The market environment within which all businesses operate changes constantly. Each business organization must be prepared to change as well, either reactively or (preferably) proactively. When all organizational resources are aligned with strategy the organization is better prepared to utilize resources efficiently and effectively to adapt to changing circumstances. This is particularly true with social resources (people). If people are not fully aligned with strategic direction an organization has a tendency to become unfocused; struggling with conflicting priorities and mismanaging resources. Effectively establishing that strategic direction, however, requires more than the completion of a written plan document, no matter how well thought out that document may be. Effective strategic alignment requires the careful blending of well–defined organizational goals with operational procedures and personal skills to achieve efficient and effective work flow. Before creating a strategic direction it is most important that leadership has a clearly defined and well communicated vision for the future of the business. The formalization of an effective business strategy begins with visionary executive leadership. Visionary leaders are not prophetic; they simply understand the importance of exercising forethought, which they know to require all of the following: a willingness to carefully and objectively consider the business environment as it exists today the anticipation of the continually evolving needs of their customers, and those of their customers’ customers consideration of the needs and aspirations of all parties having an interest in the future well-being of the organization a thorough understanding of necessary internal organizational competencies, and how those competencies relate to the demands of the marketplace an ability to visualize internal organizational change as a process of ongoing, managed innovation
Author: Cody Soska (Page 1 of 2)
Our planet is one large system composed of thousands of smaller systems. Though tiny, our everyday activities combine to affect the global system in a big way, and the global system, in turn, affects each of us significantly. Similarly, in any business organization there are many components that must be recognized as contributing to organizational sustainability, and therefore must be effectively managed to align towards a common goal.
The Earth’s climate is a perfect example of one such global system. From agriculture, to work, to housing, to lifestyle – climate affects all aspects of human life. We are now trying to understand how changes introduced into our environment over many years (some so small as to be hardly noticeable) are impacting our climate, and correspondingly, our personal sustainability.
In business, leaders frequently establish “special project” teams to deal with change. Likewise, concerning our global system, many projects are underway to help us understand what factors contribute to a long term change in climate conditions. Understanding how and why the environment we live in is changing is important to both “micro” business projects and “macro” climate projects. Success however, is defined as the ability to pro actively (and practically) manage change to the advantage of the organization (system).
For example, as of 2016, there are several working models, startups, and plans to actually remove greenhouse gases from the atmosphere and oceans. However, given the interrelationship of the many components of the global environmental system, the impact of executing any of these plans on the entire system (think organization) must be understood before any plan can be considered viable.
The first obstacle to pro actively managing global climate change is the “how” of actually removing carbon and other greenhouse gases from the atmosphere and oceans. Several methods have been proposed: Bio-energy with carbon capture and storage, biochar (a charcoal used as a soil amendment), enhanced weathering, direct air capture, C02 scrubbing chemistry, and others. Research programs, global initiatives, and startups are already addressing the practical implementation and feasibility of these methods, with careful attention to the implications to the whole system of any remedial actions.
Not unlike any organization dealing with change in their business environment, when addressing climate change, global leadership must first create a strategy that ensures all options are carefully defined, alternatives weighed, costs and benefits quantified and solutions proposed. Then resources must be aligned to support the adopted solutions (strategy).
Without a clear vision of how to proceed, a method to do so, and an understanding of the cost benefit relationship of actions taken most good plans are likely to fail. For example, any method of greenhouse gas removal will probably be costly in the developmental phase, and have ongoing costs past implementation. Without a clearly communicated global strategy that helps all interested parties understand the cost offsetting benefits of managed change, greenhouse gas removal projects are unlikely to gain any traction.
As previously mentioned, when taking strategic action, all parties involved must understand the strategy and ramifications of implementation. Imagine leadership funding a long-term, costly activity without a clear understanding of the potential costs or benefits. Funding could be cut at a crucial point and potential benefits lost. Essential to any project of scale therefore, is the diligent utilization of metrics. For example, with greenhouse gas removal, what type and how much of each gas does each proposed solution remove? How much does each proposed solution cost to operate? How many different proposals should be acted upon ? These types of questions will require have many points of data to be collected, stored, and analyzed in real time.
