041 – Companies Lose Fat Like Humans, Bold Strokes & Long Marches

I’m passionate about health and fitness.  From optimizing my coffee (Bulletproof) to maximizing my lifting session (Body by Science lift until failure), I’m all about trial and error.  I believe wholeheartedly in the individual nature of one’s health, and so what works for me might not work for you.

One caveat to it is that I also believe in the power of the placebo.  A lot of studies are compared to the “placebo” to see if it has meaningful changes compared to just a sugar pill and the belief you are taking the medicine.  For me, I don’t mind that much being sold “snake oil” if my mind tells my body it’s the cure and my mind cures the body. But that does mean you try out some really stupid things and fail miserably.  You search infomercials, supplement companies, and the like in hopes that you find something “so revolutionary” that you are absolutely convinced by the testimonials, flashy slogans and other persuasive tactics like scarcity that you click purchase (So much easier now than calling that 1-800 number).

I think my favorite device I wanted (and luckily never got) was the ab zapping belt that would turn your flabby belly into rock-hard abs in just 90 days

Ad belt

(a close second was Billy Blank’s Tae Bo).

As a somewhat pudgy child, I watched those videos and dreamed about getting six-pack abs by just sitting on the couch while eating flaming hot Cheetos, Entenmann’s Cinnamon Rolls, Lunchable’s Pizza and Nacho’s, and Nestle Crunch Ice Cream Bars. #drool

You might say I’ve come a long way, but it didn’t happen over night.  But at the same time, it sort of did.  More on this later.

In one of my classes, we are studying the concept of long marches (slow steady changes in organizations) vs. bold strokes (fast, quick changes).  This week we dove head first into the drastic approaches many PE firms take to rake in their returns after successfully buying a company.  Coincidentally, only 25% of PE firms return above market returns.

Another industry I’ve been studying is the search fund industry.  An industry that is best summed up as if PE had a baby with Venture Capital and Strategy Consulting. That is, a (typically) younger person searches the country (and world) for established companies that have potential to have better returns but the owner isn’t focused on improving the company (because he/she is getting older, doesn’t have the energy, is satisfied with the low returns, has other companies to focus on, would rather be on the golf course, etc.).  Then, you show how remarkably easy and sure thing it is that even you (a young inexperienced MBA person), can reap a hefty return from running this company better.  This gets your investors to fork over money (plus as much debt as you can reasonably get) to buy the company (at a decent price) and then you go to work fixing things.  But not really.  Well, at least just not yet.

Most of these search funds discuss the best way to be successful is to wait and not do anything drastic–I mean for the most part it’s been providing decent returns with a seemingly absent CEO so, it will be fine on autopilot for a bit.

Instead, what you should do is get to meet each person in the company, meet the vendors and customers, and really integrate yourself with the organization and build your understanding of the business and how it operates before doing anything.  But then, when opportunity knocks, when enough time has passed and (with approval of your investors), you start making changes when you have buy-in. (Sometimes, you do however make rapid changes when someone messes up, but you still have the buy-in/trust from your employees, so it is still a different approach from those PE teams going full steam ahead from the get-go.  Sidenote: not all PE shops make drastic changes, but there is a solid sub-set who are known for doing so).

Here’s a primer explaining search funds better…but seemingly not as colorfully.

The fun org change lingo for the difference between these PE drastic changes and the search fund’s slow changes is “bold strokes” and “long marches”.

These types of approaches can be also be used for fitness.

“90 day workout plan that’ll have you in the best shape of your life, with that beach bod you’ve always dreamed about” -quote every fitness device ever

Translation: change everything you normally do, and you’ll be a better you.

Sound familiar? It’s almost identical to the “bold stroke” actions of these private equity operations.

  • Cut all carbs = close down the plant in Tuscaloosa, Alabama (sorry nothing personal…except we’re playing you to start off the season, so ya, here’s some “reasons” why we need to shut down this plant versus the other plants)
  • Do 5 sets of 40 squats even though you can only really do 3 sets of 10 = increase your department’s production by 20% but you’re not getting any new employees or resources to do so
  • Eat only this tiny plate of lean protein and vegetables = our holiday party is now just going to be re-heated Costco appetizers at our office
  • You can have a protein shake after you’ve finished running 5 miles = we’re a meritocracy and performance alone will dictate your compensation

This list can go on…and to be fair, this list will help you lose weight and it will help you improve your bottom line mathematically.

But humans, just like companies, have a standard homeostasis/culture.  And if left alone, will resort back to that homeostasis when no longer being “encouraged” into shape.

Case in point: the Biggest Loser.

You lose a ton of weight in a short amount of time as America watches on their couch, some I’m sure eating more calories in that one episode than you did for an entire week on the program. You had a “coach” the entire step of the way, and all the advice and encouragement possible.

But, many gain back most of the weight, if not more, after the show is over as they go back to their normal lives (what you mean having a personal trainer and working out 8 hours a day isn’t normal for you?)

In fact, many injure their bodies through over training and create more long-term damage due to the intensity of the workouts/diets (somewhat like a company slashing R&D only to find out that growth stalls because there’s no more new products to peddle/you fired too many people).

