Agents2Change - Smart Business Thinking

Developing Common Operating Models

More and more globalised companies are seeing the need to develop one common framework that guarantees the same look and feel throughout its entire organisation.  The list includes many of our own clients such as BP, Allianz and British Energy, alongside other global players such as Deloitte, Tesco, Nortel, Reuters to name but a few.  Often these companies have grown through a mixture of organic and acquisitive growth which can lead to a range of operating systems and processes, originally set up to service a very different set of strategic goals.

Whilst the rewards are considerable, there is a fine balance to be struck in creating a common operating model.  The challenge is to provide a coherent and workable framework, yet at the same time not over prescribe what the framework that it inhibits local content.

Going down a principle based implementation route is often more successful than a prescriptive one, but does require a good degree of agreement on what we would call the big ticket items.  We would define these as:

 
 
How these apply in each of the entities and divisions of a corporation may differ according to business needs, geographic requirements or IT platforms, but in order for the value to be delivered at a group level, a set of minimum standards needs to be applicable across each and every region.

Sometimes organisations can fall into the trap of thinking that it is purely a technological issue and roll out best-in-class IT systems which are then under-utilised or bolted onto existing (& usually inefficient practices).  

The real benefit lies in working through all of the strands – from defining the business results, to mapping out (or at least re-confirming) the core business processes, developing systems  (IT & Behavioural) to support those processes and then intensively developing your people on-the-job to engage with these new found processes and systems effectively.

The benefits in terms of efficiencies, cost savings and enhanced implementation skills are well documented and provide a strong business case.  The question for most organisations is:  Do we know enough about what we don’t know and care enough about what we do know to create a common operating model?  Your competitors may already be making those efficiency gains, so can you afford not to?

It’s the situation stupid! How Leadership needs to be adapted to the environment.

OK, so it’s not breaking news, but just how many times do you see leaders use the same response to a widely varying array of situations – which ultimately leads to a widely varying array of results.  The adage that a successful leader in one company may fail in another is not just about culture and values (although these are important as well) but it is often about leadership styles.

Almost 40 years ago, Ken Blanchard and Paul Hersey developed a model to explain this phenomenon, called Situational Leadership.  Their insights told us that before a leaders selects a style to use, they must first understand the situation, the capability of their team  and the importance of the possible outcomes. The model places importance on four key factors:

• How much Direction (Task behaviour) is required?
• How much relationship acknowledgement (Relationship behaviour) is required?
• How capable is the team member at following a specific tasks?
• What is the level of motivation (Importance) exhibited by the team member to complete the task?

 

Task behaviour is concerned with conveying the who, what, how and when elements of the task.  Usually a one way communication from leader to team members, it is about getting the job done, with little need (or room) for debate, innovation or creativity.  When the outcome of the task allows no room for error, this is often the preferred approach.

Relationship behaviour is concerned with winning the hearts and minds of team members, so that they see the importance of the task and they know the value that is placed on their particular contribution in achieving the task.  If the outcomes of the tasks allow some flexibility for individual learning, this is an ideal approach to take.

As Hersey stated:  the most successful leaders are those that adapt their leadership style to the maturity of the group; the capacity to set high but attainable goals, willingness and ability to take responsibility for the task etc, but also on the leaders understanding of the task, job or function that needs to be accomplished” (1977). Management of Organizational Behavior 3rd Edition

The model was further simplified by Marshall Goldsmith (et al) into a the skill ‘v’ will matrix, illustrated here:

 

 
  
The model implies that once a leader learns to diagnose and implement the corresponding leadership style, they will be a more effective leader. An effective leader is able to execute each of the four techniques and know when to apply them, even if this means that the same team member might have a different technique applied in to respond to different tasks.

How conscious are you of the style you apply in the workplace?  How could you use this model to influence and motivate your teams differently?  Send us your comments at:  feedback@agents2change.com.

What did Deming ever do for Performance Improvement?

W Edwards Deming left quite a legacy in the field of performance improvement, changing the face of process driven industries for ever.  His style was reflective, bringing careful observations and delivering sage advice.

Not that his insights were always welcomed.  Indeed in the US in the  40’s and early 50’s when industry was booming his ideas around process analysis and control did not influence much outside of academia. 

It was the Japanese government, struggling after the decimation of war to rebuild their society, that picked up on his insights.  A zero based economy: - zero GDP and zero industry, they had nothing to lose.  His theories centred around statistical control of processes – that is measuring and understanding the processes  (not increasing output at the cost of quality).  What he found in the Japanese culture was a fit with this thinking.  As he himself said:

“Statistical thinking and statistical methods are to Japanese production workers, foremen, and all the way through the company, a second language. In statistical control you have a reproducible product hour after hour, day after day. And see how comforting that is to management: they now know what they can produce, they know what their costs are going to be.”

