The Single Most Important Choice for Organizational Leaders

Of the plethora of challenges that an organization faces each day there is one single question that is by far the most important of any question. The answer to this question determines every decision an organizational leader makes as well as determines the future success or failure of the organization or its leaders. The question is straight forward; what do we value?

The values of an organization are important because they represent the core set of beliefs that guide organizational leadership in developing programs, managing talent, and growing leaders. Whereas a mission provides the roadmap, values provide the underlying ethical behaviors that drive the mission. It is an imperative; therefore, that an organization embraces a shared belief system that permeates through the entire enterprise. Values are constants for an organization and do not typically change but serve as a foundation for how decisions are made and business challenges are met.

Several years I had an opportunity to talk to a CEO of a large health care organization about a particular core value of the company; treat every employee with dignity and respect. He shared with me that sometimes this value cost the organization by way of a small percentage of employees remaining on the payroll longer than may be acceptable in other companies. He strongly believed, however, that people should be afforded every opportunity to become productive employees and that the benefit far outweighed the cost of these few employees. He valued humanity in the workplace and in return he garnered loyalty and respect from employees. In contrast a large health care organization I worked with could not name their company's values. The company flounders in conflicting policies and procedures, disharmony between senior executives, as well as an ill-defined culture. I believe at the heart of this company's struggle is a lack of clearly defined values.

Blanchard and O’Connor (1997) In Managing By Values assert a company that truly manages by values, has only one boss-the companies’ values. If values were a box on a company organizational chart they would reside at the top of the chart. Organizational and individual goals, therefore, should be aligned with the values of the organization.

So how does a company actually manage by values? Collaboration by core leadership to name and define the organization’s values is the first step. The next step is publicizing the values in all communications and holding the mission and values as a litmus test for all projects, programs, initiatives and talent management activities.

As the organization determines its priorities, identifies projects, writes policies and procedures the question becomes is this project, process, policy or procedure representative of our values? Which value is supported and how is the value supported? In the selection, assessment and succession planning processes, the question is does this employee or potential employee's values align with the values of the company?

Are Training Departments Obsolete?

The days of the Training and Development Department as a necessary operational expenditure are long gone. Training Departments are continually finding themselves in a position where they must justify their existence. Feeble attempts at ROI have left many of us questioning the value of the work we do and more and more senior executives are doing the same. The question remains, “How were we making training decisions?” The most obvious way is reactively. A new system or a new procedure is introduced and we scramble to provide training in a ridiculously short period of time to often-resistant participants. Proactively we offer a basic core group of training courses on management and customer service because everyone needs that, right? Occasionally we even conduct a needs assessment; an often faulty instrument which assesses everything but the important things with all but the right people. But how do we determine what we need to assess? How do we know what is important?

“What is important?” A senior executive in an organization would answer, “The bottom line”. Why haven’t we as educators fully explored the impact of training on the bottom line particularly management training? My colleagues have responded to that question by claiming that these so-called “soft skills” cannot be quantified. If we believe this then we must then accept the fact that management training has failed to impact business results. In fact our metrics indicate that we never intended to impact business results. We’ve measured our success by use of three metrics:

1. Course evaluation- response to the course from the participants typically based on how much they like the instructor.

2. Basic validation of training content-verbal or written feedback affirming the competency was learned.

3. Application of what is learned-assessment of whether newly acquired skills are being applied in the workplace.

These metrics do not address the impact of training to the bottom line of our companies. We must approach management education with the intention to improve business results. The goal of the training intervention should be measurable changes in organizational performance.

A few years ago began to explore how training in my own organization could improve business results. What is costing my organization loss of revenue? Are these costs universal? And most importantly, can training not only address these areas but also impact them significantly? As an OD and training professional for the past 20 years the answer to that last question either would validate or besmirch an entire career. Did I dare venture down this path? I felt that training is critical to the success of an organization, perhapsI just had to approach training in a new way using the same metrics that senior executives use.

