Yours In Improvement

What is Your Organization’s IQ?

2012-02-22T07:19:00.000-08:00

What if you were able to measure your organization’s rate of innovation – its ability to build on its knowledge base to grow, increase revenue, and improve productivity? A professor at the Olin School of Business, Washington University in St. Louis is doing just that: armed with a sizeable National Science Foundation grant (which is pretty rare for a business prof), Dr. Anne Marie Knott is researching how to measure a firm’s IQ to figure out what makes smart organizations tick. The implications are obviously significant…

Dr. Knott’s work is completely against the academic grain in that it challenges a 20-year-old concept called “absorptive capacity” – the idea that for an organization to assimilate new knowledge, it must have prior knowledge on which to expand. In other words, absorptive capacity assumes that organizations can only get smarter if they are smart in the first place. Obviously, this can’t be true. For example, organizations with little or no knowledge in a particular technology, product, process, or market can acquire another organization that does possess that knowledge.

So rejecting the concept of absorptive capacity, Dr. Knott believed that organizations could benefit greatly from knowing empirically if their investments in research and development were paying off. I’m labeling R&D broadly, as: making investments in anything from products, services, processes, markets, technology – in fact, one could call it making investments in innovation. Knowing this information would not only help organizational leaders determine how much to invest in R&D, but it would also suggest how much an organization should spend on acquiring knowledge from other organizations in the event that they needed to close a gap somewhere.

What emerged from this work is the notion of “organizational IQ” – a measurement that quantifies a firm’s effectiveness in generating revenue from R&D expenditures. Though she’s currently focusing on businesses, I believe Dr. Knott’s work could also apply to nonprofits, educational institutions, healthcare organizations, governmental agencies – to help them measure the return on investment for their outcomes or impact.

Before you close this article and move onto something else because you don’t think it applies to you, consider this: if you were able to accurately quantify your organization’s (or department’s or team’s) effectiveness at innovating – at improving products, services, processes, or virtually anything else in your enterprise – wouldn’t that help you set action plans and budgets that enable you to invest at the “right” levels to generate a desired return? And if you were able to actually measure your organization’s (or department’s or team’s) IQ, wouldn’t that help you monitor improvements over time – of whether or not your organization was getting smarter?

It would have helped Hewlett Packard. Knott used her IQ tool to explain the harmful impact that former CEO Mark Hurd’s decisions had on HP’s intelligence. According to Knott’s calculations (and as reported in the June 2011 Washington Magazine), for most of the 25 years leading up to Hurd’s tenure, HP had an IQ of about 159 – yes, that’s in the “genius” range for humans. Why? HP was brilliant at innovation, mainly thanks to highly effective research and development practices. One could also argue that they had a keen ability to allocate appropriate budget levels to sustain this R&D – that they had figured out the “right” levels of investment to keep their knowledge at a level required for continued innovation, growth, and sustained competitive advantage.

However, by the time that Hurd took over, the effectiveness of HP’s R&D had declined. Rather than focus on innovating, succeeding CEO Carly Fiorina had sold off the “smartest” parts of Hewlett Packard – those divisions that were successful at innovating – and bought companies that simply weren’t as smart. As a result, Knott calculates that HP’s organizational IQ dropped to 83 – that’s below average according to educational and psychiatric labels.

According to Knott: “The irony is that given Hewlett Packard’s current IQ, it is grossly over-investing in R&D – that is like buying books for someone who cannot read” she says.

Knott’s goal for organizational IQ is to ultimately provide a tool to help firms determine if they have the right stuff to turn research and development investments into profits (or, in the case of nonprofits, into growth of mission, impact, and so forth). Knott predicts that IQ information will provide useful data for organizations because “…once you know your IQ,” according to Knott, “you can actually start to improve it.” In essence, your organization can indeed get smarter.

And that leads to a positive cyclical pattern: smarter, more efficient firms will in turn generate more innovation. According to Knott: “Economic growth comes from innovation, and R&D is the biggest source of innovation. So if we can get each firm to increase their IQ a little bit, that will lead to a permanent increase in economic growth.”

Some things are incredibly difficult to measure – like organizational knowledge, effectiveness in innovation, and return on investment of the “soft stuff” like marketing and employee development. But as Dr. Knott is proving, even hard-to-measure soft stuff can be measured. And if it can be measured, it can be tracked, managed, and improved.

Interestingly, both Performance Improvement Network sessions in March focus on organizational measurement: March 1 (Minneapolis) will feature the National Marrow Donor Program’s use of Balanced Scorecard and March 14 (St. Paul) will feature Perry Parendo’s insights on decision making with data. Information on both sessions is w or at http://www.councilforquality.org/performance_current.cfm. And these discussions are – as always – free for members of the Council (and open to non-members for a small fee).

Yours in Improvement,

Brian S. Lassiter

President, Minnesota Council for Quality

www.councilforquality.org

14 New Year’s Resolutions for Personal Productivity, Health, Happiness

2012-01-24T20:17:00.000-08:00

Research shows that up to 80% of New Year’s resolutions are broken, and that the average date of breaking resolutions is about January 20 (so if you made it this far, you are better than most!). But if you want a second chance, here are 14 research-based New Year’s resolutions for you to try – tips for improving your personal productivity and time management, your health, your happiness, and your overall levels of success in 2012. They come from several sources – an annual University of Buffalo study of research-based resolutions, Inc. Magazine, CNN, and NPR. I’ll bet if you try just two or three of them (and stick with it for more than three weeks!), you’ll see instant improvements in your personal and professional performance this year…

The Council’s mission is to advance excellence within organizations, communities, and individuals. However, much of our visible work is in facilitating organizational excellence, so I thought it fitting to kick off the New Year with some tips for improving personal performance.

First, here are nine suggestions for improving your professional performance in 2012:

1) Work backwards from goals to milestones to tasks.¹ According to project management blackbelt Tony Wong, just “writing ‘launch company website’ at the top of your to-do list is a sure way to make sure you never get it done.” He suggests you break down the work into smaller and smaller chunks until you have specific tasks that can be accomplished in a few hours or less. Not only will it sequence and pace your work in a more effective way, but it will also be motivating to you, as you complete the smaller tasks that eventually lead to large accomplishments.

2) Stop multi-tasking.¹ Everyone’s busy these days, juggling multiple projects and competing priorities. Furthermore, in today’s instant-access society, we’re also constantly inundated with emails, phone calls, texts, social media alerts, and all sorts of other demands on our time. So there is a constant tendency to want to work on a few things at once. But get this: according to a British study reported by CNN², switching tasks more than 10 times in a day makes you dumber than being stoned on marijuana! Seriously: smoking pot drops your IQ by about five points, but multitasking decreases IQ by an average of 10 points (five for women and 15 for men!). Focusing on one thing at a time will improve your completion rate as well as your effectiveness at doing all things well.

3) Be militant about eliminating distractions.¹ We hosted a workshop three years ago, facilitated by Professor Art Hill of the University of Minnesota’s Carlson School of Management, in which he shared effective strategies for improving personal productivity. In it, I remember Dr. Hill commenting that we get interrupted on average about 200 times a day – yes, about every two-and-a-half minutes. And the average time to recover from one distraction? Ten minutes. That’s the amount of time it takes to refocus your mental energy back on the task at hand. So, yes, do the math: we spend a big part our days dealing with distractions, causing considerable loss of personal productivity. So lock your door; put a sign up for people to leave you alone; turn off your phone, texts, and email; in fact, you may want to disconnect from the Internet/satellite altogether so as not to be tempted to check messages when you are concentrating on something else. Go to a quiet area and focus on completing one task.

4) Schedule your email.¹ Also suggested by Dr. Hill, batch your emails two or three times a day. Checking your email constantly throughout the day creates a ton of noise and kills your productivity: you are continually in reaction, fire-fighting, response mode rather than focusing on higher priority (or at least higher value) tasks.

5) Work on your own agenda.¹ Most people begin their day with email. Don’t. As mentioned in #4, emails can really waylay your time in that they can cause you to have to react to others’ requests rather than accomplish what you need to. So after you wake up, have something to eat (to get the glucose back up) and drink (preferably water to rehydrate) and then set prioritized goals for the rest of your day. I usually script my to-do list: 4-6 key tasks that I want (or have) to accomplish. You can then start tackling these tasks systematically (and email can be left until later).

6) Use the phone.¹ Email is a great communication tool, but it isn’t for ALL communication. Certainly, it’s not intended for conversations, so don’t reply more than twice to an email. Pick up the phone instead; you’ll get resolution quicker.

7) Use LinkedIn effectively.³ According to a December article in Inc. Magazine, there are five key mistakes people make in using LinkedIn: posting an unprofessional photo, soliciting fawning recommendations (go for recommendations with substance over those with superlatives), linking to an overly personal webpage (it’s best to keep personal and professional separate), providing a trail to youthful indiscretion (make sure your LinkedIn profile only contains relevant information and that people can’t follow threads to questionable content elsewhere on the Internet – like that picture of your college kegger), and misspelling anything (mistakes will lead people to believe you are stupid or careless; or both). LinkedIn is a great networking tool, but try to avoid these five common mistakes to increase your effectiveness and credibility.

8) Be a humble leader⁵. According to research conducted by Dr. Bradley Owens, assistant professor of organization and human resources in the University of Buffalo’s School of Management, humble leaders are more effective and better liked in the workplace. In his interviews of leaders at military, manufacturing, healthcare, financial services, retailing, and religious organizations, Owens found that “admitting mistakes, spotlighting follower strengths, and modeling teachability are the core of humble leadership. These three behaviors are powerful predictors of the leader’s personal growth, as well as the organization’s growth.” Sounds like the classic definition of servant leadership, a concept that has been around for about 20 years, and has widely been validated as best practice in leadership effectiveness.

9) Work in 60 to 90 minute intervals and move around every hour.^1,4 Your brain uses up more glucose than any other bodily activity: typically you will have spent most of it after 60-90 minutes (which is why people feel so tired after long meetings or long days). Also, new research last year shows that those in sedentary jobs are 64% more likely to develop heart disease than those who are more active. So take break: stand up to take your phone calls; go for a walk; do a couple of minutes of stretching or light calisthenics. Do anything to get the blood flowing and to recharge your mind. The general rule is a few minutes of activity every hour.

And now for a few quick personal resolutions, all from the University of Buffalo’s annual research-based list of best ways to increase your health, happiness, and success in 2012⁵:

1) Floss every day to protect against pneumonia and heart disease.

2) To lose weight, eat the same foods over and over (although variety is necessary for balanced nutrition).

3) Read more fantasy to combat loneliness – this satisfies a need for human connection.

4) Maintain separate e-mail accounts (one for work and one for personal) to avoid being scammed.

5) For better health, reflect on the things that give your life meaning. Feelings of spirituality appear to offer protection against emotional distress and physical ailments.

Sure, most of us will fall into old habits pretty quickly, but if you’re looking to improve your personal productivity, your health, and/or your overall well-being in 2012, try some of these resolutions. And let us know how it’s going – visit our blog to post a comment! I’ll check back with you next month to see if you made it past the first 20 days!

Yours in Improvement,

Brian S. Lassiter

President, Minnesota Council for Quality

www.councilforquality.org

¹ 7 Things Highly Productive People Do, Inc. Magazine, 12/13/11

² Emails Hurt IQ More than Pot, CNN 4/22/05

³ LinkedIn Mistakes: Top 5 Ways to Kill Your Credibility, Inc. Magazine, 12/13/11

⁴ Sitting All Day: Worse For You Than You Might Think, NPR, 4/25/11

⁵ Ten (Research-Tested) New Year’s Resolutions, Quality Digest 12/22/11

The Butterfly Effect: Managing Your Organization as a System

2011-12-21T20:28:00.000-08:00

Because most things in life are part of larger systems, some seemingly trivial events can have significant impact. For example, in 1961, mathematician and meteorologist Edward Lorenz took a shortcut in entering data in a weather prediction model. He innocently entered .506 instead of the full numeric value of.506127, and the result was a completely different weather prediction. In a 1963 paper, Lorenz commented that if the theory were correct, “one flap of a seagull’s wings could change the course of weather forever.” He later changed that metaphor to a butterfly, and now the phenomenon is widely labeled the “butterfly effect” – where seemingly little events can lead to more significant changes to the larger system.

Though I’m a little cautious to source Wikipedia, here is the definition of the Butterfly Effect: “The butterfly effect refers to the idea that a butterfly’s wings might create tiny changes in the atmosphere that may ultimately alter the path of a tornado, or might delay, accelerate, or even prevent the occurrence of a tornado in another location. The flapping wing represents a small change in the initial condition of the system, which causes a chain of events leading to large-scale alterations of events. Had the butterfly not flapped its wings, the trajectory of the system might have been vastly different. While the butterfly does not ‘cause’ the tornado in the sense of providing the energy for the tornado, it does ‘cause’ it in the sense that the flap of its wings is an essential part of the initial conditions resulting in a tornado, and without that flap, that particular tornado would not have existed.”

So the whole concept of the Butterfly Effect (which is similar to the Domino Effect) relies on the notion that everything is part of a larger system – in which small changes in part of a system can result in larger changes to other parts of that system.

