MANAGING TIPPING POINTS

by: Issues: July / August 2004. Tags: Strategy. Categories: Strategy.

The smash best-selling book, The Tipping Point, is full of astute observations and excellent suggestions for executives who must manage change. In other words, for all executives. Regular Ivey Business Journal contributor John McCallum links the book’s lessons with the challenges facing managers today.

Every executive should read Malcolm Gladwell’s The Tipping Point (Little, Brown and Company, 2000). It is no accident it has been on BusinessWeek’s bestseller list for more than two years. The Tipping Point is chalk full of wisdom and insight sure to improve executive understanding, judgement, decision-making and performance.

A big part of being an executive today is managing change – understanding it, explaining and justifying it, initiating it, planning and organizing it, driving and forcing it, timing and pacing it, containing it, financing it and selling it to stakeholders including employees, customers and shareholders. The change file is one of the toughest any executive will carry. That well known management thinker, Niccoló Machiavelli, was right on change in The Prince: “There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.” So important and tough is change management that executives with the talent to manage it have a name all their own – change agents. No reputation is more coveted. Truly effective change agents can name their price.

Why change management is such a big deal in business today is not rocket science. Simply put, the pace of change in everything that matters to running a successful business is breathtaking, arguably unprecedented, and accelerating from here. It is either keep up or get pushed out. Technological and scientific advance, globalization, the internet and connectivity, wide open product and financial markets, fierce competition and a revolution in consumer and societal attitudes have done in the days of leisurely response and adjustment. This is not too strong: Change is not on the agenda; it is the agenda.

Enter the author Malcolm Gladwell. The cornerstone of The Tipping Point is the epidemiologist’s view that change is best understood if thought of as an epidemic. “Ideas and products and messages and behaviours spread just like viruses do.” Viruses are contagious; with viruses, little causes and changes can have big consequences and effects; and with viruses, change is often dramatic, not gradual.

Epidemiologists call that moment when change explodes the tipping point, the critical mass or boiling point moment when a single straw breaks the proverbial camel’s back and everything changes forever. In physics, it is the moment when a nuclear reaction goes through threshold and becomes a self-sustaining chain. What is particularly interesting and somewhat counter-intuitive is that the tipping point is often reached all of a sudden, right out of the blue, a consequence of the smallest change. At 50, 75, 80, 90, 95, 96, 97, 98 and 99 degrees Celsius, water is just water. But add that one more degree, to 100 and water boils, changing its form profoundly. At the molecular level, “all hell breaks loose.” Water tips from a liquid to a vapour.

Gladwell develops three rules of the tipping point that are crucial to both understanding and initiating change. First, the Law of the Few: Some people have far more capacity and power to initiate change than others – the messenger does matter. Second, Stickiness: the idea the messenger is pushing to motivate change has to be a grabber – memorable and powerful enough to spark and sustain action. Third, the Power of Context: the messenger and the message have to suit the circumstances and conditions of the moment.

Gladwell provides all kinds of wonderful examples of the tipping point process. Quite apart from its management implications, The Tipping Point is flat out a delightful read. In it you will learn about Hush Puppies shoes, New York crime rates, syphilis in Baltimore, HIV/AIDS, TV shows Sesame Street and Blue’s Clues, smoking, Rebecca Well’s book Divine Secrets of the Ya-Ya Sisterhood, the early Methodist Church and Gore-Tex apparel, all in the context of abrupt and seemingly unpredictable change.

The story of Paul Revere illustrates the tipping point process. On April 18, 1775, a stable boy told Revere, a Boston silversmith, of a conversation he overheard in which a British army officer said there would be “Hell to pay tomorrow.” Later that night Revere made his famous ride to warn of the coming British. When the British made their move the next day, they ran into fierce resistance from colonial militia-men at Lexington and Concord. It was a short step from Lexington and Concord to the American Revolution. The rest, as they say, is history.

Revere was a “Law of the Few” messenger with the power to move people — the personality, the connections, the knowledge, and the credibility. His “Stickiness” message was a dynamite grabber: “The British are coming.” Four words that changed the world. As Gladwell points out, had Revere’s message been that he was having a sale of pewter mugs, the “Stickiness” factor would not have been quite the same. Revere also had the “Power of Context” going for him. He delivered his message in the dramatic dead of night. Writes Gladwell: “One can only imagine how “Paul Revere’s afternoon ride” might have compared”.

