Defining the Culture of an Organization - Step 1

Is Your Leadership Ready for Culture Change?

There is often a large gap between how an executive will define their corporate culture and how their stakeholders define it.  The easiest way to determine the perception of your culture is to ask.  That may be the hardest thing to do in an organization for two reasons: you don’t want to hear the answer and you aren’t ready to make any changes.

If that is you, you are not alone.  Culture is one of those topics that many like to dance around.  It is often the elephant in the room at executive meetings.  When it is brought up, most will agree that there are some cultural issues, but as a topic of conversation it rarely rates an in-depth look.  Culture is a reflection of leadership, and leadership doesn’t want to look in the mirror and see a monster staring back at them.  Nobody likes to feel like they are causing issues in the company, especially if it is their company. 

Defining culture can be an evasive task.  If someone asked you to describe your personality, it would be almost as difficult.  We can all use relatively ambiguous words to describe ourselves, or we choose words that are fitting to the conversation.  The difficult thing about defining a culture is trying to quantify that definition.  We hear all day long about using data to drive change, so how do you empirically define your culture.

The first step to recovery is admitting you have a problem.  I realize that sounds a lot like a twelve step program, but it holds true here as it does there.  All of the tools in the world won’t help you fix your problem if you aren’t able to be honest with yourself that it even exists, much less plays a major role in your organization.  Even admitting the problem won’t help if you aren’t ready to understand the depth of the issues or prepared to develop strategies to change them.   Before any culture change can happen, there are hard, honest and often difficult conversations that need to happen.  If you can’t make it through that step, you won’t go any further.

The good news is that for all of the bad press that corporate culture gets, there is a path to improvement.  This path takes you on a journey through different phases with the end result being a direct reflection of the honesty and desire you have when you start your journey.

Enlightenment – This is the first step on often the most difficult of the journey.  If this phase bounces back and forth between enlightenment and denial, don’t feel alone or bad.  Keep pushing until you are ready to continue.

Discovery – This is the stage of the journey where you find out just how big of an impact your culture has on your stakeholders.  You will need to ask the questions that you are sure you are ready to hear the answers to and be prepared to make necessary changes.

Engagement – To truly engage your stakeholders, the most important thing you can do is become credible.  If any of them feel that you aren’t being honest, candid and self-aware, you will have a much more difficult journey.

Delivery – You know you have an issue, you are aware of what that issue is and your stakeholders are ready to support you.  Now is time to deliver.  Show the stakeholders that you mean what you say through your actions.  Bring your plan to life and work through those issues.

Like any other change, this isn’t a solo act.  This is one of the most difficult things to do, and trying to do it alone can lead to frustration and potentially deeper issues.  Find an expert.  This is one of those things that requires objectivity.  Align yourself with an advocate that isn’t involved with your day to day activities.  There is nothing wrong with asking for help, especially if you mean it.

Nimble Strategy

The Importance of Maintaining Strategic Initiatives through Agile Processes

“No plan of operations extends with any certainty beyond the first contact…”  Helmut von Moltke.

The need for strategy in a business environment is predicated by the desire and need for ongoing success.  With the globalization of our markets, and the technological improvements we have seen recently, the desire for a more strategic approach to business has become more necessary and more prominent in a wide variety of industries.  With these environmental changes, strategic planning processes and platforms need to evolve as well.  Continuing to operate on long term strategic plans without the ability to maintain and adjust for changes becomes difficult to do. 

Strategy is by definition “a careful plan or method for achieving a particular goal usually over a long period of time.”  The problem in today’s economy is that particular goals become harder to determine and the long period of time is a relative phrase that is in actuality becoming shorter and shorter.

For years, strategic planning was based in large part on using data and information to determine best practices and a better approach to move forward.  A large part of that process was coming up with the right information.  Now, almost all of the information we need is at our finger tips at a moment’s notice.  In fact, there is so much data that it sometimes becomes difficult to figure out what to use and how to use it.    The trick is not succumbing to the analysis paralysis that seems to grip so many companies as they struggle to adapt to so much additional information.