I started by asking myself, what is costing my organization revenue? The first was obvious, employee turnover. Could training impact turnover? I had to think first about why employees really leave. Most of the time I found employees don’t leave the organization, they leave their direct management. The question then becomes, “How well does our management team hire, train, support, reward and ultimately retain staff?” How can I assess, provide the training intervention, and then measure? I knew that there are two direct sources for assessment that didn’t even require I develop a needs assessment. One source is the employee exit interview and the other is our company employee satisfaction survey. In many organizations the exit interview is so confidential I’m not sure anyone sees it. If we aren’t going to use the exit interview as an opportunity to learn and change, why do it? I wanted to know why employees were leaving and most importantly I wanted to know the percentage of turnover for a particular manager. With this information I could target my training directly. The employee survey could provide me with similar information. I could also make predictions from the survey about future turnover. I could measure turnover pre and post training.

What other area was my company at risk for losing revenue? The most obvious way we lose revenue is customer dissatisfaction. Of course, we offer customer service classes but are these classes addressing why customers leave? I knew I had to see the data from our customer complaints. I knew this data would not only tell me why customers were leaving but which personnel member they last interacted with that caused the complaint. The data would reveal to me process issues as well as employee performance issues. Training can address those issues. We can target specific process areas or performance issues and specifically design training address the need. We could measure the number and type of complaint pre and post the training intervention.

One other area we could be losing money is risk. What have we suffered loses due to litigation? This data would help determine the priority of training design and delivery effort. Once again, I could measure risk pre and post training intervention.

I began to realize we have been doing everything backwards! We develop training and then try to justify it. Why not use the organizational metrics we already have in place as our need assessment and deliver training for the organization’s bottom line as opposed to cookie cutter, feel good training? I realize that what is important to my organization is universal. The same approach can be used in every organization by looking at where revenue is lost and those areas are universal employee turnover, customer dissatisfaction, and risk. Then design training that addresses the specific reason for that revenue loss.

Designing training to the bottom line, however, can only be successful in an organization in which accountability is systemic. In other words, post training intervention, a positive change in the metric must be realized and established compliance measures be enforced. The entire training effort must be an integrated part of the company’s performance management system. This requires buy-in from the senior management team.

The following is the criteria in determining a training program:

· All training must positively impact the company bottom line

· Use of organizational metrics (turnover reports, customer satisfaction surveys, risk factors) all direct the training effort

· Evaluation of the training intervention must be based on organizational metrics as opposed to training department metrics

· Accountability must be organizationally systemic

· Compliance measures must be integrated into current performance management

· Senior management must buy-in to the process

We must look at ROI, not as a foe but as a guide to direct our priorities and focus what really

matters in an organization. Whatever your organization has selected to measure is important to your organization.

Study these measures and determine how a training or educational intervention might impact the bottom line of

your own organization. There must be a continual process of analysis of data from organizational metrics,

determining the appropriate training intervention, conducting the training or educational intervention, measuring

the effectiveness of the intervention, redesigning the intervention if appropriate and then beginning the cycle again.

As training professionals know what is important, how it is measured, and most importantly how you can leverage your training to address the organizational priorities. Linking the training effort to the bottom line is not just one way to approach training, it’s the only way.

“But We’ve Always Done It This Way!”: How to assess and prepare an individual or an organization for change

So often when change is introduced it is met with varying degrees of resistance. As leaders we focus on developing the new process only to find the target audience is not supporting the change. Through this experience we learn the hard way that the best processes fail if the people don’t support it. How can we anticipate this failure and what can we do to limit its impact? The first step is to understand why people resist change. People resist change for three primary reasons:

1. Tradition

2. Fear

3. Lack of leadership

Tradition is established by repeating a behavior over a period of time. The behavior becomes comfortable. Think about any behavior you engage in routinely such as having that first cup of coffee in the morning. How resistant would you be to someone suggesting that you change your behavior of having coffee each morning to having a glass of juice instead? Obviously you have the coffee for a reason. It may have served your needs quite well. You can’t imagine how juice can replace that comfort of the first cup of morning coffee. Your first reaction would likely be to question the value of making that change. “Coffee has always worked for me, why drink juice?” This is a simplistic example; however, the feeling of resistance is the same. Any change we introduce as managers is likely to evoke a similar response. “I’ve done this job this way for ten years, why should I change?”