 

In his book Out of  the Crisis, Deming puts forward a 14 point management checklist:

 

1. 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.
2. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.
3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.
4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.
5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.
6. Institute training on the job.
7. Institute leadership. The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.
8. Drive out fear, so that everyone may work effectively for the company (see Ch. 3).
9. Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.
10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.
11. Eliminate work standards (quotas) on the factory floor. Substitute leadership.  Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.
12. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.  Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective.
13. Institute a vigorous program of education and self-improvement.
14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody's job.

Deming’s teachings, combined with a number of other factors rocket fuelled growth in post-war Japan, but Deming’s particular influence was the increase in quality.  Whilst the larger and wealthier European, UK & US manufacturers saw quality drop in proportion to growth, Japan managed to bring the two factors together, bringing some of the best methods for manufacturing to the world in the form of 'just-in-time' production and Kaizen thinking.  The influence of Deming on these and many other aspects of manufacturing and in turn global standards for process management cannot be under estimated.

Central to our work at Agents2Change is performance improvement.  Whilst Deming is only one part of our retinue of methodologies and theories, he is nonetheless an important part.  So what did Deming do for performance improvement – quite a lot actually!

So many leaders - so few managers

In a recent article in People Management, Rob Briner of London's Birkbeck University lamented the rise of leadership and the shadow it creates over management.  Leadership sounds dynamic and exciting, whilst being a manager can sound, well a bit mundane.

Many of us have seen the contrasts that are used to show leaders as visionary and managers as practical.  The impact that such contrast models can have, is to over-state the benefits of leadership at the cost of the somewhat undersold management.  The fact is that organisations need both, but the mix and the contribution that each can play needs to be understood.  An organisation with too many visionaries can lack the skills for implementing ideas and equally one that has too many pragmatic operators may lack the ability to respond to changing needs of the business.

It might seem to regular readers of this blog that we have a bias towards leadership, but most of our work is concerned with implementation.  This is done by the people who control processes and manage teams.  It does not matter if their job title has leader or manager within it, the fact is the essential skills of management need to come to the fore to bring about improvements.  As Mintzberg would put it, 'Leadership is management well practiced'.  Here, here to that.

What do you think.  Send us your comments or email us on feedback@agents2change.com, 

Recession Trends, or what happens when the going gets tough

During this recession there have been many surveys reporting on how it has affected our daily lives.  One of the most frequent that is reported is how our buying habits have changed.  Some rather interesting trends emerge:

On the Increase

On the decrease

Supermarket branded food – instead of the more expensive branded counterparts; Vodka – sales sour as wine & champagne takes a nosedive Pyjamas – Increase sales in internet and stores; Root vegetables such as turnips as we return to more basic home cooking Afternoon Tea – increased sales over last year as more families (due to redundancy) have time and need a cheap going out option

Birthday Cards – as the UK cardmaker Clinton amassed large debts, people made their own or opted for e-cards; Book buying – Waterstones saw a drop in sales whilst municipal libraries saw an increase in memberships; Antiques – getting cash out of the attic is on increase as ebay reported a 200% increase in family valuables; Coffee – Fancy coffee bars are losing favour as Starbucks report a 77% quarterly profit drop and UK chain Coffee Republic folded this year

What has been widely reported is the sweeping changes that we see in human behaviour when there is a real or perceived risk to income and lifestyle.  Whether through actual changes such as redundancy or the fear of it that has changed buying patterns, it’s clear that the environment and our perception of it fundamentally alters our decision making process.

More basic, simpler and affordable pleasures are sought, whilst the more exclusive or hedonistic options appear to be shunned.  Retail and particularly supermarkets have been very quick to pick up on this trend by introducing such ranges as ‘back to basics’.

As well as the monetary changes, psychologically the nation is looking for comfort rather than opulence.  The increase in pyjamas sales for instance suggest that it is about returning to a time when we felt more secure  (often childhood or early-adulthood) to help us to feel better about our relatively insecurity now.  Again advertisers are quick to realise this, hence the increase in the re-release of retro adverts for household names such as Heinz.

 

Businesses also have to respond to the recession and its potential threat to them by following some of the same rules; prioritise ruthlessly, spend wisely and cut out unnecessary waste.  What is less helpful for business owners and leaders is to also follow the trend for ‘nesting’ and looking for retro-comfort.  What every previous recession tells us about the business survivors is that they looked after their core business sharply, whilst also looking for opportunities for bold-mover status.  They could do this by believing that their long-term survival was linked to innovation and growth regardless of whether the current circumstances suggest otherwise.

 

For businesses to survive a recession they need to understand the mood of the nation, manage their own processes and costs very well, but maintain focused on their long term survival by constantly looking to the horizon for inspiration.  Getting caught up in the doom and gloom of the scare-mongers and allowing this to make their decisions less bold, will only steer them off course in the long run.  History for certain tells us this.