Strategic thinking is to a large degree intuitive, and requires the practitioner to understand data points as well as their utility in the process.  Data alone won’t build strategy, it has to come with someone, or a group of people that understand the numbers, but can also use their instincts and experience to build a platform that can adjust for variables and can be adjusted as things vary. 

Being truly agile means that you aren’t stuck with the information you have in front of you.  Agility means you can stretch your limits, can move quickly from place to place, topic to topic or goal to goal and that you can do it all without causing injury to yourself.  Having an agile strategy means you have a nimble business.  For so many years, we are taught to stay the course and stick to our targets.  We have been cautioned that straying from the plan is inefficient and ineffective and that keeping in our swim lanes returns the highest rewards. 

Times have changed, and the ability to adjust goals, change direction at a moment’s notice, and become more instinctual are the building blocks to building a more comprehensive yet nimble strategic environment.  The benefits of this type of strategic plan are that you are constantly redefining your business, you are evolving instead of just changing, and surprises truly become opportunities instead of roadblocks or hurdles.  Agility requires active participation from everyone involved and encourages by its nature a more engaged and task oriented business environment. 

A nimble strategic environment requires everyone to know exactly what their role is.  It also requires everyone to know what they are accountable for and how they can get it accomplished.  Having true agility in a business environment means you are constantly asking why you are doing it that way, how can it be improved, what else can we do and how can we engage our stakeholders even more.  With agility, size doesn’t have to matter.  Small, medium or large, if you are willing to put in the work, you can make it happen.  You don’t have to be a gymnast to be agile, I’ve seen some 350lb defensive linemen perform some pretty impressive feats.

 

 

The Five Components of a Nimble Strategic Model:

 

1.      Engagement – Strategy isn’t driven by one group or one person, it is driven by the business and all of its stakeholders.  Everyone has an active role in determining what direction they want the business to go, and how they want to get there.

2.      Dedication – To win the war, you may have to lose a few battles.  Dedication isn’t about staying the course or keeping your plan intact, this dedication is about developing an ongoing evolutionary environment, and dedicating the proper resources to each problem. 

3.      Analysis – The analysis component is two parts.  The first is having the information to properly analyze the direction you want to go.  The second being able to track the actuals to make sure you are getting there.  The analytical component also includes the ability to know which critical variables are important in strategizing and which are just there for information.

4.      Timing – The thing that separates the haves from have nots is often the timing.  It is the timing of their ideas (innovation), timing of their efforts (entrepreneurship), and timing of their implementation.  In this environment, being able to be timely plays a large part in its success.  Having the ability to make in time decisions requires the ability to receive timely information.  Being able to make timely decisions is only relevant if you are able to have timely actions.

5.      Efficiency – Efficiency in this environment is the string that holds the rest of these components together.  While being proactive is the sign of a healthy environment, being efficient when you have to react becomes a sign of a highly successful environment.  Putting together the tool boxes you may need in an emergency means when it happens, you will be ready for it. 

Vision Statements and their place in a Strategic Plan.

I don’t disagree with the effect a positive vision statement can have on an organization.  To be clear, vision on its own is an integral part of all levels of strategy while a Vision Statement does not necessarily carry the same weight.  Vision statements are important, however, where that vision statement fits, and when it should come into play is where I disagree with others in my field.

Vision statements are purposely both ambiguous and defined.  Vision statements should evoke emotion, but very seldom stimulate internal action.  Having a vision and making that vision a reality are too very different things.  Anyone can put fancy words on a piece of paper and call it a vision statement.  Even the best vision statements, with their clarity of goals, focus and attachment to values do little more than provide ambiguous statements that could be the same goal as every one of your competitors.  We all want to a little healthier, or a little less stressed, etc.  Telling someone that our vision of our lives is to be healthy and happy while we smoke a cigarette and cry about someone hurting our feelings gives mixed signals. How does the adage go?  “Actions speak louder than words”.

