Author Archive

More Trouble Ahead For Struggling Companies

Over the past four weeks, I’ve heard the same disturbing comment from at least six different people in different industries.  I’m hearing that companies that have been relying on their “rainy day fund” (i.e. savings and/or line of credit) to get them through the recession are reaching the end of the line with no end in sight for the recession.  Are you hearing the same thing?  Are you experiencing the same thing?

If this is true, we are in for another round of companies faced with dire options. 

I can’t effectively give consulting advice in a blog post, but if you are faced with this situation, I have three suggestions:

• Get help sooner rather than later.  You’ll need a proactive banker, a proactive CPA and a proactive business attorney.  If any of these three people have not been helping you proactively, replace them.  One client facing possible collapse was told by their CPA to make sure they got their statements out on time and to watch their accounts receivable balance.  That’s crap advice given by a so called professional only interested in collecting their hourly fee from a safe distance without any accountability for results!  Fire them as an advisor!
• If you’re faced with layoffs, cash flow problems or the prospect of closing the doors, get the help of an organizational restructuring or turnaround consultant.  But, be careful.  Find a person with the temperament that you are looking for.  Some aggressive turnaround consultants will come in and leave a wake of blood and broken glass that only makes the situation worse, not better.
• As much as you will focus on surviving day to day, focus on deciding which parts of the company are performing well.  What do you do well, provides the customer lots of value and is not easy for competitors to copy?  If something meets all three criteria, it’s called a strategic competency and it is the “secret sauce” that is unique to your company.  Maybe you’ll decide to discontinue products or services that don’t meet that criteria.  If that’s the case, at least you won’t be cutting the parts that can be a strong foundation for your company’s recovery.

These are very challenging times.  There are dire consequences and opportunities along the path.  All the best at negotiating the terrain ahead.

Personal Note: If I can be of assistance to any organization faced with this situation, please don’t hesitate to contact me for a confidential, no cost and no obligation phone call to discuss the challenges you’re facing.  

Jim Connolly
(309) 828-9060

A Generation Y Benefit

No, I’m not suggesting that Generation Y has only one benefit.  Nor am I suggesting that Generation Y has a leg up on other generations.  In fact, as I am famous for saying, “Where There Are People - There Are Issues.”  This truth applies to all generations.  And, all generations, with their unique perspective, bring vast talents (and issues) to the marketplace.

However, Generation Y has a unique benefit.  Generation Y is called that because of their propensity to ask, “Why?”  It can drive managers from prior generations crazy. 

Instead of viewing this characteristic as a annoyance, why not capitalize on it?  Use Generation Y’s willingness to raise issues, question decisions and move on to better opportunities as an early warning system.  If you pay attention to the issues being raised by Generation Y in your workforce, you might be able to detect a looming organizational issue before it takes on a life of its own. 

Like a canary in a coal mine, you’ll be able to detect a small issue before it becomes a threat to the organization.

3 Steps To Get More ROI From Your Employees

We don’t like to think of employees in a cold/harsh sense like ROI (Return On Investment), but at the end of the month/year, the bottom line tells the cold/harsh reality or warm/celebratory reality.

Improving sales or gross profit or profits or employee performance are outcomes to be achieved.  The key question is how do you make these things happen?  The answer is to get more of a return on your investment in your employees.  This is an area with hidden profit potential and most of your competitors will ignore this opportunity.

Here’s how it works in three steps:

• First, compare an employee’s current performance on their top 3 primary tasks/duties against the performance of a “peak performer” in the same position.  This is critical because a peak performer provides a substantially higher ROI than an average performer.
• Second, write down what’s different between the performance of your employee and a peak performing employee in the same position? 
• Third, answer the question “Why is there a gap?”  Answer that question and you have an action plan for building a peak performer. 

The action steps may include equipping the employee with some additional knowledge or skills.  However, the action step might also be the realization that this employee doesn’t have the raw talent to perform this task/duty at a peak performance level.  If this is the case, you may have an action step that you don’t want to face, but your company’s results depend on what you do in situations like this.

We help organizations with issues like this every day.  It’s not easy, but there is a significant return on investment.

