The Square Orange

Creating Resilient Organisations

The following appears in "Implementing an Effective Change Management Strategy" by Neryl East, MA, PhD, published by the Ark Group in association with Inside Knowledge.

While it might be admirable for organisations to strive to be resilient, change and strategic management specialist Teik Oh says resilience is not the end of the journey. Resilience is an element that needs to be embedded in the culture of the business.

He believes that can only be achieved if the organisation and its leadership demonstrate some fundamental behaviour that point to resilience.

Resilience is not only important in the hard times or during change. It must also be demonstrated when business is going well. That can be a challenge for many leaders, who Oh says are generally suited to only one style of an economy.

Many perform well when the economy is also doing well. Other leaders rise to the challenge when the economy does badly; Oh points out that it is relatively easy to think of great leaders who have turned companies around. However, they may not have been so successful when the business was back on track.

Oh says resilience needs to be a constant, rather than something that is brought in with change management. "If you can bring in that cultural resilience over time, the next time a crisis happens, hopefully you will react accordingly," he says.

He cites the writing of Harvard Business Review senior editor Diane L. Coutu [http://hbr.org/2002/05/how-resilience-works/ib], who describes three key attitudes for resilient behaviour:

• To be able to face the truth without any ego
• To actually see the grand vision – the meaning and purpose of the organisation
• To be able to react quickly with whatever is at hand

In relation to the first point, Oh says leaders who have risen to the fore during good times are not always able to instil in their organisation the need to respond to a changing environment. Leaders who have an overly optimistic nature risk being blinded to the truth, and to believing that "we'll be right, we'll just keep doing what we're doing."

"People are looking at the positives, but do have to realise when things have changed," he says. "You do have to face the possibilities. Ego has a great part to do with it. You have to have a clear sense of your own ego so you don’t rest on your laurels. It's like being able to be on the dance floor at the same time that you are in the wings watching yourself dancing."

Oh says a resilient organisation is one in which the culture allows people to honestly challenge each other. If they are able to do that within the organisational hierarchy, they will have a culture that allows the truth to be faced. Otherwise the culture is very dependent on the leader, and workers are likely to ask questions among themselves such as, “if it’s so good, why is this happening?” rather than openly questioning.

Oh believes being resilient does not necessarily come down to personality, and is something that can be learned.  It also reaches far beyond organisational reporting systems.

"An organisation can have good systems for monitoring its environment, and they display the truth, such as an accounting system showing a loss," Oh says. "But the ability to challenge opinions adds another layer. If you bring forward that you have made a loss but everyone is very supportive and sympathetic, you try to soothe the pain and that’s when you start to get into trouble. You need that open and honest communication, with people being able to question why it’s happening, how long will it last. It's about being prepared to face the tough questions and to ask them. Or is the organisation in hiding?"

Regarding Coutu’s second point, Oh is a strong believer in setting an organisational vision that is empowering and subscribed to by everyone. "If you’re going to shake up an organisation, you need to tell them what the whole horizon looks like," he says.

"A non-resilient organisation lacks that longer term vision, and they attack current problems. One result of that is that the internal value systems change. For example, total customer service might have been a value, but if things go wrong, an organisation might sacrifice parts of its customer service system to save costs. If you’re doing that, you’re lost. Resilience has value systems that just don’t change.  If your values are right, they’re right in every situation. So, using the customer service example, even if the firm was losing money a resilient organisation would not use change management practices to reduce its customer service. You’ve got to find your savings elsewhere."

Oh believes many organisations still lack that clear vision. "They have a vision statement, but it's not quantifiable," he says. "Often it's just a flag they fly, without any real connection to the outcome and operations of the business."

Clarity of vision has to come from management. "The organisation needs to be clear on what each sentence or paragraph means, and it must be linked to the Key Performance Indicators of the organisation," Oh says. "It's effective to combine the vision statement with something like a balanced score card; 'When we’ve achieved our vision, what will our customers say about us? If we achieve it, what will our stakeholders think about it?' You do that with people, and with processes. That way, someone down the line totally understands the big picture."

