The Adizes Program

The first step in the Adizes program is to bring all top management together and do what I did for Bank of America, to get to the awakening: “We have problems. We need to solve them. We have to change.” To come to the realization that the organization has to start working together. Don’t look for a savior to solve your problems. You are the problem, thus you must be the solver.

This first step takes two days. In these two days, you’ll find out where you are in the lifecycle, what is normal, what is abnormal, and what, God forbid, is fatal to your company, so you can focus on the real problems at the right time in the right sequence. At the end of these two days we make a plan of action: what is going to happen, and how long it is going to take.

The program from there on takes one to three days a month, depending on the company. It is therapy. You cannot delegate someone else to go to therapy for you.

We first address low-hanging fruit. Why? People need to learn how to work together because working together is not easy. It’s natural not to work together because we are different. If it were so easy, then we wouldn’t have so many marriage and family problems. What is happening here? People are starting to trust each other. They discover they can solve problems.

After that, we create a bottom-up channel, so people can communicate from the bottom up.

So far what has happened? We learned to diagnose problems without killing each other. We learned to solve problems together. We created communication channels. Now we are ready to make strategic changes.

The next step is to discuss and agree on the real mission of the organization. Some companies say they already have a mission statement. Usually, a mission sounds like this: “Our purpose is to satisfy our clients profitably and be responsible to the community in which we live.” Bravo. It makes for a beautiful plaque on the wall. But what happens? Nothing. It’s too generic.

I claim that if your mission applies to anybody else, it’s the wrong mission. It has to be particular to you. To say we’re in the business of satisfying our clients, investors, and owners, and being socially responsible applies to everybody. It is like saying your mission in life is to be happy. Good luck.

In Adizes we lead an exercise to develop a company’s mission. At Bank of America, when we worked with them in 1982, I asked, “What business are you in?”

Their answer: “We’re a bank.”

“I know you are a bank. But what is a bank?” (We are not scared to ask stupid questions.)

“We take savings and we give loans.” Then the discussion led to a realization: It was a dead business. They had competition on the demand side and on the supply side, and they were disadvantaged by laws that prohibited banks from competing with them. In the modern world, how many people put money in a savings account? You hardly make enough money to cover the inflation. You put the money somewhere else, in stocks or in bonds. On the demand side there are other institutions that provide capital: private equity funds and private investors, the stock market—tremendous competition here. The traditional business model of a bank—trying to make money on the difference they pay in interest on savings and earn in interest on loans—was getting squeezed. (This was in 1982. Years later the whole savings and loan industry went bankrupt.)

What to do? You have to change who you are. Remember I started this lecture with the admonition to leave behind what made you successful in the past. It might be the reason why you’re going to fail in the future. Don’t drive forward looking in the rearview mirror. Forget the past. Where are you going?

The change for Bank of America was fee-based banking: charging fees for every service. It was a paradigm shift. Now they were not a bank, but in financial services.  “Then we should buy a brokerage firm,” they thought, “and we should have an insurance firm and we should do mortgages.”

That is where we are going. Not where we are coming from.

What do we do next in the program? Build an organizational structure that is designed to deliver the mission. As they say in America, good fences make good neighbors.

The next phase of the program is to divide authority correctly, and the following step is to cascade the program through the organization. In this phase we train and certify people in the company in the Adizes methodology. We transfer our know-how so the company can be emancipated from external support. We are proud of every client we lose—I really mean it—because we are organizational therapists. Just imagine a psychotherapist saying, “I’ve had this for twenty years and he’s going to be with me for the next twenty years.” What kind of a psychotherapist is that?

We want to train the company, start moving the iceberg, transfer the technology, and depart. We tell the company to call us only in an emergency; otherwise, they’re on their own. We train people in the company, we license them, and they come to our conventions. They are part of our professional community. We share knowledge, update ourselves on the technology, and impart that knowledge to the community.

Once we are working together and have cascaded, hopefully, to the last worker, down the guy who cleans your bathroom, and they’re solving problems from the bottom up—now we can stretch the company to peak performance. That’s where you get all your return on your investment. Now we find all the holes, where you are wasting money.

You cannot only stretch your hand; if you really want to stretch the whole body you need to stretch arms, hands, shoulder, hips, toes—everything. Everyone, down to the last worker, has to cooperate for the whole culture to change.

At this point we are ready to do strategic planning. Usually consultants say: “Tell us your goals and then we’ll do strategic planning.” But if the company is a mess, how can your strategic planning be successfully implemented?

Now that we are all working together, everything is transparent and we know where the money is being lost or made, and we have a direction, and a structure—now we can talk about major direction changes. At this point it will be very easy to turn the company around, because everybody’s on board, participating, and collaborating.

In the next phase we teach companies how to start moving the energy from the bottom up. Energy cannot move top-down and bottom-up in the same channels. It will get stuck. That’s why the people who resent changes the most in your organization are the first-line managers, the foremen: They get pressure from the top to change and resentment from the bottom. They are at the neck of the hourglass. We create a bypass system, a cybernetic structure: top-down, bottom-up, everything is flowing.

The last step in the program is reward systems. If you make these changes earlier, you will pay much more. When the people are frustrated, they hate their work: “You want me to work for you? Pay me.” When everything is working smoothly, they still want money, but less.

There are eleven steps, and twelve months of the year: in January do step one, February step two…November step eleven. In December, do nothing. Rest, or go on vacation. What should you do in January? Start all over again. But not we. You.

That is the methodology for changing an organizational culture, for healing a sick organization, for making an organization the best it can be.

Just thinking.

Ichak Kalderon Adizes

Stay tuned for part 6 next week.

Read part 1 here.
Read part 2 here.
Read part 3 here.
Read part 4 here.