Successful vs. Effective Leadership

In my work with clients over the years, one discussion comes up more than any other.  It’s the distinction between successful and effective leadership.

Let’s start at the beginning.  Leadership is necessary because one person cannot accomplish all that needs to be done.  There isn’t enough time.  Things have to happen simultaneously.  Specialized expertise is needed.  More input results in better ideas and decisions.  And, so on.  So, someone has to coordinate the work of others.

In my last post, I defined leadership as opposed to managing or coordinating.  Today, I want to focus on the distinction between successful leadership and effective leadership.

If you give out work assignments assignments and employees complete them, you’ve been successful.  One question to consider is why you have been successful.  Maybe employees did the work because they like the work.  Maybe they did the work because if they don’t do the work, it may, over time, put their employment at risk.  Maybe they did the work to make money to support their boat racing habit.  Who knows.  In any case, if they completed the work, you have been a successful leader.

But, have you been effective?  We acknowledged at the outset that leadership is necessary because one person can’t accomplish all the work that one person is responsible for, right?  For that reason, we need leaders who are more than successful.  We need leaders who are effective. 

Effective leaders are those who influence others to work on achieving organizational objectives even when the leader is off working on other areas of his/her responsibility.  In other words, employees will work toward achieving the organization’s objectives because they, like the leader, are committed to achieving the organizational objective.  When leaders are effective, they multiply their efforts and their results five to ten fold because they have influenced others that the organizational goal is worthy of their best effort.

What kind of leader are you?  Do you strive for success or effectiveness?

To learn more about the difference in organizational results for organizations with effective leaders, call or write for the details.

A Working Definition of Leadership

I define leadership as the act of influencing others toward organizational objectives.

Leadership requires influence.  If you’re managing a project, giving out assignments to team members and coordinating what items can be checked off the list, I’m not sure you’re really leading.  In the true leadership context, the definition of influence is to affect or to sway.  Team members may not be influenced by your direction as much as they are by the fact that they like the work or that there are consequences if they don’t do the work.  So, avoid automatically crediting management experience as leadership experience.

Secondly, leadership is the process of influencing others toward an organizational goal.  Leadership to achieve organizational objectives is necessary because the leader can’t do all the work him/herself.  Believe me, if it were possible, the leader would have done the work him/herself if they could have.  It’s easier than leading others to get the work done. 

Whether it’s the soccer team, a church committee or a manager and his/her employees, the purpose for our influence is to achieve an organizational objective.  Despite our different interests and motivations, the leader’s job is to get his/her followers to accomplish organizational objectives.  Unlike the weight loss class teacher who wants each person to achieve their own goal, true leadership requires pulling different people with different skill sets, diferent experience, different opinions and different motives together to accomplish organizational objectives.

Keep these distinctions in mind as you select and develop leaders in your organization.

Next up:  Successful vs. Effective leadership

Driving Organizational Results

Improving organizational results.  As business leaders, that’s what we’re interested in doing.  And, in this economy, improving organizational results is even more critical than ever. 

Lots of articles offer advice, but does the advice ever really work?  Here, based on sixty plus years of our experience in helping organizations make improvements, are three keys to improving results in your organization.

Organizational Truth #1
The first key to improving organizational results is this:  Organizational results are a function of individual employee performance.  Read that again.  Now, before you skip ahead, stick with me.  I will acknowledge that some readers will think that this truth is quite obvious.  But, stay with me.

Let’s walk through an example.  For the ABC Company, an increase in gross profit last year is probably due to numerous factors; getting better prices from suppliers, increasing productivity, innovations to deliver products and services more cost effectively and so on.

Here’s where this organizational truth comes in.  Those improvements happened because employees, individually and collectively, took the initiative to seek out and implement those improvements.  Makes sense, right?  So, the organizational results are the outcome of the individual efforts to bring about the improved results. 

But, here’s the kicker.  If this organizational truth is obvious, let me ask you this.  Why, today, in hundreds of companies around the world, is some business leader pounding his or her fist on the table about the need to improve their results?  The focus of the lecture and the discussion that follows is about the results.  Our results compared to our #1 competitor’s results.  The changes that will take place if the results don’t improve.  And, the questions about one or more manager’s ability to do the job. 