Oh uses an example of NASA in the 1960s when the space agency was first trying to land a man on the moon. "A study group went around and talked to all the NASA employees, including the cleaners, and asked them if they had a boring job. They all said they had a fantastic job because they were helping to send a man to the moon!"

He says Coutu's third point, to some extent, comes from the first two. An organisation that is true to its values and vision but is also able to diagnose problems with honesty, is able to react quickly and come up with innovative solutions. When rapid change is needed, an organisation can only react with the resources it has at the time.

"I think this is why many organisations don’t perform well," he says. "They wait months before anything happens."

"This element needs a culture of empowerment, so that the person who sees the problem feels empowered to bring it up. The way it filters down to the people on the ground depends on the leader's ability to totally explain the vision."

Oh likens the power of strong leadership in a resilient organisation to the scene depicted in a recent advertisement for logistics and delivery company UPS, in which a group of van drivers are following a UPS driver through a jungle, complete with bridge washaways and other obstacles. They follow because they know the UPS van will get through.

He says those strong qualities do not necessarily have to be stated. "For example, with the guiding principles or vision, the organisation may not say 'we have a clear vision', but people just act in a certain way from knowing what the bosses would do, and feel empowered to do so. They don’t say ‘oh, we have a strong values system’ but the way they act says that they do."

"And it's not necessarily the leader driving those organisations. I worked with one business with an extremely charismatic leader. In front of a group of people he could talk about where the company was going, but then organisationally he lacked the kind of operational structure to translate that into outcomes. People were inefficient because there wasn’t that central understanding of those values. They didn't react quickly with what was at hand."

Oh believes that to develop a resilient culture, an organisation needs to go back to basics. "They need to ask where they're going," he says. "They need to know 'who have we got on the bus? Are they on the right seats? What kinds of processes are we using, and do these support looking at the truth? Are they aligned to the vision and values, and do these support or reward people who take those first two things and create an innovative approach?"

He reiterates that it is much harder for an organisation to implement cultural change when business is going well. "I have yet to see a client come to me and say 'everything is OK but we need to change'. It’s usually in the middle of something," he points out. "You read about great leaders and how, despite everything being OK, they keep changing. You might go too far, though. If you don’t have an impetus for change, what are you changing to?"

The good times, however, are the ideal period to begin developing resilient characteristics in the organisation's culture "In the bad times, it becomes less likely that you’ll invite long term change," Oh says. "All your attention is fixed on your short term problem."

He says "resilience" has now been taken up as a catch phrase, in much the same way that "change management" was a hot topic in the recent past. He does not see them as separate topics. "You just need to build a good organisation, and that, surely is a resilient one."

"There is a danger that if you think resilience is the next nice thing, you will build a resilient organisation separate from all the other things that create a good organisation. You have to see resilience as one of the characteristics of a good organisation. And that gets back to the leadership team."

Oh says that even a few years on from the Global Financial Crisis, the jury is still out on which organisations have demonstrated that they are truly resilient. "There are a lot of things that muddy the water, like the government putting money into organisations," he says. "They may well have been funded out of trouble. Where organisations have clearly come out the other end, perhaps unaided, I think you’ll find they already had strong corporate cultures, which would then have displayed those three resilient attitudes. They survived, not because they were resilient, but because they were already strong corporate cultures with good leadership."

"That's a lesson for any organisation. You don't need an initiative to create resilience. You want to change your company to the type of structure and culture you want, and in that you’re creating resilience."

Choosing, Implementing and Cascading Performance Measures

Implementing Performance Measures

Determining what to measure can take considerable effort, but it will probably be less than one-third of the total effort required to implement an efficient and effective measurement system. Data collection and processing systems will have to be implemented to produce the measures; everyone will have to be trained in using the systems and measures; and as the measures are used, some problems are sure to be identified that will require changes to the system.