Fear is established by not knowing what will be expected of me and worrying that I may not be competent at performing the new procedure. Most of us experience fear anytime we try something new. Remember your first few days on a new job or you first home purchase, or your first child? All those new experiences can cause us to feel fearful. For many of us work provides a significant level of security. How we live is often dependent on the security of our jobs. Many people equate a change at work to an increased level of risk to our jobs. “If I fail I will be fired”.

Confidence in leadership is another crucial factor to changing behavior. Lack of leadership undermines the trust an employee may feel that the organization is looking out for their interests. Lack of leadership feels like racing down a highway with no one at the wheel wondering “Where I’m headed?” “Who will look out for my safety? “Does anyone care about me?” Sometimes lack of leadership can be a supervisor or work lead who hasn’t totally bought into the new process. Their verbal or non-verbal messages are likely to evoke a feeling of “If he/she doesn’t care why should I?”

The three reasons people resistance change, tradition, fear, and lack of leadership all directly impact buy-in. Buy-in is simply overcoming resistance to change. It must be present in any change initiative for the process to be successful. Managers and training professionals whose work involves change management, will tell you that the best technology, the best process, the most competent employees are no where near as important as buy-in when implementing change.

Assessing the extent of resistance to change and the potential for buy-in is critical in predicting the outcome of the proposed change. When a change is unsuccessful, how can we assess how much influence resistance to change had on the integrity of the change process itself? In other words, is it the process or the people? To adequately answer that question we must consider the following factors prior to introducing the change:

• Desire
• Openness
• Insight
• Values

Let’s consider each of these factors individually.

Desire

Desire is the extent to which a client wants to learn the new behavior. Determine if the client has a keen interest in trying out the new process and wants to do the work involved in changing and maintaining new behaviors.

Ask yourself, how receptive has the client been to the communications about the change? How well has the change answered the client’s need to know what’s in it for me? Make sure implementation of change has been preceded by specific information about what is changing and why the change is necessary. Include in your communication any benefits to those involved in the change. When several departments are targeted for change ask for volunteers first if possible. Those who desire the change will be committed to seeing that the process works. This can build confidence in the process for those who are more resistant.

Openness

What new thoughts has this person had in the past year? Is this person up to changing their view? Change requires change in thinking. As managers and training professionals we must listen closely to the language and the behaviors the client uses in describing work processes. Interview the client before implementing the change. Beware of responses to change such as: “We’ve tried that before and it will never work” or “But we’ve always done it this way”. Acknowledge the client’s knowledge and experience. Find out as many specifics as you can about why previous changes were unsuccessful. Ask what they would have done to make the change successful. Finally, ask if they are willing to try the new process.

Insight

Insight is the extent to which a client is capable of processing feedback about changes in their behavior. Work behaviors are often very personal and have been developed to meet the need of a particular individual. Asking that person to change their work behaviors can be threatening. Ask yourself, to what extent does this individual define his worth by the behaviors he has established? Also, to what extent can the individual view work behaviors objectively?

If the client strongly associates work behaviors as linked to self worth you will need to sell the benefits of the change to the client prior to attempting to implement the change.

Values

What a client values from work is an important aspect to consider prior to implementing a change. Work values include job security, independence, money, authority, recognition, advancement, etc. There are simple instruments designed to assess work values. The results of the assessments will help you determine the degree of importance that a client may place on a particular value. This information can be used in determining how to introduce the change. For example, a person that indicates that job security is their most important value needs to know that there is a certain amount of predictability in their daily work routine. For this individual change will most likely be perceived as a threat to what they value most at work. These workers will be more receptive if they have all the facts about the change, are informed about what to expect, and if at all possible have some involvement over the implementation of the change.

