Take Care of the Culture, Everything Else Will Follow

A few weeks ago Harvey MacKay wrote in his syndicated column about the idea that if you take care of the culture in your organization, everything else will follow.  I couldn’t agree more. Actually I believe this is true in a business organization, a family, or a country. 

Culture is similar to personality in that it is largely a subconscious collection of attitudes, beliefs and actions which influence individual behaviors and, therefore, results. So the culture of an organization becomes the collective beliefs, attitudes and actions of the employees.  Organizational performance, therefore, is a direct result of the culture within an organization.  Seems to me like creating a robust, healthy, empowering culture where employees feel valued and appreciated for their contribution is a pretty powerful leadership imperative.  Unfortunately, many people in leadership positions (I’m tempted to say most!) spend very little time thinking about or intentionally focusing on creating a culture that supports their intended goals.  

There are many, many reasons for this, but I suspect one of the key reasons for not doing so is the fact that most companies don’t tangibly measure and reward the ‘softer’ side of their business.  They are looking for a quick fix.  But just like the stock market, investments in people and organizational capability are long-term propositions yielding benefits over time, not over night.  The fact is most managers get rewarded for meeting financial goals not for building an organization capable of reaching financial goals.  But how are the employees supposed to be able to meet the financial goals if there is little overt attention paid to positively creating and supporting their skill and the overall organizational capability? 

Very frequently my clients can tell me what they wish for, what they think is wrong, what they are experiencing as undesirable results, but few take the time to determine the root cause. Here are a few examples of root causes which adversely impact both human and financial performance.

  • High turnover costs are often rooted in poorly defined job expectations and weak hiring processes.
  •  Employees feeling they aren’t listened to stems from weak management skills and few, if any, intentionally designed communication processes.
  • Work force members not knowing where the company is going is due to leadership not specifically defining and sharing company goals and failing to highlight the key role employees play in making these goals a reality.
  • Favoritism emerges in the absence of objective standards of performance as a basis for performance evaluations. 
  • Questionable behaviors and ethical issues arise when companies don’t have well-articulated values or when the values they have are platitudes rather than benchmarks for how the company is run.
  • Top performers become concerned when they can’t see a career path and little attention is paid to succession planning.

 

While these are just a few of the more common examples, you get the idea.  Almost any leadership issue that comes up is grounded in organizational culture.  It all comes down to the 5 P’s – People, Processes, Policies, Practice, and Procedures.  Examine these and you’ll find the root cause of performance issues.  

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Deb Waitkus and I are co-facilitating three corporate-learning workshops used to anchor concepts – Birdies, Bogeys and Business: Success On and Off the Course, Mental Mulligan’s, and the Two-Day Golf School.  All are ways to build your team, increase your skills and add new tools to your bag.

Strategic Thinking

Have you ever thought about thinking?  Sounds like kind of a trick question, but I am not intending it to be.  I often find myself thinking about how people think.  In my profession, you have to be a bit of a psychologist …always looking for the reason behind why people do what they do. As a result, I frequently have to figure out the rationale for people’s actions.  One of the ways I can be most beneficial to my clients is to help them understand the logic of their own and other people’s actions.  People always do what they do because of what happens to them when they do it. It may not seem logical from your perspective, but from their point of view what they do always makes sense to them.

For those of you in leadership positions, learning how to think strategically as well as tactically is critical.  Tactical thinking is all about how to get near-term and more immediate tasks completed.  It is the tactics of the day to-day operation.   At the same time because of your leadership role you have to continually be thinking strategically.  What’s the bigger picture, what should today’s actions and decisions be in order to be positioned for the future, etc.    

There is a pattern of strategic thinking which some of you use without even thinking consciously about it.  For others, learning to think strategically would be very beneficial. If you find yourself in situations where you know how to proceed in the near-term, but have a tendency to not check your actions as compared to your future needs and goals, this pattern will be useful to you.  Thinking strategically means you…

  • Decide where you have to go, where you have to be at X point in the future, what your goal is
  • Identify issues that will be both beneficial and potentially harmful in achieving that goal
  • Determine the options available to you to build upon the benefits identified and avoid the obstacles
  • Create a strategy/plan from these options that optimizes the benefits and minimizes the risks
  • Implement the strategy…here is where the tactical actions come back into play.

