President, Lefkoe Institute

There are hidden saboteurs in almost every organization that are inhibiting innovation, creating inefficiency and ultimately reducing profit

April 28, 2011

There are hidden saboteurs in almost every organization that are inhibiting innovation, creating inefficiency and ultimately reducing profits. These deadly saboteurs are in plain sight, but are not seen. What are they?

Beliefs about what can’t be done, what must be done and what each employee believes he/she should be doing.

In an earlier post I explained how you can help employees eliminate the most common limiting belief in organizations, “We can’t ….” In this post I will describe an actual case history that will make perfectly clear how other types of beliefs in an organization are the biggest single roadblock to success…and why eliminating them can be the single most important thing you can do to insure your company’s success.

The Lands’ End story

For years the people at Lands’ End had tried and failed to reduce the time it took to move new products from conception to catalog. Before I began working with them it had taken 14 months. The Gap and Limited at that time were going from idea to store in six months. The people at Lands’ End were vastly inefficient by comparison and they knew it.

The executives and the managers in each department tried to make the departments more efficient—they tried to speed up design, purchasing, inventory, quality control and catalog. But nothing they did resulted in any significant improvement in the time it took to bring a new product to market. They needed a real breakthrough.

As a result of the work I did with them, over 700 people began to examine their operating beliefs, including beliefs about their jobs, what they had to do and what they could not do. They discovered that everyone in the company had the common belief, “We have to have different departments, each of which is responsible for a different function.”

Despite the fact that the need for different functional departments seemed obvious, most employees were aware that many different problems resulted from the existence of different functional departments. For example, the bonus awarded to employees was based largely on the results of their department. But sometimes focusing on having one’s own department be as successful as possible was detrimental to other departments.

Here’s an example. The inventory department’s effectiveness was measured, in part, by its ability to reduce inventory costs. So it tended to keep the minimum amount of product on hand. Customer service, on the other hand, was measured by surveys that measured the level of customer satisfaction. So this department wanted plenty of inventory of each item, each color, each size, etc., so that customers would always be able to get what they wanted.

Once this belief was identified and eliminated (in other words, when they realized it wasn’t necessarily the truth), we put together a team of management and non-management employees to come up with an innovative structure that didn’t require functional departments—something that would have been impossible as long as the belief existed.

This team suggested that Lands’ End get rid of the functional departments and replace them with “product teams” that had representatives from the old functional departments.

Management loved the idea and decided to put it into action. Each team—such as the men’s accessory team the luggage team, and the bathing suit team—was responsible for coming up with ideas for new products, contracting with vendors, being responsible for inventory and quality control, etc. No time was wasted in interactions between departments, because they no longer existed. People were no longer trying to get a bonus by reaching their department’s targets, because there were no departments.

As a result of this change—which resulted from eliminating a fundamental belief about the way the company had to operate—the new time from conception of a new product to having it on hand, ready to sell, and presented in a catalog was reduced from 14 months to six months.

The point isn’t that I did it. The point is that Lands’ End was open to identifying limiting beliefs it did not know it had, to eliminating them, and then to creating innovative ways of operating that would have been impossible with the old beliefs.