A vision statement should be not only about what is paramount within the organization, but also what is possible.  That realm of possibility has limitations based on so many different aspects of a business.  You can’t have a vision statement to be a world leader in anything, if you have no access to the whole world.  It could be argued that vision statements should be best case scenarios or end results and that the strategy is going to be chronologically segmented to eventually lead to the final result.  Of course that would add a degree of finality to the organization and nobody really wants to involve mortality into an organizational strategy. 

Vision statements or Mission statements have a place in business and a place in their strategy.  If nothing else, they are a rallying cry for the organization to gather to when faced with critical decisions or a cross road in their business.  While important to defining what a culture should look like, and how those within that culture should act, they will only serve the purpose they intend to serve.  Statements in an organization should always be in the background of any plan or action, but when they become more than white noise, not only do they become less effective, but their power abates significantly. 

I have read numerous articles or posts in regards to vision statements being anchor points or cornerstones to organizational strategy.  Each time I read them, I seem to get more and more swayed towards believing the opposite to be true.  Like buzzwords, adages, clichés, etc. things can have a tendency to become overused.  The concept of improvement or growth is aligned with the concept of effective organizational change far more than with the ability to have a great vision statement.  Goals and values are a large part of the organizational change plan, and statements provide guidance for those goals, but shouldn’t be more than that.

Mission and Vision statements look good on marketing brochures, effective organizational management looks good on a balance sheet.  While I would agree that good marketing is a necessity to a good balance sheet, the strength of the balance sheet isn’t entirely predicated on how good that marketing is.  Statements in an organization have their role.  Perhaps instead of a cornerstone or anchor point to a good strategic plan, they should be looked at as more of a halo or dome covering the organization under which all actions and plans are determined.

While this may seem to some an issue of semantics, I would argue strongly that positioning your statements in the right place has an effect on your ability to run your organization.  You can rally your team to “remember the Alamo”, but if you haven’t equipped them to win the battle, you end up with a bunch of patriotic dead people.  When you have effective tactics, empowerment and leadership under the umbrella of solid values, your chance at success becomes exceedingly higher.   Knowing where you want to go is important figuring out a good path to get there is imperative.  Understanding how to use a statement in your organization is more strategic than having one.  Strategy and vision have to be mutually exclusive.  One without the other is either a plan with no purpose or an idea with no action.   Using one to create the other will become an unending circle with no results.

You Can't Motivate Your Employees

than not, these discussions come at a time when the business is faltering or having difficult times.  A business needs to push ahead, increase revenue and profitability, grow market share or any other number of growth ideals.  In order to do that, they need to get the most out of their employees.  At this point, a business must make that difficult decision on how to get their work force to be more productive.  What is the correct way to motivate your employees?

As the title of this post says, you can’t motivate your employees.

If you’ve gotten to the point where you need to determine how to motivate your employees because your business needs immediate growth, more likely than not, looking to motivate your employees may be too little too late. 

Every employee at every company is capable of doing more and doing it better than they are currently doing.  This is not a quantifiable fact, but a theoretical one based on the logic that humans by nature are capable of extraordinary effort when they are in a situation where they are motivated to do so.  No sane person would jump in front of a moving vehicle just because someone asked them to (unless they are a Hollywood stuntman), but put their child in the way and the vast majority of them would risk it to save their child.

I’m not saying you need to put your employee’s children in front of moving vehicles, but the point of the analogy is that employee motivation stems from the individual, not the company.

I’ve seen a number of different ways that corporations have tried to motivate their employees:

-          Give them more money – This might be a short term fix for some of the more financially motivated employees.  The problem with this motivation is that you are giving more money to an employee who more than likely has learned to live on what they are already making.  Giving them more money and then asking them to do more will more than likely mean you will have higher paid employees doing the same amount of work.

-          Threaten them – While this sounds very old school in the business world of today, it happens very often.  Telling an employee that if they don’t improve they will lose their job will most likely result in an employee doing the bare minimum to keep their job while they search for another one.  Most of your employees have had jobs before they came to work for you, while having to go and look for one isn’t a great prospect, it’s not a gamble you always want to take, and more often than not, it ends up with you getting a little more effort in the short term and then having to find someone to replace them.