Consider a ball rolling down a hill. If you start the rolling at the top of the hill rather than 20 feet from the top, or even five feet from the top, the change in velocity will determine how far it can roll. Similarly, if there are changes in wind speed, surface tension, or any number of other variables, the eventual landing spot of that ball will change.

Or consider the impact that small changes in our climate are having on various ecosystems. An increase of only 1 to 1.5 degrees Fahrenheit of warming is causing: changes in vegetation (notice the slightly longer growing season in Minnesota?!); wildlife to migrate to different habitats (notice how Canadian Geese don’t always migrate south now?); icecaps to melt, which is causing oceans to rise (which has a huge impact on worldwide shoreline, particularly in coastal cities); ocean waters to warm (which is killing coral reefs as well as certain plankton, which impact marine life’s shelter and food sources). Not to get into the politics – or even scientific root causes – of global warming, but the simple event of increasing worldwide temperatures by even 1 or 2 degrees is having dramatic effects on many ecosystems.

Or consider the impact of too much use (and not enough regulation) of mortgage-backed securities. People across the world began to enjoy a false sense of wealth as their real estate values artificially increased last decade. Many would take on increasing levels of debt (and so would our banks), but when several triggers impacted the system (oil price increases, monetary policy easing, and federal budget deficits, to name a few), the system began to unravel and real estate (and stock market) values began to plummet, which in turn caused a slowing in economic output, which led us into a worldwide recession. Many would argue that we have not addressed the underlying issues that caused the 2008-10 recession, and with additional factors beginning to emerge (instability in Europe, for example), we could be in for more tough economic times in the future. Yes, the worldwide economy is a highly interconnected system.

Most things in our lives are parts of larger systems, where various parts of the system interact and affect various other parts of the system. “Systems thinking,” then, is the process of understanding how things influence one another within a whole.

In nature, systems thinking examples include ecosystems, in which various elements such as air, water, movement, plants, and animals work together to survive or perish.
In the human body, various systems work together to sustain life. For example, the cardiovascular system (with the heart, veins, arteries, and blood) carries oxygen and nutrients throughout the body; the neurological system supports movement, response to stimulus, and decision making; the digestive system (mouth, esophagus, stomach, intestines, etc.) supports digestion; and so forth. If any one of these systems (or any part of any one of these systems) is not working properly, the body suffers disease, disability, or some form of sub-optimization that affects lifestyle or life in general.
In automobiles, various systems work to enable the car to operate – the fuel system, the transmission system, the braking system, the heating/cooling system, the GPS navigation system, and so forth. All parts of the car work in combination to make the vehicle operate, and if any one of them to fails, the car will not perform (or not perform well).
In organizations, systems consist of people, information, and processes that work together to make an organization healthy or unhealthy.

Organizational systems theory dates back several decades, traced to early work of experts such as Deming, Ackoff, Senge, and Wheatley, among others. Collectively, these experts believed that organizations were highly complex systems, and that managers should therefore manage organizations as systems rather than only focusing on its individual parts. In fact, these experts believed managers should view problems as parts of an overall system, rather than only reacting to specific events, failures, or process problems (the result of which could contribute to unintended consequences).

I’m sure you’ve seen examples of myopic thinking within organizations. Take, for instance, an organization that introduces a new product without fully considering the impact of existing products? Or a certain engineering team reacting to a design defect by changing a spec, but not considering what impact that might have on the overall product performance (quality, warranty claims, customer complaints in the call center)? Or manages who change a staffing schedule because of workforce shortages without considering customer traffic patterns or the impact on direct customer service?

A systems perspective is based on the belief that the component parts of a system can best be understood in the context of relationships with each other and with other systems, rather than in isolation. And a systems perspective focuses on cyclical, rather than linear, cause and effect relationships within and between organizations.

This is where I believe many organizations struggle: they don’t have the measurement systems or the general insights to understand how certain decisions create impacts within and outside the organization and/or how changes to parts of the system impact (positively or negatively) other parts of the system. Surgeons would never just start cutting on various body parts without considering the impact on the heart, brain, and other various organs and systems! So why do managers sometimes make changes to processes, technology, workforce policy, customer-facing processes, and so forth without first gathering requirements and then studying the impacts of various potential changes to the system?

I believe that successful management of overall organizational performance requires synthesis, alignment, and integration of the organization’s various parts. According to the Baldrige framework:

Synthesis” means looking at your organization as a whole and building on key organizational attributes, including core competencies, strategic objectives, action plans, and work systems.
“Alignment” means using the key linkages between areas of an organization – between its leadership system, planning process, customer focus processes, workforce processes, operations, and other processes – to ensure consistency of plans, processes, measures, and actions. The result of better alignment is more predictable and ever-improving outcomes.
“Integration” builds on alignment, so that the individual components of an organization’s performance management system operate in a fully interconnected manner and deliver anticipated results.

For an organization, then, having a systems perspective means several things:

that senior leaders focus on strategic directions and customer/stakeholder needs.
that strategies are linked with work systems and key processes.
that an organization’s resources are aligned to strategic objectives to improve overall performance.
that senior leaders monitor, respond to, and manage performance based on data – on results; in fact, that workers are all levels of an enterprise use measures, indicators, and organizational knowledge to make decisions and to improve the processes used throughout the system.
that organizations can learn: they operate as a closed loop systems, where data and information inform decision making so that processes can be adjusted, strategies can be “course-corrected,” and core competencies can be fully leveraged.

In essence, a systems perspective means managing your whole organization, as well as its individual components, to achieve success.

But that is hard to do, because 1) most of us were never trained in systems theory and really don’t have the tools to manage organizations as systems, and 2) systems are inherently complex and our brains, as powerful as they are, are wired to handle comprehension of only parts of systems rather than viewing things in three, four, and five dimensions (recall Senge’s “Fifth Dimension” book? – that was all about systems thinking).

So what are managers to do? It sounds a little self-serving, but enlightened leaders from higher performing organizations (or at least those who aspire to be higher performing) use organizational assessments based on validated best practices to diagnose their systems – to verify what is working well in their systems and identify and prioritize opportunities for improvement. Much like an annual physical for your organization, these assessments uncover blind spots, redirect resources, inform planning, and refocus efforts on the most important areas of your organizational system.

There are many such diagnostics out there, but the Council offers three assessments based on the proven “Criteria for Performance Excellence” of the Baldrige Performance Excellence Program:

the comprehensive Minnesota Quality Award (that offers a very thorough evaluation of the system with teams of trained Evaluators) – this offers the deepest, richest learning experience for the organization and its leaders, and motivates sustained improvement at all levels of the enterprise;
an Alternative Assessment (which leverages management experts, who help leaders identify their organization’s improvement opportunities) – this is a “short cut” assessment, but still helps leaders identify where they should focus their organizational energy; and
a self assessment (which finds strengths and improvement opportunities through the collective lens of an organization’s workforce) – this is the quickest and easiest assessment, which provides a roadmap for immediately improving organizational performance.

All three assessment processes are based on a validated set of best practices from leading organizations across the US; all three are diagnostic in nature and help inform leaders of where in their system they need to focus their attention and resources; all three promote organizational learning; and all three assist with resource optimization, process improvement, and improved and sustained results.

So the bottom line is this: your organization is a complex system, filled with hundreds – if not thousands – of independent work systems and processes, each designed to produce a set of outputs that presumably move the organization forward. In order to manage and improve – or at least better understand – the dynamics of your organization, leaders should have a framework to put those processes into context within the larger system, so that resources are optimized, negative consequences are minimized, and results are improved and sustained.

Part of the Council’s mission is to help leaders better understand their systems so that performance excellence can be achieved and sustained. So like the butterfly, whose single wing flap could cause (or divert) a tornado several hundred miles away, a leader’s decision to begin managing their organization as a system could (positively) change the trajectory of their enterprise’s performance. All stakeholders in your system – your customers, workers, owners, partners – would benefit from that seemingly “little” decision.

Yours in Improvement and Happy Holidays,

Brian S. Lassiter

President, Minnesota Council for Quality

www.councilforquality.org

A Message from the President: Good Leadership is Never an Accident

2011-11-16T20:35:00.001-08:00

I’m taking a slight risk here, and I’ll be careful with what I write. But I’m going to submit that – the moral issues aside – everything that was revealed about the Penn State tragedy last week was the result of a colossal failure of leadership…

…which I guess is why the President, the Athletic Director, and even the formerly beloved head football coach Joe Paterno – basically everyone in the hierarchical leadership system – were all fired by the Board of Trustees (which, thankfully, might have been the only act of positive leadership demonstrated by the institution on this terrible issue).

Here’s the deal. There are good leaders, and there are bad leaders. But organizational leadership is a process (or a collection of processes, to be more accurate), and for what happened at Penn State to occur, multiple leadership processes had to fail. Like:

Processes that ensure ethical (and in this case ethical AND moral) behavior. Leaders should create the environment where ethical behavior is not only encouraged, but demanded. And measured. And reinforced. And – for lack of conformance – punished. Truly ethical organizations have ethics at their core – embedded in their decision making, their performance reviews, and their recognition systems. Good ethical behavior is recognized and rewarded; poor ethical behavior is not tolerated.
Processes that ensure accountability – not only the staff member who allegedly committed the terrible acts, but for those who potentially witnessed it and did nothing (or very little). Or worse: those who knew about it and may have attempted to cover it up, putting the institution’s reputation higher than the well-being of innocent kids. Why it took upwards of nine years to fire those involved in these transgressions (and only when subjected to public pressure) demonstrates there was no environment of accountability at the institution.
Processes that ensure transparency in operations – the set of information, privacy, and business policies which improve organizational decision-making and which facilitate openness to employees, stakeholders, and the general public. This requires robust communication throughout the organization, openness of information, and the encouragement of stakeholders to raise concerns when they perceive them (such as through whistleblower policies). Clearly, secrecy is the opposite of transparency, and secrecy usually facilitates distrust, dishonesty, guarded behavior, and diminished collaboration.

Processes that create an environment that protects stakeholder interests, that ensures compliance with legal and regulatory requirements, and that identifies and manages risk. Ensuring high performance in these areas requires that leaders (and governing boards) establish appropriate measures or indicators that are tracked, reported, and used to manage behavior. High performing organizations are sensitive to issues of public concern, whether or not these issues are embodied in laws or regulations: indeed, role model organizations look for opportunities to exceed requirements and to excel in areas of legal and ethical behavior.

Now, I’m not here to pick on Penn State. And, for the record, all of these issues are so far alleged – nothing has yet been proven, and I’m certainly not wishing to contribute to a public witch hunt or feeding frenzy on something that’s not yet fact (though you have to admit that the two public interviews the last two nights, one from Sandusky and one from McQueary, probably did more to do that than my little column will!).

But my point here is this: bad leadership occurs when processes break down. And good leadership, really, is the opposite: it’s when processes are well-designed, fully deployed, and consistently working.

Last week, we hosted a two-day conference on effective leadership and best practices in employee engagement (slides at http://www.councilforquality.org/specialevent2.cfm). One of our keynotes, Mike Drazan, VP of Contractor Business and CIO for Toro, claimed in his opening remarks: “Good leadership is not an accident.” I’d submit it’s the result of the careful design and the diligent execution of leadership processes.

We featured 11 tremendous speakers from many high performing organizations, each sharing best practices that drive leadership effectiveness. Consider some of these valuable insights:

According to Mercy Hospital (part of Allina Hospitals and Clinics), good leadership means having purpose, worthwhile work, and making a difference. It means being transparent about performance – telling employee where they stand. It’s about aligning work and behaviors to the needs of the organization. It’s about developing employees. And it’s about having fun and celebrating. I guess that’s why they’ve seen their employee engagement go from 31% in 2005 to 77% today (high performer benchmark is 78%).
According to AMSOIL (manufacturer of synthetic motor oil based on Superior, WI), to create a culture that ensures organizational success, good leaders hire the right people. In fact, they submit that hiring the wrong employees is the number one risk to destroying a culture, impacting efficiency, causing waste, reducing morale and increasing frustration. So they take care to advertise only within targeted channels; they work diligently on conveying a strong first impression with recruits and new hires; they are consistent with their message; and they set expectations early and often. They are also diligent at delivering performance reviews – at 90 days and a full year. And they also dismiss employees that simply not performing. While they admit this is one of the toughest tasks of a leader, by NOT taking this step, they contend there might be permanent damage to the organization’s culture and performance (and, in fact, dismissing poor performers usually results in EVERYONE – the dismissed, the remaining employees, and the organization itself – being better off).
According to Benedictine Health System (which manages nearly 50 long-term care facilities in seven states), good leadership is embedded in the organization’s values. As such, the organization has developed leader attributes that align with its culture and values, and has systematically embedded those attributes in leadership training and development, personal leadership plans, and succession plans. They believe in mutual accountability, relationships, continuous learning, service, and the Benedictine tradition. And they measure leadership performance, leadership satisfaction, workforce engagement, and overall organizational results related to these measures.
According to Toro (manufacturer of outdoor machines and equipment), good leadership is rooted in strong ethics – by “constant and continuous sincere effort, frowning upon methods which are temporarily lucrative, cultivating business ethics, which are cherished by those with whom we deal.” Their vision is rooted in people and behavior (respect, teamwork, coaching, empowerment, recognition, and communication) and performance values (delivering what you commit to, growing profitably, being customer driven with urgency, embracing risk and opportunity, creating and leveraging innovation, and continuously improving). Their view of leadership is in making small course corrections (of people, processes, plans, etc.). In fact, they quoted Steve Jobs (who I focused on in last month’s newsletter): “What’s interesting is that if you change the course of a vector near its origin, by the time it gets a few miles out, its course is radically different.”
According to Gallop (which is known for their deep research on employee engagement, among other things), leaders can ensure higher levels of employee engagement by putting people in the right jobs, creating great managers throughout the enterprise (one of the greatest predictors of job satisfaction is to whom the employee reports), focusing on employees’ strengths (not just their weaknesses and developmental needs), helping employees to build stronger relationships and social networks, keeping employees engaged in everyday interactions, measuring employee progress/performance effectively, and leading employees towards a positive future with trust, hope, stability, and compassion – many of the traits most would label “servant leadership.”
According to Olmsted County (SE Minnesota, which includes the Rochester area), good leadership requires having faith in yourself. They reminded us of a quote by Mary McLeod Bethune: “Without faith nothing is possible. With it, nothing is impossible.” Good leadership is also allowing others to make mistakes: “I have always found that mercy bears richer fruits than strict justice” (Abraham Lincoln). Leadership is also about having fun, always learning and growing, having effective communication, and having strong alignment.