 

Perhaps the greatest challenge faced when implementing performance measurement systems is changing an organisation’s culture. Using performance measures requires managers and employees to change the way they think and act. For most people, this is relatively easy, but for some, changing old beliefs and habits is very difficult.

 

Overcoming such problems requires strong leadership to provide appropriate direction and support. The best measurement system in the world will yield few benefits if the right knowledge, skills, abilities, and values are not developed in a company. An organisation doesn’t just interface with a measurement system; it is part of the system.

 

Developing and implementing effective measurement systems requires leadership, commitment, and hard work. Some investment is required, but it is small relative to the key benefits of a well-designed and implemented measurement system:

· The ability to determine if sales and profit problems are caused by strategies, operations, or both;

· Early identification of problems and opportunities;

· Increased productivity, quality, and customer service;

· A clear understanding of what drives financial and operational performance so resources can be allocated to the areas of greatest return; and

· A cohesive organisation working toward common goals.

 

Cascading Performance Measures

 

Corporate level measures are very important, but they aren’t going to have much impact unless they are cascaded all the way down to front-line employees. The case for cascading is simple: Do you want 10% of your employees working toward company objectives or 100%?

 

With some exceptions, such as market share, what you measure at the top is what must be measured at all levels. However, the specific measures will change with every functional and organisational level because managers doing different jobs need different information to make different decisions.

 

The same methodologies used to develop measures at the corporate level can be used to cascade the measures down to front-line managers, supervisors, and employees. However, as you go down the organisation chart, the focus is on operations or processes. Strategy is incorporated into operational measures by giving more weight to the measures that are strategically important. This communicates strategy to all employees by translating it into operational terms – at the individual level.

 

Key Questions to be answered by Performance Measurement Systems

 

No matter what approach you use to develop performance measures, bear in mind that the objective is not to have a measurement system in itself, but to empower business improvement, and to do so, to enable managers at all levels to answer ten key questions:-

 

1. Are we satisfying our customers?

2. Are we satisfying our shareholders?

3. Are we satisfying our other stakeholders?

4. What is happening to our customer base?

5. Is our company strategy working?

6. Are our individual strategies being properly executed?

7. Are we serving our customers and stakeholders effectively?

8. Are we operating efficiently?

9. Are stakeholders contributing what they should?

10.  Are we developing the abilities we need to  execute our strategies?

 

If all of your managers can readily answer those questions about their areas of responsibility and support their answers with objective numbers, your company has the performance measures it needs. If they can’t, some of the "good" decisions they are making are undoubtedly not very effective - and they may even be harmful.

The challenge of merging two corporate cultures

  

Teik Oh

 

The most challenging change management initiative is the proper management of a successful merger between two organisations. While the actual steps and processes in themselves are not uniquely different or any more complex than any other business reorganisation, the cultural environment in which a merger takes place creates a very different situation.

Unlike any other change management engagement where disparate groups at least work under one singularly identifiable organisation, a merger brings together two totally unique groups with different core values and working environments that need to go through the same change and emerge united. In a merger, while there are usually areas of “fit”, it is unlikely that the deeper indicators of corporate culture such as corporate history and corporate experience will have any but the most remote of matches.

Mergers and acquisition transactions are usually entered into to gain advantages yet the vast majority of these transactions are done with scant thought on how best to maintain the strengths of both parties and indeed to use them to synthesise greater strengths. Accounting models are not the best indicators for merger success; in a merger 2 plus 2 rarely equals 4.

The prime objective of a merger therefore, is to make the sum of the parts greater than the whole, in as quick a time as commercially possible. To achieve this, both soft and hard systems need to be considered, new processes generated, others dismantled. A poorly planned merger, no matter how small or simple (“let’s get together and we’ll work it out as it goes”) will lead to an unmitigated disaster.

