Turning the Titanic: the challenges of making a company change

A CEO is like a psychologist for a company in need of change.

Every CEO understands the challenges of working with a board that wants to effect change. Imagine trying to persuade a board that may understand the need for change, but may also underestimate how dramatic that change needs to be.

The Provident Loan Society of New York had been doing business the same way for more than 120 years. Now, imagine trying to change those employees who have been doing business the same way for decades.

It’s not easy, but that’s what I faced during my first few weeks as CEO with Provident Loan Society of New York – a nonprofit lending organization founded by a group of famous financiers that included J.P. Morgan and Cornelius Vanderbilt in 1894. Their iconic names alone represent a rich history in finance, but with that history came a profound aversion to risk by many of the key players.

With every corporate turnaround, the executive in charge needs to pick a vehicle for change. One of my first vehicles for change involved a strategic shift in our customer targets. As a whole, we needed to do a better job of going after the fastest growing minority group in the U.S.

In less than four years, Hispanics are projected to make up a quarter of New York City’s population, according to the Urban Institute. As a whole, their buying power will reach $1.8 trillion by 2020.

If we were going to survive into the next century, The Provident Loan Society needed to reach this growing population and fast.

It wasn’t easy but three years later, one out of every two new customers at Provident Loan Society is Hispanic. Millennials are also our fastest growing customer base – a group that has traditionally been difficult to reach.

How did we do it? Here are four action items that can help any CEO or entrepreneur pivot into a new arena.

Be a part of the staff

I didn’t bury myself in the office or hide behind walls as our company was restructuring. I made sure I was part of the company daily routine. I wanted to be seen, like that elephant in the room. It’s a basic need for people to be seen, heard and understood. By positioning yourself in the middle of the room – or company culture – you are allowing employees to see you as more approachable. It gives them an opportunity to be seen, heard and understood. But it has to be authentic. Employees can read through agendas. If you’re going to be a part of the staff, make sure you are truly listening and understanding what your employees are saying.

Understand the Data

It’s easy to acquire data, but it’s not always easy to apply it. When I got here, the data said we got customers from word of mouth, but our computer system collected data in a way that was inaccurate.

Flawed data leads to poor decisions. Beware of data manipulation. Understand what your data represents. Once we began understanding our customers’ stories, we were able to better understand our customers and as a result, we could better serve them. One of the best ways to understand data is by creating stories – something that a CEO or entrepreneur can apply to his or her business.

Apply Lean Operations

In any turnaround, you need to identify and remove defects from the customer experience. You can do this by applying six sigma, lean manufacturing, operations excellence. Keep everything focused around the customer and view everything from the customer’s perspective. 

In our situation, we had a process that required an affidavit if the customer lost their loan ticket. Was this really important to the customer, or were we doing this because that’s the way it was done yesterday. By putting yourself in the shoes of the customer, you will see ways to streamline the operation. Take an objective look at your company as if it is your first day on the job – every day.

Understand How Your Board Operates

Not every CEO has a board, but every CEO reports to someone. If you want to pivot your company, you must understand your board and your customer to make sure they are in agreement with your vision.

Finger pointing doesn’t do any good. Engage them as colleagues as opposed to adversaries. I think many boards have adversarial relationships. If you find yourself complaining about having a dysfunctional board, or you distrust the member’s motivation, it always boils down to communication. Bring your board over to your side, or join their side. I might have my agenda or my plan, but ultimately, I don’t own this company. I must always defer to my board, and my customers.

Isaac Rodriguez is the CEO of Provident Loan Society of New York. Follow him on Twitter @irod67


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