There are over 30 best practices in those six bullets above – processes and behaviors that ensure effective leadership in all types of organizations (and the list goes on…for slides from last week’s conference, including additional best practices from Plunkett’s Pest Control, US Bank, Goodwill/Easter Seals of Minnesota, Cardinal of Minnesota, and the City of Edina, visit http://www.councilforquality.org/specialevent2.cfm).

Sadly, there are many examples of poor leadership in today’s organizations. But there are also many examples of excellent leadership from organizations that are, not coincidentally, getting excellent results.

Good leadership is never an accident – it’s the result of the careful design and the diligent execution of effective leadership processes.

Yours in Improvement,

Brian S. Lassiter

President, Minnesota Council for Quality

www.councilforquality.org

A Message from the President: The Legacy of Two Great Leaders: Steve Jobs and Bob Galvin

2011-10-19T10:32:00.000-07:00

This month, the business world lost two giants: Bob Galvin (former CEO of Motorola) and Steve Jobs (co-founder and recently retired CEO of Apple). Both were highly successful businessmen; both founded and/or led high performing organizations; both literally created one (or more) industries; and both left legacies that will sustain for quite awhile. One (Jobs) was highly visible if not somewhat immortalized; the other (Galvin) was a quieter giant – his obituary didn’t even hit the front business page in many US newspapers – but without his contributions, there may not be iPhones today. One single-handedly created the cell phone industry (that was Galvin); one single-handedly revolutionized that industry by creating smarter-phones, “pod” and “pad” technology, the digital music industry, and a new way of watching animated movies (Pixar). Both of them left us with dozens of best practices and many insights for advancing organizational excellence. I’ll give you eight…

Sell the benefits of your product or service, not just its features and attributes. Think about the ads that Apple has run the last few years. Yes, they show the products themselves, but more importantly, they also capture emotions and show the benefits that come from the using the products. The commercials show people playing games and having fun, dancing in the streets while listening to music, kids reading and learning from educational applications. They show customers doing simple daily tasks (like checking in for a flight or booking a reservation at a restaurant for that evening) – only completing the tasks with more ease by using Apple products. They create a FEELING not just from the products themselves, but by what the products can enable people to do.

Know what customers want before they do. Both Motorola in the 80s and Apple more recently have developed a keen sense of what the market needs, even before customers could articulate those needs. I guess you could say that both companies have had premonitions of the “voice of the customer!” People didn’t know that they needed cell phones before Galvin’s company created them; customers didn’t know that they needed a place to store music digitally instead of on the hundreds of CDs we all owned, but Jobs did; customers didn’t know they needed smart devices that can do 500,000 things (that’s how many applications are currently in the Apple AppStore), but Jobs envisioned a way to integrate the phone with personal computing, with music and video, with GPS and the Internet, and with personal applications that can do specialized and helpful things. Galvin and Jobs had visions of these solutions before customers did, finding ways to solve problems that customers didn’t even know they had. Stated by Jobs in a 1998 Business Week interview: “It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.”

Make things simple. This was a quote from Jobs in that same Business Week article: “Simple can be harder than complex: you have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.” Think about how everything at Apple is simple – from product design itself (the simple curves and first-of-its-kind keyless technology of the iPhone and iPad), the simple website (Apple’s site is white, clean, and uncluttered), the simple advertising (“If you don’t have an iPhone, well, you don’t have an iPhone.”). In today’s complex, fast-paced world, less is oftentimes more.

Take risks and never be satisfied with status quo. Galvin once said: “One of our main thrusts was that our company was always going to be preparing for the next adventure – the next thing. I [Galvin] was always asking the question, ‘What’s the next thing we could be adding, multiplying; what would be good for our future lineup of products?’” Galvin knew that not all products would be successful, but he demanded at Motorola that employees always try to find the next big thing. He insisted on a strong R&D function, and he launched Motorola Labs, a leading contributor to cellular, digital and semiconductor technologies.

Be creative and innovate. Both Galvin and Jobs were highly innovative: they solved problems by applying proven technologies in new applications. Steve Wozniak, who co-founded Apple with Jobs in a garage in 1976, said Jobs “had the ability to think out new ways of doing things…to do it in a totally different way that the world would swing toward.” Part of Jobs’ genius was in finding new ways to use existing technologies. According to Jobs in a 1996 interview in Wired: “Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn’t really do it, they just saw something…” He goes onto say that “Picasso had a saying: ‘Good artists copy; great artists steal.’ We have always been shameless about stealing great ideas…” Galvin had a similar philosophy about innovation and change. He said “the absolutely distinguishing quality of a leader is that a leader takes us elsewhere.” That’s visionary leadership.

Strive for perfection. When you think of Six Sigma, you may think of Jack Welch, former CEO of GE. But it was Bob Galvin who first launched Six Sigma nearly a decade earlier in Motorola: January 1987. Building off the work of two Motorola employees (Mikel Harry and Bob Smith), Galvin promoted the quality movement at Motorola, where his goal was “six nines” manufacturing quality – 99.9999% accuracy. Motorola went on to receive the prestigious Malcolm Baldrige National Quality Award in 1988, partially because of their superior product quality. Steve Jobs, too, demanded perfection. iPhones just don’t crash (well, not frequently). And it’s Apple’s reputation for nearly flawless manufacturing, along with its sophisticated engineering, that allows it to make premium pricing look like a value purchase. While much of Apple’s and Motorola’s success can be attributed to innovation, a great deal of credit has to also go to its high quality production.

Build an environment for employees to succeed and for the organization to achieve high performance. “The most important thing that Bob [Galvin] did was create an environment that gave people the freedom and stimulus to do great things,” says Martin Cooper in Quality Digest, former Motorola vice president and division manager, who during the 1970s led the team that developed the handheld mobile phone. “He also set the tone from the top—no compromise on ethics—and emphasized objectivity in decision making by taking the personal issues out of the discussion and deciding based on doing what was right. His skills were not technological, but no one could pick and motivate people better than he could. He also made sure everyone in the company has the same tools and incentives to excel.” Galvin was so tuned into the needs of his employees that he created Motorola University, an in-house training and development center that still stands today, some 25 years later.

Be passionate about what you do. Both Galvin and Jobs were driven. They both had a vision for not only what was possible, but for what would change the world. Even after Job’s illness in 2004, he kept driving the company forward because he believed what he was doing was important work. According to Jobs in the Wall Street Journal: “Being the richest man in the cemetery doesn’t matter to me. …Going to bed at night saying we’ve done something wonderful…that’s what matters to me.”

Those eight tips could help us all improve our careers, our leadership effectiveness, and our organizations’ performance. But I’ll add a ninth that may have less to do with business than it does with life itself. Jobs, in a very powerful commencement address at Stanford University in 2005 (a year after he was diagnosed with cancer) said:

“No one wants to die. Even people who want to go to heaven don’t want to die to get there. And yet death is the destination we all share. No one has ever escaped it. And that is as it should be because death is very likely the single best invention of life. It is life’s change agent. It clears out the old to make way for the new. …Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma – which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice.”

In other words, be your own person. Live life to its fullest and be true to yourself. If you live life with passion, with purpose, with creativity…if you take risks and continue to learn…if you maintain ethics and respect people, you’ll not only be successful in your life and in your career, but you may just leave a legacy. Thanks for your contributions, Bob Galvin and Steve Jobs.

Yours in Improvement,

Brian S. Lassiter

President, Minnesota Council for Quality

www.councilforquality.org

The Importance of Leadership and Engaged Employees in Driving Excellence

2011-09-29T07:15:00.000-07:00

I often start my public talks by giving the audience a question: what is required for organizations to achieve performance excellence. I get appropriate and accurate responses: highly engaged and trained workers, a focus on customer needs, effective leadership, a vision and a plan for the future, data and measures, high quality products and services, good processes, and so forth. Then I ask: “what is THE most important driver of performance excellence?” And after the obligatory pause, the same answers usually come pouring out: good workers, good processes, focus on the customer, good leadership, good data. All of these responses are appropriate, and to a certain extent, it depends on the environment and circumstances facing the specific organization: what is most important for one organization may differ for another because of differences in market, core competencies, and other key factors. But believe it or not, there is one right answer – one that’s universal across all organizations. The single biggest predictor of organizational excellence is…

Leadership. And it’s pretty conclusive: there is considerable research out there that draws correlations between effective leadership and superior organizational results/outcomes. In fact, a few years ago, the Baldrige Performance Excellence Program studied organizations applying for the national quality award, and found that the area most strongly correlated with high performance results was leadership, followed by a focus on the customer and then having satisfied and engaged employees.

It makes intuitive sense: your workers are those who are delivering products, services, and/or programs that customers value. So their ability to deliver effectively and consistently will either make or break your organization’s ability to satisfy customer/stakeholder needs. The link between employee satisfaction and engagement and customer satisfaction and engagement has been thoroughly researched (see “Employees are MORE Than an Asset” in the May 2009 Council newsletter: http://www.councilforquality.org/about_newsletter.cfm).

But you can’t have engaged, competent workers that lead to satisfied, loyal customers without effective leadership.

This month, I want to focus on the connection between strong leadership and employee engagement (in the interest of full disclosure, this is a little self-serving as the Council is sponsoring a one-day conference on “Best Practices in Leadership & Employee Engagement” November 10 – see Article 3 below).

So let me begin by sharing some data – some pretty compelling evidence of the link between leadership and engaged employees and then to organizational results. Unfortunately these days, that link is mainly negative.

Here’s the situation…

Employees aren’t happy:According to Gallup, only 33% of American workers are currently engaged with their jobs, while 49% are not engaged and 18% are actively disengaged.
In a Conference Board report issued last year, 55% of American workers are not satisfied with their current work, which is the highest dissatisfaction rate in 22 years.
In the summer of 2010, Hewitt reported that nearly half of the 900 organizations they tracked experienced declines in employee engagement versus about 30% that experienced improvement. This was the largest quarterly decline in 15 years.
Other studies have indicated that 60-80% of American workers would consider a job change if the opportunity presented itself (Manpower, CareerBuilder).
And according to Towers Perrin’s 2010 Global Workforce Study, 46% of new hires DO leave their jobs within the first year.

Much of this is due to poor leadership:

Only 38% of American workers think their leaders have a sincere interest in their well-being (Human Resources Employee Engagement Statistics, Businessandthegeeks).
Only 47% think their leaders are trustworthy (ibid).
Only 42% think their leaders inspire and engage them (ibid).About 61% question whether their leaders deal effectively with poor performers (ibid).
Only 42% think senior leaders encourage development of talent (ibid).

And this is costing American organizations dearly:

Disengaged workers cost US businesses as much as $350 billion a year (Gallup).
Job stress costs $200-300 billion to US employers annually in lost productivity, tardiness, and absenteeism (University of Michigan).

But if the trend were reversed, performance of organizations would improve:

Companies in the top 10% of employee engagement beat their competition by 72% in earnings per share; companies in the bottom three quartiles had earnings 9.4% below their competition.
(SHRM)Gallup reports that businesses scoring in the top half on employee engagement DOUBLE their chances of delivering superior results compared to those in the bottom half. Further, those in the 99th percentile are nearly FIVE TIMES more likely to deliver high performance than those in the bottom percentile.

According to Towers Watson, “…the recent recession has driven a final wedge into the social contract, or ‘deal,’ that has traditionally underpinned the employment relationship. Today, there is a gap between what employers (leaders) want and expect from this shifting relationship, and what employers can afford to deliver in a highly competitive business climate. So organizations have a unique opportunity to define a new and more sustainable employment deal with their employees, which include fostering towards ‘self-reliance.’” (Towers Watson, 2010 Global Workforce Study)

Interestingly, there was a study reported just this week (National Governance, Culture, and Leadership Assessment study by the Boston Research Group, 2011) that looked at the differences between organizations that are “self-governing” (in which employees are guided by a set of core principles and values that align around a company’s mission) versus “command and control” (more top-down management, leadership by coercion, or blind obedience).