 

I find that while people in leadership positions tend to naturally think strategically if this isn’t your natural pattern you can learn to do so by following the steps above.  Where the challenge comes in for most every leader is in the last step…execution of the strategy. The overwhelming tendency is to get so caught up in tactical day-to-day activities that the strategic, bigger picture focus often becomes fuzzy.  Intellectually it is understood, but on a practical level it gets lost in the crush of activity.  

Taking this quick SQ quiz (Strategic Quotient) will help you analyze your own thinking and pinpoint where you might need to improve this aspect of your leadership ability. Answer yes or no to each of these questions:  

  1. Do you have a well-articulated, clearly stated strategy?   
  2. Could you write a one or two sentence statement of that strategy?  
  3. Could each of your subordinates write a one or two sentence statement of that strategy without consulting each other?
  4. Do you use this strategy as a guide in making important business decision?  
  5. Have you as a management team tried to obtain consensus about the future of your firm?
  6. Did you get consensus or are there still different visions of what your organization is trying to become?
  7. Are you and are your subordinates recognized and rewarded for making wise long-term decisions?
  8. Are the measure of success for performance and company performance aligned with your strategic objectives?

 

If all your answers are positive, then you are in good shape.  The greater the number of negative answers and the wider the discrepancies between your responses and those of your subordinates, the more you need to work on strategically thinking personally and in leading your organization as a strategic thinker.

One valuable service I provide my clients is helping them think through and plan for the bigger picture needs of their organization, listening to them as they sort out their options and alternatives, and then helping them put a practical, objectively measured execution plan in place that they can actually achieve.  We all can easily stay in the activity trap, but leadership is about keeping the needs of today in perspective with the goals of tomorrow.

* * * * *

Behaviors are observable, but motivators are not.  If you would like to better understand the motivations behind your own actions and those of your employees, give me a call.  Better information and better understand yields better results! 

 

Joyce Friel

Peak Performance Consulting

480-236-4266

www.peakperformancecorp.com

Decision Making in Organizations

Every day, countless decisions are made in organizations that impact corporate strategy.  In our work with Fortune 500 companies, we have seen decisions that range in effectiveness from brilliant to destroyers of value.  How can you ensure that your company’s decisions contribute to flawless execution and the advancement of the strategic plan?  We’ll use the example of a major health care company (fictionally named Health Tech) in financial difficulty that was evaluating a make vs. buy decision on a new software system and infrastructure.  Their existing system was blamed for inefficiencies, lack of flexibility, and ultimately loss of profits and market share that lead to its financial problems. As it turned out however, the root cause of the financial problems was ineffective decision making.     

Decision Making can be divided into Decision Management and Decision Control.  Decision Management is the process of initiating and implementing decisions.  Decision Control is the ratification and monitoring of decisions.  Different types of information are key to each of these, and in order to make effective decisions in organizations, proper assignment of both Decision Rights (the right or power to either manage or control a decision) and Decision Information (the pertinent  extrinsic and intrinsic data required to make a decision) are required. 

Decision Management requires information on the problem definition, and the potential solutions.  In our example, Health Tech’s leadership team required information on the capabilities of the current software, capabilities of the available software in the market, and the shortcomings of both with respect to the desired requirements.  Also, the Decision Makers would need to know the costs and implementation steps before presenting this information to the Decision Controllers for ratification. 