As data is collected, the scope of a project like this will likely change. By realigning resources to better fulfill their role in the evolving strategy, leadership on a project of this scope can be more effective in realizing strategic goals , use fewer resources, and keep costs down while continuing to execute innovate.
In part 2 of this blog, we will use a real life example as a hypothetical case study of how managing a project like this on a global scale requires meticulous organization to be effective, and how long term planning, design, and adherence and redesign of processes can lead to improving profitability for an organization willing to undertake such a large project.
When a merger or acquisition is well planned and properly executed significant value can accrue to the combined organizations.
The fact is, however, the results from most business acquisitions and mergers are disappointing. Management covets the gains that consolidation and economies of scale are expected to bring, but the great majority of M&A’s do not live up to their promise. This has been demonstrated by dozens of studies covering hundreds of companies across all industries.
Some thought provoking comments follow:
“70 percent of mergers fail to achieve their anticipated value.” - Weekly Corporate Growth Report
“Most [mergers] fail to add shareholder value-indeed, post-merger, two-thirds of the newly formed companies perform well below the industry average.” – Harvard Management Update
“One-third of the transactions provided marginal returns, while only 17% provided substantial returns to shareholders.” About these figures, one expert said: “That’s a staggering number. That means those organizations were better off before they merged than after they merged.” – Best’s Review/Property-Casualty Insurance Edition
Why do the majority of M&A’s fail to live up to expectations? Mergers and acquisitions fail for a variety of reasons. First, a deal can fail because it was simply not a good idea to begin with. Management may get caught up in the ego-boosting idea of an acquisition, and try to combine two organizations that are better off left alone.
Other times not enough research is done beforehand. Maybe speed is thought to be essential. Maybe internal managers and external agents are discouraged from pointing out potential pitfalls, and a deal goes through without any serious examination and challenge.
Confusing and/or conflicting directions from organizational leadership often leads to poor execution on the part of those directly responsible for implementation.
Frequently there is a failure to manage the “human” or “cultural” side of organizational integration. By definition, all organizations include people; people with skill sets, uncertainties, self-interests, and needs. A great number of organizational integration efforts proceed with too little effort to integrate the people aspects of the businesses. When this happens, the likelihood of failure becomes greater. Study results seem to bear this out:
“By some estimates, 85 percent of failed acquisitions are attributable to mismanagement of cultural issues.” – Industrial Management
“In acquisitions that do fulfill their promise — that really make two and two equal five — leaders paid a great deal of attention to the integration process and, not surprisingly, involved people at all levels of the process.” – Academy of Management Executive
Overall, the costs of an unsuccessful merging of two businesses are significant; including higher expenses, lower morale, increased employee turnover, poor productivity, customer complaints, loss of reputation, and a decrease in “owner” value. Considering the great amount of work necessary to put a deal together, and the heady sense of optimism formerly experienced among the dealmakers, the financial cost of losing anticipated merger savings may be minimal compared to the loss of respect for leadership and general organizational turmoil.
Identifying a target business, structuring the deal and obtaining the financing are all important and difficult aspects of any M&A transaction. Arguably however, the most difficult part of any such transaction is the effort to combine two or more separate organizations into one, efficient organization that can deliver the positive operating results originally envisioned for the combined business.
The effort to integrate different organizations and successfully manage through the transition period generally requires actions above and beyond those required for managing normal business activities. If you find yourself to be part of an organizational integration effort, please consider the seven key imperatives identified below:
1. Leadership must articulate a clearly defined vision for the future of the combined organizations
2. Potential difficulties related to the blending of different cultures must be recognized
3. Both transition and ongoing roles and responsibilities must be quickly and clearly defined
4. The skills and abilities of the people involved have to be accurately assessed in a short period of time
5. Formal project management activities must be established to ensure thoroughness, timeliness and accountability
6. Leadership must provide a vehicle for “steering” the integration process
7. Formal, open and integration specific communication channels must be created and maintained for use by everyone involved to facilitate quick and informed decision making
The effective integration of two or more organizations requires vision, careful planning and open communications. When organizational leadership takes steps to ensure an effective integration process at every level of the business the chance to realize promised results, and build value added competencies throughout the new organization, will be greatly improved.