The business leader may feel better after venting, but the meeting is not a productive one because the fact of the matter is that yelling about the results and staring at the results won’t change the results.  Not only is the meeting not productive, but the blood and broken glass left in the wake of the meeting is actually moving the organization backwards.

I’m not suggesting that results shouldn’t get measured or reviewed.  I’m suggesting that the focus of the meeting would be more productive if it focused on how we’re going to improve employee and organizational performance.  What new actions and behaviors will employees adopt that will eventually drive improvements in the organization’s results? 

In the heat of the moment, we forget that focusing on improving employee performance instead of yelling about the results is a far more productive way to improve organizational results.
 
Organizational Truth #2
Organizational structure, by its very existence, is dysfunctional.

Let me start with an example.  Over the course of the years working with my clients, I’ve been presented with existing or proposed organizational charts that were designed with 2 co-leaders at the top of the organization.  Some of you have lived in this bad dream like the movie Ground Hog Day, where Bill Murray plays a Meteorologist who relives ground hog day over and over.

The reality is, that no matter how well intentioned, 2 co-leaders at the top of an organization will, over time, pull the organization or team or committee apart. 

That’s an example of an organizational structure that’s badly designed from the start.
Here’s an example of a well designed and well intentioned process that has unintended consequences.

You work for a major high end retail department store.  You’re a senior manager.  The customer survey came back and you’ve developed an idea that will get you some attention with the higher ups.  You say “I’ve analyzed the data and our customers are complaining that when they call the store they can’t ever get connected to a knowledgeable person to find out if something is in stock.”  You go on to suggest that the phone calls, which have, up until know, been routed to customer service reps, should get routed to the employees in each department because employees in the departments have the best knowledge and the best information.  You also suggest that maybe we could eliminate one or more of the customer service reps in each store and cut costs.  Brilliant, your boss says.  And you implement the plan in all stores.

What’s better than having the most knowledgeable employees with the most accurate information help the customer?  Nothing.

Except, the next year, you find out in the surveys that customer satisfaction has gone down.  Now, put yourself in the customer’s shoes.

I’ll grant you that men and women shop very differently, but stick with me.  You drive to the mall.  Ah, that familiar smell.  You’re on a mission.  You brought your wallet and you say to yourself “I’m going to buy something today.”  Life is good.

You walk toward the counter in the department you’ve visited so many times before.  A seasoned employee sees you, smiles and prepares to greet you and……the phone rings.  It’s a customer who saw the ad yesterday in the paper and wonders if the store carries a petite size in a softer shade of green and if the store will price match the competitor’s price.  That’s at least a ten minute call, while you, having driven across town, with your wallet in hand, ready to spend money, you have to wait.

Our well intentioned organizational structures, by their very existence, create dysfunction.

Now, you’re not in a class I’m teaching so I can’t collect this homework, but here it is.   Take a blank sheet of paper, fold it up so it fits in your pocket or purse.  And, over the course of the next three weeks, write down every dysfunctional process you encounter in every interaction you have OUTSIDE of your company. 

The dry cleaners.  McDonalds.  The coffee shop.  The store at the mall.  The car repair place.  The furniture store.  The doctor’s office.  The contractor who’s doing work on your house.  Document every dysfunctional process you encounter.

Then, and only then, start to discover every dysfunctional process you and your customers encounter within your own company.

For those clients of mine who have taken this homework assignment seriously, my clients report back that they have reduced costs and improved sales by as much as  $250,000 per year in the first year.  What could you do with an extra $250,000?

So apply this organizational truth in your organization:  Organizational structure, by its very existence, is dysfunctional.

Organizational Truth #3
Every business challenge has both an organizational structure component and a human behavior component.

Let me prove this organizational truth with a couple of real life examples from my work with clients.

You’re working at a company that produces custom printing jobs.  You know that you need to significantly streamline the ordering process.  Customers used to give you 7 – 10 days to deliver a job, now they want it in 3 – 5 days.  Structurally, you need to reduce the 13 step order process down significantly.  You meet with the employees involved and you finally get support for a streamlined 4 step process that will allow you to meet the customer’s 3 – 5 day requirement.  So, you implement it.

