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Neil Smith, CEO of Promontory Growth and Innovation, helps Fortune 750 companies dramatically improve performance by increasing profitability.

Reluctance To Change

In the retail store environment–a fast-moving industry–it is important to transmit sales and pricing data electronically to headquarters on a daily basis. Doing this allows decisions to be made about several things critical to the business: what inventory to order in advance so the stores do not run out, what prices to change if a new item either flies off the shelf or does not sell as expected, and which items should be placed on sale immediately to clear inventory. It also allows information about how sales are being affected when a competitor tries something new in a market. Immediate sales and product information is key to managing the business. This data is so critical that one company carried two separate telephone lines, each with a different carrier, feeding each of its retail stores. The second line was considered a backup. But the chain continued to struggle transmitting the data from all its stores on a daily basis. Every week all the lines to at least one of its stores (and often more) went down. The company felt this inconsistent data collection was impacting its ability to manage the business.

Why was it happening? Most power outages to stores were caused by construction accidents when the cable carrying the lines was damaged. As most lines, even from different carriers, go through the same cable, the second backup line was often damaged at the same time as the primary line, so the insurance proved useless. Several people within the organization had discussed using a wireless system as the backup rather than a physical line, but the communications manager had not made the change. He didn’t see the need to change because the company had created an internal estimating system, a Band-Aid if you will, to make up for the lack of data when lines went down. “We’ve made it work,” he insisted. “Besides, wireless will have its own set of problems. We could go to a lot of trouble and expense and not be any better off.”

The communications manager’s Reluctance to Change was a combination of complacency–everyone had learned to live with this less-than-ideal situation–and a fear of the unknown. What problems would wireless bring? What new adaptations would a switch to wireless demand? The manager’s previous experience with changing systems made him less than enthusiastic about doing so again.