In order to project a consistently friendly, professional and competent image all members of an organization have to be prepared to interact with customers. That interaction can take place in a number of ways; through the written word, the spoken word, and/or through “body language”. Good customer service practices are seldom inherent in an organization. Customer service skills have to be actively learned and frequently practiced. The customer service “handshake” begins on the inside and then flows out.
Normally there is an expectation of good customer service when two people or organizations do business together. There may be a contractual agreement that one party can fall back on if the service provided is poor, but generally there is an implicit “handshake” expectation that, when the service is complete, both parties will be happy with value received. To the customer this “value” is generally provided through the entire service process, probably including sales, reception, operations, delivery and invoicing. The individuals performing each of those functions are part of the service chain.
Individual service providers at each contact point in the customer service chain must be linked through a common service language, product knowledge, readily available customer information, and the expectation that each member of the service chain will be supported by other members. The “handshake” expectation therefore, begins on the inside of the organization and flows out.
In order to ensure that the customer service chain is strongly forged, each point and method of contact with the customer must be identified, examined, critiqued and approved of. The approval process should include management of course, but more importantly must include the service providers themselves.
An excellent way to understand what type of customer service chain exits in an organization (and determining how to improve it) is through the process of “group learning”, where service providers interact with each other outside of their daily responsibilities with the intention of learning how each person’s job responsibilities impact others. During these sessions, a checklist consisting of factors important to a “values’ oriented system-wide customer service chain can be created, discussed and acted upon. The checklist may include:
the identification of the customer’s service expectations
the exploration of existing perceptions regarding departmental and/or personal responsibilities
an examination of existing standard procedures and guidelines
the creation of standard procedures and guidelines where none currently exist
the need for an interdepartmental service support structure
the development of a common service language and appropriate communication tools
In the never ending search for ways to improve the customer service a managed, bottoms-up approach frequently works best. All of the people inside of the organization impacting the customer’s perception of value received should be represented in the search. Participants will benefit greatly from a well-defined and on-going “group learning” process. When organizational insiders feel they are well supported by the others in the service support chain, the outside customers will reap the benefit and appreciate the value received.
Okay, now your business has a strategic plan, built by organizational leadership, clearly establishing the Mission, Vision and Objectives for all to follow. But, does the work stop there? Hardly; now responsible people in all departments must define tactics, oversee implementation, and create measurement tools to evaluate results. Seems logical, doesn’t it? So, is it reasonable to expect that all departments will work together, in harmony, for the benefit of customers; achieving the key objectives listed in the book labeled “Strategic Plan” proudly displayed on the shelf? Perhaps you are thinking, no; not so reasonable.
The value proposition of good customer service needs no defense. All too often, however, organizations rely on one department, or specific persons, to provide that value externally to paying customers, instead of recognizing customer service as a key internal organizational competency, practiced by each member of the organization for the benefit of the organization overall.
In many organizations communication obstacles, like artificial walls, exist between departments, interfering with internal processes and the best laid business plans. These walls may have been under careful construction for years to insulate one department from another one that “just won’t cooperate”. Or perhaps pride creates too much internal departmental focus, limiting an employee’s ability to see the contribution of other departments. Maybe one group of employees simply doesn’t understand what another group does. Whatever the reason, once created, these walls inhibit organizational cooperation and inhibit organization-wide customer service efforts. An understanding of the interdependence between all departments, or employees, is essential to full cooperative effort in an organization. If we limit our thinking to “serving” only the paying customer, we soon won’t have any.
When an organization’s customer service effort is too “externalized” internal communication problems may serve to diminish the value provided. Employees may not be aligned properly to create a mutually beneficial “service chain”. When people in an organization learn to appreciate the critical nature of a system-wide customer service competency they are likely to be more willing to learn the skills necessary to accomplish it. It takes time, work and leadership to create an internal customer service organizational competency. Once begun, the sound of walls crumbling will tell you that you are doing it correctly.
