-financed, do not have adequate cash reserves, and have high debt-to-income ratios. They may not be considered essential and may completely shut down. Simply put, they were already under financial stress prior to suspension. Unlike a job, small businesses consume their owners’ whole lives, and as a result their businesses become their identity. They generally care very deeply for their employees and their investment in them can be deep in both resources and heart. If they have had to shutter their businesses, they are likely facing bankruptcy as well as having lost what they have put their all into for the past decade or more. They may not return as businesspersons or return to any productive role. But there is more to small business closures than the emotional aspect. Because economy and business are organic in nature, it is the creativity and dreams of individuals that manifest as small businesses. Some of these businesses become larger and are acquired by larger businesses, which are in turn are acquired by even larger businesses. The creativity organic to small business may be the same creativity that feeds the established economic structure of our society.
As a society, we face changes to the economy. Some sectors of the economy will change a little; some will be significantly changed. The amount of change any sector may experience can be correlated to how great an effect the suspension had on their financial situation, whether customers were lost because they found other options, or whether the business even though it was not shuttered, was affected by businesses that were. The silver lining is that there are always opportunities in adversity. Not all businesses are successful when attempting to adapt to changes. Change practitioners are available to assist businesses in adapting to a changing economy. Investing in a change management program may be the best decision a business can make this year.
Mark Dennehy has managed top-level departments in major North American companies and is a leading Consultant who will bring fresh ideas and acuity to your organization.
Connect with Mark Dennehy and discuss your situation in confidence. He can be reached at [email protected].
Essential and Non-essential are not Sever-able in an Economy
4/13/2020
The thinking behind the method used by the states and federal governments to suspend aspects of the economy is based on separating perceived essential and non-essential businesses. As most of the leadership in government have devoted their careers to work within government, it is not surprising that their thought processes are informed by the inherent compartmentalization of the structure of government; wherein certain government functions can be deemed essential while others non-essential. The government is not an economy because it ascertains its role as a response to economy. In situations where government must self-limit, e.g. funding bills fail to pass, etc., the government can temporarily and indefinitely sever its non-essential functions without damage to itself.
This is not true with an economy. The government in their shutdown strategy is attempting to preserve the supply chain while suspending what is considered non-essential. The heart of an economy resides in an non-severable interdependence. Factors of the economy cannot be suspended without damage to other aspects. If enough factors are suspended, a domino effect can be created leading to collapse. I have some examples from personal experience that illustrate this point.
Years ago, when as CEO of Computer Assisted Testing Service, Inc. (CATS), I was faced with a situation of possibly discontinuing one of our brands. We had two brands; “CATS” which served FAA and FCC knowledge testing candidates, and Comira which served the knowledge testing industry in general. The CATS brand was profitable while the Comira brand was not. CATS existed in a limited universe; Comira was considered a long-term growth investment. Nevertheless, because of the drag Comira created on company profits, I had to consider whether to discontinue the brand. After considering the idea I abandoned it, as I arrived at the conclusion that discontinuing the brand might threaten the survival of the company. Why? An analysis of the structure of the company highlighted the reality that both brands were dependent upon a foundational layer of technology, and to discontinue it would reduce the IT footprint of the company below what might be sustainable for the whole company to survive. Too many IT human resources would be lost. In other words, I recognized where the interdependence of the organization was, even if at a high level the various departments appeared severable. We kept the brand.
Presently, I am a principal in D&S Moto Works; a motorcycle sales, service, and repair facility in Stockton, CA. Vehicle service and repair is considered an essential service and as a result we remain open for service and repair. We have suspended motorcycle sales until the authorities give the “all clear” as regards Covid-19. Even though we remain open for service and repair, it is getting more difficult to obtain parts and the parts we can get have longer delivery times. This is a clear example of economic interdependence, as although we provide essential services and remain open, some of the distribution centers that support our parts requirements have closed; therefore, effectively all but suspending our operations.
This is the danger of considering some aspects of the economy to be essential and others non-essential. Those aspects of the economy considered non-essential, in their suspension, will have a direct adverse effect on those considered essential. It is the domino effect, and the fall of the dominos is headed for the supply chain. If the supply chain is affected to too great a degree, the ensuing economic damage might be too great to overcome with Federal stimulus bills.
Mark Dennehy has managed top-level departments in major North American companies and is a leading Consultant who will bring fresh ideas and acuity to your organization.
Connect with Mark Dennehy and discuss your situation in confidence. He can be reached at [email protected].
A Risk-based Approach to the COVID-19 Crisis
3/30/2020
The world is engaged in a multi-faceted crisis related to the COVID-19 pandemic. The United States is not only embroiled in it but is rapidly becoming the nation that the remainder of the world will look to for answers. Regrettably, the United States’ response to COVID-19 thus far has not been a thoughtful one and has resulted in hypoxic economic spatial disorientation, leading us ever closer to a fatal economic graveyard spiral.