What is the connection between performance improvement and continuous improvement?

In a recent client conversation the question came up about what if any difference exists between performance improvement and continuous improvement.

Regular readers of this blog will know that we have a lot to say about performance improvement (PI) , but perhaps we imply rather express our opinion on continuous improvement (CI).

We would argue that both  PI & CI come out of the same stable, but PI is about baselining and embedding systems of control and CI is the daily, weekly and monthly interaction of those systems to improve results.  CI then is perhaps the behavioural response to the systems and processes introduced through a PI drive and one could aruge where the real value is achieved over the longer term.

The most successful implementations of CI have been in Japan, where they wholehearted adopted Deming’s  theory of quality management.  This developed into an approach known as Kaizen (the translation of kai (“change”) zen (“good”).  It was their slavish attention to detail, the consistency of approach and highly developed feedback loops that rocket-fuelled their post-war growth, particularly in car manufacturing arena.

We would therefore argue that PI & CI are not separate entities but two sides of the same coin.  With Continuous Improvement the emphasis shifts to:

• A deep and shared understanding of core processes and their key control areas

• Implementing Management and Control Systems (MCRS) that identify, reduce, and eliminate  suboptimal processes.

• Team and leadership behaviours that open up communication channels thereby facilitatig incremental and continuous improvement of core processes.

We would love to hear the experiences that you have in your organisations or share your views.  Contact us at:  feedback@agents2change.com.

 

Why do Projects Fail?

If change and implementation skills were universal what would we see?

Projects that always deliver on time and to budget

Mergers & acquisitions that always deliver shareholder value

Organisations that are nimble in their behaviour – responding to the market conditions

Employees continually learning new skills and behaviours

But the reality is somewhat different …

Over 60% of projects fail to deliver their stated value (KPMG 1997)

Gartner Group state that 30% of IT projects never come to a fruitful conclusion. On average 51% exceed budget by 189% while only delivering 74% of the originally stated functionality (2001)

70% of mergers & acquisitions fail to deliver (SMRC – Univ of Missouri, 2005)

Hostile takeovers on the increase (USA Today 3 March 08)

Industrial Tribunal Cases (UK) increasing by an average of 20% per year (Source:  Employment Tribunal figures)

So where does it all go wrong?

Many organisations view project management skills as purely technical set of skills comprising of scheduling, Gantt charts and critical pathways.

In reality, these skills probably only account for 10% of what is important to ensure that projects (or indeed any change implementation) deliver on time.  Reasons cited for failure are almost all behavioural or business contextual.  Lack of senior management buy-in; poor communication and roll-out of project outcomes; and unrealistic scheduling.

When organisations ask us to help with project management skills what it often comes down to is change implementation and engagement skills:  How to ensure that everyone knows what the journey is about; the route that will be taken; and the role that they will play in making it successful.

When you hear the cry in your organisation that ‘we need to improve our project management skills’, consider how much this comes down to standard project management and control (in which case a project management course might be ideal) and how much comes down to interpreting and responding to the business environment (in which case the coaching and development of change implementation skills might yield more sustainable results).

We’d love to hear from you, so please post a comment about your experience or email us on feedback@agents2change.com.

Team Performance - how do we break through the barrier of mediocrity?

Teamwork is how we organise most of the work in organisations, yet it is surprising how poorly it can be executed, even by the most seasoned of professionals. What does it takes for teams to rise from mediocre performance to make teams exceptional performance?

Teamwork – a modern myth?

A recent team event with a group which had been working together for a year showed a distinct lack of teamwork. That’s not unusual you might retort, but given that this is a group of mature professionals who ‘specialise’ in the areas of teams, leadership & behaviours, the resulting malaise is a bit surprising.

We could analyse this team looking at one of the classic team models such as Belbin’s Team roles (see: www.belbin.com) and perhaps the reason that the team was struggling was due to the lack of investment early-on, in understanding each others styles and working preferences in a team setting.

If this was a group of freshly recruited individuals, thrown together with little support and little understanding of how people change in a group setting, then we might expect the group to potentially descend into chaos. However, the group in question had knowledge of leadership and team development and indeed individually were providing this support to others in the organisation.

The difference between Knowledge and Learning

At the heart of the work that we do is change. For long-lasting change to occur it requires learning. For learning to be meaningful and permanent it requires some form of behavioural change. Learning therefore goes well beyond knowledge acquisition –‘I understand a model and can recite a theory to others’ – to behavioural follow through – ‘my position and viewpoint have altered, along with my interventions with others in response to my new understanding’.