Implementing change in a business is often seen as a major hurdle or obstacle. To an extent, all change is essential if it is aligned to the businesses strategy for growth or development in a new market. Regardless, outside forces can create the need for businesses to change. Rather than viewing change as an obstacle, leadership in a company needs to see change as the opportunity that it can be.
Healthcare is an industry that knows this better than others. Because healthcare has been around as long as people have, it has had to change. Healthcare providers are the first to incorporate new technology and education into their practices because the effects can literally save lives. When Alexander Fleming cemented the use of penicillin, he revolutionized medicine. His innovation created the need for change around the world. However, the use of penicillin has created resistant strains of bacteria and with this, the cycle of change of innovation continues.
Healthcare professionals have adapted to changing in their practices very well over time and cannot afford to be resistant. Management in the healthcare industry needs to follow this example as well.
Though the consequences aren’t as dire in the lives of their organization’s patients, the life of their organization can depend on integrating new, disruptive change and innovation. The real business success comes when they recognize these changes as the opportunity they often are.
One Monetary Incentive
A new change that all health administrators must adapt to are the Clinical Quality Measures. These are electronically-documented measures of the quality of care patients receive. According to the Health IT Committee Report from September 3, 2013, around $16 Billion in incentive dollars for meaningful use of the new policies have been paid out to eligible providers (both hospitals and professionals). Clinical Quality Measures are assessed in a 2 phase process. Providers must demonstrate their compliance with new regulations in the data storage and tracking for the services and the quality of care they provide.
The reluctance to change under these circumstances can be justified by the cost per bed to upgrade to these new procedures, but hospitals from large, metropolitan center – to mid-size and smaller, rural facilities are seeing revenues return to normal within one year and a return on this investment after 2 years. Regardless, if a facility is providing quality care, they may already be meeting many of these new changes.
The following is from the Centers for Medicare and Medicaid Services Website (cms.gov) and shows the type of information that is collected in the Medicare and Medicaid Electronic Health Record (EHR) Incentive Program:
Clinical quality measures, or CQMs, are tools that help measure and track the quality of health care services provided by eligible professionals, eligible hospitals and critical access hospitals (CAHs) within our health care system. These measures use data associated with providers’ ability to deliver high-quality care or relate to long term goals for quality health care. CQMs measure many aspects of patient care including:
efficient use of health care resources
population and public health
adherence to clinical guidelines
Measuring and reporting CQMs helps to ensure that our health care system is delivering effective, safe, efficient, patient-centered, equitable, and timely care.
To participate in the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs and receive an incentive payment, providers are required to submit CQM data from certified EHR technology.
2014 Clinical Quality Measure Options
In August May 2014, CMS released a final rule that grants flexibility to providers who are unable to fully implement 2014 Edition CEHRT for an EHR reporting period in 2014 due to delays in 2014 CEHRT availability. The different 2014 CQM submission options are outlined below.
2011 & 2014 CEHRT
Providers scheduled to demonstrate Stage 1 who are using a combination of 2011 and 2014 Editions submit 2013 CQMs or 2014 CQMs, depending on whether they report 2013 Stage 1 or 2014 Stage 1 objectives.
Providers scheduled to demonstrate Stage 2 using a combination of 2011 and 2014 Editions submit 2013 CQMs if they report 2013 Stage 1 objectives, or submit 2014 CQMs if they report 2014 Stage 1 objectives or Stage 2 objectives.
Providers scheduled to demonstrate Stage 1 or Stage 2 in 2014 who have fully implemented 2014 CEHRT use 2014 CQMs.
Visit the 2014 Clinical Quality Measure page to learn more about 2014 CQMs and 2014 reporting options.
Visit the Resources for Previous Years of the EHR Incentive Programs page to learn more about 2013 CQMs and 2013 reporting options.
It is possible that your facility is already compliant with much of these new changes and the only thing left to do is record this information. In fact, providers may have already been doing this – in which case, the issue is using the correct software and methodology to track and store data.
In addition to the monetary incentives of this program, medical staff could also operate more efficiently and provide higher quality care to patients. Change is always necessary in the healthcare field, and it may be difficult, but generations of people living happier, more productive lives are a testament to the powerful effects well-implemented change can have on your organization and the people within it.