The conclusions are pretty compelling:

There was a difference in ethical behavior: Nearly 50% of the command and control companies showed evidence of unethical behavior in the previous year, compared to 25% in self-governing organizations, yet
Only 25% of those in command and control companies said they were likely to blow the whistle, versus over 90% of employees in self-governing firms.This lack of trust also seemed to impact innovation:
90% of employees in self-governing firms versus 20% in command and control employees agreed that good ideas are readily adopted by their organization.Some of the other data from this study show just how different leaders’ perceptions are versus employees:
some 27% of management believes their employees are inspired by their firm, but only 4% of employees agree. What a disconnect!Some 41% of managers say their organizations reward performance based on values rather than merely financial results.
Only 14% of employees believe the same.And amazingly, managers are EIGHT TIMES more likely than the average worker to believe that their organization is self-governing (in the study, only 3% of organizations were actually categorized as self-governing, while 43% were command-and-control and 54% were somewhere in between – a culture that was top-down, had skilled leadership, lots of rules and a mix of carrots and sticks). Apparently leaders in most organizations have a much higher impression of themselves and their organizational culture than do their workers.

I wrote a column on the importance of employee engagement (and how leaders and increase it) in March of this year and also February 2010 (both can be found at http://www.councilforquality.org/about_newsletter.cfm). In both articles, I outlined several ways organizations could improve employee engagement:

Measure and manage the factors that drive employee satisfaction and engagement. It’s amazing how many organizations simply don’t have a handle on how engaged (or even how satisfied) their employees are. Not knowing this important information leaves you at risk and also leaves you in the dark about what to improve to increase workers’ happiness.
Identify “critical talent” and work to retain these workers. All employees are important, but some are more important. Organizations need to inventory their workforce’s talent levels and focus on keeping those that are crucial to the business.
Train and develop your workforce – on those things that are important to the success of your people and your company (and not anything else). Having highly competent, highly skilled workers is the only way to deliver consistently high value to customers and other stakeholders. People run your processes, your systems, your equipment, your operations. If they don’t have leading edge knowledge (or worse, they really know what they’re doing), your organization will sub-optimize its resources, will experience waste, and will experience a negative impact on customer and financial results.
Build systematic ways to transfer knowledge and skills among employees. About 10,000 Baby Boomers retire EVERY DAY, a trend that will continue for the next 20 years. Before those assets walk out the door, find ways to systematically transfer and leverage the collective knowledge of your most experienced, most seasoned workers.
Adapt to different work styles. Not all employees are the same. Organizations need to engage with their workers in new and different ways, depending on the varying needs of their people. Council member Manpower calls it a “one size fits one” mentality. It requires a keen understanding of how your workforce can and should be segmented, and then the ability to respond to the varying needs and characteristics of those segments.
Eliminate organizational waste. Not only does this drain on the bottom line, it frustrates employees who really do want to do a good job. Try hard to streamline operations, eliminate unnecessary steps/approvals/barriers, and get ride of non- or low value-added activity.

All of those tips are still valid today, and to them, I’d offer a few more thoughts. A 2008 study by Conference Board, found eight core areas to be essential factors in employee engagement (and Gallup’s 12 survey questions address all eight of these areas). As reported by Craig Britton, president of SwitchTrack, they are:

The organization and its leaders build and expect integrity.
Leaders build personal relationships with employees, addressing concerns and promoting trustworthiness.
Leaders empower their workers and give them influence – they leverage worker expertise, they listen, and they take action on suggestions.
There is a clear line-of-sight between individual and company performance. Organizations that are better aligned have higher engagement.
They have pathways for career growth.

Building systems that promote these practices – and an environment that consistently supports them – are hard work. It requires a better understanding of employees’ needs; it requires transparency and open communication; it requires trust and integrity; it requires setting expectations and holding people accountable for them; it requires building a culture that focuses on improvement and performance excellence. In short, it requires effective leadership.

To hear from 10+ high performing organizations how they have established effective leadership and how they have promoted and sustain high levels of employee engagement, consider attending our November 10 conference (and November 11 post-conference). Details below and at http://www.councilforquality.com/specialevent2.cfm.

Yours in Improvement,

Brian S. LassiterPresident,

Minnesota Council for Quality

www.councilforquality.org

You Deserve a Break Today: Overworked Americans Nearing Burnout?

2011-08-24T19:02:00.000-07:00

Last weekend, I read that President Obama “enjoyed” his vacation at Martha’s Vineyard with daily briefings from his economic and counterterrorism advisors. The newspaper showed Obama with a golf club in one hand and a cell phone in the other, and commented that Obama had taken only 61 days of vacation in this first 30 months of his Presidency, compared to 180 days of vacation at the same point in President Bush’s tenure. Sure, the current President is managing some pretty major issues, but it got me thinking: are US workers overworked? So during these waning days of summer, I did a little research. The data will frighten you. And an overworked, overstressed workforce is no doubt impacting American productivity, morale, and health. Wait until you see these numbers…

First, here are the facts.

American workers do not get nearly the vacation time that the rest of the world does. According to the World Tourism Organization, Italian workers average 42 paid days off a year, followed by France with 37, Germany with 35, Brazil with 34, the UK with 28, Canada with 26, and South Korea and Japan both with 25. The US was nearly dead last, with an average worker only receiving 13 days off a year.
Interestingly, the US is only one of a handful of nations (along with Nepal, Suriname, and Guyana) whose workers are not legally guaranteed a minimum number of days off.
But the US vacation deficit is largely self-inflicted. Expedia estimates that only 38% of American workers take the time off to which they are entitled, leaving an average of three days on the table every year. So most American workers only “take” about 10 days of vacation a year. Hardly enough to recharge the batteries.
But it gets worse. While AT work, American workers may work too hard! According to the International Labor Organization, Americans work 137 more hours per year than Japanese workers, 260 more than British workers, and 499 more hours than French workers.

Furthermore, even when we do take days off, we sneak a peak at our smart phones, we lug along our laptops, and we check with the office once, twice, sometimes three times a day. Admittedly, I do it. Because I just can’t fathom the thought of coming back to 600-800 emails after a week off. So I try to “clean them out” nearly every day and keep somewhat connected so my “re-entry” isn’t quite as painful. Consequently, I never truly “shut down.”

However, according to writer Eric Weiner in the LA Times: “In the Digital Age, we need more, not less, vacation time, if for no other reason than to overcome what one Dutch researcher calls ‘leisure sickness,’ [which is] the inability to relax during the first few days of vacation.” Boy, that sounds familiar.

There are a few theories as to why Americans are taking less time off. For one, you could argue that we have a different work ethic than in other parts of the world – possibly because of religious beliefs (that Protestant work ethic) or possibly because of how the country was founded in the first place – our perpetual drive to innovate, compete, succeed, and create wealth. Possibly it’s technology driven. Possibly it’s just the hassle of taking vacations – gas prices are high, air travel is a pain, traffic has increased in many parts of the country. Or possibly it’s just plan fear: in a down economy, no one wants to look like they are slacking and everyone is watching how they spend their discretionary money. Eric Weiner’s position on this: “Companies don’t need to tighten vacation policies to save a few bucks. Workers are doing that for them.”

Regardless of why this is happening, the impact on American workers and American organizations is concerning. Vacations are important – they help us recharge our batteries, they connect us to family and/or friends, they have a positive impact on health, and they contribute to higher morale, productivity, and creativity. Consider this:

A Blue Cross study estimates that more than 2.8 million work hours are lost per year in the US because of stress and health problems.
A Council for Disability Awareness study puts the odds that a new worker will experience long-term disability before retirement at 33%.
People who take regular vacations are less likely to die of heart disease, according to the Framington Heart Study.

In short, more time spent at work (and commuting, by the way) allows for less time available for activities that researchers consistently find make us happier: communing with family and friends, exercising, enjoying a good meal, sightseeing, listening to music, sleeping, reading. As Weiner says, “A nose permanently yoked to the grindstone is a nose that is unable to smell the flowers or anything else.”

British Research shows that we NEED a vacation biologically about once every 62 days (source: Metro UK). Yes, that’s a vacation every two months. That’s about the time where humans need a mental and physical break from the routine of their work. Going beyond 62 days begins to impact productivity, error rates, stress levels, effectiveness, and morale. According to the study, workers who wait longer in between vacations, go from being “fresh and focused [to being] anxious, aggressive, and ill.”

Eric Weiner suggests that – if companies are really serious about keeping their employees fresh, engaged, satisfied, and effective on the job – they should require their workers to use their allotted vacation time or face some sort of financial penalty. According to Weiner, this isn’t all that absurd: organizations already require employees to show up at certain times, meet productivity and other goals, so why not require that they recharge their batteries? “That would not be an act of charity,” says Weiner, “but a smart business move. A rested worker is a more productive worker.”

I personally don’t know if I support a financial penalty for not using vacation days, but I do fully support the notion of organizations and individual managers requiring (or at least strongly encouraging) their employees to take time off. How employees spend that, of course, is up to them. But they are not allowed to call in, check voicemails, or check emails (ok, I probably will personally fail on that last one). It’s a forced mental separation from work – to do the things you like to do with whom you like doing them.

So as we approach the end of summer, I encourage you to take some time off. Hit the golf course; go for a swim with the kids; pack a picnic or hit the campground; go for walks or bike rides around the lake; go to the movies; read books; go to the Fair. Do whatever recharges your batteries. You’d better clear it with your boss first, but after sharing the data above, he/she should wholeheartedly support your need for some time off. You – and your organization – will be better for it.

Yours in Improvement,

Brian S. Lassiter

President, Minnesota Council for Quality

www.councilforquality.org

Leadership and the Lost Art of Compromise

2011-07-27T10:19:00.000-07:00

I have two kids, ages 8 and 6, and not a day goes by that I don’t have to break up some conflict between them…about sharing a toy, or splitting the last piece of cake, or taking turns going first at whatever. I guess fairness and civility are not innate traits, but rather need to be taught, practiced, and reinforced over time. Maybe humans are just generally self-centered; survival of the fittest. I’m hopeful that the skills my kids learn now will enable them to appreciate the concepts of sharing, fairness, and compromise – all absolutely essential skills for professional and personal life.

But many leaders have never learned (or have forgotten) the art of compromise – just look at the state and federal budget catastrophes, the two sporting league lockouts, and scores of labors disputes going on today in businesses…

Conflict is all around us: In Minnesota, we just experienced the longest state government shutdown in US history, 20 days, after elected officials could not agree on how to close a projected $5 billion budget gap. More than 20,000 state workers we’re furloughed (as well as many more thousand in the private sector due to suspended contracts and reduced government demand), not to mention the thousands of Minnesotans that had services they needed temporarily (or, in some cases, permanently) suspended.

On a national level, the President and Congress cannot agree on a solution to raise the debt ceiling and address the growing budget deficit. There is a bit of political brinksmanship going on, but if our elected leaders don’t come to resolution by August 2, the US will begin defaulting on our debt, the consequences of which aren’t even fully understood by respected economists. For sure, a failed agreement would impact interest rates, the stock market, and possibly the very fragile economic recovery that everyone wants to accelerate, or at least sustain.
On a more trivial level, two of the four major sports leagues – the National Football League and the National Basketball Association – are in the throws (yes, pun intended) of labor disputes. The NFL just this week ended their nearly-five month lockout of players, agreeing to a 10-year collective bargaining agreement and ensuring that games will go on this fall. Unfortunately (for some), the NBA’s labor dispute is more fundamental in nature; many predict the entire 2011-12 season may be lost because the two sides are so far apart with an agreement. While not as catastrophic as the Minnesota or US budget issues, there will be jobs lost and negative impact to the economy due to both labor disputes.
Many businesses are also finding themselves in labor disputes. Just this week, a medium sized manufacturer in western Minnesota announced a potential lockout of its 1300 employees. Apparently, the two sides can’t come to agreements on pay and other issues, so the company is willing to shut out its current workforce and hire replacements as early as next week. It also looks like the UAW is entering rocky times in negotiating new contracts with Detroit. After a quick web search, I found no fewer than nine other strikes or lockouts in the US this year – conflicts between management and labor that certainly threaten jobs, customer satisfaction, and overall organizational results of all types of businesses.

So what the hell is going on? Can’t people agree on anything anymore? Yes, I know the issues are complex, and yes I know that the stakes are high – that both sides in all of these disputes stand to lose something. But don’t they all stand to lose MORE by not finding the middle ground? – by not compromising and agreeing to solutions that offer some give and take? Where is the art of compromise in our governments, our businesses, and even our sports leagues?

Compromise is the foundation of democracy and at the core of capitalism. It means, according to Dictonary.com:

“ [the] settlement of differences by mutual concessions; an agreement reached by adjustment of conflicting or opposing claims, principles, etc., by reciprocal modification of demands.”In my opinion, compromise requires a full understanding of your (or your constituent’s) needs. It also requires patience, empathy and respect (for the other side in the negotiation), trust, a long-term view of the future, effective two-way communication, fairness, and some give-and-take. In short, it requires strong leadership.

Our democratic society – our social, political, and economic systems -- is not zero-sum game (meaning the winner takes all). Yes, resources are scarce and therefore decisions need to be made on how to divide them. But solutions that find the middle ground – that satisfy the basic needs of all parties rather than tilting the scale one way or the other – are not only more fair and respectful, but they are also generally more stable in the long-term.

