Leaders, Tattoo this Causal Relationship on Your Forearms

February 22, 2012 By 6 Comments

I’ve been mildly surprised that the book, Beyond Performance-How Great Organizations Build Competitive Advantage by Scott Keller and Colin Price, hasn’t commanded more attention in mainstream business circles. Perhaps we’ve grown numb to the almost endless number of books purporting to show us the way to sustained success. However, don’t let the existence of 25,000 or so books published on managing change during the past two decades, blind you to some of the important and data-backed conclusions of Beyond Performance.

The book is the outcome of a massive McKinsey research initiative that suggests that the ability of an organization to gain and sustain success is a function of a focus on traditional performance tools and measures AND something they describe as Organizational Health. 

Organizational Health is defined as, “the ability of your organization to align, execute and renew itself faster than your competitors.”  

The authors backed by research that encompasses 600,000 survey respondents from more than 500 organizations; surveys and interviews with 6,800 CEO’s and an exhaustive literature review, put forth a powerful claim “On the strength of our research and analysis, we assert that the link between (organizational) health is more than a correlation, and is in fact causal.”

We’ve moved beyond correlation to a place where most of the 25,000 aforementioned books never go. The authors are stepping out on the statistical limb (a fairly sturdy, data-supported limb) in suggesting a causal relationship between performance and Organizational Health.

They take their conclusion one step further: “We argue that the numbers show that at least 50 percent of your organization’s success in the long term is driven by its health.”

What’s Organizational Health?

The short form: Organizational Health is described by three key components:  internal alignment on direction, quality of execution and capacity for renewal.

These three break down into 9 elements:

  1. Direction
  2. Leadership
  3. Culture and Climate
  4. Accountability
  5. Coordination and Control
  6. Capabilities
  7. Motivation
  8. External Orientation
  9. Innovation and Learning

The 9 further subdivide into 37 distinct management practices that can be measured, monitored and evaluated.  The 37 practices comprise the Organizational Health Index (OHI) survey, “a tool for measuring the health in rigorous and comprehensive manner.”

My Quick Takes:

Invest the time and read the book.  The book, the data, the OHI and the inherent management practices merit our time and attention!

There are practical implications for you and your firm now. Often, big  research studies seem to come back and confirm the obvious. There’s a little of that here, but the data backing of the conclusions allows us to move from conjecture about these practices to confidence that we need to focus our energies around promoting organizational health.  Anyone reading this or any other leadership and management blog will intuitively get that the 9-elements (and 37 practices) are essential. The book offers few epiphanies from an intellectual perspective. From a practical perspective, it clubs us over the head and reminds us that we tend to ignore much of the softer stuff (beyond performance activities and measures). Translation, too many business and leaders suck at cultivating organizational health.

It’s broader than employee engagement.  The OHI is comprehensive enough to bypass my gag reflex on employee engagement surveys serving as proxies for organizational health. If I see one more question asking me whether I have friends at work or whether I have the tools to do my job, the gag reflex will fail!

See also the last decade. Ignoring organizational health has in large part contributed to the creation of the lost decade we’ve just lived through. This past decade guarantees heartburn many years into the future.

Reminds you of your priorities. The authors and their concept of Organizational Health speak to the pieces we all intuitively know are essential for survival in this world…alignment on direction, focus on getting great people supporting execution, and promoting a culture that learns and adapts. The encouragement to work on the practices that beget health is an important reminder for all of us.

The Bottom-Line for Now:

No magical answers, but strong support for what the best leaders and managers have long known…the soft stuff of culture, climate and environment and all the inherent management practices are critical. Organizational health begets performance. Is it time for a check-up?

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Art Petty is a Chicago-based management consultant focusing on strategy and leadership development. Art regularly speaks on innovation in management and leadership, and his work is reflected in two books, including the recent, Leadership Caffeine-Ideas to Energize Your Professional Development.  Art publishes regularly at The Management Excellence blog at http://artpetty.com

Prior to his solo career, Art spent 20+ years leading marketing sales and business units in systems and software organizations around the globe. You can follow Art on twitter: @artpetty and he can be reached via e-mail at art.petty@artpetty.com

Filed Under: Leadership, Leading Change, Management Innovation, Strategy Tagged With: , , ,

Leadership Caffeine: Motivate with Context

April 25, 2011 By 13 Comments

Overheard:

Why are we doing this project?

