How to reverse the fortunes of a declining business

15 May 2012 Leave a comment

According to Adizes, to get back to their Prime, aging companies basically need to go on a diet and get more flexible. To get their companies back in shape, owners and directors need to cut management layers, decentralize, hire talented people with fresh ideas, make risk-taking a cultural tenet, banish as many control systems as possible, sell off secondary businesses, and most importantly, refocus every person, process and ounce of organisational energy on the company’s products and customers.

The first step, of course, is to stop the denial that the company has lost its once golden position in Prime. Key decision makers identify and analyse only those problems that they believe they are able to manage and control. Owners and directors need to remove denial and get the group to accept responsibility squarely. A specific plan of action must be detailed with clarity on what, by whom, by when.

Secondly, the management team must be taught how to manage meetings and deal constructively with conflict.

The team’s attention is then drawn to learning how to empower the rest of the organisation to solve problems and deal with change. Without an organisational power change, there can be no behavioural change.

Units must then be established where units for change operate independently to units needed to produce results, eg. marketing and sales are separated.

Rarely does the rejuvenation process require a change of leadership. As the system changes, so does everyone’s behaviour. Read more of this post

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12 things managers must do to create a great workplace 9 of 12

8 May 2012 Leave a comment

9. Doing Quality Work

Highly productive employees tell us there is a vast difference between being assigned to a team and actually identifying with that team. It’s a common experience — our manager assigns us to a workgroup and our name is added to the roster. Just because our names are added, however, doesn’t mean that we psychologically join the team, especially if we are afraid the other members don’t share our commitment to producing quality work. Helping all team members identify the characteristics that will result in a quality product can lead to greater efficiency and increased productivity.

Trusting that one’s coworkers share a commitment to quality is a key to great team performance and is one of the 12 key discoveries from a multiyear research effort by The Gallup Organization.

[Our objective was to identify the consistent dimensions of workplaces with high levels of four critical outcomes: employee retention, customer satisfaction, productivity and profitability. The research identified 12 dimensions that consistently correlate with these four outcomes -- dimensions Gallup now uses to measure the health of a workplace. An associated research effort, in which Gallup studied more than 80,000 managers, focused on discovering what great managers do to create quality workplaces.

When employees are asked, "Are you committed to quality?" they all answer in the affirmative. This reflects employees' natural, human tendency to think highly of the work they produce. Since the answer is always the same, however, the question does not differentiate the most and least productive workgroups. Much more revealing are the answers to "My associates are committed to doing quality work." Employees want their coworkers to share their commitment to quality, and want to be part of an organization that challenges and enables them to excel.

Often, the definition of quality sets the tone of a workplace culture. If quality is defined as the absence of defects or mistakes, we indirectly encourage employees to cover up mistakes or problems quickly, without drawing attention to them. In the best workplaces, managers realize that human beings will make mistakes, and can learn from correcting them. In these workplaces, quality is defined as the process of recognizing and solving problems. In healthy workplaces, employees understand that a customer's loyalty can actually increase if the employees take a positive approach toward problem solving. The best managers and workgroups do not scapegoat; rather, they see quality issues as a challenge to improve their product or service and, thus, to increase customer loyalty.

A problem can also bring out a greater sense of teamwork. Employees who are committed to doing quality work know that a problem can improve their team cohesiveness. They use the power of the team not only to overcome the crisis, but to correct the process to avoid future problems, and move on to greater productivity and quality. Interestingly, some of the most productive teamwork is observed during these times of crisis. The excellence and the spirit of teamwork that emerge from effective problem solving are the stuff of great workplaces.]

Please leave a comment, or phone me on 0412 921 292 if you’d like some help in your business to implement any of what you’ve read here.

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Forgetting your customers could spell the end

17 April 2012 Leave a comment

Any time a company’s office decor becomes more important than its product, you can assume that the company is declining from its Prime. It’s beginning to age.