Decision Control requires information on the decision itself, such as the implementation steps, and how it will affect the company.  The effects include, the costs of the implementation, the potential failures, the various areas of the company that rely on the decision, and the intended results of each decision.  Those who are responsible for Decision Control must be able to judge each decision based on its application to the strategic business plan or “big picture”, considering both the company and the marketplace.  Additionally, the Decision Controllers must have sufficient information to monitor each decision’s performance in terms of cost and results.  For example, the Decision Controllers at Health Tech would need information on the estimated cost and time required to design and implement a custom software package before ratifying any decisions and the estimated cost and time required to modify an off the shelf solution.  Also, they would need metrics to continually monitor whether or not the new system, whether purchased or home grown, was effective after it was implemented.

Initially the symptoms pointed to a the software as the reason for the financial distress in the company, however, Health Tech’s financial problems were actually due to the poor assignment of Decision Rights within the organization.  More specifically, the problems were caused by the over assignment of Decision Rights and lack of control on Decision Making caused by Health Tech’s culture of entrepreneurship and rebellious empowerment.  Health Tech employees disliked the rigidity of health care regulatory agencies and they were empowered with both Decision Management and Decision Control. 

The assignment of Decision Rights at Health Tech was flawed.  First, the Decision Makers were not owners, and therefore could not be expected to make decisions that were in the best interest of the organization even if they had all the appropriate information.  Secondly, since the Decision Makers were not owners, they should have been assigned either Decision Management or Decision Control, not both.  Furthermore, the Decision Makers at Health Tech did not have the appropriate information needed to make the good decisions, partly because of the flawed computer system, which gave everyone misinformation and therefore blamed for the problems, and partly due to lack of communication throughout the organization.  Even the CEO did not have specific information about the severity of the problems because of the lack of communication

By separating Decision Making and Decision Control and correctly assigning Decision Rights throughout the organization, Health Tech would have had better information on the state of the company despite the errors in their software.  For example, they would have known that the computer system was giving the accounts payable department frequent problems.  Because with proper controls, billing and payables performance would have been one key metric in monitoring the effectiveness of the software application.  The Decision Controllers (presumably senior leadership) would be made aware of these flaws and could direct corrective action. 

However, Health Tech collectively did not know what problems existed or what to do about them because of a poor understanding of and lack of assignment of Decision Rights in the organization.   I would be remiss without noting that in addition to understand the basic components of Decision Making, communication horizontally across an organization (breaking down silos) is critical.  A properly designed organizational architecture is necessary to support the sharing of different pieces of information needed by Decision Management and Decision Control entities.  If this does not already exist, it will need to be created and then supported through a redesign of the organization.

Competitive Advantage Opportunities in Retail

Predictive analytics focused initiatives face a few obstacles. Many companies do not have a lot of experience in handling analytics projects which presents some unique opportunities for all involved (management, business line, vendors, etc). Often a key learning is to understand that analytics projects have a strong research and development component to them. Most organizations have a lot of experience and are comfortable with “execution” initiatives but may not be comfortable with “test and learn” process.  Also, selection of the right resources and partners can be a daunting task. Deploying enterprise level analytics that span business, statistics, and common sense can, at times, be a very foreign concept to an organization.

First and foremost, the selected partners need to fit into the culture of the organization. They need to quickly come to understand the business problems and incorporate them into the statistical tools to solve the problem. In addition, the ability to clearly and effectively communicate recommendations is imperative. 

The Ergenomics approach for developing an enterprise-level analytical strategy for retail clients is rooted in the “decision tools” fundamentals of: Business Process, Data, and Analytics. A thorough understanding of these foundational organizational elements is critical to ensure an optimal business intelligence solution. Failure within—or lack of attention to—any of these interrelated components will result in an inefficient and underperforming result.

We define Business Process to incorporate such key items as a company’s overall business model, culture, competitive environment, leadership, business partners and resources, and realistic state of readiness. Similarly, within the Data perspective, we immerse ourselves in our client’s data elements, warehouse capabilities, legacy systems, ERP, and external or appended sources. Likewise, within Analytics, our team of professionals leverages years of academic and industry experience around target value, dependency, correlations, interactions, predictive impact, and significance.

Implementation of standard industry leading analytical tools (SAS) can have a tremendous impact on business decision making. In addition, these tools can be modified to further enhance their effectiveness in understanding and analyzing an organization’s operational, customer, and financial situation.

