Patrick Salaski,
Digineer:
952.807.1906
psalaski@digineer.com
www.digineer.com
I ONCE WORKED with a company that faced a major crisis when contract negotiations with one of their major supply chain partners came to an abrupt halt. As with most chaos-filled organizations, that was not their only significant problem.
They also needed to make major changes to their back-office IT systems to continue to keep pace with new services offered by their competitors and comply with new government regulations.
Rather than gathering information on their options and then making a sound business decision, this organization went into a severe “analysis-paralysis” mode. They engaged multiple nationally recognized consulting firms to study the problem, provide advice and offer recommendations.
When the leadership team couldn’t agree, they fired the consulting firm only to bring in a different firm to review the same subject, which went on to make virtually identical analysis and recommendations. In my opinion, this was due to the significant organizational chaos that had filtered into every aspect of the company.
If parts of this situation sound familiar, your company may be in chaos, too. And once you recognize that truth, the most important question is what to do about it? While this is a big subject beyond the scope of one article, I offer several steps to start your company on the path back to health.
Choose your framework
Most of us remember the quote from Lewis Carroll’s Alice’s Adventures in Wonderland, “If you don’t know where you are going, any road will get you there.” Without a clear vision and specific, measurable objectives an organization may find itself meandering.
To get started on a performance improvement initiative you need a framework by which to benchmark your company’s current capabilities. There are many published management frameworks to choose.
One of the most comprehensive is the Malcolm Baldrige Criteria for Performance Excellence. These criteria are published and maintained by the National Institute for Standards and Technology (www.quality.nist.gov/criteria).
The Minnesota Council for Quality offers an assessment process by which organizations can benchmark their capabilities against the Malcolm Baldrige Criteria (www.councilforquality.org.)
Business owners and leaders should make a conscious decision to stop listening to the “squeaky wheels” in the organization when making investment decisions. Rather, they should ensure that investments are made by establishing clear, objective criteria; establishing a governance process for reviewing funding opportunities, and then adhering to the process.
These criteria should include an assessment of strategic alignment, business value and risk. The business value should be further decomposed and include the evaluation of both financial and non-financial benefits of a particular initiative.
Many organizations learned this lesson the hard way. When times were good, they spent resources chasing opportunities in multiple directions at the same time. Then when resources became constrained they discovered they lacked clear, objective criteria for deciding where they should continue to invest. The result: They simply decided not to invest anywhere.
Now this business strategy might be successful if all their competitors chose the same approach. But what if the firm’s competitors had a method for judiciously the crisis stronger and better positioned to dominate their competitors.
Little by little
Many times I have witnessed a company’s strategic plan becoming derailed because people at various levels of the organization either did not understand the strategy and thus went off in different directions, or they purposely chose to do something different because they did not believe in the chosen direction.
Most of the time this occurs when leaders do not take enough time to ensure that the people understand the direction, why it was selected, why other directions were not chosen, and understand what roles they are being asked to play in order for the strategy to be effectively executed.
Communication is key; talk often to all employees, and listen to what they have to say as well. And don’t try to accomplish everything all at once. One of the most important lessons in organizational change management is setting realistic, short-term goals and then celebrating success once they are achieved.
I will confess that I frequently leave this out of my own top 10 recommendations, probably because of three personal characteristics: I like to get things done; I can usually see clear paths to get where I want to go; and I embrace change easily.
I’ve found that while many leaders and business owners share these traits, most people in any company don’t. For these individuals change is uncomfortable; future directions can seem hazy and murky; distractions and day-to-day tasks get in the way of bigger picture.
One approach that helps to improve organizations through incremental change is called SCRUM, which Wikipedia defines as an incremental framework for managing complex work. SCRUM teams use fixed-term iterations, called sprints, to create business value in small, incremental steps.
Secret sauce
Most of us have heard the phrase, “What gets measured, matters.” A colleague of mine added the phrase, “What gets rewarded matters more.”
The combination of these two phrases is really the secret sauce. In other words, it is extremely important that you have methods in place to identify performance indicators that will help you monitor and track your organization’s performance relative to your overall strategic priorities.
In establishing these indicators, keep in mind that you will want to include a combination of results indicators (those metrics that will help you know how close you are to accomplishing your desired goals) and process indicators (the metrics that will serve as guideposts to help you determine if you are moving in the right direction).
A good rule of thumb is to have only a handful of key performance indicators (those metrics that are most critical and are monitored on a 24/7 basis). For both results indicators and process indicators strive to limit yourself to a dozen in each category.
Applying the management principles discussed in this article is not simple, but the need to counteract the high cost of chaos is clear. The real challenge is to create a disciplined organizational culture that watches for symptoms of chaos, and acts swiftly when it appears.