I searched the modern media and OpEd columns the last few weeks and found quite a few theories of why we’ve lost the art of compromise. Most were written about the pubic sector, but I think the philosophies translate to the private sector as well. Let me offer a few of them:

Our culture has become toxic: it now values winning at all costs. This theory is that politicians simply reflect the broader society – those who elect them – and that society has become hyper-competitive and über-partisan, obsessed with winning at all costs.

Ivor Matz, a political activist from St. Anthony writes: “It may be wistfulness on my part, but I seem to remember a time when people had more respect for one another, a greater empathy for the enduring struggles of life: holding a marriage together, raising a family, paying a mortgage, meeting a payroll. I remember a time when more people than not placed integrity before success and honor before money. The larger culture upheld that ethos, and our political culture and our government reflected it.

“Now I hear a different, poisonous ethos, ascendant in statements like ‘winning isn't everything -- it's the only thing’ and ‘rules are made to be broken’ and ‘whatever it takes.’ It's as if a kind of sickness has taken hold of us. Americans once were a nation of barn-raisers. Have we become a nation of barn-burners?”

I hope not. But the division in politics (and business, and sports) may just reflect the polarization in our society and a loss of shared values in our communities.

Compromise is a long-term proposition. Another view is that – when it comes to compromise – we have all fallen out of habit. In an April 4 StarTribune Op/Ed column, Lori Sturdevant writes that “…it may be that polarization simply begets more polarization…Minnesota Republicans and DFLers [and the same could be said at the federal level] are so polarized today because they compromised too infrequently in the past decade. Too many legislative sessions produced a win-lose result -- governor wins, Legislature loses. One party's zealots cheered, the other's sulked, as both went to their usual corners and looked to the usual suspects for campaign support [which perpetuates the cycle].

“[However,] Win-win endings produce a different dynamic between and especially within political parties. Compromise takes the leaders of both parties to a new place and obliges them to defend the new ground they occupy…Instead of ‘look at what the bums did to us,’ their message is that the accommodations made to the other side ‘really aren't so bad.’ The smart ones talk about all the new possibilities that emerge from compromise.”

This theory contends that 1) we are out of practice in the art of compromise, and 2) that compromise requires a long-term vision of the future. You can’t screw the opposing side to the wall in hopes that the next round of negotiations goes well for your side; it just doesn’t work that way. And somewhere along the way, we’ve lost that wisdom.

We lack true leadership. Compromise demands strong leadership. And strong leadership requires a vision for the future as well as a shared vision for the greater good – an “all-for-one” mentality that puts individual differences aside and believes that shared problems can be solved with shared action.

Sturdevant, in a June 25 column, reflects on a quote from former Augsburg College President William Frame: “…too often what passes for leadership is really just ‘lobbying for the status quo.’” Frame’s research shows that leadership failure is likely when a leader and the group being led (a state, a country, a sports league, a business) haven't arrived at a common understanding of "who we are and who we are trying to be…Without that, leadership becomes a partisan battle. You try to get what you want while others around you try to get what they want. The result is increasing polarization. The only way out of this polarization is to find the thing that both sides' constituents are part of, and build on that.”

And that, as Sturdevant suggests, is the State (or country or sports league or business) itself. Leaders have to put the institution (Minnesota, the United States, the NFL or NBA, or XYZ business) ahead of themselves and ahead of their constituencies. “They have to be willing to buckle down together to answer the question, 'How might we ALL be better?' [my emphasis]”.

That demands loyalty to the greater good. And that demands strong leadership to guide the way.

In the last week, we have seen the Minnesota state shut-down thankfully end, as well as the NFL labor lockout. But as you read this column, federal leaders are still struggling with a budget/debt solution that – without resolution – may put us on the brink of economic disaster. At the same time, many businesses across the state and nation are dealing with their own polarized conflicts. For all of our sake, let’s hope that cooler heads prevail. Let’s hope for more respect, more compromise, and better leadership.

And let’s all, as leaders of our own domains, practice the art of compromise. My six and eight year olds are practicing it, and I’m sure our businesses, government, and even sports leagues would be better for it if we all did.

Yours in Improvement,

Brian S. LassiterPresident,

Minnesota Council for Quality

www.councilforquality.org

A Message from the President: Performance Excellence in Three Simple Questions

2011-06-27T14:16:00.000-07:00

It has been said that the Baldrige framework is highly complex, which is the reason some leaders give for not using it to optimize their organization’s resources and improve outcomes. But at last month’s Minnesota Quality Award event (slides and video from 14 high performing organizations here), I offered a quote from Harry Hertz, director of the Baldrige Performance Excellence Program that translates Baldrige into three very simple, yet powerful, questions. They are:

1) Is your organization any good?
2) Is it getting better? and
3) How do you know?

If you can answer those three questions definitively, your organization would be well on the way to achieving higher performance and sustaining superior outcomes…

We’ll delve into each question, but first, I need to offer some quick commentary on the Baldrige framework itself. Created by law in 1987, the Baldrige program exists to help organizations improve results and achieve performance excellence. The “Criteria for Performance Excellence” are revised every two years by studying high performing organizations in all industries to determine what they are doing to reach superior levels of performance, and those practices become future years’ Criteria. As such, the Criteria represent what’s been referred to as the “leading edge of validated management practices” – a collection of best practices against which any organization can gauge its own performance, make adjustments, and focus their resources on the highest leverage improvement opportunities. And many do. The Minnesota Council for Quality offers three assessment processes – from our “Cadillac” Minnesota Quality Award (which is the most comprehensive, thorough evaluation of an organization’s operating system) to two “short cut” assessment processes that are entry level evaluations that help leaders identify and prioritize improvement opportunities. But more on our assessment resources later (and in Article 4 in the June 2011 newsletter).

Let’s look at those three simple questions and see how they translate the leading edge of validated management practice.

1) Is your organization any good?

This question implies that continuous improvement requires data: leaders need measures and information to determine if strategies are being effectively executed, if offerings are satisfying customer/stakeholder requirements, if employees are competent and engaged, and if systems and processes are delivering value to stakeholders. In fact, in high performing organizations, most decisions are fact-based: rather than relying intuition and gut (which will lead to inconsistent decision making and unsustainable performance), high performing organizations use data to diagnose problems, make decisions, adjust resources, and improve processes. However, it’s amazing to me how many organizations have not taken the time to determine what is important to its overall success! By selecting, collecting, aligning, and integrating data and information to track daily operations AND overall organizational performance, then – and really only then – will leaders have a handle on whether the organization is any good. Performance measures should reflect a balanced perspective of different organizational and stakeholder needs. Tools like the balanced scorecard helps leaders to identify metrics that represent success along many different dimensions, including financial/budgetary and market performance; customer-focused outcomes; workforce-focused outcomes; leadership, governance, and strategic outcomes; product, service, program outcomes; and process, operations measures. Pick measures that reflect organizational priorities and key stakeholder expectations. And once you have those measures, organizations should use them!

You should:

A) Review them regularly and systematically and across all levels of the organizations (which requires making them accessible and available to anyone that needs them). Analyze performance to assess organizational success, competitive performance, financial health, progress relative to strategic objectives and action plans, and the organization’s ability to respond rapidly to changing organizational needs and challenges in your operating environment. In short, data should be the foundation of leadership meetings, staff meetings, board discussions, and anywhere else where key decisions are being made.

B) Take action! Use the organizational review findings to develop priorities for improvement and opportunities for innovation. Deploy improvement efforts across work groups and functional-level operations throughout the organization (and to suppliers and partners, as appropriate). Share lessons learned and best practices across units and work processes. Measures are only useful if they inform decision making, and decisions are only useful if they are acted upon. It’s true that many organizations take action to improve performance, but many do so using a great deal of intuition and speculation. By simply using metrics to determine what to improve and then monitoring progress and making adjustments as you go, you will begin to create a culture focused on innovation, fact-based improvement, accountability, and transparency. You’ll also be creating a true learning organization, in which key decisions are made based on data…and in which improvements, adjustments, and action are rooted in measurement and analysis rather than conjecture and guesswork.

2) Is your organization getting better?

Once you have your metrics in place, and as part of the analysis an organization regularly conducts, the Baldrige Criteria suggest that leaders should consider levels of performance for each of your key metrics, as well as trends of those metrics – which are performance levels over time. If trends are favorable, you can determine how to sustain (or accelerate) performance. However, if trends are unfavorable, you can determine how to adjust processes and/or resources to reverse the unfavorable trend or change the trajectory. Without trend information, leaders really cannot determine how performance looks over time, and therefore may make decisions inconsistent with the direction and speed of desired change.

3) How do you know?

I believe the last question relates to two very important concepts. First, your performance data needs to be framed in the context of your key stakeholders. Organizational “goodness” really only can defined by your stakeholders: your customers (students, patients, citizens, clients, stakeholders, etc.), your workforce, and your partners. And you’ll never know if you’re any good unless stakeholders tell you that you are. So the first insight regarding the “How do you know” question is: you have to ask your stakeholders how you’re doing. Use surveys, focus groups, one-on-one meetings (systematically captured and aggregated) to determine satisfaction, engagement, and loyalty – to get feedback on how you are doing to respond to stakeholder needs. Asking your stakeholders allows you to definitively answer the question “How do you know?”

The second insight embedded in this question, I believe, is the notion that all of your key metrics should have comparative data associated with it. In order for leaders to determine the organization’s relative performance, performance for similar activities and processes – inside or outside an organization’s industry – should be collected and used to determine competitive gaps and to set goals (rather than setting arbitrary performance targets, why not use the top quartile or best-in-class as a stretch goal?). Comparative data allow organizations to understand current dimensions of “world class” performance – to see what’s possible and to encourage discontinuous or “breakthrough” performance.

Here’s a simple example of how comparative data can be powerful, from a Minnesota manufacturer I visited a couple of months ago. The company was extremely proud of the fact that they had reduced a certain type of production error by 10% the last six months. This type of error has a direct and meaningful impact on their gross margin and presumably their customer satisfaction, so any reduction should be rightfully celebrated. But I asked them how their error rate now compared to the industry, simply wondering if they could determine if they’ve reduced it enough. They really had no answer…they had no idea how their performance compared in the marketplace.

A few weeks went by and their VP of Operations gave me a call and thanked me for my question. They did some digging in the market, and – through their sales force and other sources – determined that their 93.5% accuracy rate lagged their competitors. The best performance was 99.2% (from a company that had much higher market share – coincidence?), and the industry average was 94.5%. So, while they were proud of their 10% improvement, their performance was, well, average.

Having this simple comparative data allowed them to understand what was possible in their industry. Rather than being content with modest improvement trends, they set a new goal of 95% accuracy within a year, 97% within two years, and a stretch goal of 99.5% within three years to beat their competition. Furthermore, they are now researching the connection between accuracy rates and customer satisfaction, and believe they have found a fairly tight correlation. Their ability to answer the simple question “How do you know” (if they are any good) will positively impact customer satisfaction and profitability.

****The Baldrige Criteria for Performance Excellence may indeed be a little complex and sometimes difficult to interpret. But I think there’s wisdom in boiling it down to its central core by asking yourself three easy questions: is your organization any good, is it getting better, and how do you know? If you can’t answer any of them – or if you can’t answer them consistently throughout the organization – you probably have room to improve. And now there are ways to ask yourself those questions without having to invest a lot of time and money.

As previously mentioned, the Council now has two “short cut” assessment processes available to any organization wanting the benefit of the proven Baldrige Criteria, but not the rigor of a full-blown Award assessment. One is consultant-facilitated (a Baldrige expert, jointly selected by the Council and the organization) and involves a series of three diagnostic discussions with senior leaders to identify improvement priorities. The other is a self-assessment that uses a survey-based instrument (Baldrige Express) to aggregate and segment the perspective of your workforce on the enterprise’s performance. This process takes about two hours to complete and outlines your improvement opportunities through the collective lens of those who operate the organization’s processes: its workforce. One of our Council members commented on the value of the self-assessment: “this was the easiest and most useful check-up my organization could receive. We found several key areas to improve, and are taking action to impact results. I’d recommend this to any organization.” More information on both short-cut assessment processes is in Article 4 in the June 2011 newsletter. So is your organization any good? Is it getting better? And how do YOU know? Want to participate in a discussion on this topic?? Visit our new blog to post a comment!

Yours in Improvement,
Brian S. LassiterPresident,
Minnesota Council for Quality
www.councilforquality.org

Maintaining Constancy of Purpose: May 26th, 2011

2011-05-26T13:38:00.000-07:00

Maintaining Constancy of Purpose

Last week, we hosted our 20^th Annual Minnesota Quality Award event, which featured 14 high performing organizations from Minnesota and throughout the US (see the article below, and a link to slides/video). One of the more compelling keynotes was from Dr. Michael Perich, a senior leader from Montgomery County Public Schools (Maryland), the 16th largest school district in the US and one of the highest performing (with one of the lowest achievement gaps) in the country. Dr. Perich was reflecting on their 10+ year journey to excellence, and commented that it took four things to achieve and sustain excellence: people (they have robust training for all 25,000 employees), a plan (they have identified seven key strategies/predictors of academic performance), processes (well defined, well designed, and well deployed), and persistence.