Whilst identification of the critical success factors of a merger and planning is fundamental, the merger needs to go beyond the financial efficacies of the transaction and even beyond the perceived advantages of a marriage, into the construction of a post-merger reality.

In any merger, the discovery of a new corporate culture can evolve into one of three results being a balanced integration (rare), a dominant culture and system, or a dominant system with a balanced integrated culture. The planning for any successful merger must at least attempt to achieve either the first or the last, depending on the strengths of each party and in particular the efficiencies of their systems. Based on this objective OTS Management uses a four-stage process to achieve merger success, a methodology we call FitQUICK ™:-

Stage One: Plan Well

All planning needs to be led by leaders of the two organisations, the people who can explain why the merger is taking place, how it fits into the longer term strategy of the combined entity, and the compelling vision of the future that is to come.

Depending on the strength of leadership, this need not be a time-consuming initial phase but it does require a great deal of time to stay “in touch” and on top of the processes. The issue however, no matter how long it takes, is to plan well and plan in appropriate detail. Planning then needs to continue throughout the whole process, but as cultural integration is substantially achieved, more and more detailed planning can be handed over to the integration teams then eventually the functional teams and in time morph into normal strategic planning processes.

Stage Two: Fit Quick

The purpose of Fit Quick is to get both teams and cultures to integrate quickly and feel like one.

If the primary purpose of a merger is to create a greater organisation, then the greatest strengths of both teams need to fit together quickly. The greatest strengths of any organisation rarely lie in systems or even customer lists but usually in their people who are the source of efficiently working systems and the relationships with the customers.

The Fit Quick phase needs to look at:-

• The new vision, brand and corporate culture including value systems and guiding principles (the “how we do it here” elements);
• Staff engagement with the new identity and entity, the one-team reflex (something as simple as weekly pays being converted to fortnightly pays could derail a merger);
• Teams and team structures – analysing and taking the most workable (not necessarily the “best”) parts of both team structures;
• Functional responsibilities – creation of a new and/or blended organisation chart to identify roles, responsibilities and reporting lines in order to clarify “the new way” as soon as possible;
• Analysis of individuals’ roles and where they sit (physically and by responsibility) ensuring people are physically identifiable in discrete integrated groups and the best people to populate the new organisation chart from either party are identified;
• Detailed Human Resources issues such as legacy staff contracts, packages and benefits to equalise to a “norm”.

Stage Three: Work Quick

Whether or not any one set of systems and procedures is more dominant than the other (more than likely) the integrated teams need to be able to work effectively within the new systems and procedures as soon as possible so as to recoup the costs of the merger, reduce inefficiencies and downtime, shorten transition periods, and start to take advantage of the previously identified strengths. The theme of the third phase “Work Quick” is therefore to get both teams knowledgeable about the new (or dominant) systems while integrating the best of the less dominant systems quickly so as to improve overall efficiency.

This phase is best dealt with by creating Merger Implementation Teams in appropriate areas comprised of people from both the merged organisations. These Merger Implementation Teams or MIT’s need to look at each process, procedure and system and decide which to use, how to convert data and processes from one to the other, and then provide recommendations and detailed implementation plans to management. The MIT’s also need to supervise and lead the actual implementation of the revised systems including training and re-training and data and process transfer.

In many areas decisions can be made swiftly, particularly where there are dominant systems. However where necessary it is important to take the time for some detailed analysis to ensure that the best of both are considered and integrated.

As the MIT’s recommended best practice systems may include parts of both the merged organisations, the Work Quick phase needs to identify local “experts” as points of referral to the “new people” who are new to the adopted systems. In this phase product experts need to be revered and supported.

Stage Four: Grow Quick

The fourth phase usually commences some time after the merger, allowing Fit Quick and Work Quick to establish some ground rules and identifiable results, and quite frankly, to allow some emotion to settle, in what is likely to be a stressful period. Obviously, not too much time must pass since the primary purpose of any merger is to “be better, be larger, be more competitive”.