While working with clients, those of us at Harmonic Systems Consulting (HSC) frequently hear HR professionals express concern over their inability to get leadership to “buy in” on HR sponsored ideas. When hearing this, we respond by asking the HR professional to think a bit differently about their approach. Instead of trying to promote a Human Resource Department idea, we recommend that the HR professional think in terms of crafting and presenting a proposal clearly supporting a component of organizational strategy.
Promoting new ideas, regardless of where (or who) they come from is difficult for most of us. We may be supremely competent in our area of expertise, but, when attempting to convince others of the value of a new idea, particularly when that new idea may be perceived as personally threatening by others, we struggle to overcome obstacles our daily responsibilities have not adequately prepared us for. To be effective in such cases we need to learn and apply new skills; skills related to both the “technical” side and “social” side of business.
HSC partners recommend HR professionals concentrate on four skill sets to improve their ability to promote their ideas. These are defined as:
3. Alliance Building
Skill #1 – Craftsmanship: Artfully design the idea to align with the strategic direction defined by leadership. The closer your idea matches organizational strategy, the more likely the value will be apparent to leadership, and the better it will fare against other ideas competing for resources.
Strategic initiatives may be quite technical in nature, focusing on specialized areas of expertise and/or mechanical processes. Many of these initiatives, however, will involve areas of the business directly related to the HR professional’s role and responsibilities, for example:
-The hiring, development and retention of people possessing competencies complementary to organizational strategy
-The development of compensation plans designed to improve organizational and personal engagement
-The design of both a physical and social organizational structure to facilitate process efficiency, the coordination of activity and harmonious cooperation between individuals
-The development of communication tools to monitor and convey progress towards achieving strategic goals
The point is to avoid pushing an idea
—instead, let it be pulled by a strategic business objective. “Pushing” an idea usually doesn’t work.
You will want to use the “pull” method by attaching your idea to an organizational goal already established. If your idea does not match very well with an organizational goal, there is little reason to promote it.
Skill #2 – Valuation: Orchestrate the effort to “dollar-ize” your proposal. The commonly accepted business standard for evaluating an idea is its economic benefit. If you can quantify a benefit in dollars, (even if that benefit is simply an estimate) you are more likely to strengthen your case.
Estimating the benefit of a new idea in terms of dollars is difficult. It requires a clear understanding of current circumstances, judgments, probability analysis (sometimes guesses) and financial tools.
The actions you take when “dollarizing” your idea will almost certainly be subject to challenge. An unfriendly audience can undercut your efforts from the start by challenging your approach. The key to success is a clearly defined set of assumptions and a generally accepted approach to quantification. When attempting to assign a dollar value, therefore, don’t try to keep your idea a secret; get help from a financial professional in your organization. Financial people have experience doing this sort of modeling, and generally have earned a reputation for caution and prudence. When you deliver a proposal that includes a cost-benefit analysis supported by Finance, you will have gained credibility, and probably an ally.
Skill #3 – Alliance Building: Build a harmonious team to evaluate the merits of your idea before presenting it to leadership. Many times an HR professional will feel too strongly about an idea being prompted to be truly objective. Organizational resistance or skepticism may be taken personally, damaging both the HR professional’s sense of self-esteem and the idea’s chance for acceptance.
If your idea has merit, other people will be able to see it. If others can’t see it, maybe your idea is not fully consistent with organizational strategy and should be revised or abandoned. Assuming you have a compelling idea that others can accept, perhaps with some tweaking, use their help. Decisions are usually made in organizations by an evolving informal consensus, coupled with the assent of the senior leadership. It is important for the HR professional to understand how this works and what can do to increase the odds of your idea being accepted:
First, become project manager of your idea and its acceptance. Accept personal responsibility for all of the planning, promotion, education, communication, politicking and other activities required for an idea to gain acceptance in an organization.
Second, make alliances with key managers and peers:
-Ask for help. Approach them by articulating how your proposal will help them personally. Ask for help in planning to get appropriate approvals. Who needs to consent to this? How can we approach them? If we need to give a formal presentation, who should we invite? What are their needs and concerns?