-          Appeal to their loyalty – Companies seem to have a pretty big ego when it comes to dealing with their employees.  Asking an employee to dig deeper in a time of need because they company needs them to may work for a small group of employees, but the majority of them will start looking for reasons that they aren’t the ones who caused the problems and it’s your job to make sure they still have a job tomorrow. 

-          Dangle a carrot – Companies can’t always afford to give employees raises or promotions, so they do the next best thing and tell the employees if they can get them through the tough times, the pot of gold will be waiting on the other side for them.  What you are really telling your employee is that their worth is only based on the how well the company is doing and not the value they believe they are adding on a daily basis.

All of these methods have one thing in common.  They make the employee feel like an employee instead of being part of something. The employee is not given control of their own destiny.  You could argue that  The other common side effect is that you are excluding them from your circle of trust.  Making a companywide decision on how to motivate all of the employees within that company is making a blanket statement that you know better than the individual how to motivate them.

Motivation is an employee based ideal, not a company based one.  A business is defined and carried out by the individuals they choose to employ.  Making a decision about what motivates them has the same detrimental effect to a company as trying to tell your customers what they want and how they want it.

Effective businesses understand that when they say their business is employee based, they mean it.  No business can make all of their employees happy all of the time, but when the majority of them feel like they are part of the decision making process and have a close relationship with their employees, the employees can motivate themselves into putting in the extra effort needed with nothing more than a request.  In great companies, the request doesn’t even have to be made because the employees are in tune with what is going on and have their own accountability and motivation to push forward.

These same businesses know that the motivational process and the involvement process begins with the hiring process.  Understanding who you are hiring, what they are looking for in a job, and what motivates them as an individual is key in the development of an employee based, self-motivated work force.  Having this information, and using it during the training process, employee reviews and on-going coaching is an excellent way to stay in touch with the needs and requirements of your employees. 

 

Systems vs. Performers

Timmy Chang, Graham Harrell, Colt Brennan, Dan LeFevour.  If you don’t recognize these names, you are probably not alone.  If you don’t recognize them, you probably don’t know what they have in common:  All four are in the top 15 all time in NCAA College (2^nd, 4^th, 6^th and 13^th respectively) for career passing yards by a quarterback.  All played their college football at DIV I schools and all were on an active NFL roster at one point in their career.  What they also have in common is the fact that they weren’t successful at the highest level. 

Of the thousands of college athletes that have gone into the professional football since 1963 only 287 have made it to the hall of fame.  There are many more names that can be added to that original list of players that were very successful in college, but didn’t make it to the next level.  This natural attrition is a by-product of the NFL’s ability to successful determine the performance quality of the potential incomers.  It is also determined by fit.  Some players can continue to develop based on the system they are brought into.

Not everyone is capable of improving on their own.  As a matter of fact, I would go out on a limb and estimate that over 90% of the people out there need a proactive and disciplined system around them in order to reach their potential.   Of the remaining 10%, I would go out on the same limb to say that 9-9.5% of them are more than capable of implementing strategic plans and ensuring that the other 90% follow them.  That leaves us with .5-1% of the employees that are capable of coming up with strategic plans, determining the steps that need to be made, and ensuring that the rest of them are able to comprehend and follow the tasks that are handed down.  Based on these percentages, for every 1000 employees a company may have, only five people in that group even have the potential of being performers.  Of those five, how many of them are in a position to affect change?

Now, take out the section of the employee populous that is made of entrepreneurs, self-employed, consultants (not that all consultants are in that group, but the percentages would be higher) and other high-performance based groups and those five employees may dwindle down to just one or two.

This brings up the question:  “Is it better to have a great system or have great performers?”  Now the obvious answer would be to have both.  Unfortunately, like the NFL, there is some Darwinism going on.  Not everyone coming into the business world has what it takes be a great performer.  In fact, I would hazard a guess that percentage wise, there are fewer All-Stars available in the business world than there are in the professional sports world.  If the success of your organization depends solely on the ability to draft or sign a Peyton Manning, you might be in trouble. 

