Talk is cheap.

Several hours ago, I watched five salesmen get fired. Between them, these guys represented more than 100 years of foundry industry experience. Like many sales people I have met over the years, they are all nice people and had been dedicated, loyal employees of their iron foundry. The whole process was difficult, uncomfortable and, above all, sad.

To make matters worse (for me at least), I did a lot more than just watch. The fact is that I played a major role in developing the new and wholly different marketing and sales program and the larger organizational change that made these guys obsolete. The bottom line is that I am largely responsible for putting these guys out of their jobs.

The happy ending to this not-really-so-sad tale is that, as they were fired, each of these salesmen was instantly rehired by the foundry to a new position: account manager. But the change in their roles and responsibilities was so profound, so much more than a mere change in job title, that its effect was every bit as intense as it would have been if they had actually been fired and subsequently hired on to a completely new job at a different company.

Now, each has a brand new job description, and their compensation system-from periodic performance evaluations to annual salary adjustments to bonus criteria and calculations - has been recreated from the ground up to fully support their overhauled job descriptions. Moreover, a new sales manager has been brought in, and his job description and compensation package has been similarly retooled to support the process of organizational and cultural change. And that's not all.

Show, Don't Tell 

Many CEOs talk about "abandoning business as usual," about changing their company's "culture," and about making the changes and improvements needed to compete successfully in the "21st century." However, talk without resolute action is mere words. Have all the meetings you want. Make all the commitments you want. Agree that change is good all you want. Talk all you want. If that talk is not backed up with specific actions in five key areas, no CEO can change behavior, the way his or her company does business, or its potential for success in the years ahead. Those five areas are incentives and disincentives, standards and measures, training, communication, and consistently appropriate top management behavior.

The story I related at the beginning of this column is a perfect example of making the changes to incentive and disincentive systems needed to support change. On the one hand, the potent combination of new, tightly integrated job descriptions and compensation plans is central to creating positive incentives for change. On the other hand, bringing in a new sales manager, one specifically selected because of his commitment to a new way of doing business, removed important disincentives.

Standards and measures are the organizational equivalent of an individual employee's incentive system. Here, resolute action must begin with the CEO clearly and unequivocally deciding which measures are most important to the organization's future success. Is it volume or value? (I'll give you a hint: it's value.) Quality or throughput? (It's quality.) Productivity or profit? (It's profit.) It can only be one or the other, and the CEO must set the tone and follow through by making sure the top management team's individual job descriptions and incentive systems support his or her vision for the future.

Simply rewriting a person's job description or moving around boxes on an organizational chart do not automatically qualify people for their new jobs or alleviate the anxiety associated with change. Training is essential to overcoming these barriers. New job descriptions and incentive systems were unveiled within the context of a full week of training for those new account managers mentioned earlier in the column. They have been encouraged to seek training opportunities during the year, and every sales meeting for the next couple of years will be similarly dedicated to retraining.

Communication (for example, a weekly letter from the CEO to all employees and periodic discussion sessions with the CEO and small groups of employees) is another key element of an effective change program. It does much to reduce anxiety and speed acceptance of any new idea or system.

So too does consistent and appropriate top management behavior. Nothing short circuits change more quickly than a CEO waffling or, worse yet, backsliding when important decisions come up or when vital principles are tested. Especially early in the change process, CEOs must be completely inflexible, consistent and resolute in decision-making and action-taking.

Change is Good

As competition intensifies and customers continue to raise the bar for supplier performance, foundries must reinvent themselves to keep up. Those companies and CEOs that embrace change will be the ones who stay one step ahead.