[Music] individuals do not change fundamentally in who they are without a very serious personal crisis of some kind but the conclusion again for for us perhaps the key conclusion is that is a wrong question to ask revitalizing people has a lot less to do with changing people and has a lot more to do with changing the context that companies that senior managers that people in this room create around their people now context some manager called it the smell of the place it's a hard thing to describe and then let me try to describe it the
best way i experience it through my sort of personal experience if you wish i i teach at the london business school i live in london have done so for the last year and a half before that i lived in fontainebleau in france for about eight years but one look at me and then one sound of my accent and you know i do not come from either of these two wonderful places in the world i come from india from the eastern part of india my hometown is the city of calcutta so every year i go to
calcutta in the month of july that's the only time when my children have a summer vacation now calcutta is a wonderful town in winter autumn and spring but but summer well the temperature is hundred and two hundred and three uh the humidity is about 99 and i feel very tired most of my vacation i'm tired i'm indoors i used to live in fontainebleau and this i genuinely challenge you go to the forest of fontainebleau in spring go with a firm desire to have a leisurely walk and you can't the moment you enter the forest there
is something about the crispness of the air there is something about the smell of the trees in in in spring you'd want to jump you'd want to jog you want to catch abram to run do something and that i believe is the essence of the problem most companies particularly large companies have created downtown calcutta in summer inside themselves and and then they complain they say you know you are lazy and you don't take initiative and you don't do take cooperation you are not changing the company this series is not about changing me i have a
lot of energy in in spring and quantum blue and i'm a bit tired uh in summer in in calcutta and that's the issue to change ultimately beyond all these abstractions of strategy of organization or processes at the end the issue is how do we change the context how do we create fontan blue forest inside companies now what's the typical context typical may be too strong a word but what's the context that you find in many companies not from their sataric level where most of the people in this room sit bought from from the perspective of
of this frontline person the salesman in lyon top management creates strategy chris talked about it and and that how does it come down to this frontline person to me the salesman in leo constrained it tells me by product my customer what i can do it's a box of constraint the smell and i'm trying to relate to that metaphor uh we all see it we enter the place in the first five minutes you get a smell you get it in the hum of people you get it in the quality the color the smell is constrained compliance
companies create this elaborate infrastructure of systems planning systems budgeting systems financial systems all of it boils down by the time it travels down to me the smell it creates for me is compliance i got to comply control my relationship not just with my boss but with the entire management infrastructure is one of control it exists to control me and finally contract we repeatedly use the word you know your job is a personal contract relationship with the company is a contract budget is a personal contract once the price is a contract so constraint compliance control contract
that's the smell we create that's what i live in and then we say you know you got to proactively create change you have to take initiative you have to cooperate where are we going to get those behaviors what we found in our research on the other hand is a few companies that have created an environment that we describe as the dimensions of stretch discipline trust and support and then let me take a minute or two to explain them where top management does not create this strategy that boils down as constraints but rather creates an exciting
set of values an aggressive ambition all of which create a smell of stretch not stretch we want to be 100 billion dollar company or anything but stretch in the sense every individual all the time is trying to do more rather than less not not compliance or all these systems that create compliance not compliance but discipline embedding norms of self-discipline and you can see that in companies you can see where day-to-day behavior is shaped by these embedded norms of self-discipline self-discipline is yes it's meeting the budget but it's much more it is if a meeting starts
at nine everybody's there at nine it is if people collectively agree to a decision in a management committee even if individually you disagree you do not start challenging that decision or unraveling it immediately outside in the corridor i mean in intel you see this norm agree or disagree but commit yes people debate people argue but at the end a decision is taken and then agree or disagree but commit self-discipline also not control but support the whole role of senior management changes where they are not seen as the exercises of control but as those who exist
with one purpose only which is to help me win by access to resources by coaching by guidance and finally not contract but trust and and trust more than this very contractual sense in which we use the word trust trust in the sense that says if you carry that card i may be in australia and you would be united states i may have never met you but the fact that you carry the card is good enough for me to let go of the safety of business as usual and and fly knowing that you will be the
same pair of hands at the other end so stretch discipline support trust and and i'll i'll invite you don't take those words don't don't intellectualize those words but try to sense the smell that can be created if those are the norms of behavior and our research says two things one it is possible to create that smell in companies there are companies and of the companies that were part of our sample 3m is is one example where a management can create the smell and protect it over long periods of time that's assertion one it is possible
to do it and protect it assertion two it is also possible for a determined management that has inherited more of the downtown calcutta in summer uh to convert it to to the fountain blue forest to that new context and then while um we do not know alcoa or very well i mean from the discussions we are having this morning some of that has been done in their companies but we have seen others where it has been possible and this and the statement that that we would make is ultimately what's the test or quality of management
of a company performance we know is a very noisy measure this to our mind is is a real test of quality of management the context that managers create that shapes the behaviors of people creating this stretch discipline trust and support