A few weeks later, you realize the new 4 step process now has 7 steps.  A week later, the new 4 step process has 11 steps. What happened?  You included employees in the process of developing the new process so that they would buy in.  And you explained that the process had to be streamlined or that you would lose more business to competitors.  What happened?

Here’s what happened.  On the human behavior side of this business challenge, the manager responsible for the process really believes that some of those steps taken out were really necessary.

The structural side of this business challenge was dealt with.  The process was reduced from 13 steps to 4 steps.  And, to some extent, the human behavior side of this business challenge was also dealt with.  You included the employees who would be affected in the design of the new process to ensure their buy in.  But, the manager of the process eventually had significant reservations about losing some of the steps eliminated from the process and unofficially re-introduced them. 

If the human behavior side of this business challenge is not fully addressed, this effort to streamline a business process will fail.

Here’s another example.

One CEO, a year before we met, moved his company from one building to another building less than one quarter of a mile away.  In fact, you could see one building from the other. 

The new building was bigger and allowed him to accomplish one of his primary goals.  He wanted his senior managers to be located in the departments that they led.  This wasn’t possible in the old building.  So, before buying the new building, he took great care to have drawings done to see if it was possible to accomplish his goal.  It was possible so he bought the building.

What he didn’t anticipate was the impact that reorganizing the office layout would have on the organization.  And it was far more than people getting used to things just being different.  Some interactions became easier as a result of where people sat.  Other interactions became more difficult.  That makes sense. 

But specifically, the informal relationships between people in different departments who used to coordinate things informally became more difficult and happened less frequently.  As a result, some balls got dropped and customers noticed.  Human behavior used to cover for an inadequate step in the process, but that didn’t happen anymore because those people were no longer located near one another.

In addition, locating department managers in their respective departments actually had a negative impact on employee morale.  This came out in interviews I conducted with employees at the CEO’s request.  Employees were not used to their managers always being around.  Over the course of the first year in the new building, employees developed a perception that their managers were watching them and, in some cases, employees reported that mangers were micro-managing them.  They didn’t see the connection between these perceptions and the move to the new office building.

When this CEO and I met, I asked him about the move into the new building.  He said flat out, “I’ll sell the company before we ever move again.”  He and I discussed this organizational truth and he gained insights he could apply to every business challenge.

So, if you’ll remember that every business challenge has both organizational structure components and human behavior components, you’ll more effectively deal with those challenges and move your organization forward.

That’s it.  Here are the three organizational truths:

• Organizational results are a function of individual employee performance.
• Organizational structure, by its very existence, is dysfunctional.
• Every business challenge has both an organizational structure component and a human behavior component.

If you’ll apply what we’ve talked about today, you’ll improve productivity, build competitive advantage and make improvements more successfully.  Keep it up and you’ll see organizational results improve as well.

If you found this information helpful, subscribe to our blog to receive more insights into how we help companies improve employee performance and organizational results.  Our website is www.orgresults.net and our blog is www.orgresults.net/newsblog.

Change is a Double-Edged Sword

Change is the buzzword these days, especially in this new economic reality.  The economy is forcing us to make organizational changes to adjust to the “new normal.”  As you make changes in your organization, beware that change is a double-edged sword.

Organizational change, when done well, brings improved employee performance and organizational results.  Companies become more focused on the customer.  Processes are streamlined as redundancies are eliminated.  Employees are more engaged in achieving organizational goals.

On the flip side, change can bring confusion, miscommunication, resistance and failure.  Here are five reasons not to take change efforts lightly:

• First, the status quo, the current situation today, is less disruptive than any change, even a good one.  As human beings, we prefer a stable situation to a changing situation.
• Second, as bad as the current situation is, the current results could be better than the results achieved with the new way of doing things.  If the change effort is poorly implemented, the new process could, in fact, generate poorer results than you achieve currently.
• Third, changes have unintended consequences.  Every decision has consequences.
  For example, you restructure your customer service process and organize customer service people by industry instead of by sales person.  It will result in better service because they are more knowledgeable about the customer’s industry.  That’s great, except that your customers still prefer to deal with their “favorite” customer service rep. 
• Fourth, the chances of success are low.  The reality is that the data on the results of change efforts tells us that the chances of successfully implementing any change initiative are low.  The fact is that the pull of the status quo is very strong and very resistant to change.
• Finally, employees will only give you so many chances before they tune you out.  Employees will say “Here they come with another flavor of the month,” as they learn to tune you out because they have “real work” to do.