Retail Intelligence is comprised of four integrated solution groups:

  • Customer intelligence helps retailers identify, acquire, activate, serve and retain the most profitable customers.
  • Merchandise intelligence helps retailers drive revenue, protect margins and earn customer loyalty with optimized merchandise plans, assortments, pricing, promotions, space plans and allocations – all driven by unparalleled demand forecasting and predictive analytics.
  • Operations intelligence lets retailers leverage organizational assets to trade with vendors and serve customers more efficiently and profitably.
  • Performance management solutions provide the ability to analyze, forecast and maximize profits across the entire retail enterprise by monitoring cost and performance, helping retailers drive disparate functional units toward common goals.

The addition of the Ergenomics Power Index and other analytical services can then provide an additional layer of accuracy to this base. Advanced business intelligence can only be garnered by dedicating to a rigorous, enterprise-level approach to customer insight. Ergonomics’ Blueprint of Enterprise Analytics is a solution to help achieve and solve all that is solvable within an organizational paradigm.

info@ergenomics.com

http://www.ergenomics.com

(612)245-4670

© ERGENOMICS 2009

Communication During Times of Crisis

I have recently aided several clients with policies for their organizations.  This work underscored that no matter what the situation, when there is a major crisis, leadership and communications are vital.  This article is about communications before, during and after a crisis situation. 

Oh, My Gosh!  No Phones!

You probably have a list of emergency phone numbers and contacts in your contingency plans. But what if both land lines and cell phones don’t work?  Do you have a method in your contingency plan that tells people where to get information when it is impossible to reach them?  For example, is there a centralized community bulletin board or community emergency disaster center in your area?  Or consider establishing an emergency internet site which even in time of non-emergency tells people what to do in case something occurs.

Remote Contacts and Storage Locations

That emergency contact list you have for all employees, does it list people who live with them or contacts in another area?  Consider asking for a contact that doesn’t live in the area in case the entire area is affected by a disaster.  

Double check to ensure all your information is stored in a safe place.  It is likely that if you have an emergency contact list off site – possibly at your home or at your HR manager’s home.  Sounds safe, but in the case of Katrina all the homes were destroyed also.  Think about storing a copy in a remote location or use a commercial vendor to store confidential data of site as a back-up.  A friend of mine is an HR VP for a company that was in the World Trade Center.  Fortunately, she had a copy of all their employee contacts in another state so she could readily get access to vital information.

Top of Mind Questions

The most important questions after finding out if family members are safe are all about leadership.  Things like…

Do I still have a job?   Will my benefits continue?    Where will I find temporary housing and what about school and day care?   How will I get paid if I am not in the immediate area?  How will my insurance claims be handled if I have to use out-of-network providers?  Can the Employee Assistance Program help me and how can I reach them?   And on and on.

How Can I Help?

Also anticipate the communication needs of employees who are not affected. They want to help, but need to know how to do so and what help is needed. Again the community disaster bulletin board or an emergency internet site can be very helpful.  

Of course, my hope is that no one ever has to deal with these concerns, but as the leaders of our organizations we have the obligation to be prepared. 

http://www.peakperformancecorp.com

http://www.joycefriel.blogspot.com

Key Components of a Strategic Plan

You all know the saying that any road will do as long as you don’t know where you are going.  And it is certainly true when it comes to achieving company goals.  If you don’t have stated goals, have them written down, well communicated, and measured, there is a very high probability you’ll never achieve them.  Thus, the importance of having a quantifiable, measurable, well-communicated strategic plan.

Roadmap

Strategic planning is like creating a map for an exciting journey.  A map helps keep you on course, but it isn’t so stringent that you can’t check out a side road along the way.  Each year in the fall I map out where I am, where I want to go, and how I want to get there.  During the year, my plan then becomes my guide as I make business decisions and come upon new opportunities.  It helps me decide if new opportunities and the choices I encounter will get me closer to my goals or are detours to be avoided.  It is critical to at least annually review your plan to accommodate new developments in technology, client requests, the economy, emerging trends, and your own interests.