Prior assessment of these areas, desire, openness, insight and values, will help your change initiative in obtaining buy-in. Obtaining buy-in begins with the assessment of the change factors. During the assessment the client will have learned about the upcoming change and have an opportunity to voice any concerns while you can assess their potential for buy-in. Keep in mind that competency and proficiency in the newly required skill is less important than obtaining buy-in to the new process. As training professionals and managers we know that skills can be trained, buy-in cannot.

After the assessment of the change factors, selecting the appropriate department or key individuals to be first in adopting the change initiative is the next most important step. If the change can be rolled out in one area at a time, select the area whose leadership and staff have rated the highest on the factors for change. In other words, select a department that has the highest likelihood of success. Other departments will be paying close attention. A success early on will contribute to buy-in of other departments and will provide credibility to the change initiative. This department can sell the features of the change to other departments. They can let them know what is working and also what part of the change process remains challenging.

Enthusiasm to implement changes in an organization must be tempered with a thorough assessment of the areas impacted by the change. Understanding that employees resist change out of fear, tradition, or lack of leadership can help you prepare for change. Assessing the factors for change and selecting the most receptive department to pilot the change are key in obtaining buy-in. Remember, without buy-in, no matter how great a new process is, the project is doomed for failure.

Evolutionary or Revolutionary Change?

In today’s business environment the challenge continues to be the ability of an organization to change and change quickly. Quick change transformations are critical to meet a demanding client base and tough competition. Baby boomers grew up wanting it “their way” and they bring this expectation to all product and service providers. As a result, change management consultants have been active assisting their clients in managing change. The challenge, however, is not managing change, the challenge is identifying the changes necessary to ensure the organization doesn’t simply survive but thrives.

Organizations face two types of changes, evolutionary and revolutionary. Evolutionary change is change that happens over time to ensure the survival of the organization. Evolutionary change is typically change brought about by either outside pressure or incentives. For example, many hospital and healthcare providers have evolved by transforming their paper medical record keeping to electronic medical record keeping due to external financial incentives. Retail and food chains typical evolve by outside pressure from competition. A new salad offering at one chain of fast food restaurants and invariably a salad offering is picked up by all the others. Whether healthcare, fast food, retail, or a service industry, evolutionary change keeps everyone in the game.

In contrast, revolutionary change occurs when organizations make radical transformations to their product or service in an effort to be on their game rather than simply in the game. These organizations engage in revolutionary transformations at key points of their evolution. Revolutionary change is when the organization anticipates a market change before it happens and views these potential market changes as a business challenge. Amazon is an organization that engages in revolutionary change. The advent of the Kindle was revolutionary to the book publishing and reading world. What was the result? The result was a new market share and increased profit margin. Amazon’s competition quickly engaged in evolutionary change, copying the Kindle with their own version of an electronic reader in order to survive and remain competitive. Amazon is just one example of an organization on their game. There are many other outstanding organizations that engage regularly in revolutionary change. It is revolutionary not evolutionary change that separates the winners from merely the survivors.

Sadly, many organizations are on the precipice of revolutionary change but have resisted initiating the necessary actions to facilitate the revolutionary change. We might look at their leadership. As always, I welcome your thoughts and comments.

Leaders and Culture

What’s the defining difference between leaders who are at the helm of poor cultures and those at the helm of great cultures? It really comes down to the type of leader; leaders of poor cultures tend to simply transact business while leaders of great cultures transform organizations.

Transactional leaders are effective at managing the day to day operations of an organization. These leaders tend to be adept at administrative managerial tasks and are quite knowledgeable about organizational processes, procedures and the importance of adhering to organizational policies. Often change and conflict avoidant, these leaders are most effective managing the status quo. They draw their inspiration inward and toward the past; what’s happening at my company, how did we handle this issue in the past? New programs, processes or procedures are viewed skeptically. Often these leaders have little interest in trying new things for fear that innovation may be disruptive to the operation.