Companies slip into middle age when they start to lose their flexibility, when they lose their appetite for innovation. Of course, despite a company’s failure to continue to innovate, sales may continue to rise for a few years, thanks to residual momentum and its good name. However, these earnings often reflect price increases rather than rising sales and eventually those high prices will consume market share. With the company’s neglected research and development producing no new products or services, the aging company tends to spend its money unproductively on benefits, buildings, and dividends. Meetings lengthen because no one cares that time is being stolen from productive work, and form supersedes function. The finance department, with its focus on return on investment, has more sway than marketing, research or sales; the picture is pretty glum.

“If courage wasn’t a standard result of aging, it meant that the young could somehow acquire it as well.” Lawana Blackwell

The denial is organisational rather than personal dishonesty. Individually, people do speak about their fears and worries, but when they get together, their behaviour changes, and they act as if there is nothing to worry about. People recognise that the company has lost its vitality, but they are afraid to speak out. Panic sets in when, as has been inevitable, sales start to slip, and cash flow turns negative.

According to Adizes, the four stages of an aging organisation are:

  1. Stability,
  2. Aristocracy,
  3. Recrimination, and
  4. Bureaucracy, which then leads to Death. Read more of this post

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12 things managers must do to create a great workplace 8 of 12

10 April 2012 Leave a comment

8. My Comapny’s Mission and Purpose

A deeply felt sense of purpose in life leads to excellence. Human beings want to belong to something of significance and meaning. They want to know they are making a difference, contributing to an important endeavor. The best workplaces give their employees a sense of purpose, help them feel they belong, and enable them to make a difference.

A clear understanding of how one’s particular job contributes to the company’s “reason for being” can be a powerful form of emotional compensation and is one of the 12 key discoveries from a multiyear research effort by The Gallup Organization.

[Our objective was to identify the consistent dimensions of workplaces with high levels of four critical outcomes: employee retention, customer satisfaction, productivity and profitability. The research identified 12 dimensions that consistently correlate with these four outcomes -- dimensions Gallup now uses to measure the health of a workplace. An associated research effort, in which Gallup studied more than 80,000 managers, focused on discovering what great managers do to create quality workplaces.

Employees at every level and in every function like to feel that they belong. Individual achievement is important, of course, but when employees of an organization feel they are an integral part of a larger whole, they are more likely to stay committed to that organization. All of us like to feel our companies stand for us, represent us, share our values, and have the same kinds of goals. It is more exciting to share a mission than to simply complete a task.

Every individual has a unique sense of purpose, and individuals find different meanings in similar situations. Thus, the proverbial mission statement does not necessarily help employees find a sense of purpose in their work. There is nothing wrong with mission statements, but they are often too vague and too broad to allow every employee to connect with them. Think about it. All employees, either consciously or unconsciously, ask themselves, "What is this company's purpose? Does this company look at the world in the same way I do?" Employees all want to know whether their purpose meshes with the company's mission. Because each employee looks at the world in a slightly different way, each comes up with a different answer.

Great managers continually strive to help employees understand how the company's purpose/mission directly relates to individual duties. This relationship helps employees find a connection between the company's values and their own. Every employee has different values. Some value competition, others value service, others value technical competence. Great managers translate the company's purpose into language that each employee can understand.

Outstanding workplaces never confuse strategy with purpose. Purpose is constant. It is the heartbeat of the company, and provides the company with power and guidance. Strategy answers the question, "How will we get to where we are going?" Strategies do change. In fact, companies constantly devise new strategies to find the most efficient path toward their business goals. The frequent evolution of strategies does not necessarily indicate a lack of purpose. Great organizations emphasize how new strategies support the broader organizational purpose. Great managers always help to keep the distinction clear for each employee.]

Please leave a comment, or phone me on 0412 921 292 if you’d like some help in your business to implement any of what you’ve read here.

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This is what business success looks like

20 March 2012 Leave a comment

Companies in their ‘prime’ are recognizable: all aspects work well together, all operations thrive, and all members of the organisation know where it is going and how to stay on track. However, this state of ‘prime’ is an ever-changing condition, a segment of a journey, not a haven at the end of the road. Due to Prime being a state of equilibrium between flexibility and control, function and form, imagining and producing, innovation and administration, it is a state requiring constant balance. So hard to achieve, so easy to lose, the state of Prime continually risks sliding back to childish habits or stumbling into the rigidity of old age, warns Adizes.