-Seek a management sponsor, someone who will agree to provide resources to open doors to other managers once your idea is sufficiently developed.
With your allies, build or strengthen the business case and the financial return on investment.
Skill #4 – Presentation: Stage a performance to present the idea as an execution step towards realizing the goals defined in the organizational strategy. A successful presentation of your idea in the form of a proposal to leadership will be similar to a stage performance in many ways. You will need a carefully composed script, probably edited many times by you and your alliance partners. You will have rehearsed your presentation thoroughly, anticipating and preparing for the critics’ response. You will clearly develop the character of your proposal as financially supporting organizational strategy. Finally, as you deliver your performance, you will see heads in the audience starting to nod in a positive fashion.
Generally speaking, the effort to “push” a new idea through an organization all too often ends in failure because of the natural human resistance to forced change. It is almost always better to have a new idea pulled through the organizational approval process by attaching it to a component of defined organizational strategy.
In order to successfully promote new ideas to leadership, HR professionals sometimes need to develop skills different from, but complimentary to, their core personal competencies; skills related to both the “technical” and “social” sides of business. As defined by HSC, these skills include the crafting of the idea into a message supporting organizational strategy; proficiency in defining the financial value of the idea; the capability to build an alliance to critique, support and translate the idea into a proposal and the ability to deliver the proposal to leadership in a thorough and convincing manner.
The development of such a skill set is an act worth clapping for.
This Blog is based upon observations originally recorded by Brien Palmer, a founding partner in Harmonic Systems Consulting.
By Janet Hayes
One imperative for organizations in successfully executing their strategies is to ensure that they have the necessary competencies to carry them out. Concepts like the core competence of the corporation and hedgehogs imply that identifying and strengthening competencies are necessary in order for companies to distinguish themselves from competition. Once an organization determines which competencies are critical, though, how does the leadership team build or strengthen them?
Individual Skills vs. Organizational Competency
Many organizations treat organizational competencies as though they were simply a sum of the skills of the people in their organizations. While individual skills are critical, however, relying strictly on them to embody critical competencies is not enough because:
1. The organization may not have enough of the right skills to distinguish itself.
2. Individuals come and go, but to continue to thrive over time, the organization needs to maintain its competency without regard to changes in personnel. In fact, if your company’s competency relies strictly on individual skills, then competitors can take over your competency simply by hiring away your company’s best people.
3. Individual skills alone do not encapsulate everything the company needs to do well in order to compete. For example, even the most highly skilled individuals working in an uncoordinated way will not fare well in the eyes of the customer or gain efficiencies for the company.
Definition of Organizational Competency
Harmonic Systems Consulting defines “organizational competency” as the harmonious blending of four basic components of organizational identity. This competency identity includes individual skills, but only as one of the four necessary components. Harmonic Systems Consulting’s view of the four components required for organizational competency is depicted in the picture below:
These components must be orchestrated to work together in daily harmony for the long term benefit of the company’s customers and associates.
The Four Keys of Organizational Competency
Following are descriptions of the four keys that comprise organizational competency. To illustrate the concept, we will use an example of a Project Management competency.
As mentioned above, individual skills are critical to an organization. However, to be part of an organizational competency, the company needs multiple individuals with the necessary skills. Most competencies require a subset of individuals with a very high level of skills and many more individuals with a lower level of skill.
Skills and training programs must be directed toward developing the appropriate level of skills necessary for the desired competency, but that does not imply that a high level of skill is always required. A custom furniture shop may require their craftsmen to have high skill levels because each piece is unique and processes are dynamic. McDonald’s, however, cannot expect a high level of skill from every employee in their restaurants, so they rely more on highly defined processes.
For an organizational competency in Project Management, a company would need one or more highly trained and experienced project managers and a broader, company-wide, group of individuals to be trained on project management techniques.
A second critical component to organizational competency is having resources that support the competency. These resources might include tools, software, methodologies, checklists, templates, etc.
For Project Management, resources might include templates for charters and meeting agendas and minutes, project management and project portfolio management software, a new product development methodology, a method for decision-making, forms for tracking issues, risks and changes and project budget tracking tools.