I don’t know who is making these priority calls. They don’t make any sense.

We’re so far removed from the customer, no one notices what we do.

During my review, I was encouraged to innovate more. I don’t know what that means.

Context and the “Walk In the Door” Test:

In workshop settings, I frequently poll participants on what I call, “The Walk In the Door Test.” It goes something like this: “When you walk in the door in the morning, can you connect your priorities to the strategic priorities of your firm (or business unit)?”

I’m never surprised, but always disappointed that only about half of the participants admit they CAN connect their priorities to the important issues of their firm. The rest are honest (and frustrated) enough to admit in public, that they struggle with understanding the context for their work.

A few weeks ago, a corporate trainer indicated to me: “I’m not certain what the managers want their people to get out of the program, but I’m going to train them anyways.” Too bad for the participants.

Beware Context Deficit Disorder:

The employees quoted above, the disconnected and under-informed trainer and my honest survey respondents all share one thing in common…they all suffer from Context Deficit Disorder (CDD).

Too many mediocre managers and lousy leaders send their teams into battle on a daily basis armed with nothing more than a “go get ‘em,” and a metaphorical slap on the back.  There’s no connection between the work and the key objectives of the firm or the pursuit of creating value for customers.

Think of the many mediocre (or worse) customer experiences you encounter in a typical week. There’s the inattentive server, the cashier who never makes eye contact, the grumpy phone support personnel or, my favorite, the guard dog receptionist you came up against at the doctor’s office.  They all lack proper context for their work.  (We’ll leave the doctor who rushes through your examination seemingly on a mission to set a new land-speed record for spending as little time as possible with patients, for another topic on another day!

These individuals lack context for the importance of their work and the impact they have on people who vote with their dollars and feet. I’ll dump the blame squarely on the shoulders of the managers who allow their people to engage with others without providing clarity for their mission and building in accountability for carrying it out in good form.

Forget the Posters and Cheerleading and Instead, Provide Clear Context:

We waste fortunes inside our organizations on misguided programs and oddball incentives, seeking ways to motivate and inspire people to work hard, innovate, create, care and to live up to their potential, when the real solution is literally on the tip of our tongues.

People do their best work when they understand how their work fits into the bigger picture. This is the critical context that fuels revolutions, promotes perseverance and encourages creativity. People working for a cause are exponentially more powerful than people working for a paycheck. Management by paycheck is little more than motivating people at the end of a gun barrel.  Alternatively, management by context creates a sense of purpose that is essential for tapping into people’s extra stores of energy and their best creativity.

Of course, context comes in many sizes and shapes. I don’t necessarily expect the front-line cashier to be familiar with the nuances of the firm’s strategies, however, I do expect this individual to have an absolutely clear understanding of how customers help the business go and grow. Alternatively, the project manager leading a major new development initiative must understand how the project fits into the firm’s future plans to open new markets, capture more customers and beat competitors.

While the level and detail of context may vary by position and mission, it must be present for everyone all of the time.

5 Ideas for Curing Context Deficit Disorder

1. Establish connectivity. Never ask someone to do something with out linking the request to a clear business rationale.

2. Create forums to improve understanding. Provide opportunities for the people doing the work to ask questions about the value of the work.

3. Create forums to improve understanding, part 2. Don’t keep the strategic issues locked in a drawer. Share liberally on the big picture issues in your market and with your customers and involve people in translating high-level goals into meaningful and connected front-line activities.   Help your people improve their “Walk in the Door Test” results!

4. Make metrics meaningful. If you are going to the trouble of developing scorecards and other systems of measurement, make certain you both share and explain the metrics to the people being measured.

5. Provide opportunities for the people doing the work to share ideas for improvement. And then let them implement these ideas.

