Mark Smith, KPMG
When Mark Smith shows up at your company, change is in the wind. The Toronto-based consultant is the dean of Canada's change management specialists, driving the softer side of the hard business of organizational transformation. At 61, he now occupies a global leadership role in the change practice of professional services giant KPMG LLP. That keeps him very busy at a time when many companies are beaten down by economic and business hits, and watching their business models disintegrate.
So you have to tell people already shell-shocked from the economy that now they have to change?
Yeah. Shell-shocked is usually a sign that you do have to change.
Is this environment easier or harder for a change consultant?
In some ways, funnily enough, it is easier. There is a famous saying that nobody likes change except a wet baby. So the question is: What causes you to really change? Typically, it is one of two things - either a bolt of inspiration or a bolt of fear.
As an outsider telling demoralized people what to do, you can't be the most popular person.
You have a disadvantage and an advantage. The disadvantage is you are not the most popular guy. The reaction of many people is: "Who is this jerk from the outside who is trying to tell us what to do?" But what you are is independent, and you can bring industry knowledge to bear.
How do you soften up an organization for change?
As I suggested, what causes change is some kind of attractive future that people are drawn into, or something about their present that scares the heck out of them. Part of getting people to engage in the act of change is helping them figure out what that balance is for them, in their company and their industry. Then they realize that "I don't like being demoralized and upset," and so "I would rather find a way to get ahead of the curve."
Does the initiative to hire you come from the CEO?
It is almost always from the executive suite. It may not be the CEO, but it might be the chief operating officer, the vice-president human resources, or the chief financial officer. One of the first things you pay attention to is: Is the person who brought you in speaking for the whole executive team or only one slice of that team? You have to sort that out.
I'm a little bit blessed in this regard. I have an MBA in finance and a PhD in psychology. I used to tell clients that "We can read your balance sheet and we can read your group dynamics."
In this downturn, is change management a good business?
It is doing quite well, not because people are particularly afraid but because the world is changing so quickly that the basis of competition is changing. And once you change that basis, you have to rethink strategy; you have to rethink organization; you have to rethink people and leadership.
Many executives know this is a historical moment when they have to change, but their impulse is to rely on something familiar.
This is a very tricky field and it is full of fads. So what you don't want is executives to say "Okay, we have a problem, so let's do Six Sigma," or "We have a problem, let's do execution-oriented strategy." First, you help them realize that, as I often say, "prescription without diagnosis is malpractice." You want people to sit down and say "Let's think carefully about the nature of our opportunities and dilemmas, but also about what our change capability is." Not everybody's change capability is the same.
Doesn't change management have a very 1990s feel to it?
That's right. It goes in and out of fashion. This is the fourth incarnation in my career. When it's out of fashion, people say, "Oh, we can take care of that and we know what we're doing." Then a new set of opportunities and shocks hits the place and as a consequence, the need to realign strategy, organization, and people and leadership comes up again. We are now in one of those phases when it is more au courant.
As the economy shifts, think of where we've come from, particularly for companies that are truly global. They started out when everything was local, and then everything became global. Now they are trying to find a much better balance between what is local - meaning common, unique and special to the market - and how to take advantage of their massive scale.
We are talking about Fortune 200 companies that have an opportunity to completely change the debate between centralization and decentralization.
They are asking the question: How much is common across all the same platforms and how much is local and unique?
So take Citibank, British Petroleum, Exxon Mobil, and Procter & Gamble - they are all asking these questions.
Are things getting better economically?
Yes, but a fragile better. Nobody knows if we're looking at a V or a W in the nature of the stresses from the recession. At the moment, things are a bit better. Profit-and-loss statements are a bit better, capital spending is a bit better, but nobody is feeling confident.
What's the state of leadership, particularly as former icons have been brought down in sectors like financial services?
It, too, is evolving, but the good news is we seem to be getting past the leader-as-guru, leader-as-god, phenomenon. That doesn't do anyone any good.
As the nature of the work force changes, from an industrial worker to a service worker to a knowledge worker, the leadership paradigm has had to shift from command and control to participatory leadership. And now it is all about herding cats, and what it takes to herd cats well.
Isn't herding cats just another cliché?
But this is one that is actually valuable. It is a very good way of looking at the issue because professional knowledge workers are truly different beasts in their own way. They want to be independent but they also want to be led within the right context. So you have to focus on what change leaders do now in an entirely different way.
It seems that, like you, a lot of Canadian management consultants, at firms like Monitor, McKinsey and Boston Consulting, are running global practices. Is it something about us?
I think so. We actually are a kinder and gentler people. With other cultures, there is a tremendous tendency to assert, be dominant, and say they have the right way.
Canadians are more likely to come in and say, "Let's figure out how we can do this together."
We are inherently polite. We are willing to say "The nature of the beast here is not just providing the right answer, but the answer you can implement, and we'll help you find that." We're not a middle power for nothing.
How much time do you spend on the road?
Right now, about four days a week because of major clients in New York and, particularly, in the oil patch around Houston-Dallas. But that's uncommon. KPMG occasionally commits their best local people to their best global clients with their best global opportunities.
This is one of those moments. It's a really fascinating assignment with one of the oil majors. My typical week starts with a weekend in Toronto. Then, I usually fly out on Monday night, and get back Thursday night or Friday around noon.
What's your travel tip?
Great books. One of the things you can do on a plane is you can get away from all the typical business books and financial statements.
What's the toughest thing you had to learn?
That business is much less rational than anyone really believes.
I have studied many situations where the answer seemed obvious, but the answer that emerged had a lot more to do with the dynamics of the people involved.
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Mark Smith
TITLE: Global lead, people and change services, KPMG LLP, Toronto Born: Oct. 14, 1948 in Palo Alto, Calif.
Education: MBA, finance (1979) and PhD, psychology (1985), both from York University.
Career highlights: Served as CEO of Hay Management Consultants.
Founded Johnston Smith International, which became Canada's largest change management consultancy.
2002: Sold Johnston Smith to Mercer Delta.
April, 2006: Joined KPMG.