Organizational Performance
Don’t Confuse Motion With Progress
One truth in our work with organizations large and small is that organizational results is a function of organizational performance .
So, as business leaders, the focus of our efforts should be on improving employee and organizational performance. Plan for it, implement action steps and overcome obstacles.
But, don’t confuse motion with progress. A flurry of meetings, PowerPoint presentations and coaching sessions doesn’t ensure that organizational performance is actually improving.
Motion is not the key. Doing whatever it takes to drive improvements in employee and organizational performance is the only measure of progress.
Improving All Of Your Results…All At Once
Revenue, profit, productivity, performance, etc. Each of these is a measure of organizational performance. Each of these is important to your organization and is a predictor of future organizational results.
However, there are two challenges with focusing on these measures in our efforts to improve results in our organizations.
First, most organizations generally consider these measures independently. Meetings are convened to discuss “How can we improve our productivity?” “What steps are we taking to triple sales in the Midwest region?” And so on. Considered independently, plans are implemented to drive one measure sometimes at the expense of another. Or worse, efforts are made to increase these measures, but with different strategies. Think of a car full of people, each with a different map, each giving different directions to the driver.
The second challenge with focusing on these measures is that we’re focusing on the wrong measures to begin with. Sure, each of these is a measure and a predictor of results. But, there is a measure that is more predictive of results and it has a high impact on each of the measures we’ve already discussed. What is it? Measure and improve the quality of the leadership strength in your organization and you’ll impact results in your organization like never before.
Now, I know that as a business leader, or THE business leader, that I might be talking about YOUR leadership strength, but hear me out. The fact is that if you can increase the leadership strength in an organization, all of the measures we discussed above can go up. But, don’t take my word for it:
- Jim Collins in Good To Great talked about the 5 levels of leadership and his team’s extensive research on the topic.
- Ken Blanchard developed Situational Leadership II to document the process of building peak performing leaders. Some twenty years later, more than 400 of the Fortune 500 have tested the model in pre- and post-test assessments and found it to be very effective.
- Marcus Buckinham’s research focused on talent as the most predictive factor in building a true strength. In this case, finding and developing leadership talent will improve leadership effectiveness.
The list goes on.
As your company emerges from the dark forest of the Great Recession, you’ll have a decision to make about what to focus on to build competitive advantage in this new landscape. Sure, measure and focus on revenues, productivity and profits. But, put building leaderhip strength at the top of your list and find the resources and the time to focus on THE factor that can drive all other factors.
Assessing Organizational Performance
I’ll admit it. Sometimes I get so enamored with some component of organizational structure or element of human behavior that I can quickly dive into more way more detail than is necessary. But, I love what I do and, if you want to talk in detail about some aspect of organizational performance, I’m up for an all nighter.
2 Simple Questions
However, as I step back and look at organizational performance from a healthy distance, improving organizational performance in your organization is really about the answers to 2 questions:
- Are you underperforming your industry? Not knowing the answer to that question is, in itself, insightful. If you don’t know the answer, find out and honestly answer that question for your organization.
- Are you committed to doing something about the fact that you are underperforming your industry? If you are underperforming your industry, that means others are achieving better results. And, if they can do it, there’s no reason you can’t achieve industry leading results as well. Are you committed to getting there?
If you answered YES to both questions, do whatever it takes to achieve industry leading results. Read a book. Hire a new employee. Expand your products/services. Attend a seminar. Engage a consultant. Fire an employee. Write a strategic plan. Close a division. Do all of the above. Don’t do your best. Do whatever it takes!
“Where do I start?”
If you really don’t even know what to do first, call me for a free, no obligation phone call. I’ll ask you a few questions and then I’ll give you my best advice on how you should get started. Really, it’s free. Really, no obligation. Why would I do this? Because, if I can help you jumpstart an effort to improve your organization’s results with a phone call, I’m glad to do that. My name is Jim Connolly. You can reach me at (309) 828-9060.
All the Best!
What and Why of Organizational Restructuring
Organizational Restructuring - Defined
Organizational restructuring is the reorganizing of a company’s structures (legal, ownership, operational, etc.) for the purpose of making it more profitable and better positioning it for the market’s changing needs. Notice that there are two goals for an organizational restructuring. First is the short-term goal of reducing the cost structure of the company down to the point so that revenues outpace expenses. Secondly, critical to the company’s future, is positioning the company to adjust to the market’s changing needs.
Why does organizational restructuring become necessary?
In most cases, restructuring becomes necessary because shareholders and business leaders take the current situation for granted. When things are going well, there is a human behavior tendency to prefer the status quo even when there are indications that potential trouble is looming. As one CEO client of mine put it, “we got fat, dumb and happy.”
Sometimes restructuring becomes necessary because of external factors. Case in point is the current global recession. Companies that were weak succumbed more quickly to the pressures of the economic collapse. The choice at that point is to restructure operations, declare bankruptcy or close the doors. Everyday there are reports about companies being affected by the economic collapse.