A good way to judge an adult company is if it fails to produce significant new products or spin off promising start-ups within any three-year period.  Then it is either decaying, or on the brink of decline.

Of course, this rule of thumb varies by industry. In aerospace the cycle is much longer, whereas in the fashion industry it is much shorter. In the restaurant business, you must offer a new special every day, and change the restaurant’s concept every five years or so. In certain industries that are evolving at a breathtaking pace – electronics, biomedical research or telecommunications – product lifecycles last only six months to one year.

A company in Prime predicts trends correctly and is not attached to a single product line or market to the exclusion of any other. It develops and changes. For example, if Domino’s saw themselves as a company that delivers quality snacks quickly instead of a pizza company, they could have opened a new chain for bagels as pizzas were declining, and so transferred energy to the new endeavour.

“You always pass failure on the way to success.” Mickey Rooney

A company in Prime focuses on results with a ferocity that ensures that they will meet and exceed customer needs. The entire organisation shares a vision, encourages creativity, and performs with excellence.

But success hides danger. The Prime organisation suffers from a dearth of managerial depth and talent to match its opportunities for growth, and rather than confront the instability and challenge of Prime, too many companies ignore the signs of their degeneration and the process of management that produces those results. Like athletes at the top of their sporting events, companies in Prime face a questionable future: continued triumph or decline.

Of the two directions, decline is the more likely. Managers’ delusions about their company’s dominant position in its markets can bring about aging. What Prime companies need to do is to open their eyes to other possibilities while remaining within the range of businesses they know and understand.

Note, these diagnostic assessments of a company’s lifecycle don’t mention financial components. That’s because the financial picture may appear rosy – deceptively. To explain, a company’s financial statements capture individual moments in its history and are in no way indicative of the future.

So what does management look like at the Prime stage of business development? Read more of this post

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12 things managers must do to create a great workplace 7 of 12

13 March 2012 Leave a comment

7. My Opinions Seem to Count

All employees want to feel that they are making significant contributions to their workplaces. The ways organisations hear and process employees’ ideas will shape, to a large degree, whether or not they feel valued for their contributions.

The need for employees to feel valued, to know that they really make a difference in their companies and organisations, is one of the 12 key discoveries from a multiyear research effort by The Gallup Organization.

[Our objective was to identify the consistent dimensions of workplaces with high levels of four critical outcomes: employee retention, customer satisfaction, productivity and profitability. The research identified 12 dimensions that consistently correlate with these four outcomes -- dimensions Gallup now uses to measure the health of a workplace. An associated research effort, in which Gallup studied more than 80,000 managers, focused on discovering what great managers do to create quality workplaces.

Attribute 7 is often referred to as employees' "internal stock price." It measures the sense of value that employees feel in their work and toward their organization. The degree to which a company's employees feel their opinions count is readily apparent to its customers. We have all encountered an employee who felt detached or insignificant, and we know the impact that employee had on us as customers.

If the ideas, instincts and intelligence of a company's employees are their sustainable competitive advantage, then employees' responses to questions relating to attribute 7 are of great importance.

Nothing is more demoralizing to employees than being excluded from significant decisions -- decisions that affect their jobs. Great managers consult with employees regularly to make sure those close to the action have input into critical decisions. This does not mean that employees have the final say on the decisions that affect their jobs. It does mean that when employees' desires and managers' decisions differ, the best managers explain the rationale behind their decisions. These managers help employees see the full scope of a decision and to understand the reasoning behind it. A straightforward explanation can build credibility and communications. Great managers never ask employees for their opinions and then decide to do the opposite without clearly explaining why.

Great ideas are the building blocks of increased efficiency and new product development. Great places to work, in which employees' opinions count, encourage great ideas to flow and be heard, and then processed and refined. Not all ideas will be successfully implemented, but the process of refining ideas is still wonderfully productive -- it builds employees' confidence in the company and shows them that their efforts can make the company better.]

Please leave a comment, or phone me on 0412 921 292 if you’d like some help in your business to implement any of what you’ve read here.

 

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Is your business struggling with its adolescence?