Key Components

  1. SWOT - The first step is to determine where you are by doing a SWOT analysis – identify your internal Strengths and Weaknesses and your external Opportunities and Threats.  Make a grid and fill in the blanks. Use two columns and two sections. Internally analyze human, financial, technological resources, culture, etc.  Externally examine the economy, political/regulatory, social/demographic, technology, competition, etc. 
  2. Vision, Mission and Values - craft a short statement that quickly and easily describes your purpose (Mission) and your ultimate future (Vision).  Who are your clients/customers, what makes you different, how would your customers describe you, what do you offer, how are you unique, what will you be like tomorrow?  Here is a quick template to follow:  “The purpose of ABC Company is to _________________ so that the company and our stakeholders benefit from ____________________________.  This quickly states who you are, why you exist, and what benefits occur as a result of your business.  You can get clever later on, for now get it on paper.  Now list the guiding principles that underpin the behaviors you expect of your self and others in order to achieve results.  Trust, honestly, creative solutions, integrity, customer services, etc., are examples of guiding principle values. 
  3. Objectives – identify the key objectives that have to be met in order to achieve your vision and mission and goals for the year.  State them in specific, quantifiable, measurable terms.  They need to be ambitious, but realistic.  Focus on “what not how”.  Your list will grow, but pare it down to the critical 4-5 most important items for advancing your business this year.
  4. Action Planning – Now we’ll look at the “how”.  For each objective, create a detailed action plan of how you will meet this goal.  For each objective state:
    • Desired results – what needs to happen or what benefit will occur
    • Potential obstacles/barriers – what might stand in your way or prevent progress
    • Support – what resources, people, tools do you have or need
  5. Implementation Process - what steps must be taken – indicate who will do what and by when. I do a quick monthly review to see what is on target, what is falling behind, what follow-up is needed, etc. This gives me a visual update and reminds me of my targets and how I am progressing.  
  6. Evaluation and Measurement - how will you know you’ve successfully achieved the objectives (this is why each must be stated so it is specific, quantifiable and measurable). As you get more sophisticated, a set of balanced scorecard measure is an ideal way to track, measure, and communicate your progress, but for now just determine how each objective will be measured.

This seems like a lot of work, but if you’ll map out each objective you will have a clear picture of where you’re going, how to get there, and achieve your goals quicker since you’ll avoid unnecessary, costly detours.  

The simplicity of these steps and descriptions belie the difficulty of this task.  I have facilitated many senior management teams that struggle getting even the first two steps done.  However, if you set aside quiet time with your key colleagues and valued advisors, this need not be a monumental task.  Once you have it in place, the annual process of reviewing, revising and refreshing becomes not only much easier, but very beneficial.  You walk away from this exercise with a sense of direction and satisfaction about how you are going to achieve your business goals with the assurance of avoiding at least some unnecessary, costly detours. 

http://www.peakperformancecorp.com

http://www.joycefriel.blogspot.com

Planes, Trains, and Automobiles – Which is Best for Me?

by: Joyce Friel, Peak Performance Consulting

“I just wanted to ask you, which way I ought to go?”   “Well, that depends on where you want to get to,” said the Cat.   “It really doesn’t matter…” said Alice.   “Then it really doesn’t matter which way you go,” said the Cat.                                                                                               

From Alice’s Adventures in Wonderland

 A movie and a fairy tale both point out the importance of having a plan.   Just like Alice in Wonderland I can’t tell you if a plane or train or an automobile is best for you until you tell me where you want to go.  If you want to get there from here, you gotta’ have a plan. 

 Where do YOU want to go?  Where Do You Want To Take Your Business?

I know as a business owner or manager you could describe to me what you want to achieve.  I also know that if you have a business loan, you likely have prepared a financial plan for your banker.  Great!  You’ve had to think through your financial goals, your needs and how you plan to repay that loan. 