Lead your organization boldly and make the changes necessary to move your organization forward.  In the process, be aware of the pitfalls of change efforts and work to minimize their impact on your progress.  Lead on!

Working Effectively With People Over Whom You Have No Authority

The secret to working effectively with people over whom you have no authority is based on working effectively with people in general.  There is a high level of correlation between organizations that have high levels of leadership effectiveness and the business results those organizations achieve.

If we have authority over someone, we have what’s called position power.  With position power we are able to influence the behavior of those we have authority over.  If the extent of our influence relies solely on our position power, we might, in fact, be successful.

For instance, if we use our position power to exercise our authority over someone and they comply, we have been successful.  The task was accomplished.  However, it is likely that this person will comply only because we have authority over them.  If we didn’t have authority over them, it would be likely that they would not comply.  Why does this happen?

The reason we are not likely to comply with what someone else tells us to do is because we live in an age where our first question to any instruction is often “Why?”  When someone asks us to write a report, we ask “Why?”  If we’re asked to attend a meeting, we ask “Why?”  When we’re asked to join or lead a team, we ask “Why?”

There are many reasons we ask why.  Here are three important reasons.  First, we use the answer to the “why” question to prioritize our efforts.  We have to balance the request with the other tasks we have to accomplish.  Second, we also want to know why because we want to believe that the task makes sense to us.  It helps us generate “buy in” for the plan.  Finally, we also know that we might have a better idea based on what we know about the situation.  So we “need” to know why.

How do we work effectively with people over whom we have no authority?  We must become not only successful, but also effective.

Effectiveness requires that we demonstrate to others that achieving the goal or completing the task is something in their interest regardless of whether or not we are wielding our authority.

For example, will your team members use the prescribed safety practices even when you’re not looking?  Will your employee double check the accuracy of his/her analysis even if you don’t double check it?  Will your employees accomplish the goal or achieve the standard because they believe the goal or the standard is now their goal and their standard.

The real key to working effectively with people is to influence their behavior toward the organizational objective whether or not we have authority over them.  Nowadays, most of us are in positions every day where we need to work with others to complete a task without any position power over them.  Without position power, all we have is influence.

Granted, influencing others toward a goal is harder to do than to simply rely on our position power.  “Do this or you’re fired” is quicker than “Can you see the benefit of doing the task in this way?”  However, influencing others toward an organizational goal is far more effective.  When those we lead take responsibility for completing tasks at a specified level of performance, they are more engaged and more committed to the task.

The goal is to drive improvements in performance, which directly lead to improved committee, team, division and organizational results.

The Real Challenge Comes After The Layoffs

You never considered that you’d be in the position to have to lay off employees.  With rare exception, your employees have been loyal and hardworking.  Some of them have been with you so long, you can’t recall when they weren’t there.  And now…now you have no choice.  You have to lay off some of them.  And, you know, that the words “lay off” are not really the right words, because you know that…they won’t be back.

You blame yourself for letting things get to this point.  “I should have fixed our problems when they first appeared,” you say.  That, coupled with this economic perfect storm, and there are no alternatives other than closing up altogether.  If the company is going to survive at all, you have to do this.  You’ve put names on a list and you’ve looked at that list a hundred times trying to find another way.  Now it’s time.  You’ve decided to have an all-employee meeting first to announce the layoffs and then meet with the affected employees.  You don’t know if that’s the right order for these steps, but it makes sense to you.

After the all-employee announcement, you meet with the affected employees one at a time.  You could have assigned this dreadful task to your supervisors, but you knew that wasn’t the right thing to do.  As you meet with each employee you are struck by the differences in their reactions.  Some are numb and in shock.  Some are angry.  One comes close to attacking you.  Some fight back tears.  Others cry.  One sobs.  And, shockingly, two of them apologize to you because they feel bad that you have to do this. 

It’s done.  Now what?  You haven’t given much thought to what to do after the layoffs because your entire focus has been on that dreadful day.  Now what?

