Many companies find ways to thrive in recessions. These well-run companies find ways to adapt; they change quickly; and they grow.
But to change quickly, companies must act quickly. And to do so, companies need a heightened sense of urgency. John P. Kotter's new book, A Sense of Urgency, explains how managers can bring constructive urgency to their organizations.
Kotter, a Professor of Leadership, Emeritus, at Harvard Business School, gave Inc magazine an interview about this topic. It was published in their September, 2009, issue.
"There are lots of signs of false urgency," Kotter told Inc. "Frenetic activity. Everyone is exhausted. Working 14-hour days. One red flag is how difficult it is to schedule a meeting."
"A false sense of urgency," he wrote in his book, "is pervasive and insidious because people mistake activity for productivity."
But when people have a true sense of urgency, he wrote, "they think that action on critical issues is needed now... Now means making real progress every single day. Critically important means challenges that are central to success or survival, winning or losing.
"A sense of urgency is not an attitude that I must have the project team meeting today," he wrote, "but that the meeting must accomplish something important today."
One reason that seventy percent of change efforts fail or never launch, Kotter told Inc, is that company leaders don't create a true sense of urgency around what they're doing; they go straight to solving the problem.
Strategy and Tactics to Bring True Urgency
"Underlying a true sense of urgency," Kotter writes, "is a set of feelings: a compulsive determination to move, and win, now.
"When it comes to affecting behavior—creating alert, fast-moving actions that are focused on an important issue, relentlessly launching needed initiatives or cooperating with the initiatives of others, pushing to achieve more ambitious goals despite the obstacles, trying to achieve progress each and every day, constantly purging low-value activities so that time is available to do all this—feelings are more influential than thoughts."
Kotter writes about four tactics that companies can use to increase urgency. In the first of these "people dramatically bring outside reality into groups that are too inwardly focused."
Gathering data about the external world is the most widely used tactic for "bringing the outside in." Such external data typically includes information about customers, competitors, the economy, and so on.
Those who do a good job with this method, he wrote, adhere to four guidelines:
As Kotter told Inc, "A lot of people create heavy-duty measurement systems to track the progress of their companies, but that's not how leaders with the greatest sense of urgency do it. They pay attention to their internal numbers, but they're much more interested in what's going on outside. They want to have as many metrics about their competitors as they do about themselves."
Systems that report those outside metrics must be easily adaptable, because companies must be able to modify their reports easily. "If you always measure the same things," he said, "you may always get the same answers. We think numbers keep us alert. But maybe they're putting us to sleep."
External metrics should be widely used in most companies. In fact, he said, "there should be no meetings that are only about internal matters, without any connection to the outside world. In some way, the outside world always provides the 'why' we are doing something."
Excel's Key Role
Kotter offers strong reasons to report external data throughout the company. But his role is only to suggest what companies should do, not how they should do it. So how should you implement this tactic of using external data to spark a sense of urgency in your organization?
Excel offers a flexible, analytically powerful, and very low-cost way to report external data. In fact, I don't know of any other system that's nearly so good. Here's the general approach:
1. Create one or more Excel database workbooks to contain your external data. Keep quarterly data in one worksheet and monthly data in another. Similar database workbooks can contain your actual data.
Alternatively, an Excel-friendly OLAP product like IBM's TM1 or PARIS Technologies' PowerOLAP can store data in a real database on the server. (TM1 and PowerOLAP work about the same, but PowerOLAP costs about half as much.)
One advantage to using an Excel-friendly OLAP -- when compared to a typical IT solution -- is that users typically maintain the OLAP data, not IT. Therefore, like a spreadsheet, well-trained users could set up a new database in a couple of hours instead of waiting weeks or months for IT to add the data to the corporate data warehouse.
2. Use INDEX-MATCH formulas in your reports to return data from workbooks to your management reports. (See How to Fight Spreadsheet Hell With Three Excel Functions.) Or, in the case of Excel-friendly OLAP, use spreadsheet functions provided by the vendor.
3. Where possible, set up Excel dashboards to display the data. Among their other benefits, dashboards tend to make the data "interesting, surprising, or dramatic", at least compared to standard Excel reports. Additionally, dashboard charts are a popular choice for people who don't want to study any more numbers than necessary.
For additional information about how to create Excel dashboards linked to Excel databases, see Dashboard Reporting with Excel. To see a wide variety of working dashboards linked to an Excel database, see Kyd War Room.