In an author question and answer session, Gladwell talked about why he wrote the book. “One of the things I’d like to do is to show people how to start “positive” epidemics of their own. The virtue of an epidemic, after all, is that just a little input is enough to get it started, and it can spread very, very quickly. That makes it something of obvious and enormous interest to everyone from educators trying to reach students, to businesses trying to spread the word about their product, or for that matter to anyone who is trying to create a change with limited resources. …This is not an abstract, academic book. It’s very practical. And it’s very hopeful.”

MBA programs do not teach epidemiology, but what executive does not want to start a whole bunch of epidemics: an epidemic of product buying; an epidemic of consumer and shareholder satisfaction; an epidemic of product quality; an epidemic of innovation; an epidemic of productivity; an epidemic of employee motivation; an epidemic of honesty, integrity and trust; an epidemic of cost control and frugality; an epidemic of prudent finance; an epidemic of good management practice; an epidemic of good governance. What executive is not in the business of creating positive change with limited resources? Positive change with limited resources defines the executive function.

Executives are also in the business of stopping epidemics – not letting some things deteriorate to the point they cannot be contained and managed. Examples: not having a key employee leave because of an accumulation of small irritants, and then one more that pushes him or her over the edge; not losing valued customers along the same lines; similarly, not losing the confidence of suppliers, lenders and shareholders.

What I particularly like about The Tipping Point is that Gladwell not only poses the change problem and deconstructs it conceptually, but he also offers four suggestions that executives can implement. First, Gladwell makes this key point: “A world that follows the rules of epidemics is a very different place from the world we think we live in now. …We are all, at heart, gradualists, our expectations set by the steady passage of time. But the world of the tipping point is a place in which the unexpected becomes expected, where radical change is more than a possibility. It is – contrary to all our expectations – a certainty.” Executives who want to initiate positive, meaningful change need to change their mindset dramatically; they need to shake up their thinking; they need to get outside the box; above all, they need to be prepared to act boldly. All this, of course, is no small task. But it will never happen if it is not front of mind.

Gladwell’s second suggestion involves the Law of the Few, which says that in initiating and driving change, some people matter far more than others. Gladwell calls them Connectors, Mavens and Salesmen, people who have the relationships, knowledge, street-smarts, style, personality, character and reputation to make things happen and get others on side. Executives who want to change things need to concentrate on the right people. That is an important message. In effecting change, most people are a waste of time and energy; a few make all the difference. Figure out who they are and get to them.

Thirdly, Gladwell states that executives need a message that Sticks, that grabs, that commands attention and excitement and spurs to action. The “Why the change” message is not some throw away to be left to the public relations department. It is at the heart of whether there will be a good outcome. Work on the message; test it out; drive it home.

Fourth, the Power of Context says that in effecting change, you have to be acutely sensitive to the conditions and circumstances of the moment. Tailor the message and by whom and how it is delivered to the environment as it is, not how you think it is. Be relevant; be useful; offer something that deals with what people are facing now.

Finally, believe!!! “What must underlie successful epidemics, in the end, is a bedrock belief that change is possible, that people can radically transform their behaviour or beliefs in the face of the right kind of impetus. This, too, contradicts some of the most ingrained assumptions we hold about ourselves and each other. …Tipping points are a reaffirmation of the potential for change and the power of intelligent action. Look at the world around you. It may seem like an immovable, implacable place. It is not. With the slightest push – in just the right place – it can be tipped.” Executives, you can change far more than you think you can, far faster and with far fewer resources. But nothing will change if you do not believe it can.

The Tipping Point’s ratio of value and usefulness to time required to read it is as high as any book I have seen for some time. Gladwell’s idea that change has much in common with a virus is one that executives should have firmly in mind. The book is also a joy! This is one book for the executive who can see some quiet, uncommitted time ahead. It is the kind of book you read twice. It is the kind of book you should think about a lot. It is the kind of book that can make you a better executive.