After the layoffs the mood has changed significantly, but you find it difficult to describe.  You realize that some employees avoid eye contact with you hoping you won’t call them into your office next.  Others are still in shock.  A few more are angry.  All of them have unanswered questions.  “Wait a minute, that’s it!,” you exclaim.  They have unanswered questions and now you know what to do.  So you make a plan.  It’s called BLACX3 (pronounced Black X 3)

• First you realize that you need to help your remaining employees see the (B) big picture.  You talk about why the layoffs were necessary from a business and financial point of view.  You also help the remaining employees grieve losing their co-workers and friends.  You help them see the big picture.
• Second, by observing your employees you suddenly realize that they are…(L) lost.  They have lost their way because their predictable, stable world has been wrecked by a tornado.  Some of them also feel guilty for keeping their jobs.  The key is to focus them on what to do now.  They know all the things that need to be done, but they are lost and they don’t know what to do now.  Give them direction and guidance and help them find their way back.
• Next, help employees (A) adapt.  Help employees deal with all the changes.  Not only the changes made by laying off employees, but all the changes caused by the layoffs that are now rippling through the organization.  Procedures and processes are being changed because some of the people in the procedures and processes are gone.  Change is everywhere and it feels like a different rollercoaster ride every day.  Help them adapt by working side by side with them to make the changes that are necessary.
• Finally, CX3.  Communicate, Communicate and Communicate.  Employees will go through a predictable series of steps as they restore themselves to full productivity.  The key is to listen to the questions that are nagging at them.  Help them ask those questions and work to answer those questions one at a time.  When they finally accept your answer to that question, they’ll move on to other questions.  Be patient and stick with them, one step at a time. 

What you are dealing with is the predictable human psychology process of adapting to change.  If you, one day, in your frustration, snap at the 12th question on the same topic and yell, “Shut up and go back to work,” restoring the productivity of that employee will be almost impossible.  Your employee may become frozen and stuck in the change process.

The hope is that all employees will move through the change process and be restored to full productivity.  Honestly, it’s likely that not all of them will make it.  As time consuming and “touchy-feely” as this process sounds, it’s your best route to restoring the company’s financial performance. 

As incomprehensible as it may seem to think about layoffs and cut backs, don’t forget to give thought and preparation to the real challenges that lie ahead after the layoffs.  The future of your company depends on it.

2 Strategies To Reduce The Impact of Economic News on Business Decisions

The Dow Jones Industrials Average is down again.  Gas prices are up.  Unemployment is well above expectations yet again this month and layoffs keep coming.  It’s a wonder anyone can sleep.  And, the bad news keeps coming. 

How should we as business owners react?   The more alarming question is to ask how the bad news is impacting decisions that employees are making in your organization on your behalf.  There are many things you could do, but here are 2 high priority organizational behavior strategies to reduce the impact of bad economic news on employees and the business decisions that they are making on behalf of your company.

Expect The Economy To Get Really Bad

This is not just a psychological exercise to reduce stress.  Instead, if you really expect the economy to get really bad, then establish a plan for how you will react and the steps you will take as the economy gets worse.  Then, the news you hear daily simply reinforces the premise and the plan you’ve had all along.  Otherwise, this is a vicious downward cycle.  Break your own downward cycle and help your employees do the same.
 
When confronted with fearful news and/or events, the human brain may kick in the basal instincts of FIGHT or FLIGHT responses.  When that happens, the ability to reason and calculate a response is gone.  The FIGHT or FLIGHT response takes over and every piece of bad news just makes it worse.

Expect the economy to get really bad and, at some point, you’ll be wrong when things actually start getting better.

Resist Short Term Thinking

In short, don’t overreact.  While you may be faced with some really difficult decisions because economic conditions have changed the rules of your game, don’t think only short-term. 

For example, instead of laying off your customer service people, can they, for a period of time, be offered to your larger customers whom they serve every day?  Large companies may be laying off permanent employees, but they may welcome your already trained people under a contract arrangement.

Resist short term thinking and look for opportunities to preserve and proactively build your business.

In summary, apply these two strategies and you’ll achieve better results than would otherwise be possible in this economic recession.