I came across this similar result with my own experimentation where in 90 days I gained 10 pounds of muscle and 1 pound of fat (4000 calories a day).  But then, when I went back to my normal eating habit of around 2500 calories, I proceeded to lose 5 pounds of that muscle gain, and since I focused on weight gain and not flexibility, I nixed the stretching and yoga during that period….but the  proceeded to tear my hamstrings a few months later.

In another example highlighted by Bite Size, the documentary about childhood obesity I helped produce, one of the characters went away to camp to lose weight over a period of weeks, only to gain it all back when returning home.  The problem: she went back to an environment with the same behaviors and habits that got her into the overweight state she was.

The area of behavior change goes into this issue.  To sustain a behavior change, you need a supportive environment.  If you have an environment that opposes this new behavior, you are battling your personal willpower with the old behaviors.  That’s never a good match-up for willpower.

And therein lies the challenge of bold strokes, of the Biggest Loser.  Your whole environment, your whole company, is being changed in front of your eyes, oftentimes without your knowledge, understanding, or input.  Just like trainers say: eat this, do that, change this. And if you don’t, you’ll be fired, kicked off the show, or go back to being unhealthy…Quite a way to generate animosity and resentment.

So when you have a chance to rebel without getting caught, like eating a cinnamon role or figuring out how to game the KPIs, or that punishment or threat is removed (like you’re off the show or the PE firm took the company public or is not focused on your department anymore) you will most likely go back to your old habits.  Why? Because you never really wanted to change, and so these new things you were doing aren’t you, they’re just what you have to do to survive and not get fired/because your trainer told you.

You didn’t want to change, you didn’t see yourself as becoming that type of “health nut” or results-driven employee.  You like eating Cheetos.  You like being able to take those 20 minute coffee breaks whenever you want and those 90+ minute lunches.

But then, there are those times where that bold strokes actually ingraine in you a particular habit you like and want to keep, and do keep…

I can still remember the exact moment when I decided to eat healthier, when I actually wanted to be healthy for the rest of my life.  Not because my parents told me to eat my broccoli or my soccer coach prescribed it for me. Rather, when I didn’t even have to make a choice.  No one was forcing me.  It was entirely a decision I wanted to have happen.

It was when I was a Boy Scout Camp Counselor on Catalina Island (16 years old, 5′ 6″ –but growing–and about 125+ pounds).

I was up at 6 am every day and active, hauling kayaks, hiking, even lifting weights in the dark with flashlights with a fellow counselor who was a body building champion (there’s not that much to do at night…in a camp…on an island…all summer).

That was my environment I was in.  And then, I received a care package from home, a little reminder of what life was like back in LA.  Inside it was cookies and brownies my mom and sisters made, red licorice, hot Cheetos, beef jerky, air head Xtremes… and maybe an extra pair of socks.

Finally I had a seemingly endless supply of sugar and junk food that I kept hidden underneath my bed, ready for whenever I felt like it.

But, I never really felt like it.  I was happy to know that it was always there if I wanted it.  But I never craved it.

When I did eat some (mainly the baked goods, because it was made and sent with love from my mom and I’m never going to reject that… and let’s not kid ourselves it was some great cookies and brownies), the sweets made me sleepy during the long hikes in the heat.  I felt the sugar crash my system when I was teaching the rowing merit badge. And I just seemed to struggle more when I was hauling all the kayaks out of the water.

I still kept that candy and junk food under my bed the rest of the summer.  I still had the option to gorge myself at any moment.  But I didn’t.  I decided not to.  Not because it was some intrinsic battle of willpower I won, but because I simply didn’t want it.  I decided to eat the healthier food the mess hall provided, and when I was hungry, I snacked on that instead.

And that’s the biggest lesson with bold strokes and long marches.  That’s the biggest lesson in health and fitness. And that’s what cognitive behavioral science has revealed.

At the core, you need three things to make a lasting change, to build a new habit:

  • Desire/catalyst to change
  • Ability to change
  • Supportive environment to change and keep that change

In some cases, you don’t have the luxury of waiting, or of making small incremental changes.  Sometimes drastic measures are needed.  Sometimes you need these bold strokes to keep the company alive, to prevent yourself from getting a heart attack.

Bold strokes do great to change an organization in the first 100 days, just like intense fitness programs can transform your body in as little as 90 days.

But the question is, will that change last?  Will you gain back all the weight you lost? Will the organization go back to the way things were after the PE people stop hovering over shoulders and making rapid changes?

And that’s where long marches come into play.  That’s where you need to consider  your company’s plan for the next 1000 days.  That’s where you need to consider your health and fitness plan for the next 900 days.

To stay with something for that long means you are truly committed.  You have bought in.  And it is an authentic part of your company’s culture; of who you are.

Are you ready to take the first step that will change not just your next few days, weeks, months, but rather the rest of your life?  Are you ready for a culture of high performance that will become the bedrock of your organization that will last for years?

Many aren’t ready.  Many don’t have the desire, ability,  or supportive environment necessary to sustain the change, to establish a new homeostasis.  But, with the right combination of skillfully deployed broad strokes and long marches, you might just be able to get that change you need–to develop those new habits you want.  And that might just be the secret that search funds have stumbled upon.

Just remember:

You don’t change a habit, you simply replace it with a new one.  So, are you actually creating a new habit, or are you merely trying to ignore an old one?

The next time you think about changing an organization, think about applying some of the lessons learned from weight loss, and vice versa.