21 February 2012 Leave a comment

Much like an adolescent teenager, the adolescent company struggles for emancipation from its parent-founder, according to Ichak Adizes in his book ‘The Pursuit of Prime’. The stakes are high during this wrenching rite of passage: nothing less than rebirth as an adult. Brave, teary-eyed, scornful, scared, the teenager zigzags into a new sense of self. Although we can accept the teenage years as a normal transition from dependence to self-reliance, we need to remember nothing grows without a struggle.

As long as the company does well, expanding revenues and market share, the board regards the founder or COO as a genius with a golden touch. When, however, profits decline and uncontrolled activity brings about a succession of managerial disasters, the board starts to view the same leader as an unguided missile.

What is going on? How did the company survive the stages of Infancy and Go-Go only to arrive at Adolescence once again to do battle?

The answer lies in understanding the dynamics of systems development. Leaders of adolescent organisations want law and order, predictability, acceptance and ‘ownership’ of decisions. They want a constitution, but one they can stand above – free to break the rules by which others must abide – and this won’t continue to work.

So how to address this in terms of the 6 aspects of management? Read more of this post

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12 things managers must do to create a great workplace 6 of 12

14 February 2012 Leave a comment

6. Someone Encourages My Development

The innate yearning to learn and grow is natural to human beings. Our jobs allow us to encounter new situations and find new ways to overcome challenges every day. Why, then, do we have a tendency to stall or stagnate?

Every employee should be consciously aware of how he or she is learning and growing. This is one of the 12 key discoveries from a multiyear research effort by The Gallup Organization.

[Our objective was to identify the consistent dimensions of workplaces with high levels of four critical outcomes: employee retention, customer satisfaction, productivity and profitability. The research identified 12 dimensions that consistently correlate with these four outcomes -- dimensions Gallup now uses to measure the health of a workplace. An associated research effort, in which Gallup studied more than 80,000 managers, focused on discovering what great managers do to create quality workplaces.

Conventional management theory has always highlighted employee development. Primarily, the traditional approach was to identify an employee's weaknesses, then create a plan to correct them. By focusing on their weaknesses, so the reasoning went, employees would become stronger and more productive. While this approach seems to make sense, it has had a significant, unintended consequence -- it has emphasized who the employee is not, rather than who the employee is. As a result, a manager's constant determination to change something about the employee has been the common theme in the management-employee relationship.

Change can be a good and effective means to improvement, of course, when it encompasses something positive such as learning a new skill. In the conventional approach, however, management has often tried to change dispositional factors, things that are part of an employee's hard wiring or talent -- time management, for example. While there are many tools to aid in this effort, the way an employee manages his or her time is a recurring pattern of thought, feeling, and behavior -- part of an employee's hard wiring and not something every employee can be trained to do better. Great managers make a clear, definite distinction between what can be trained in and what can't.

For the past 40 years, development has primarily meant, "getting promoted." Today, the world's best managers suggest that development embodies the degree to which employees are growing within their current roles. Most employees want to be promoted, but not if it means doing a job that does not match their individual talents and skills. Such promotions may work, but the new position often requires a distinctly different set of talents -- talents the promoted employee may not possess. So, in the end, the promotion significantly impacts the quality of life for both the individuals promoted and the people they supervise or support.

In today's workplace, the concept of lifetime employment is passé; the new emphasis is on lifetime employability. Managers who want to help their direct reports assist them to develop self-understanding and a clear perspective on the roles they will excel in. To accomplish this goal, such managers pursue straightforward discussions with employees. In these discussions, the manager seeks to understand the employee's strengths, talents, and skills, why he accepted a position with that employer in the first place and what keeps him there. They discuss the kinds of relationships the employee needs for greatest productivity, his desired mode of recognition, and the yearnings and directions the employee wishes to follow.

The best managers feel there is nothing very complicated about development. Development holds up a mirror to employees and encourages them to know themselves. As employees come to understand who they are, these managers strive to provide responsibilities that will be a good "fit" for their talents. Then, as employees move forward in their self-knowledge, great managers persist in looking for opportunities to make the best use of employees' talents.]

Please leave a comment, or phone me on 0412 921 292 if you’d like some help in your business to implement any of what you’ve read here.