In order for the company’s customers to benefit from the competency, the skills and resources must work together in a coordinated way. That coordination comes via the third key, processes. Processes might include manufacturing steps, research and development scientific methods, application development, order entry, customer service, etc.
For Project Management, a process might start with creation of a charter and a budget, then assignment of personnel to the project, followed by development of a plan, etc. There should also be a process for prioritizing projects and deciding which ones need to be started or stopped.
The final key to organizational competency, shared knowledge, is the one that is most often neglected. Knowledge held by individuals must be shared in order for the competency to be institutionalized within the organization. Sharing knowledge is crucial to maintaining the competency as individuals get promoted, transferred or leave the organization and to continuously improve. Knowledge may be shared through formal or informal means, but must be accessible to everyone who needs it. It might be shared via an intellectual capital database, a wiki or in a file drawer that everyone knows about. It could also be shared by mentoring or birds-of-a-feather meetings to share learnings.
For Project Management, shared knowledge might include a repository of previous project plans, a collection of post-project completion reports that capture learnings and a project office where less-experienced project managers can go for mentoring by highly skilled experts.
Culture’s Role in Organizational Competency
One important factor in developing or strengthening an organizational competency is the company’s culture. If the company culture doesn’t support the development of a competency that is critical for the strategy, it must be addressed or it will put the organization out of alignment (for more about alignment, see our blogs on the Orchestra Model© and Alignovation©) and the competency will not be realized.
For example, a company strategy may determine that better attention to efficiency and quality is necessary, so they may embark upon developing a competency in Lean Six Sigma. If, however, people in the organization are not accustomed to data-based decision-making or disciplined execution, that culture will need to be addressed via change management and clear definition and communication of desired behaviors in order to build the new competency. Demonstrating that the desired competency is built upon existing capabilities and emphasizing the career opportunities that result from the new competency will help to support the change.
Individuals may also see a downside to sharing knowledge if they believe that their skills are what makes them uniquely important. In that case, rewards and compensation focused on sharing knowledge a crucial. Techniques for creating a learning organization should also be considered.
The word “competency” comes from the Latin word competere, which means “strive together”. Our Harmonic Systems Consulting definition of organizational competency includes the four interlocking components of skills, resources, processes and shared knowledge. This multi-faceted definition guides companies in defining all of the elements they need to develop for their organizational competencies in order to “strive together” harmoniously for distinction in their highly competitive markets. Understanding organizational competency in this comprehensive manner is especially appropriate because competere is also the root word for “competition”.
A common problem faced by many companies today is the lack of involvement of Human Resources in formulating new strategies for a company in the process of transforming itself. HR departments may not get much respect if they are viewed as “feelers” who function only as administrators, so they may not be asked to the table when the company’s executive team is developing a new strategic direction.
The fact is that everything in a business is done through people. In order to get your employee base properly acclimated to any new strategic changes, HR’s involvement is an absolute necessity. People at all levels in the organization need motivation and some degree of counsel in order to adjust properly and quickly to critical changes.
To achieve the best results, companies should consider the following when developing or updating strategies:
1. The company’s leader (CEO or President) should ensure that the head of Human Resources is engaged in the strategy development process. In particular, the executive strategy team should look to the HR head to provide input on how the new strategy affects culture, compensation, structure and competencies and how the strategy should be communicated to the organization. The executive team should be counseled to value HR’s “feeler” perspective since employees’ reaction to the strategic change must be considered when planning implementation.
2. The HR representative must demonstrate the ability to think strategically and ensure that he or she is properly informed about the business in order to be involved in executive strategy meetings. If the HR representative has the means and ability to contribute, then his or her presence will be welcomed.
Consider this issue in relation to the Orchestra Model©: if the Conductors (executive team) decide to have a change in the score (strategy) it is necessary for the HR representatives (concertmasters) to not only pass out the score to the musicians (employee base) but to also be able to explain how each part is played. Being able to adjust who plays what parts and with what instruments lies more on the end of the HR reps who would be more familiar with individual employees and their strengths and weaknesses. In short: harmony can only be achieved if everyone plays their parts AND plays them together, and HR is critical to ensure a great performance.