However, even strong companies have been forever affected by this economic recession. Many companies with strong financial and operational structures thought they would ride out this recession just like they did during the last recession. But, this “recession” is turning out to be different. Steve Ballmer, CEO of Microsoft has said several times in the past few months that we are not experiencing an economic recession. Rather, Ballmer says, we are experiencing an economic reset.
If this is true, what we are experiencing today is the new “normal.” Our economy and our businesses will grow again, but not from where we were eighteen months ago. We will grow from where we are today. This new reality causes even financially strong companies to consider restructuring operations because their customer’s needs will be forever different. Relying on the “rainy day” fund to get through the temporary economic slump won’t work if the “slump” isn’t temporary.
Whether your organization is financially and operationally strong or weak, today’s circumstances may, in fact, be the new “normal.” If that’s the case, what steps will you take to position your company for a strong operational and financial performance?
For more insights on organizational performance, check out our other free articles here.
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.
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.
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.
Are You The Micromanager Your Employees Are Complaining About?
How would you react if your boss reminded you several times a day how to tie your shoes? Would your reaction be “Stop wasting my time” or “Don’t you have anything else to do?” Ask an employee who works for a micromanager and they will instantly know what that feels like. So, how does a manager become a micromanager? What are the impacts of micromanaging? How can it be fixed? What if the micromanager is you?
To start, let’s define a micromanager. A micromanager is a manager who uses a highly directive management style even when it’s not called for. A highly directive style is perfect in an emergency or when working with people new to a task. But, a highly directive style is not the most effective choice when leading people who perform tasks moderately well or extremely well. Unfortunately for employees, micromanagers believe a highly directive management style is always called for.
So, why does a manager become a micromanager? There are at least four reasons.
- First, their model for what a successful manager looks like may have been a micromanager from their past experience. They saw managers taking control and getting things done so they think they should emulate that successful, but less than effective, manager.
- Second, as I have studied micromanagers over the years, in their defense, they often can’t help it. Micromanagers are often “wired” to be highly directive. The same is true for delegating managers who delegate too much. We each come “wired” by our personalities and previous experience with a primary management style that we use most often. The goal is to make a conscious decision to use the
most effective management style for each situation. - Third, micromanagers often believe that only they can do the job right. And, in fact, they may be right. Of course, if the micromanager never allows anyone else to learn and do the job, no one else will ever do it “right.”
- Finally, micromanagers often develop out of a lack of proper planning and effective management. If tasks are not planned out, assigned and followed up on, then the micromanager often has to do much of the work himself or herself.
The interesting thing about micromanagers is that they are sometimes groups of people. If the board of directors you sit on approves purchases of office supplies for the organization, the board has become a micromanager of the organization. This is not some way out extreme example. I know of numerous organizations where this level of micromanaging by the board is routine. That’s a topic for another article.
Next, let’s consider the impact that the micromanager has on the organization.
For employees who work for the micromanager, there are two outcomes that result from being micromanaged:
- First, employees develop “learned helplessness.” The micromanager’s style causes an employee over time to give up their ability to take charge and complete tasks. The employee knows that the micromanager will come in and change whatever they did accomplish. So, the employee mentally “gives up,” resulting in “Learned Helplessness,” a disease that infects organizations.
- Secondly, employees stop demonstrating passion for their work. It’s a defense mechanism that causes them to say “If my input will never be considered or if my completed work will always be changed, then why should I bother.” Employees feel like their contributions are not valued or trusted. The result is that you end up with employees who, like prisoners, are serving time instead of serving the needs of the organization.
For managers who have become micromanagers, there are at least two outcomes of their micromanaging style:
- First, micromanagers are racing toward burnout. Micromanagers feel that few tasks in their departments can be carried out without being personally involved. Their burnout may take the form of continued poor productivity, their resignation or even being fired.
- Far more significantly for managers, the major outcome of micromanaging is that, while the manager is mired in the details of accomplishing other people’s tasks, he or she is missing the big stuff. Big stuff like analyzing sales profitability, performance to budget, industry trends, new products and key contacts that would bring more business. The micromanager is single-handedly limiting the ability of the department or the company from growing beyond their personal ability to manage the details.
So, how can a micromanager be “fixed?” In short, if you work for a micromanager that doesn’t make the changes that need to be made, my only advice to you is to find a new job. Life is too short.
What if the micromanager is you? Simply put, if you keep doing what you have been doing, you’ll continue to get the results you always gotten. Seek out the help of books, a trusted mentor to act as your coach, a management effectiveness workshop or other professional resources that have expertise in helping managers become more effective.
Changing the style that you’ve become accustomed to and found some success with will be difficult. But, with a strong desire to improve your management skills and lots of persistence, you can become a much more effective manager in a relatively short period of time.