The questions asked by transactional leaders are most often tangible and concrete; “How much will it cost? How long will it take? What is the resulting benefit or profit?” The questions transactional leaders ask are not poor questions they are simply the wrong questions. It’s a question of altitude and timing. Once the transformational questions are answered then it is appropriate to hit the tarmac, not before.

Leaders at the helm of organizations with great cultures transform organizations. These leaders are willing to make revolutionary organizational changes through calculated risks to move their organization to the next level. They draw their inspiration outward and forward. They are focused on what is happening in the marketplace, what their clients want, and what their competition is up to. Innovation is nurtured in the culture through recognizing and rewarding employees who contribute forward thinking ideas. These leaders are also willing to scrap innovations that simply aren’t working. The “We’ve always done it this way” reason is not good enough for the transformational leader.

When a new program/product, process or procedure is introduced the transformational leader asks, “Why should we do this? How does this support our mission and values? What will be the impact to the client and the employee? What have other organizations done in this area? Who in our organization has experience in this area?” A sense of patience and deliberation permeates the discussions of transformational leaders as well as respect for the talents, experiences, and thoughts of those throughout the enterprise.

The contrast between these two leadership styles is stark. Transactional leaders, intent on maintaining the status quo, create an organizational culture that squashes innovation and personal contributions. The leaders are thought of as having all the answers and employees are often viewed as expendable. In contrast, transformational leaders are innovative and inspiring. Their charisma and forward thinking approach to organizational challenges and opportunities create a culture of employee participation and engagement.

What type of leaders guide your organization; predominately transactional or transformational? As always, I welcome your feedback and comments!

The Leadership Challenge

Welcome to the Leadership Challenge! So many managers and quite frankly executives hear terms like organizational culture, change management, climate and the like and wonder what does this mean to me and to my organization? Each week I will address issues facing managers through brief tutorials and examples. I welcome your comments, experiences and questions on these topics and others of interest. This week The Leadership Challenge is focused on the challenge of Corporate Culture.

The culture of an organization is critical in attracting, recruiting, engaging and retaining key talent. Culture is also crucial to meeting organizational goals and objectives. Whether intentional or unintentional the goals, priorities and actions of executive leadership ultimately form the basis of organizational culture. In other words, an organization may unintentionally evolve into an undesired culture or intentionally evolve a desired corporate culture.

A corporate culture is illustrated in the manner and to the extent in which the corporation engages in innovation, manages its talent including the activities of recruitment, engagement and development, celebrates its success including formal and informal recognition and rewards programs, continuously seeks improvement, manages knowledge, capitalizes on its learnings, and grows its resources both capital and human.

The following is a synopsis of features present in organizations that possess great organizational culture as well as those organizations that possess poor organizational cultures:

10 Features of Great Organizational Culture

1) Zealous attachment to the organization’s mission

2) A sense of pride, sincerity and cooperation (chasing the work not the dollar)

3) An attitude of constructive discontent (never stop looking for ways to improve)

4) Value based mind set and management style (decisions made consistent with the values of the organization)

5) Emphasis on creativity and innovation

6) Focus on building role models not just leaders (leaders get things done, role models get things done in an ethical framework)

7) Fair compensation and incentive program

8) A sense of high expectations and professional standards (strive for excellence)

9) Habit of celebrating successes

10) Adhering to the Golden Rule

10 Features of Poor Organizational Culture

1) Gross compensation inequities

2) A fear based management style

3) Lack of a clear path for advancement

4) Being treated poorly

5) Tolerance of poor performance

6) Broken promises

7) Putting personal interests ahead of what’s best for the company

8) Lack of recognition for superior work

9) Feeling under-appreciated

10)Lack of trust

These features represent four spheres of an organization; mission and values, processes and procedures, leadership, and people. The extent and manner to which an organization invests in these four areas ultimately form the organization’s culture. What is your organization’s culture? I welcome your comments!