Performers are those that can go anywhere and make it better.  Performers are people that are capable of reading the business and being able to come up with profitable completions non-dependent on the effective skill level of the rest of the team.  That isn’t to say that a performer can be successful alone, just that a top performer by nature makes the team better.  The downside to a top performer is that when they leave, a lot of the performance goes with it. 

Systems, if implemented correctly and led through disciplined processes create an effective team that makes all of the individual members better.  These systems are the infrastructure of a successful organization.  People inside the system are interchangeable.  This provides the ability to increase productivity, growth and engagement from everyone working within the system.  The other benefit of an effective system is the ability to accurately rate your employees.  Every day becomes that pre-season game where you can effectively ascertain your talent level.  If you know exactly what the expectation of each person is, you have a way to measure it.  When you measure it, you can see what is working and what is not.

If your business can’t be successful without the All-Star performer, you need to take a harder look at the infrastructure you have in place.  Good systems and structure give you a lot more agility and strength.  If you are lucky enough to get an All-Star performer on top of that, that’s when the discussion of dynasty can happen.

Formulating a Change Plan

There is a right way to change things and a wrong way to do it.  The right way is a series of steps and chronological patterns that lead the process to fruition.  The wrong way is not doing it.

That being said, making changes comes with the inherent risk of not coming up with the exact result you were looking for.  Even at the end of the road, if there is nothing different, going through the process of changing had the benefits of practicing the process and determining that the current way, for the time being, is an adequate path to take.

Change requires planning.  Planning for change can be a very simple process, or it can take longer and be more involved than the actual process.  There isn’t one formula for every change, so an organization needs to figure out what works for them. 

The change process begins with determining which category of change is needed.  The chart below illustrates the three different change types an organization will go through.  Once the category of the change is determined, the next steps can be formulated.

Category of Change	Recipient	Difficulty	Length of Initiative	Reversibility
First-order Change	Procedures-	Minor	Short	Reversible
Second-order Change	Policies	Moderate	Medium	Irreversible
Third-order Change	Values	Very	Long	Irreversible

 

First-order Changes – These are procedural changes and are the most common organizational changes.  Very often they can be relegated to a specific department or even a group within that department.  Procedural changes are just what it says they are, changes to a way a process within the business works.  These changes take effect when a new process is implemented, or there are published changes to an existing process.  These types of changes are relatively easy to make and usually don’t take a whole lot of time to plan, develop and implement.  The other benefit to this type of change is that they are reversible.  A new process is a living organism within an organization and has the ability to constantly evolve and improve.  An example of a first order change would be a new process for processing cash transactions within the organization.

Second-order Changes –These are policy changes and are less common than first-order changes within an organization.  Policy changes are relatively more difficult to implement as they require changes in the underlying organizational structure.  This means that some of the guiding principles of the organization require modification or in some cases deletion all together. These changes take more time to organize, implement and manage than first-order changes and once they are completed are irreversible in nature.  An example of a second-order change would be that the organization decides no longer to accept cash as a viable means of payment.

Third-order Changes – These are value changes an organization determines are necessary in order to become more efficient or effective.  Value changes are the most difficult types of changes an organization can make as they impact the core values an organization has been built upon.  Most often, these types of changes are also culture changes that will affect the organization in its entirety and involve not only every employee within the organization, but many times key vendors and customers that have been in a relationship with the corporation for a long period of time. 

Beginning the Change Process

Prior to beginning and process for change, the very first step is to establish the group of people that will be ensuring that the changes are in line with the goals of the organization, and have the ability to affect change as well as being empowered to facilitate the changes being made.  This group should be comprised of the organization’s leaders along with people designated for specific purposes such as project management or IT.  Once you have developed this group, the change can start.

1.      Identify the change you want to make

a.      Make a list of changes you believe the organization needs.

                                                              i.      Pick three or four depending on ease of change and necessity of change

1.      Trying to get two or three Third Order changes accomplished at once won’t be as effective as trying to get one of each done.

