INC.: Why is the sequence so important? We know of companies that do wonders with their compensation systems.
ADIZES: That's only because they're already clear about mission, structure, and accountabilities. A reward is meaningless if you don't understand the direction, if you don't have specific responsibilities, if you're not accountable and you don't know how you're being measured. Without those things, it's not really a reward at all. It's a bribe.
INC.: What about strategic planning? Earlier you dismissed it as a fad. Now you say it's part of your methodology.
ADIZES: It's the sequence that counts. Strategic planning is the ninth step of my methodology, not the first. Putting a cherry on top of a pile of manure does not give you a cherry pie. Some consultants come in, and they do a beautiful strategic plan, but the infrastructure is not there for delivery. The internal marketing is out of sight. People are eating one another alive, and they believe strategic planning is going to save them. You know what this is analogous to? A marriage that is falling apart, so let's have another baby. You only postpone the inevitable. Success is not outside-in. It is inside-out.
INC.: How long does the whole process take?
ADIZES: We can get most companies to prime in a year, sometimes less. It used to take longer, but we've gotten better. There are two exceptions. It will not work in a company with negative cash flow, which is like having a heart attack. What caused your heart attack is your lifestyle, but it does no good for me to stand by your hospital bed and say, "Change your lifestyle." At that point, you need a heart specialist. Later we can work on changing your lifestyle. The methodology will also not work with a manipulative, self-centered, arrogant, autocratic bastard running the company. I have had only two failures, and they were both cases that called for psychiatric intervention. I need leaders who have confidence in themselves.
INC.: Isn't that asking a lot?
ADIZES: No, not really. I don't change human beings. I change the environment human beings operate in. If people are intelligent and relatively balanced, they will read the writing on the wall. The environment changes, and they change their behavior.
INC.: But don't you also have to change people's attitudes to make this transition to prime?
ADIZES: That's exactly what I'm doing with this methodology. You have to understand there are different approaches to consulting. Some people are trained in psychology and group dynamics. They think you just get people talking to each other, working together, and everything will be OK. I don't believe it. I believe environment has an impact on behavior. If I want to make you OK, I don't talk to you. I change the environment within which you operate. I don't say, "You should be participative. You should have integrity. You should be honest." That has no value to me. Instead, I establish a system around you so you know what it means to be participative, to have integrity, to be honest. I change the behavior of a company by changing its structure and the process by which it makes decisions, and that guides the behavior and changes the attitudes.
INC.: What if people don't want to change?
ADIZES: Then they leave, which is OK. Let them go to the competition.
INC.: Let me stop you for a moment here. You seem to be suggesting that the only way people can get through this transition is to hire you.
ADIZES: Not necessarily, but if they don't hire me, I strongly recommend that they get outside help from someone they absolutely trust, someone who has experience in making these transitions and a lot of common sense. My methodology is really based on common sense. I take pride in the fact that I don't tell people anything they don't already know. Unfortunately, it's often difficult to use common sense when you are a founder or a president dealing with these kinds of problems. You form attachments -- to dreams, to people, to ways of doing things. It's not easy to see the situation clearly while you're in the middle of it. It takes an extraordinary individual. Believe me, if it were easy, I would have done it a long time ago in my own company. I wouldn't be stuck in the founder's trap right now.
INC.: Isn't it just as hard to turn your fate over to an outsider? It sounds as though you wind up playing a big role in the companies you take on as clients.
ADIZES: If you mean I make decisions for them, that is not true at all. The whole purpose is to empower them to deal with their own problems, to create an environment in which problems can be solved with trust and respect and cooperation and communication. That's why we do the methodology this way, giving people bigger and bigger problems they can solve by themselves. By the time they get to the reward system, they're ready to handle anything. We'll come back once a year to check how it's going, but our goal is to transfer the technology to the client. We're proud of every client we have lost.
INC.: I still don't see how it works. You talked earlier about making the transition from structuring the organization around people to structuring people around the organization. What actually happens in that process?
ADIZES: I'll give you an example of a recent client -- a construction and engineering company. The construction part has a unionized component and a nonunion component. Engineering is separate. They're all at each other's throats. Now the way for this company to make money is to integrate the different parts so it can provide turnkey delivery to customers, but the president cannot get the organization to change. He heard my lecture, and it took him three years to call me in. He was scared. He did not believe it could be done without risking the company. So we got the top people together, had them tell us the problems, and everyone agreed we had to solve them. Then we did a mission. What came out of the mission loud and clear was that the future is in turnkey delivery. But they are not organized for turnkey. So I started building the structure with them. By the time we finished, it was all integrated. I asked if anybody disagreed with the structure. Nobody disagreed. A guy came up to the president afterward and said, "I've got 30 years in this company. I don't know where I'm going to end up, and I'm scared. But you know what? This is exactly what we need to do." I didn't design it. They designed it with my help.