On persistence, Perich said every successful organization needs a “PITA” – a resident Pain In the A** (you fill in the blank). He was that PITA for Montgomery County Schools, as he worked with other administrators to create a culture that promoted accountability, a focus on excellence and constant improvement, and dedication fully to a vision and plan. When it comes to persistence, what he described was the need for “constancy of purpose”…

Montgomery County Schools demonstrated constancy of purpose. Their 12-year journey to excellence involved many challenges: a high community poverty rate, a student body that speaks 184 different languages, and the expected challenges of an organization with 144,000 students, 200 buildings, and a $2 billion budget. Many things created barriers, and they had many opportunities to settle for slightly-above-average. But they stuck with it and are achieving world class results – student learning outcomes that are near the top in their state and the nation, along with operating, budgetary, and stakeholder results that show significant improvement and high levels compared to other districts (especially of their size and complexity).

Think about your organization and just how many challenges, distractions, and competing priorities it faces all the time. Certainly, all organizations must balance (oftentimes conflicting) stakeholder needs, must anticipate and react to competitive pressures, and must constantly innovate to remain relevant and responsive to market changes. The tension in these demands often creates conflicts within organizations – pressures on scarce resources, tension within the workforce, and conflict between competing priorities, strategies, initiatives, and core processes.

All of that is a long way of saying that organizations are highly complex, with many potential conflicts that leaders must constantly consider. It’s no wonder, then, that most organizations are in a constant state of change: they switch strategies, they change operating models, they acquire or divest in other companies, they enter or exit new markets, they restructure, reorganize, layoff downsize, upsize, rightsize, and supersize! Most of these changes are rooted in data and are well-reasoned, intelligent risks. But some of them are not, and consequently cause organizations to lose their focus – to lose sight of their purpose/mission, their customers’ real needs, their core competencies, and/or their core values.

Some people have called this tendency “chasing rabbits” or being fascinated by the next new “shiny object.” Whatever the label, organizations sometimes have a tendency to hop to the next best thing. It’s true that organizations need to change – they need a way to systematically improve, innovate, and respond to changes in their environment. But changing just for the sake of change almost always negatively impacts outcomes, causes organizational stress, and sub-optimizes results.

I’m sure we all can think of many examples of decisions or changes that just didn’t work: new products or services that the market didn’t buy; an acquisition that failed because cultures didn’t blend; restructuring that might have made some intuitive sense but took an organization in the wrong direction. There are many examples of organizational changes that, for various reasons, didn’t succeed. Some may be the result of bad data or insights; some may be the result of a lack of focus, persistence, or constancy of purpose.

So what exactly is constancy of purpose?

Most managers and quality gurus give authorship to the phrase “constancy of purpose” to W. Edwards Deming (more on that in a minute). But the first quote I could find was from Benjamin Disraeli, the British Prime Minister from 1874-1880: “The secret of success is constancy of purpose.”

Deming was a little more specific. As the first of his 14 key principles for transforming business effectiveness (first presented in “Out of Crisis” in 1986), his exact quote is that successful organizations need to…”create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs.” He also said that LACK of constancy of purpose was one of the seven deadly diseases that almost certainly impact organizational performance.

According to John Hunter, administrator of Curious Cat Management Improvement Connections, a constancy of purpose involves…“maintaining a focus of the important long term vision. Without [this focus], many organizations waste huge amounts of resources shifting focus from one crisis to the next without ever making sustained progress. Senior management should make sure the day to day issues don't result in a shirting of resource from the organization's significant priorities to the shifting priorities of the day. Without constancy of purpose, the rate of improvement over the long term will be greatly diminished.”

So how does an organization create a constancy of purpose? Here are a few ways:

* First, make sure that your “enduring statements” (by that, I mean mission, vision, and core values) actually reflect reality. Leaders should ask themselves if their organization’s mission statement truly reflects why the organization exists, if the vision statement truly reflects the aspiration for the organization’s future, and if the statement of core values truly reflects principle tenants of the organization’s culture. If they don’t fully reflect reality, then by all means, change them! This process should be owned by the organization’s governing board and its senior leaders, and review and revisions should be systematic (repeated at some regular frequency, with data upon which to guide the refinements).

* If your organization’s enduring statements DO represent reality, then those three statements – mission, vision, and values – should be communicated often throughout and beyond the organization. They should be mentioned in staff meetings; they should be in printed or electronic materials; they should be mentioned in customer/stakeholder discussions; they should be mentioned in new employee orientation; they should be addressed in supplier/partner discussions. You get the point.

* These statements should also be a lens through which key decisions are made. Here’s where mission, vision, and values meets strategy, performance metrics, and core competencies. Strategic and operational plans – including major initiatives, action plans, performance measures, and goals – should reflect the true priorities (and core competencies) of your enterprise. If your mission is why you exist and your vision is to what you aspire and your core values reflects your culture, then your strategic plans should align with those principles so that your future direction supports what your organization views as success. So when an organization considers any new strategy or any major decision (about a new market, new product/service, a possible acquisition, significant staffing changes, and so forth), leaders should keep the organization’s mission, vision, and values in mind so that the decision or strategic initiative reflects what’s important to the organization’s purpose and culture. By the way, this applies to all levels of an organization: decisions and plans at the unit, department, and team levels should support and align with enterprise-level decisions and plans. Seems simple enough, but I can’t count how many organizations I’ve seen that have action plans that don’t support its core mission, have strategies that don’t seem to support its vision, and/or have made key decisions that are inconsistent with its values. That’s the fastest way to lose your constancy of purpose.

* The organization’s performance management system then should reflect your mission, vision, values, strategies, and key organizational metrics. If strategy, action plans, key measures, and key decisions are all aligned with what’s important to the organization (its mission, vision, and values), then so too should be employee review, rewards, and recognition. This should probably also seem obvious, but ensuring accountability as to what’s important – and rewarding that behavior and accomplishment – will enable an organization to keep focused. It enables constancy of purpose.

Here’s one simple example. Say your company is very customer focused and that customer service is a primary differentiator, as well as a key requirement of your marketplace. Your mission should reflect something dealing with customer focus or service, and your vision will probably state that the organization strives to be the best in service within your industry, market, the nation, or whatever. Your core values might also state that customer is the foundation of your culture. Your strategies will likely reflect a strong focus on serving customer needs – with new markets, new products or services, innovative solutions that uniquely address customer needs, and so forth. You might have action plans (and metrics) that build infrastructure to better serve your customers – adding new technology to serve customers, improving key customer contact processes to better enhance the customer experience, increasing training so that customer-facing employees have additional skills to improve relationships with customers, and so forth. And your employee performance management will reflect these priorities: employees will be rewarded (compensated, promoted, publicly recognized) for accomplishing activities that support this level of customer focus and/or achieving high levels of customer satisfaction and engagement.

It all hangs together. It all is aligned. It all makes sense. And it all reinforces a constancy of purpose (in this case, with a strong focus on the customer).

So find what is “key” to your organization’s success, and integrate that into your mission, vision, values, strategies, action plans, metrics, communication, performance management, and other key organizational processes. It will keep your organization focused on what’s important; it will promote a discipline throughout the organization; it will prevent you from chasing shiny objects; and it will reinforce a strong constancy of purpose. The payoffs are worth it: you’ll have better alignment of activities throughout the organization; you’ll optimize resources; you’ll promote clarity (and reduce stress) throughout the organization; and you’ll improve and sustain better outcomes. So here’s to all you organizational “PITA’s” and here’s to constancy of purpose!

Yours in Improvement,

Brian S. Lassiter

President, Minnesota Council for Quality

www.councilforquality.org

The Art & Science of Effective Leadership: Insights from Successful CEOs

2011-04-28T08:12:00.000-07:00

What is the number one predictor of organizational excellence? Maybe it’s having a persistent focus on your customer – understanding their needs, providing good service, building deep relationships that promote satisfaction and engagement? Close, but that’s number two. Having an engaged, well-trained, capable, effective workforce that is highly motivated and committed to the organization’s customers, mission, and strategic objectives? Close: that’s also in the top five, but not number one. Having robust strategic plans that are well-executed? Nope. Having the right measures and data for better decision making and fact-based improvement of key processes? No, and no. All of these are very important, but are not the number one predictor of organizational success. Leadership is. But while effective leadership is probably also the most difficult to fully achieve, a NY Times article last week may have provided insights that help crack the code…

The NY Times article (“Distilling the Wisdom of CEOs,” found here) summarized five best practices that most top leaders demonstrate – qualities that appear to be consistent across all senior leaders, regardless of the type or size of the organization they are leading. Adam Bryant, the author of the article (and a corresponding book also released last week: “The Corner Office: Indispensable and Unexpected Lessons from CEOs on How to Lead and Succeed”), interviewed 70 successful CEOs and found five essentials for success: qualities that most of those CEO’s share and also look for in people they hire – “X-Factors,” as he calls them.

Fortunately, none of them are innate: all can be learned, practiced, and perfected. According to Bryant, “these qualities are developed through attitude, habit, and discipline — factors that are within your control.” I would also submit that they can all be hardwired into your organizations through your leadership system and various processes (training, evaluation, reward/recognition, and so forth).

Bryant goes on to say: “They will make you stand out. They will make you a better employee, manager and leader. They will lift the trajectory of your career and speed your progress.” And they will make your organizations stronger and higher performing.

Bryant’s work is based on years of research, studying the best practices of dozens of high performing senior leaders. As such, they aren’t theories, but appear to be somewhat validated principles that drive – and perhaps ensure – effective leadership. Ready for the list? See how you and your fellow leaders rate on these five best practices…

Passionate Curiosity
While CEOs are expected to exude confidence, predictability, and perhaps some conservative authority in a public setting (Wall Street doesn’t like surprises), one of the qualities that leads to their excellence is being passionately curious about how things work. They ask big-picture questions; they wonder why things work they way they do and whether those things can be improved; they are constantly learning and don’t mind tinkering with possibilities. This entrepreneurial spirit does occasionally lead to failures and mistakes, but it also allows them to discover new solutions that solve organizational problems, new marketplace opportunities that satisfy customer needs, new ways to foster collaboration and teamwork with their people and their partners. They are always learning, discovering, and pushing the edges of what’s possible.

They don’t have all the answers, but according to Bryant “…their greatest contributions to their organizations may be asking the right questions…They can push their company in new directions and marshal the collective energy of their employees by asking the right questions.”

Their curiosity leads to discovery and innovation. This is consistent with the Baldrige “Criteria for Performance Excellence,” a set of validated best practices that drive organizational performance. According to these Criteria, passionately curious leaders “…create an environment for organizational improvement, the accomplishment of mission and strategic objectives, innovation, performance leadership, and organizational agility.” They foster organizational and workforce learning, and they create a more sustainable, high performing organization that isn’t satisfied with the status quo, but rather stretches to find ways to achieve higher levels of performance.

Battle-Hardened Confidence
Successful senior leaders not only embrace adversity, but oftentimes relish it and indeed have track records of overcoming it. Bryant calls this “battle-hardened confidence,” and it relates to leaders’ ability to take ownership of challenges, rather than look for excuses or the easy way out.

Successful leaders have a sense of purpose and determination and exude confidence. They try to find ways to shape events and circumstances of the things they CAN control rather than blame adversity on the things they CAN’T. They view challenges as a way to learn and grow (for both themselves and their organizations) rather than having negative perspective of challenges, which oftentimes leads to a downward, self-fulfilling prophecy in many organizations.

Team Smarts
Being “team smart” involves many things: it’s about being reliable to the group; its about having an ability to recognize the players the team needs and how to bring them together around a common goal; it’s about having good “peripheral vision” for sensing how people REACT to one another, not just how they ACT; it’s about understanding how teams work and how to get the most out of the group; and, yes, it’s about getting along well with others. So Team Smarts is not just about being a good team player yourself, but being able to get the most out of other others within your group.

Team Smarts is about inspiring change and about commanding respect and attention but in a subtle (and even sometimes self-deprecating) way. According to Susan Lyne, Chair of the Gilt Groupe, “The people who truly succeed in business are the ones who actually have figured out how to mobilize people who are not their direct reports.” They manage through influence rather than control.

A Simple Mind-Set
Successful leaders are concise in their thinking and speaking (and they appreciate others to be that way as well). It could be because they are just so inundated with information and need to make quick decisions and move on, and/or it could be because they appreciate the ability of synthesizing, focusing, and getting to the crux of an issue. Either way, leaders like things simple and to the point.

According to Bryant, “There was a time when simply having certain information was a competitive advantage. Now, in the Internet era, most people have easy access to the same information. That puts a greater premium on the ability to synthesize, to connect dots in new ways and to ask simple, smart questions that lead to untapped opportunities.”

In Bryant’s interviews, some successful best practices emerged that encourage focus and simplicity. Some leaders ask their people to give summaries in 10 words or less, which forces brevity and focused thinking on what’s truly important. Other leaders – like Steve Ballmer, CEO of Microsoft – requests the conclusions FIRST in a presentation, rather than the background information and sequence of underlying research that lead to the conclusion a the end. He believes this makes conversations more focused and efficient.

Fearlessness
Successful leaders are comfortable with being uncomfortable: they thrive on ambiguity because they see the possibilities and opportunities in creating a new path. They like situations where there’s no road map, compass, or proven method. They have no “comfort zone” because they are used to operating with uncertainty. In a word, they are fearless. And they appreciate others on their staff who are as well.