2.      Determine the Goals for that change

a.      Goals need to be specific, quantitative and attainable.

b.      Quantifying goals can include specific dates for completion, or other data points that can show progress.

c.       Find a good balance between the impossible and the painless. 

                                                              i.      Finding this balance takes practice.  If you are unsure, work backwards.  Figure out where you want to be and go to where you are to make sure you have given yourself enough time and resources to hit your goal.

3.      Determine how you will track the change/Develop metrics to manage the change

a.      When you have quantitative goals, you can develop metrics to make sure you are on track.  Before you begin, you should have a clear and easy way to make sure that you can inspect what you expect.

4.      Determine who the change will have an effect on

a.      This is an internal and external function where you will determine which people, departments as well as customers, channel partners, etc. will be affected by the change. 

b.      Make a list of everyone that will be part of the change as well as any individuals or groups that will feel the results of those changes and any of the tasks required within the change process.

5.      Build an action plan including who will be responsible for each step    

a.      Step by step action plans are important in the change process.  For each step you need to identify the following items:

                                                              i.      Specific goal for the step to include a quantitative measurement

                                                            ii.      Resources required for completing the step – people, supplies, accommodations, etc.

                                                          iii.      Definition of what the step will be – specific action items that can be completed.

                                                          iv.      Who is responsible (Specific name or title) for ensuring the particular step is completed accurately and timely

                                                            v.      Timeline for completion of the step – this should include when that step should begin and when it should be completed.

6.      Do a risk assessment for the change

a.      Once you have a list of who is involved, it is time to do what I think is one of the more important steps of the change process; a risk assessment.  Risk assessments are determining factors in change management.  If the risk of losing customers, employees, etc. is higher than the benefit of the change, you may want to either re-engineer the change or look for something different to do.

b.      Risk assessments entail looking at the opportunity costs of the change.  These costs are either the cost of the next best option or worst case scenario at each step of the change process.  Like any other financial analysis, you should determine a cost benefit to the change before blindly charging forward.

c.       That voice in the back of your head wondering if this new idea is the best is the onus behind a risk assessment.  Don’t overthink the risk and talk yourself out of the change.  Instead, use it as an opportunity to look at the process in the most objective way possible.  Look at your options and make an assertive decision:  move ahead, modify or eliminate.  Don’t go halfway because of fear.

7.      Determine a timeline for the change to take place

a.      Just like the goals, make sure that your timeline is realistic.  When coming up with timelines, the best way is to assign goals for each step and add them together to come up with your end goal.  If it is too far in the future for your comfort, you can look more closely at the individual goals and adjust.  If it is happening too fast, you may have missed a couple of steps or have goals that need to be stretched out a bit. 

b.      We all want change to happen overnight.  Unfortunately, that isn’t always going to be the case.  Establishing realistic timelines will give you an idea of how big of a change it is, and how long you will have before you realize any benefits from it.  This is a great exercise for those with a high sense of urgency working in a large or lumbering organization.

8.      Determine a communication plan for the change

a.      Now that you have formulated your change plan, you will need to develop a communication plan to ensure that your goals, timelines and specific expectations are clearly communicated to everyone involved or affected by the change that will be taking place. 

b.      Your communication plan should keep the results of your risk assessment in mind.  If you determined that one group or another has a high degree of risk in regards to turnover or dissatisfaction hitting them over the head with the change might not be in your best interest:  consider your audience. 

c.       No matter your audience, your communication plan must be assertive, concise and include three very important items:

                                                              i.      An unwavering leadership commitment to the change

                                                            ii.      Specific goals, timelines and expectations for the change

                                                          iii.      Openness to ideas, thoughts or other input to the process or any of its components.

Once you have completed these steps you will have a basic formula for change.  In order to maintain consistency and ensure future successes, your individual formula should be documented through processes, memos or other written tools so that you can replicate those things you did well, and eliminate those that didn’t work.   Now that you have the formula put together to put a change in process, you can start laying out the change itself.