The theme of Grow Quick is to leverage the merger to, firstly, keep the combined customer base, then to expand it, increase sales and grow profits, outcomes that will achieve the real advantages of the merger. This phase needs leadership at the highest levels of the integrated organisation, usually at senior executive level. This phase will require concentrated focus on the strategic objectives of the merger and the compelling vision of the new entity. For this reason, the senior executives who conceived of the merger, its advantages and the vision will need to lead from the front. Often, executive management identify the solid and real reasons to merge, but then expect the merged organisation to automatically realise what those often subtle advantages mean and follow through almost by accident.

As in all organisations striving for best practice, the people with the vision need to talk about it, communicate and explain what it means; bringing others along with them by the strength of the compelling vision.

Looking towards the immediate to medium term future in Grow Quick, the areas that need to be designed in congruence with the vision are:-

• Comparative selling prices and cost structures;
• Strategic marketing planning;
• Advertising and external branding;
• Vision and internal branding, the Unique Selling Proposition;
• Integration of divisions, sales teams and manufacturing teams and locations, physically moving people from both organisations around where necessary so that there is a mix of people servicing a mix of previously separate customer bases;
• Grow new service lines, products and service capabilities using the synergies of the merged organisation.

Conclusion

In working through the four phases, organisations are put well on their way to a successful merger. However two key steps need to be reiterated. The first is to ensure that there is an agreed Vision for the new entity, one that is compelling, engaging and sufficiently quantified to be the central pillar around all strategy and integration. The second key step is selecting the right person or people to lead the overall implementation and the Merger Implementation Teams, and to track the execution. The mergers that do best tend to have such leadership.

Clearly, with proper planning and the right people it is possible to avoid the pitfalls and close a successful merger initiative.

Effective Meetings

Your meeting should be an event that produces results or outcomes and not the "process of meeting." Things need to get accomplished. To improve the results of a meeting, begin by defining and improving the meeting process and people's commitments to it.

According to a study by the University of Southern California in Los Angeles (as cited in Forbes, 10/25/93)

• The average meeting takes place in the company conference room and 11 in the morning and lasts an hour and 30 minutes.
• It is attended by nine people -- two managers, four co-workers, two subordinates and one outsider -- who have received two hour prior notification
• It has no written agenda, and its purported purpose is complete only 50% of the time.
• A quarter of meeting participants complain they waste between 11 and 25 percent of the time discussing irrelevant issues
• A full third of them feel pressured to publicly espouse opinions with which they privately disagree. Another third feel they have minimal or no influence on the discussion
• Although 36% of meetings result in a "complete" resolution of the topic at hand, participants considered only one percent of those conclusions to be particularly creative.
• A whopping 63% of meeting attendees feel that underlying issues outside the scope of the official agenda are the real subjects under discussion.
• Senior executives spend 53% of their time in meetings, at an average rate of $320 per person hour.

Some Steps:-

1. Clarify The Meeting Objective

The team begins the meeting by ensuring that people understand and agree on what is to be accomplished. Objectives include both the content of the meeting and the specific process objectives, such as improving participation, gathering initial ideas and listening to others.

2. Review Roles of Participants

Confirms who will be taking on specific roles for the meeting and what their roles will be. These can include: leader, team members, recorder, timekeeper, and facilitator.

3. Review the Agenda

Each agenda item includes the methods (e.g., brainstorming, mind mapping, cause and effect tools, fishbone diagrams, system thinking, roadblock analysis process, etc.) to be used for that item as well as the amount of time to be devoted to each.

4. Work Through Agenda Items

There may be one or several items for a particular meeting. The team works through them in an organized manner, using the methods and the time frame decided upon in step 3 above.