The Bottom-Line for Now:

This topic reminds me of the old story about the workers moving a pile of rocks.  When asked what he is doing, the first worker indicates, “I’m moving this pile of rocks from here to there.” The second one is asked the same question and responds,  “I’m helping to build a cathedral.” I certainly know which one I want on my team.  Do your employees and team members see the future cathedrals in their work at your organization?

Filed Under: Leadership, Leadership Caffeine, Performance, Strategy, Surviving Lousy Leaders Tagged With: , , , ,

Management Excellence Book Series: Six Disciplines Execution Revolution with Gary Harpst

December 8, 2010 By Leave a Comment

I started this book series to share the insights and approaches of some truly sharp people on solving vexing business problems. This particular interview with Gary Harpst, author of,  Six Disciplines Execution Revolution and the earlier Six Disciplines for Excellence, taps into Gary’s hard won, practical experience and his great ideas on helping small and mid-sized businesses deal with strategy execution.

On a personal note, the discussion, while remaining true to the strategy execution topic, ranged fairly far beyond the borders of the book. Talking with Gary during this interview was like engaging with the wise, thoughtful and helpful business advisor that we all wish we had. Gary offers experienced based, actionable ideas on improving business performance through great execution, that we can all put to use immediately.

Gary’s premise for his “Business Excellence Model” is described in the book as:

  • “Excellence is the enduring pursuit of balanced strategy and execution.”
  • “Planning and executing, while at the same time dealing with the inevitable surprises, is the biggest challenge in business.
  • “Overcoming this challenge is what we mean by “solving the problem that makes all others easier.”
  • “Failing to solve the problem destines your organization to a reactive, fire-fighting future.

During the podcast, we talk about the different stages/phases found in the “Business Excellence Model,” and reference the four-box matrix pictured here:

Enjoy the podcast and this unique opportunity to learn from someone that has lived what he is talking about from the business-owner’s side of the table, and now helps clients realize success by guiding them on effective strategy execution.  I’m thrilled to feature Gary Harpst and his important thoughts on strategy execution here in the Management Excellence Book Series!

Gary Harpst Six Disciplines Execution Revolution podcast [ 27:57 ] Play Now | Play in Popup | Download

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Note from Art: I purchased the book, Six Disciplines Execution Revolution on my own and have no commercial motive for sharing this podcast and linking to Gary’s website. The Management Excellence Book Series podcasts are intended to share thoughts from leading figures in business and management writing.

Filed Under: Leadership, Performance, Strategy Tagged With: , , , , , ,

The Importance of Strategy Fueled Leadership

September 9, 2010 By 3 Comments

soapboxI’ve written on the topic of Strategy Fueled Leadership several times, and fresh off of a great podcast interview with Gary Harpst, author of Six Disciplines Execution Revolution (stay tuned for my posting) and my recent interview with Jocelyn Davis for Strategic Speed, I am on my soapbox again.

It is critical to link leadership with strategy and vice-versa and the failure to do this is one of the root causes of strategy and execution failure in organizations.

Soft Soap:

Much of the writing and talking about leadership appropriately emphasizes the softer side of things. Creating a great working environment, building credibility, leading with fairness, providing motivation and even inspiration…all of these are important. There’s a good chunk of my half-million blog words tied to those issues.

Nonetheless, the tremendous energy required to develop as a leader and to develop leaders around you is an exercise in human relations if it is not intrinsically connected to the underlying purpose of the enterprise…solving vexing problems for others and making or generating money.

I’ll invoke Drucker’s view as to the purpose of an organization: “The purpose of an organization is to acquire and keep customers.” Choose his version or your own favorite form of  “maximize value for…” definition and the issue is still the same.

Leadership uncoupled from strategy might as well be counseling.