Breaking the cycle of non- performance

The Forming, Norming, Storming & Performing model by Tuckman tells the story of development and discovery not dissimilar to the classic epics. We start out in earnest, wanting to put our best foot forward. We then fall into the roles and norms of the team – both consciously and unconsciously. We then face some major storms along our journey – at which point we can choose to go onwards, or turn back.

For teams to achieve high performance, another they have to go through a number of stages of development. The team in question lacked a common purpose, a commitment to succeed and an honesty in their dialogue with each other. At some level the choice had been made by the team members not to hold the difficult conversations that would have helped them to get through the Stoming phase and move through to a performing team.

If we are brave enough to go through the storm we see the prize at the other end – in this case a team that is confident, has belief in itself and is able to bring high performance to everything it does.

Like the moral in stories like The Illiad, the message for modern day teamwork is one of belief, courage and honesty. We need all three before we can break through the barrier of mediocrity. Isn’t that what we could conclude for all aspects of modern living, leadership, teamwork and personal integrity need a magic blend of all three to bring that extra sparkle to our performance. As for the team in question, we are starting with honesty first. The ability to hold the difficult conversations will be the key to their progress along their own journey.

What are your experiences of teamwork in your organisation. Please post your comments here or email us on feedback@agents2change.com

Performance Improvement - What is it and how do we do it?

At the heart of the work we do at Agents2Change is bringing about sustainable performance improvement.  Performance is defined as production increases; efficiency gains; more efficient outcomes.  Sustainable in terms of engagement of the very people who drive these processes through their engagement in the improvements and co-developing solutions so that ownership is embedded in the organisation.

We do this by taking the best of the methodologies that exist - Deming; Kai-zen; Lean Production; Six Sigma etc., and applying these in a robust performance improvement model.

All improvements need a context - an overarching direction and set of goals for the organisation.  This may be defined monetary - EBITDA for example, or in production or quality terms.  This context needs to be clear and widely understood.  Most organisations are very good at articulating these high level goals, but making them meaningful to grass root workers is not as easily achieved, yet essential to build momentum around an improvement drive.

These high level goals need to be interpreted in terms of results for each operating unit and work teams:  Are the team targets clear?  Does everyone understand them and know how these affect their role? Is growth factored into these results?

Once there is a good understanding of targets, the processes (how the work gets done) requires some scrutiny:  Are processes clear and consistently applied? Are there clear performance measures for key stages of the process? Are bottlenecks in the process identified and addressed promptly?

Managing these processes is the essential component in sustainable improvement through data collection, management reports and quality and focused meetings that address issues as they arise.  It is how this data is analysed and how leaders act on that data (both positive and negative) to address and improve results that defines the difference between success and failure.

The last two areas of our model are concerned with behaviour:  Are roles and responsibilities clear? Are these well documented and reviewed regularly? Do teams have a clear identity and a defined way of working? Do managers understand their role and intervene in a timely and effective manner?

By applying our model consistently (although not slavishly) by experienced change practitioners we have brought about sustainable improvements in many organisations.  If you would like to find out more visit us at www.agents2change.com.

Or if you have stories of how you have achieved sustainable improvements in your organisation please share your stories here or email us at:  Feedback@agents2change.com.

How well does your organisation set up and manage teams across different locations & countries?

Working with multinationals, we often find that project teams are dispersed in different locations, sometimes in different continents and this can have a big impact on their performance.  Often we are brought in precisely because of these difficulties, but a recent piece of research by MIT caught our attention which found that dispersed teams can actually outperform co-located teams given the right conditions.  “Beyond task-related processes, organizations must also ensure that team members commit to the overall group goals, identify with the team and actively support a team spirit.” 

Often, when supporting such teams, we have found that there was frequent mis-communication between the teams  (some based in UK and others in US and Africa) and often a tendency to revert to territorial behaviour patterns (e.g them & us)

The role of team leaders in supporting dispersed teams cannot be overestimated, nor can  the level of effort that needs to be put in to creating the conditions for collaboration and the clarity around team tasks and roles.  Yet it is surprising how little time is spent assessing and developing those skills in the very people who will be managing dispersed teams.  It links in very strongly to some earlier research we conducted on emotional intelligence of leaders and how that impacts on organisational performance .

“When assembling a virtual team, managers should carefully consider the social skills and self-sufficiency of the potential members.”

In our work, we have found that the investment that is needed to create those conditions, although relatively small for the returns is often over-looked in the rush to deliver something and meet project deadlines.

The MIT research findings, although counter-intuitive are indeed heartening.  Evidence from their research showed that dispersed teams, when managed well bring about superior performance.  As organisational structures and processes becoming more complex and the use of dispersed teams increases, it is clear that superior skills from team leaders will be key to success.

 

Building the requirement for these cruicial skills into the development and talent management processes for future leaders could indeed be the competitive edge that drives sustainable long term performance.