Last week I began to hear some voices advocating for a risk-based approach to managing social distance guidelines. Utilizing risk-based methodologies is a return to sanity. To date these voices have not gained much traction, as those voices advocating for a risk-based approach have not determined how to proceed, and those advocating for a total economic shutdown have embraced only the singular variable analysis of public health. It has been difficult to counter this thinking with other vital aspects such as that of the economy. Yet as the crises continues and the economic damage worsens, we will see a shift to a dual (at least) variables analysis; that of the economy vs. public health. The perceived value of a risk-based approach to social distance guidelines for the COVID-19 crisis begins at this point.
The economy that we have today is a layered organism that developed organically and has grown and evolved over the centuries. It is a complex phenomenon that cannot be closed-throttled and then simply opened again. The Federal government did not create the economy. Rather, it regulates it (as best it can) and attempts to influence it, often through tax law manipulation.
What is a risk-based approach? ISO 14971 defines the term “risk” as “the combination of the probability of occurrence of harm and the severity of that harm”. For the COVID-19 crisis, harm can be defined by hospitalizations and loss of life. A risk-based approach will consider the probability of both as well as those that could experience less harm. It therefore functions as a useful filter that could inform the national response.
The first step in a risk-based approach is to collect and verify any data associated with infection. 100% COVID-19 testing would be helpful, if available, because the full power of geographic data analysis could be utilized. Step two is the classification of all people into risk categories based on verified data. Some examples include those most likely to be hospitalized and those most likely to experience moderate or mild symptoms. The third step is to quarantine those highest at risk and, in addition to the necessary medical industry adaptation, develop a national response around serving those highest at risk. Social distancing guidelines can then be more loosely applied to the remainder of the population, allowing the economy to function somewhat normally.
A risk-based approach to the COVID-19 crises could grow our economy. Especially if considering the economic growth resulting from innovation when attempting to serve those quarantined as well as meeting the demand for increased medical resources. We should consider a risk-based approach before we pass the economic point of no return.
Mark Dennehy has managed top-level departments in major North American companies and is a leading Consultant who will bring fresh ideas and acuity to your organization.
Connect with Mark Dennehy and discuss your situation in confidence.
An Approach to Solving Difficult Problems
03/23/2020
There is nothing quite like facing a seemingly no-win scenario. I am speaking of situations that appear to have only bad outcomes; problems where it looks like one must choose the path that results in the least amount of loss. As executives, we often make decisions on minor matters in a field of gray, mostly because we must get through the day and our creativity must be preserved for more important things. However, life doesn’t become black and white once a consequence-heavy situation arises. Sometimes the outlook is all still gray.
A relevant case study is the turmoil that Harley-Davidson Inc (HOG) has been experiencing for the past several years; one where their customer base has shrunk along with their market share. Harleys are of the most expensive on the market (I know – I own one), while their aging customer base retires from riding and are not being replaced by younger riders. Harley-Davidson is a lifestyle as well as a product and the lifestyle aspect is a generational anomaly. Motorcycling will continue to thrive and grow, but the counterculture “biker” culture will eventually, and likely permanently relegate to a commercial non-factor. This is a tough situation to be in. As a matter of fact former CEO Matt Levatich was forced out three weeks ago for his inability to provide a solution. Levatich’s solution was to attempt to increase younger entry ridership by producing small street bikes (500 & 700cc) as well as betting Harley’s future on electric motorcycles. Both attempts have not been successful because, among other things, the core problem (generation-based image) was not addressed.
This was however a foreseeable issue; and preparation for it might have begun twenty years ago. Tough problems require real investment, and there is no way around it. If this problem was my charge to solve, my angle of approach would begin at exhaustive data analyses on every aspect of the business, but especially in these four areas.
- Who is my customer (Who could be my customer)?
- How can I reduce my expense footprint (How can I reduce the price of my product)?
- What direction can I market my business (What can my product become)?
- Where can technological innovation be realistically be introduced?
Having developed researched and tested answers to the above questions, I would come to the only solution available. That is to develop a new motorcycle market that has not been developed by another. Perhaps as intercity transportation that is significantly less expensive than a small car, as well as the introduction of small, liquid-cooled, liquid fuel engines, and small electric bikes. BMW succeeded at developing a new market with the pioneering of the adventure bike.
At this point, and without direction, it may be too late. Harley’s problems were exacerbated under Levatich. But I reserve judgement on Levatich’s plight and removal. The truth is that no one owns success. It is only leased, and the rent is due every day. It’s a tough world.