Unfortunately, We Kind of Suck at Strategy:

  • Year in and year out, one of the top concerns of global CEOs is the struggle that their firms face in executing strategy. McKinsey’s year-end surveys are a great source, and the recent Harvard Business Review research focused on this topic underscores this issue.
  • I regularly poll on my “walk in the door” test in workshops and consulting sessions. The question is simple: “How many of you can connect your own priorities to the strategic priorities of your firm?” You can be certain that less than half (sometimes way less) can pass this simple test.
  • In Strategic Speed, the authors identify some insane number of strategies that are abandoned due to the inability to execute. Their findings, “It’s the people, stupid.”
  • In Six Disciplines Execution Revolution, Gary does a great job of making the case that most small to mid-sized firms spend most of their useful time somewhere out of balance between strategy and execution, often getting lost in operations or fire-fighting mode while neglecting both the “what next?” and the issues surrounding “how do we execute, learn and improve?”

Strategy is Everyone’s Business:

It’s critical for everyone in an organization to be attuned to their firm’s strategies and priorities, and to be part of the execution and feedback/learning processes.  It’s doubly important for those managers making key calls every day on how people spend their time, to be attuned to strategy.

When suggesting this “everyone is involved” concept before, I’ve received pushback that it’s too cumbersome…and not everyone gets a vote. These points miss the point.  There are undoubtedly key calls that need to be made by the people operating at high levels.  However, the work of implementing happens below those making the big calls, and all of the rich organizational learning opportunities including customer feedback, competitor response and “Ah Ha” moments take place somewhere well below the C-Suite.

Leading with Strategy Creates Context:

People do their best work when they have context for the importance and relevance of the work. Strategy provides that context in the workplace.

What might be just an IT improvement project to one team charged with the responsibility for carrying it out, may well to another group be a critical enabler of strategy, that once implemented will dramatically improve the ability to engage, support and even sell more to existing customers.

It’s much like the old story of the two stone-cutters that were asked what they were working on. One responded, “I’m cutting these stones into blocks.” The other answered, “I’m building a cathedral.” Context plus inspiration!

The Bottom-line for Now:

Gary articulated the importance of getting all layers of leadership involved in understanding strategy and translating that into execution. Jocelyn and her co-authors build a compelling case that the execution problems that bedevil so many organizations, are in fact people and communication problems. I agree.

It’s time to put the strategy into leadership and start counseling and coaching with context.

Filed Under: "To Do" List, Leadership, Performance, Project Management, Strategy Tagged With: , , , ,

Art to Help Kick-Off Project Leadership Forum at Harrisburg University

May 11, 2010 By 2 Comments

Fresh ideas As a long-time, self-described zealot for the importance of project managers developing as leaders, imagine how excited I was to learn about a conference devoted to just this topic! I’ve written at length in this blog (Learning to Lead in the Project Focused World and others) and even offered up my e-book, Leadership and the Project Manager, in support of this concept.

I’m even more excited to be a part of the conference as a guest keynote as the Project Leadership Forum kicks-off on Thursday in Harrisburg, PA.

From the release: The 2010 forum focuses on how to increase projects’ ROI by using leadership practices to influence results and reduce failure rates.

I suppose in true zealot fashion, if I were writing the release, I might trumpet something to the effect that great project managers….that have developed and practice as effective leaders are THE X factor in project success!

I might go on to talk about the remarkable opportunities that firms have to create value, improve performance, improve the effectiveness of strategy execution, grow talent, foster learning and innovation and cure several other common managerial and organizational ailments if they develop effective project leadership cultures.

And finally, I would likely challenge executives to wake-up and recognize and support the opportunities to improve in this area, and I would cheer on project managers to seize the day and grow their careers and increase their value to their firms by developing as leaders.

Of course, to hear all of that and much more, you would have to join us in Harrisburg, PA at the University on Thursday, May 11.  The line-up of guests, case studies and break-out sessions is certain to inspire and motivate anyone that is interested in strengthening project performance!

Congratulations to the great professionals at Harrisburg University for recognizing the value in this important topic and to Jennifer Reiner, the Director of Strategic Program Management and the team for devoting their energy to producing this exciting event!

Filed Under: Leadership, Performance, Professional Growth, Project Management Tagged With: , , , , , ,
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