In particular, if you’d like some insight into the natural dispositions of your staff for development purposes, take a look at www.121Match.com.au

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12 things managers must do to create a great workplace 5 of 12

24 January 2012 1 Comment

5. My Supervisor Cares About Me

Gallup’s research indicates that employees don’t leave companies, they leave managers and supervisors. The impact that a supervisor has in today’s workplace can be either very valuable or very costly to the organisation and the people who work there.

Making sure that every employee has a quality relationship with someone who can guide them is one of the 12 key discoveries from a multiyear research effort by The Gallup Organization.

[Our objective was to identify the consistent dimensions of workplaces with high levels of four critical outcomes: employee retention, customer satisfaction, productivity and profitability. The research identified 12 dimensions that consistently correlate with these four outcomes -- dimensions Gallup now uses to measure the health of a workplace. An associated research effort, in which Gallup studied more than 80,000 managers, focused on discovering what great managers do to create quality workplaces.

As employees, we have all had unpleasant experiences with bad supervisors or managers. Many of us have also experienced the benefits of a good one. Employees see an amazingly clear difference between good and bad supervisors, according to Gallup evaluations. Yet, when we ask employees, "Do you want to be managed?" everyone says "No." Why is this? Because we automatically think of our bad experiences. What if their best supervisors could manage those employees? Would they want to be managed in that case? Yes. So, the issue is really this: What makes a great manager?

Gallup finds that great managers and supervisors possess identifiable talents or recurring patterns of thought, feelings and behaviors. These managers find a true sense of satisfaction when their employees grow and succeed, even if the employee's success surpasses that of the manager. Great managers intrinsically know how to match the right person with the right roles to produce the best possible results. They set expectations by defining the desired outcome. They don't dissect every role down to exact steps. They help people grow within a role instead of grow out of it. And they always try to bring out what was left in versus trying to put in what was left out.

Great supervisors genuinely care about the people they work with. They treat people as individuals rather than treating everyone in the same way. Supervisors serve as filters between broad organizational changes and employees. They help employees make sense of new initiatives and thus gain true acceptance and understanding. One could speculate that people are not resistant to change; they just have no one to explain how modifications will impact them and their jobs.

For years, Gallup has learned from surveys that the credibility of senior management is critical to employee perceptions of the organization. This led us to encourage CEOs and leaders to increase their visibility and create clearer communications. Then, three years ago, we made a discovery: For employees, the credibility of senior management is largely driven by the quality of relationships employees have with their supervisors. Thus, rather than feeling the need for a town-hall meeting, the CEO should feel compelled to ensure that all employees have caring relationships with their managers or designates.]

Please leave a comment, or phone me on 0412 921 292 if you’d like some help in your business to implement any of what you’ve read here.

There services of www.TEC.com.au may be of particular interest to business owners, CEOs, Managing Directors and General Managers.

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How to survive business growth and expansion

24 January 2012 Leave a comment

The big message for the Go-Go stage of the corporate lifecycle, according to the Adizes model, is to get the company to stand on its own. Caught up in the chaos and excitement of growth, founders think there’s no time to set up effective production and administration systems. They must make time or they will find themselves in such messes as failing to deliver, or selling bad products. If the founder is not capable of institutionalising independent leadership, he will be in the founder’s trap of the business depending inextricably on him to survive. A company that grows with too much abandon will be undone by a project that demands more than its ad hoc systems can handle.

As we have seen in previous posts in this series, what is an asset in one stage of business development turns into a liability in another. A founder’s superb ability to ‘spot a deal’ has a troublesome counter-side during this Go-Go stage. The first taste of success for a founder is like swallowing a tasty minnow for a seagull – it sends her off, scanning the seas for yet another morsel, making deals, foraging for more joint ventures. While some seagull behaviour is normal, and we expect it, seagulls can make a real mess. They fly off, and when they appear they drop undesirable things on deck. Then they take off again and again, only to return later, unannounced, with more to unload!

“All growth is a leap in the dark, a spontaneous unpremeditated act without the benefit of experience.” Henry Miller

So how to handle this growth in terms of the six dimensions of management? Read more of this post

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