The world around us is in a constant state of change. While change is an inevitable part of reality, it can come with a multitude of problems, particularly in the business world. A business plan that works perfectly now may be an utter failure a year from now. Therefore, it is imperative that businesses work their way ahead of the change or even be harbingers of the change itself. But how do you do that? To demonstrate the process, refer to Michael Beer’s “Leading Change” and The Music Man.
In “Leading Change,” Michael Beer describes a unique equation that illustrates the necessary components of leading change and how they interrelate with one another:
Amount of Change = (Dissatisfaction X Model X Process) > Cost of Change
Beer explains that change only happens if the level of dissatisfaction with the status quo, combined with a clear model and process for change, are sufficient to overcome the perceived costs of change (e.g., loss of power, loss of competence, etc.).
Now, how does The Music Man fit into this equation, you may ask? Meredith Wilson and Franklin Lacey’s musical Midwestern misadventure demonstrates the whole process quite simply through the antics of “Professor” Harold Hill.
A con man and traveling salesman, Hill rolls his way into the small town of River City, Iowa with a plan to scam the humble townsfolk. The first part of the plan deals with the first issue outlined in Beer’s equation: Dissatisfaction. In order to get the complacent townsfolk to listen to his proposal, Hill first goes about convincing them that the local pool hall is turning a number of their younger boys into juvenile delinquents. In doing so, he stirs up a sense of dissatisfaction amongst the populace. This first major distinction that he “creates” as part of his sales pitch alerts the people of the town to a potential problem in need of change. A change leader must be a salesman, and as any good salesman knows: where there’s dissatisfaction and need, there’s a sales opportunity.
The next part of Beer’s equation comes into play when Hill proposes his solution to the town’s newly apparent problem. Hill presents them with a grand vision (Model) of a local boys’ band that would be the pride and joy of the town. The town would gain a unique distinction while also dealing with the “problem” of what to do about the local boy delinquents. With the initial dissatisfaction in place, the “solution” that he sells them solves a problem and generates a benefit which comes across as being doubly appealing to the people of the town.
The Process itself is simple: the townsfolk need to give Hill their money so that he can order instruments and uniforms. Hill then promises them that he will be the one to teach the boys.
Costs of Change
Michael Beer also points out the importance of perceived Costs of Change. Professor Hill assesses these costs and, with the help of his friend who lives in the town, Marcellus Washburn, identifies influencers in the community who have either informal or formal power. He then either persuades them to become evangelists for him (e.g., the mayor’s wife, the piano teacher), or he distracts or deflects them (e.g., the mayor, the school board). Hill accomplishes this initiative so well that, even when he is unmasked, people in the town stand up for him.
Of course, being a conman, Hill really plans to leave as soon as he’s collected enough of the people’s money. However, despite the fact that Hill intends to walk away as the only one who would actually profit from this scheme, he personally has a price to pay in order to make his scheme work to its best effect. Hill needs to spend time getting to know some of the townsfolk in order to work his way around any skeptics. He ends up establishing very close bonds and connections with them. As a result, he later regrets his actions and stays in the town to make things right by actually following through on his promises. The boys’ band and his connection with the townspeople become more important to Hill than personal profit. He realizes that, in order to fulfill the vision, he himself will also have to change.
Even though most of this story involves a scam, it also demonstrates perfectly how a business can get ahead of change:
1. Discover and/or create dissatisfaction with the status quo
2. Develop and communicate a practical model that solves the problem or fills the need
3. Convey a process that meets the needs set forth in the proposed model
4. Assess the costs of change and develop strategies to address them, including allowing people to participate in planning for changes and letting them mourn their losses briefly before moving on
As Brien Palmer so aptly put it in his book Making Change Work, “Some change will always happen but not necessarily the change you want. It is far better to plan for and manage change systematically, rather than simply react to events as they occur”.
It’s also worth mentioning that some change costs just can’t be foreseen, so remain flexible and have a safety net.
Finally, as Ghandi, said, “Be the change you wish to see in the world.” As Professor Hill discovered, lasting change only happens when the change leader invests in it himself.