This is a good start, but what about all the other aspects of your business.  Finances are one very critical piece of business success, but they are only one piece and your financial goals will never be achieved if you don’t also think about and plan for all the aspects of your business that support achieving financial success.  What about your marketing plan? Sales Plan? Employee Development and Satisfaction?  Stakeholder Satisfaction?

It is just amazing how many businesses do not have a comprehensive strategic plan and then they wonder someplace down the road why they aren’t able to achieve their goals.  (That’s when they call me in a panic!)  Much like Alice they often seek advise of which way to go, but haven’t determined where ‘there’ is or how they want to get there. 

So what are the benefits of having a strategic plan?    Simply put, a strategic plan…

  • guides the decisions you make along the way
  • becomes the yardstick for measuring progress
  • is a communications vehicle for gaining support and commitment from your banker, employees and all other stakeholders
  • allows you to keep in mind your goal while focusing the selection of informed choices along the way

But wouldn’t having a strategic plan mean I’ll be limited and have to follow it strictly?  No, it means you have a good guide and like any guide you can deviate from it as needed as you move along your journey toward your goal.  Just like driving across the city, you think you’ll take one route to your destination, but when you come upon a detour you deviate, but still keep the destination in mind.

http://www.peakperformancecorp.com

http://www.joycefriel.blogspot.com

Give It Away – a Growth Strategy

by: Joyce Friel, Peak Performance Consulting

Yep, that’s right! You gotta’ give it away to get it back. Sounds kind of like reverse logic and it is in some ways, but many things in life compound themselves many fold only after you give them away.

  • Love
  • Trust
  • Friendship
  • Wisdom
  • Knowledge
  • Service

These and many more things must be given away before you get them back!

Ever notice when you smile at someone they generally smile back. When you speak first, the recipient responds. When you do a kindly deed, one will come back to you. I have a good friend, Silver Rose, who speaks on the Law of Attraction and another friend, Arlene Rosenberg, who develops leading achievers based on this same principle. You get what you focus on. So when we give love, trust others, bestow friendship, share wisdom, share our knowledge, and provide service it comes right back like a boomerang.

I use this same strategy to grow my business. I’ll bet it would work for you too, but you have to be willing to ‘give before you get’. Let me give you an example of giving away $10,000 dollars in service to a client in order to get back monthly billing for the last 7 years. I had a break even point in four months. Would you make that kind of investment?

A few years ago, I decided the best way I could grow my business was by meeting members of Boards of Directors. My logic was they were the kind of people who owned businesses and could afford to hire me. So I volunteered to design and facilitate the Board retreats for a major employer in our area. I knew I’d have to give away service, but I hoped in return I would meet potential clients and be able to influence their decision to use my services. After several conversations with the President of the organization, it was clear there was long-term interest in using my services not for the Board, but for the organization it governed. I am still working with this client and they provide me wonderful referrals to other potential clients.

I just did it again. I just offered pro bono services too one of the clients they referred me to. Yet again, I believe if I give it away, I’ll get it back. I can’t be a philanthropist of money, but I can be a philanthropist of talent and service and, sure enough, I get paid back in friendship, a larger, richer community, and growth of my business.

What I focus on is identifying who are good prospects. Who are the business leaders who believe in returning value for value given? Who believes in the law of attraction and have something I need in return.

Try it! I guarantee the more you give away wisdom, friendship, love, trust, knowledge and service you will most assuredly get it back.

http://www.peakperformancecorp.com
http://www.joycefriel.blogspot.com

Develop a Strategic Plan

An effective strategic plan considers both the beginning (why are we here? what is our purpose?) and the end (were we successful?).  Strategic planning is more than PDCA (plan-do-check-act) but it is a comprehensive feedback cycle that must be actively monitored.  Consider the following steps;

Mission – why we exist

Core Values – what we believe in

Vision – what we want to be

Strategy – our game plan

Balanced Scorecard – implementation and focus

Strategic Initiatives – what we need to do

Personal Objectives – what I need to do