5. Review the Meeting Record

Team members should review information recorded on flipcharts during the meeting to refresh their memories about what has occurred in previous meetings along with what has been decided. The team should check for corrections or additions to these meeting records and decide what information needs to be kept in the team's permanent transcript. In many organizations, these are included in formal knowledge management databases and archives. Try to add to the Learning Organization focus, if applicable.

6. Next Steps and Next Meeting Agenda.

By the end of the meeting, the group should discuss what needs to be done based on the results of this meeting and the start of the next. Often, there are multiple steps and tasks needing followup or planning. Agree on the work that needs to be done next in order to advance. Clarify if necessary and complete the transcription of the goals, summarizing commitments.

7. Evaluate the Meeting

Team members should take a few minutes to discuss:

* What went well that we should continue doing?

* How could we improve the next meeting?

Meetings are part of the improvement and communications process. They should be tied to long-term learning objectives and organizational development initiatives. They can serve many useful purposes (but sometimes do not!).

A new way of serving our clients

At OTS Management we are constantly looking at new ways to provide services. The culture we encourage is one where we are not embarrassed at making mistakes, where we take them as learning experiences, and where we are not embarrassed at making an apology as long as we have a new and better way to service our clients.

In completing the 2007/2008 year we realsied that we were faced with something that many industries will face for the foreseeable future - a shortage of human resources at the right times and at the right levels of experience. We realised we had to compensate for this and for some time now our hiring policies have been based on three questions we ask ourselves at staff interviews:-

• Can they do the job?
• Will they do the job?
• Will they do it here?

The third question is the hardest to answer at interview and yet it is the most important because while you can train someone you cannot make them "fit in" and fitting in, we think, is the key to providing the best service for our clients, because then, all our staff will believe in the culture of giving our clients what we would want given to us.

While we are very satisfied with our staff this year in both ability and service culture, nevertheless our human resources are finite resources with a finite number of working hours. We have calculated our "capacity" and have planned to use it effectively next year.

The next issue we found in our review of the year was that the efficiency of our work suffered when we started a job and then had to put it down due to missing information. This would lead to a lengthy series of delays as we stopped, requested more information, restarted, then got stuck and requested more information, In between if the information took time to get to us it caused more delays. As we restarted jobs we would also have to take time to "get up to speed" again, remembering the points in our work processes we had completedhalf-completed, and not quite got there. This meant delays in getting the work back to clients as well as increased costs.

Finally we also found an issue where clients brought in their books only when the deadlines were approaching. This meant, very simply, bottlenecks. While we deal with our clients on a one-to-one basis, it appears (and we want it to be true) that for that time, they are our only concern. However this is patently not true if 30 clients bring their books in at the same time each expecting then at the end of the week - when we only have man-hours to do 10 sets of books in a week!

Imagine a factory-line that can manufacture 100 cars a month at full capacity. If the car salesyards have done a great job and obtained 200 orders that month, some people will have to wait!

Putting all three aspects together we have come up with a new way of serving our clients.

Firstly, having identified our monthly capacity, we shall be making requests of clients to bring in their expected work at certain times of the year, thus matching the "orders" to our capacity. In this way we can work on your affairs efficiently and exclusively during the nominated period. If on the other hand, an individual client may not be able to meet our timed capacity, or if they need the work for a different deadline, we shall try our hardest to reschedule to meet their needs. In order to cater for "emergencies" anmd urgent and unexpected jobs, we are scheduling our staff capacity to 75% and allowing 25% of the time to cater for these unpredictable tasks.

Naturally we need the teamwork and co-operation of our clients. If they bring in their work later than scheduled without letting us know there may well be delays in completing it.

Secondly when we write to clients to ask for their expected work at the stated times, we shall also be providing them with checklists for each of their entities. This will help remind them of what we need to do our jobs efficiently and effectively, avoiding the delays of the stop=start approach.

We believe this will be an improvement to our response times and will only improve with the years.

To us, it is always important to meet the needs of the client and if we have not been able to do so in the past we must look ahead to do so in the future.