This is going beyond pure risk-taking. It is true that successful leaders do take calculated risks (as the Baldrige Criteria now label it, “intelligent risk”). But it goes beyond risk-taking: they want their people to take ACTION.

According to Bryant, “With the business world in seemingly endless turmoil, maintaining the status quo – even when things appear to be working well – is only going to put you behind the competition. So when chief executives talk about executives…who are fearless, there is a reverence in their voices. They wish they could bottle it and pass it out to all their employees. They’re looking for calculated and informed risk-taking, but mostly they want people to do things – and not just what they’re told to do.”

For me, this means two things: leaders are fearless themselves and take calculated risks that move the company forward, but leaders also appreciate others in their organizations that are action-oriented. Interestingly enough, the latter requires the senior leaders to first create an environment that allows that to happen. Leaders from high performing organizations, according to the best practices in the Baldrige Criteria, “create a focus on action to accomplish the organization’s objectives, improve performance, and attain its vision.” Leaders themselves are comfortable taking calculated risks and implementing innovations and ongoing improvements that impact productivity, customer satisfaction, and other organizational outcomes. But they also appreciate others on their team who proactively do so as well.

I think Ursula Burns, CEO of Xerox, captures this concept perfectly: “One of the things that I characterize as fearlessness is seeing an opportunity, even though things are not broken. Someone will say: ‘Things are good, but I’m going to destabilize them because they can be much better and should be much better. We should change this.’ The easiest thing to do is to just keep it going the way it’s going, especially if it’s not perfect but it’s not broken. But you have to be a little bit ahead of it, and you have to try to fix it well before you have to. Companies get into trouble when they get really complacent, when they settle in and say, ‘O.K., we’re doing O.K. now.’ ”

To me, that’s about creating an environment that encourages – and indeed requires – continuous improvement and achieving higher levels of performance excellence. That’s about breaking things that appear not to be broken. That’s about stretching the organization to want to always improve. That’s about recognizing that good is the enemy of great.

*****
So there you have it – five best practices for leadership that have been demonstrated to impact organizational performance: passionate curiosity, battle-hardened confidence, team smarts, a simple mind-set, and fearlessness. Interestingly, an April 2009 article in Forbes indicated there were three fundamentals of effective leadership: leaders are driven by an inspiring vision, they excel at communication, and they have superior judgment. Seems consistent with the NY Times study.

And the Baldrige Criteria for Performance Excellence, which I’ve already referenced a couple of times, claims that senior leaders of highly successful organizations usually: set and deploy vision and values; promote legal and ethical behavior; create a sustainable organization that supports performance improvement, accomplishment of mission and objectives, innovation, and agility; create a culture that delivers consistently positive customer experience and fosters customer engagement; develop and enhance their own leadership skills; participate in succession planning and the development of future leaders; build processes that encourage frank, two-way communication throughout the organization; take an active role in reward and recognition of their people; and focus on action. Sounds consistent to me.

Many things are important to achieving and sustaining organizational success. But remember that effective leadership is the number one predictor of organizational excellence. There’s both an art and a science to good leadership. Where does your organization stand? Where are you personally on those leadership best practices?

By they way, the Council plans to feature a full day conference this fall that focuses on the best leadership practices of high performing organizations. Look for more information this summer. Maybe we can all come together to share what works in driving leadership and organizational excellence.

Want to participate in a discussion on this topic?? Visit our new blog to post a comment!

Yours in Improvement,

Brian S. Lassiter

Labor Pains: With Your Employees, One Size Does Not Fit All

2011-03-23T19:52:00.000-07:00

If you haven’t noticed, there is a great deal of labor unrest these days. The NFL can’t agree on how to split their $9 billion empire, so owners have locked out players, threatening next season. And not a day goes by that we don’t hear of some interesting twist in the budget deficit-induced labor saga affecting our friends and neighbors to the east. Or closer to home, it wasn’t too many months ago that all of the major hospitals in the Twin Cities were bracing for a nursing strike, which threatened to incapacitate the healthcare system for days. It seems that workers are becoming increasingly dissatisfied with things – their compensation, work environment, collective bargaining rights, benefits, or any number of job-related items. But this is not a column about organized labor. In fact, this is a column about a shifting paradigm between organizations and their workers – both union and non-union. There appears to be a growing divide, and I think organizations need to pay attention because it might just get worse…

Here’s the situation:

Unemployment rates are slowly improving. In fact, national unemployment has declined from its peak of 10.1% to 8.9% (February). Minnesota is fairing slightly better than the nation: unemployment has decreased from 8.5% to 6.7%.
Hiring is increasing. Not everywhere and not exponentially, but many organizations are beginning to add capacity to their workforce. Manpower’s second quarter workforce report (released two weeks ago and discussed at our March 9 Performance Improvement Network) indicated that 8% more companies planned to add staff (over those who planned to decrease staff) in the second quarter of 2011.
But incumbent workers aren’t happy. In a Conference Board report issued last year, 55% of American workers are not satisfied with their current work, which is the highest dissatisfaction rate in 22 years. Other studies have indicated that 60-80% of American workers would consider a job change if the opportunity presented itself (Manpower, CareerBuilder).

So what does this all mean? It means that the labor market may just about be ready for a shake up – that 2011 may introduce the job-hopping that we all predicted might happen after the recession finally ended. Call it musical chairs, but our workforce may experience some significant shifting in the near future.

And here’s the real concern for employers: it’s usually not your worst performers that decide to leave, but rather your best performers, who – by the way – are also the most attractive to other organizations (including, heaven forbid, your competitors).

If you manage people – be it one employee or one hundred thousand employees – you should be concerned by this data. The job market is starting to loosen; employees are not satisfied; and therefore your (best) workers may begin to look elsewhere for work.

But it gets worse. Remember that concern we all had three or four years ago about Baby Boomers retiring, creating a massive human capacity crunch in our workforce? Well, the recession delayed that trend a bit, as Boomers needed more time in the workforce to recoup their retirement savings. But the shift is still coming: in fact, nearly 10,000 Boomers are retiring EVERY DAY (and will for the next 19 years, according to Pew Research). Many experts predict that the US will experience a decelerating rate of growth in our labor market over the next 40 years, and some predict an actual contraction (negative growth). It’s already happening in the EU: the working age (15-64) population will begin shrinking in 2012, and will decrease 12% by 2030 and 30% by 2060 (source: European Commission, through Manpower). Some Asian nations (South Korea, China) are beginning to see decreases as well.

All this is to say that organizations may have a growing need to respect and cultivate its greatest asset: its people. I wrote a column on this topic about a year ago, in which I outlined several ways organizations could improve employee engagement (for the full Feb 2010 article, visithttp://www.councilforquality.org/about_newsletter.cfm):

Measure and manage the factors that drive employee satisfaction and engagement.
Identify “critical talent” and work to retain these workers.
Train and develop your workforce – on those things that are important to the success of your people and your company (and not anything else).
Build systematic ways to transfer knowledge and skills among employees.
Adapt to different work styles.
Eliminate organizational waste.

I think all of those tips are still valid today, and I believe there is a theme that runs through them that was emphasized in the Manpower presentation a couple of weeks ago: organizations need to engage with their workers in new and different ways, depending on the varying needs of their people. Manpower calls it a “one size fits one” mentality. It requires a keen understanding of how your workforce can and should be segmented, and then the ability to respond to the varying needs and characteristics of those segments.

Some employee groups prefer a traditional work environment (classic reporting relationships, communication structures, predictable 8-to-5 workdays), while others prefer flexibility in their work schedules, work location, and communication methods. Some employees cannot work on religious holidays – and those holidays don’t always fall on the same days that mainstream US workers have off. Some employee groups have special physical needs. Some have special family situations.

You get the point. Employee segments are not just about race, but today’s workforce is a complex aggregation of various characteristics and traits, each with slightly different needs, desires, and expectations. One size definitely no longer fits all. Yet many organizations still only provide one benefits package, relatively inflexible work schedules, rigid work environments, and other policies/practices that don’t address the diversity of worker needs. No wonder employees are dissatisfied.

To understand this point on another level, indulge me a moment with some additional context. Reaching back into your economics textbooks, recall that the American (and world) economy has moved through several transformations – from the agricultural revolution to the industrial revolution (in which productivity exponentially increased due to automation of manufacturing processes), to the more recent information revolution (where the explosion of information has led to more innovation in the last 10 years than it has in the last 1000 combined). The previous revolutions, according to Manpower, were all characterized by the domains people conquered with ever-improving technology. However, human potential itself – also according to Manpower – would be the catalyst for future change, impacting economic, social, and political systems across the world.

Anita Dwyer, Regional Manager for Manpower’s Chicago office, stated that “…our ability to tap into the passion, creativity, and innovation of our inner human potential will determine whether we are able to adapt to this new reality.” She continues: “As human potential becomes so vital, the source of that potential – the skilled talent an organization (or indeed, a nation) has access to – will become the key competitive differentiator.”

I tend to agree. As the growth in our workforce begins to slow (or, in some economies, shrink), the pressure to develop new and different skills may become as critical to future growth as capital was for the last few generations. There simply aren’t enough (skilled and talented) people to fill positions, so attracting, keeping, and motivating your workforce may be the single biggest obstacle to future success that organizations face.

Manpower calls it the onset of the “human age,” and their research suggests there are a few powerful factors at work:

A demographic/talent mismatch – today’s top jobs are the most difficult to fill. Manpower’s research claims that many of today’s job openings (such as sales reps, technicians, engineers, accounting/finance, production operators, and others) are the very skills that we don’t collectively have enough of in the economy. In fact, according to Manpower’s most recent Talent Shortage Survey of 35,000 employers across 36 countries, 30% are struggling to fill jobs they desperately need in order to succeed. In this new “Human Age,” this gives rise to a second factor…
Individual choice – workers want freedom of choice in their work, which becomes especially important as the economy improves and workers become more mobile. This factor makes it critical for organizations to realize that they need to attract, retain, and motivate their select group of most talented employees. This is the “one-size-fits-one” approach: in other words, realizing that its best workers have a choice requires organizations to better customize the services, benefits, policies, and processes it offers its people. Better training; more empowerment in decision making; more deliberate career progression; more flexibility in terms of work environment.

Part of this may be driven by the fact that – for the first time ever – we have four generations in the US workforce (traditionalists, Boomers, Gen Xer’s, and Gen Yer’s), each with their slightly different styles, characteristics, and needs. But I think it goes beyond generational differences: workers are all people, and people have unique needs, talents, and personalities that can/should be understood, cultivated, and leveraged. Organizations that are able to better understand their workforce profile (and cluster similar characteristics into employee segments, upon which services and policies can be delivered) will be far more effective in leveraging their talent and creating higher levels of employee engagement.

Diversity is a powerful advantage for organizations – it leads to creativity and innovation, better decisions, and better relationships with various customer segments. But understanding diversity is also a responsibility: organizations need to tailor their workforce-related processes to varying workforce groups. After all, if you don’t accommodate different needs, your workers have a choice…and they may find another organization that can.

Technical revolution – with the onset of technology, information becomes more available – for your customers and your workers. The benefit is that organizations can now accommodate workers’ needs in new and different ways. “Virtual organization” wasn’t a common phrase until about 10 or 15 years ago, but now it has become increasingly common – not just to accommodate workers’ personal needs and desires, but also to better manage the use of facilities, get closer to customers and marketplaces, and reduce transportation and supply chain costs. However, technology also produces a level of transparency never before seen: with the Internet and social media, your current/future workforce has a quick and unfiltered view into your work environment (if you’re interested, check our Glassdoor.com, which provides insights into over 100,000 organizations from the voice of their people).

These factors continue to put pressure on today’s organizations, forcing them to discover new ways of doing more with less while faced with an eventual constraint on talent. Indeed, one size does not fit all (though I’m not sure it ever did). Faced with an improving job market, increasing talent shortages, a generally dissatisfied employee base that will no doubt lead to increased worker mobility over the next several years, organizations need to discover better ways to engage with their workers. Or another organization will.

Want to participate in a discussion on this topic?? Visit our new blog to post a comment!

Yours in Improvement,

Brian S. Lassiter

President, Minnesota Council for Quality

www.councilforquality.org

Managing at the Speed of Change

2011-02-23T11:55:00.000-08:00

Doesn’t it feel like – daily struggles aside – the world is accelerating? We are changing at rates never before experienced and probably only represent the proverbial tip of the iceberg. In fact, many experts predict that the pace of change will only accelerate, drastically impacting our businesses, our schools, our healthcare system, our communities, and certainly our personal lives. The world is changing in ways that we cannot fully comprehend and most certainly cannot fully predict, let alone manage…

It may ultimately lead to what some futurists call “technological singularity”: the point at which accelerating technology becomes so advanced that it surpasses the capabilities of the human brain. Basically, technological change could accelerate to a point at which humans can no longer proactively manage it…it manages (and changes) by itself. I’m not sure I completely buy it, but if it’s true, it’s a frighten notion. However, in many ways, the pace of our change represents a tremendous opportunity for economic, political, social, and professional development. And what it means for our organizations is compelling…

In 2006, Karl Fisch, a high school technology teacher in Colorado, developed a video and slide presentation called “Shift Happens” (you can easily find it on YouTube). Consider some of his thought-provoking findings regarding the pace of change in the world:

The 25% of the population in China with the highest IQs is greater than the total population of North America. Translation: they have more honors kids than we have kids.
China will soon become the number one English speaking country in the world.
Name this country: richest in the world, largest military, center of business and finance, strongest education system, world center of innovation and invention, currency the world standard of value, highest standard of living? England in 1900. [Probably could be said, too, of Rome and Greece before them.]
The US Department of Labor estimates that the average US worker will have 10-14 jobs…by age 38.
There are 540,000 words in the English language – that’s five times more than during Shakespeare’s time.
There are 3000 books published every DAY.
A week’s worth of NY Times contains more information than a person was likely to come across in their lifetime in the 18th century.
It is estimated that 40 exabytes (4.0 x 10¹⁹) of new unique information will be generated worldwide this year – which is more than in the previous 5000 years combined.
Third generation fiber optics are now being used that can carry 10 trillion bits per second down a single strand of fiber. That’s 1900 CDs or 150 million phone calls every second. It is currently tripling every six months and is expected to do so for the next 20 years.
Predictions are that by 2013, a supercomputer will be built that exceeds the computation capability of the human brain. Indeed, we may be seeing that today, with the creation of IBM’s Watson and their new supercomputer efforts, announced just a few weeks ago. And while technical predictions further out than about 15 years are hard to do, predictions are that by 2049, a $1000 computer will exceed the computational capabilities of the entire human species.

Basically, his premise is that the world is changing in significant and pronounced ways. In fact, to alter a familiar saying: the more things change, the more they change (rather than stay the same).

Sure, we’ve had significant changes before – the agricultural revolution (which allowed us to more efficiently feed a growing human population), the industrial revolution (which facilitated higher productivity, growth of cities, new forms of transportation, and new standards of living), and the information revolution (where the speed of information transfer facilitates accelerating communication, knowledge transfer, problem solving, and commerce).

But the pace of this change is what is fascinating. Consider this: based on population growth, the worldwide economy doubled every 250,000 years from the Paleolithic era (2.5 million years ago – the “Stone Age”) until the Neolithic Revolution (about 10,000 BC – the Agricultural Revolution), at which point the economy began doubling every 900 years. That’s a considerable increase! And the Industrial Revolution of the mid-1800s caused the world economy to double every 15 years (that’s 60 times faster than the agricultural era).

If the expansion of technology – which really is responsible for the previous significant changes – continues to accelerate and we witness similar revolutions in the future, some experts predict that the economy could double every quarter and possibly every week! In fact, one statistic I found says that the worldwide economy could increase between 60-250 times what it is today sometime in the next 40-60 years (Robert Hanson, “Economics of The Singularity,” 2008). Mind blowing.

But see the pattern? Every major period of change has led to an accelerating pace of change.

Ray Kurzweil (inventor, futurist, author, and MIT-trained scientist) claims that the rate of change itself is growing exponentially. While change has always been accelerating (witness the statistics above), we certainly notice it more today.

There’s even a phrase for it: Moore’s Law (named after the founder of Intel, Gordon E. Moore). This phenomenon describes a long-term trend in computing hardware, in that since the invention of the integrated circuit in 1958, the number of transistors that can be placed inexpensively on an integrated circuit has increased exponentially, doubling approximately every two years (Moore, “Electronics Magazine,” 1965).

We really see this phenomenon all around us. The Minneapolis Star-Tribune had an article on Singularity two years ago (Karen Youso, February 21, 2009) that illustrated a few compelling examples. One is the telephone. Since its invention in 1875, it took over 100 years to go from a crank-style to push button. Then the transformation accelerated – from cordless (but still on landlines) to headphones and speakerphones to cell phones (a different technology altogether) and from analog to digital to 3G to 4G. The hardware – the phones themselves – continued to get smaller and smaller, and smarter and smarter. Now your phones take pictures, play music and videos, send texts, show GPS, connect to the Internet, keep your calendars, play games, even serve as construction levels – they’ve basically become 3x5 personal computers that also place phone calls.

You could probably come up with hundreds of similar examples – from changes in travel (horse to chariot to train to car to plane to jet to whatever’s next – personal transport devices?); changes in medicine (herbs and natural remedies to penicillin and antibiotics to new forms of bio-pharmaceuticals and stem cell solutions); changes in computers (from massive supercomputers to mainframes to personal computers to integrated smart phones and netbooks to whatever’s next)…you get the picture.

Technical knowledge today doubles about every two years, and some predict that technical knowledge may double every 72 hours in the next 3-5 years.

That’s incredibly fast change. So “…survival, naturally, depends on innovation, especially in times of economic uncertainty,” claims Youso in the Star-Tribune article.

And Fisch states: “The corporations that survive and go on to excel are going to be the ones that use this time to increase their use of technology and data gathering, and find new and innovative way to use it.” Youso expounds: “They are the ones who will be bringing us more and increasingly sophisticated robots; medical treatments delivered directly to cells, turning on and off as needed; instant information so you’ll know who the person is who just waved to you across the street and why you know them…avatars [little virtual images of yourself] that try on jeans [at the store, allowing you to] never leave the house.”

Sound ridiculous and far-fetched? So was the smart phone 10 years ago. Or the Internet 20. Or landing on the moon 50. Or getting from Minneapolis to Paris in seven hours 100.

“We aren’t going to experience 100 years of progress this century,” says Kurzeil. “Rather, we will witness on the order of 20,000 years of progress this century – at today’s rate, that is.”

So what are implications for our organizations and our society? I believe there are several major implications for our accelerating technological change:

Implication #1: Organizations must change – to keep up (and indeed perhaps create) some of this discontinuous change, organizations must:

Have flexible operations – more adaptable processes; more fluid work systems where materials, resources, and activities quickly transfer between suppliers, partners, and customers.
Rely on closed-loop, data-based decision making – they must have the information technology to facilitate rapid access to data, must have agility in quick decision making and execution, and must be adept at making rapid transformations (starting new plants/sites, acquiring new technologies, identifying and developing new products and solutions, creating new work structures, building new capabilities, and so forth).
Have quick planning cycles – be skilled at identifying shifts in their environments (new technologies, new competitors, new regulations, new market needs); be savvy at research and development (for products, processes, solutions); have responsive, proactive voice of the customer (VOC) methods to anticipate market changes; have systematic ways to innovate products, processes, and business models.
Have a highly adaptable workforce – trained employees (and partners) in how to deal with and manage change; employees that have skills that are transferable – the “soft skills” of communication, leadership, conflict resolution, analysis, decision making, project management – that can apply to new situations and emerging environments.

Implication #2: The educational system must change – if technical knowledge is indeed doubling every two years, then half of what a student learns about technology as a freshman in college is out of date by the time he/she graduates. Former US Secretary of Education Richard Riley speculated that the top 10 in-demand jobs for 2010 did not even exist in 2004. John Moravec, director of the University of Minnesota’s College of Education and Human Development’s Leapfrog Institutes states: “We send kids to school, they move grade by grade, using the 18th-century model, and during that time, the whole world has changed so much. How relevant is that education? We’re training them for jobs that existed 20 years ago, not for those that’ll exist when they finish school…”

Implication #3: There will be massive implications on our society:

People will live longer, thanks to accelerating improvements in healthcare and medical technology, which will impact our healthcare delivery system, our health insurance system (even more than today’s debates are suggesting), and our long-term care system.
Technology maybe used to better address community and social problems like pollution, energy, climate change, crime, poverty, hunger.
Singularity, however, may have a negative side – a risk of institutional control, loss of privacy (remember the book “1984”?), more deadly terrorist attacks, or – as some futurists predict – a threat to human’s existence itself (as machines begin to adapt themselves, challenging human’s place as superior beings on this planet).

That’s a bit far out for me, but the pace of technological change has significant implications on our social, political, and economic policies.

And all of that aside, there are major implications – and a major opportunity – for organizations that can harness, and indeed create, contribute, and manage the pace of change for their benefit. Companies (think Google, Apple, 3M) seem to be creating the change rather than responding to it. Therein lies the lesson probably for all of us.

Yours in Improvement,

Brian S. Lassiter

President, Minnesota Council for Quality

http://www.councilforquality.org/

A New Year's Resolution for Your Organization: Aligning Strategy with Culture

2011-02-02T12:54:00.000-08:00

It’s January 27, and most of you have already broken your New Year’s Resolution(s). In fact, a University of Minnesota study claims that about 80% of adult Americans break their resolutions within two months (other studies have shown that the average date of breaking resolutions is about January 20). So while you had good intentions, don’t feel bad if you’re sneaking a cigarette, skipping a workout, or not paying down as much debt as you’d like…you’re not alone. Why? Self-change isn’t easy, especially when trying to accomplish relatively vague goals (workout more, save money).

According to Lia Steakley, a Seattle based journalist and editor of the 43 Things Book, “accomplishing behavioral changes combined with the non-specificity of most resolutions is the main culprit behind the rising percentage of people who fail to keep their New Year’s pledge.” I think the same can be said of organizations that fail to successfully implement strategy or execute successful change initiatives…

Organizations – like people – fall into patterns of behavior. You might call it “culture,” but have you ever noticed that organizations have a distinct personality? Some organizations are risk averse; some are thought of as highly innovative; some are known for extremely high levels of customer service; some rigorously focus on high quality products or other outcomes; some are thought of as good places to work – focused tirelessly on their employees’ needs; some are highly analytical.

I believe these patterns of behavior don’t just happen, but rather are cultivated – certainly by senior leaders, but usually throughout the enterprise. You see it manifested in the decisions it makes, the people it hires (or rewards or promotes), and the strategies it pursues. And ultimately, you see it reflected in the results it generates (good or bad).

Culture takes time to develop, and once developed, is very difficult to change. In fact, you could say that these patterns of behavior – like a personality – become somewhat hardwired into the organization’s fabric, making it difficult to implement actions that are contrary to the organization’s culture.

BusinessDictionary.com defines organizational personality or culture as “pervasive, deep, largely subconscious, and tacit code that gives the 'feel' of an organization and determines what is considered right or wrong, important or unimportant, workable or unworkable in it, and how it responds to the unexpected crises, jolts, and sudden change. All new employees must assimilate this code ('learn the ropes') to know the correct way to behave and what to expect from other employees. Organizational culture is the sum total of an organization's past and current assumptions, experiences, philosophy, and values that hold it together, and are expressed in its self-image, inner workings, interactions with the outside world, and future expectations. It is based on shared attitudes, beliefs, customs, express or implied contracts, and written and unwritten rules that the organization develops over time and that have worked well enough to be considered valid.”

So therein lies the challenge: since all organizations have a culture or personality, implementing change initiatives can be difficult if in any way the change is perceived as counter-culture. Much like individuals struggle to change behaviors and successfully maintain New Year’s Resolutions, organizations oftentimes struggle to implement (or stick with) new strategies that don’t align with their personality or habits.

The data are compelling: in a column about a year ago, I shared that an estimated 90% of strategies (and change initiatives) fail (see “Why Is Executing Strategy So Hard?”, January 2010: http://www.councilforquality.com/about_newsletter.cfm). So how can organizational leaders break that pattern? How can you change the tendencies of an organization to move to a different direction preferred by the enterprise, even if it’s not perfectly aligned with its past tendencies and habits – and to stick with it?

Here are some ideas:

Change the organization’s language. Consider how leadership articulates purpose (mission, vision, values) and direction. Perhaps organizations are what they think (or say) they are. Start at the top and be deliberate in the language used.
Change the workforce. I’m not suggesting starting over or making wholesale people changes, but organizations should consider how aligned its workforce is with its core competencies, its strategic direction, and yes, it’s culture (its values and “personality”). Where there isn’t a strong fit, then consider making changes. This implies alignment of recruiting, hiring, training/development, and many other workforce-related processes. How do you think Apple continues to hire highly innovative, creative employees? Not by accident, I’d guess.
Change processes. This is a broad one, but what I’m suggesting is that organizational processes should reflect the organization’s priorities. For example, if customer service is important to your strategy and goals, hardwire it into all key processes – employee training, reward/recognition, customer access processes, complaint resolution processes, and many other processes. If speed is a key element of your strategy, then nearly everything you do should reflect rapid response and constantly improving cycle times.
Change your measures. Progress towards a new direction can only be gauged through metrics, so the metrics must be aligned with what’s important to the organization, its culture, and its priorities and direction. However, so many organizations have a significant mismatch in what they are measuring and what they say is important, so that it is nearly impossible to make appropriate decisions that guide the organization toward a successful vision. Consequently, change efforts are doomed to eventual failure.

In summary, I believe that organizations struggle to execute strategies and change initiatives primarily because the culture, personality, and processes of an organization are set up to produce the outcomes they’ve always produced. For organizations to break the pattern and truly affect change, leaders must change the “wiring” of an organization – its language, its measures, its recruitment and hiring processes, its employee development, its reward processes. Essentially, leaders must make changes that better align strategy with culture…or culture with strategy. Any change that isn’t aligned with culture, will likely be rejected – it just won’t stick…about like most of our New Years Resolutions about this time of year.

Yours in Improvement,

Brian S. Lassiter

President, Minnesota Council for Quality

http://www.councilforquality.com/about_newsletter.cfm.