Measuring Organizational Culture

When someone tells me that they want to measure organizational culture I get just a little nervous, as I am pretty sure however I respond there is a good chance that person might have something else, other than what I say, on their mind. If you ask 10 people who say they want to measure organizational culture what they mean, you will likely get 10 different answers. Organizational culture in the words of one of my esteemed colleagues is “often a big, sloppy, wet concept that means different things to different people.  It usually requires longer, maybe fuzzier surveys more akin to personality tests than aptitude tests.”

People who push generic cultural assessments are in general taking a very specific point of view, usually their own world view, and pushing it to the exclusion of what might actually be in the best interest of the client or organization. It is of course easy to fall into the trap of a “quick” cultural assessment. It sounds simple, and as though it will give insight on some organizational issues, but in my experience these quick and easy assessments are often a waste of time and money. They make good marketing fodder, the magic silver bullet that can solve your issues, but little else.

Here for instance are a series of words that could be used to describe an organization’s culture. How would you go about picking and choosing which of these concepts to include in your assessment of an organization’s “culture”?

Aggressive	Family Oriented/Personal	Striving
Innovative	Customer Focused	Bottom-line focused
Learning	Diverse/Homogenous	Meritocracy
Sales Driven	Cooperative	Silo’ed
Safety Oriented	Quality Focused	Resistant to change
Respectful	Communicative	Secretive
Traditional	Ethical	Integrity
Bureaucratic	Sustainable Oriented	Entrepreneurial
Authoritarian	Hierarchical	Collaborative
Shoestring	Efficient/Streamlined	Transparent
Resourceful	Prideful	Career Oriented
Partnering	Effective	Fun
Irreverent	Paradigm Changing	“Get-it-Done”
Courteous	Problem Solving	Empowering
Standardized	Engaging	Hubris

 

Clearly the list can go on and on, but the point is that there are about as many words to describe an organization’s culture as there are organizations. Some people have models regarding which aspects of organizational culture are important, and I have more than a few myself. However, those that push one model as “the answer” are giving the complexities of organizational life and the business world short shrift.

So how might you go about deciding which aspects of culture are important to measure? Let me answer by describing a situation several of my clients have had over the years.

Most of the time, after an employee survey, we are asked to present the findings to the executive team. However, every once in a while, we simply provide reports which summaries the findings and the internal team takes it from there.  On several occasions the internal team has stated to me that they get only a very brief time slot to present the findings, the culmination of a pretty big effort. I ask them to show me the presentation and invariably the presentation is organized around themes like training, and communications, and decision-making. Not that there is anything wrong with that, but those categories are not what senior managers think about day-to-day. What do they think about? Their business strategy. So what if you design the organization’s survey and take the resultant information and categorize it into what is enabling the execution of the business strategy and what is preventing the full implementation of the strategy, perhaps by each strategic topic? Usually you’ll find that you get a whole lot more attention and the time of senior managers.

Guidelines for Successfully Linking Employee Engagement Scores to Management Compensation Incentives

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A group of us, with a great deal of experience at this task, got together and pooled our collective knowledge of linking employee survey results, such as an index of employee engagement or other index scores (e.g. safety, customer service culture, organization effectiveness, innovation, turnover, risk-taking, customer satisfaction) to management incentive compensation systems.

Some organizations feel that the way to have maximal impact on “moving the dial” on critical measures of organizational performance is to put your money where your mouth is and to link the performance on these indices to a manager’s compensation. Now, there are about as many ways to perform that linkage as there are organizations out there, but when we compared notes as a group, certain characteristics and guidelines of systems that are deemed more successful seemed to consistently rise to the surface. Here is a listing of the guidelines that we came up with and that have proven successful in a great many organizations.

Overall Guidelines

• Transparent:
  • Be open and clear about what is being done and how.
  • Avoid a “black-box” mentality. The calculation of the scores should be transparent and easily understood to all of those affected by the system.

• Require Visible Leadership Support:
  • Leaders should encourage employees to participate in data collection,
  • Hold managers accountable for sharing results with employees and action planning,
  • With assistance as needed, leaders create plans for using survey results within their area of responsibility,
  • Create and cascade high level action plans,
  • Have regular feedback to staff on activities related to objectives.

• Make the Effort Substantial and Relevant:
  • Rigorous survey and process design,
  • Ongoing validation through rigorous research of the instrument, demonstrating why it matters (e.g. linking index scores to business metrics),
  • Commit to continue the survey program on a regular basis.  Any performance goal or incentive program works best when consistently applied over a longer period.  Managers and employees begin to understand what types of efforts lead to success. This understanding is critical for the program to effectively motivate and reward improving the work environment.  The commitment to continue should include plans to re-administer the survey and the goal or incentive program on a regular basis.
  • Ensure that the managers who are affected by the performance goal or incentive program have the ability (including time, budget, and other resources) to make real improvements on areas identified as the priorities.

• Have a Transition Period:
  • A “dry run” period where everyone gets comfortable with the process, the calculations and what is being incented, as well as what has to happen to achieve incented goals.
  • The “formula” for the linkage should be communicated well in advance.  As with any incentive or performance management system, expectations should be communicated well enough in advance so that managers have a chance to react and do not feel the “rules have changed” in midstream.

• Provide for Mid-Cycle Corrections:
  • Providing feedback mid-way through the cycle so managers are not surprised by year-end achievements or failures. Provides an opportunity to focus on what is working or correct what is not.

• Apply Incentive Compensation to Appropriate Levels/Managers:
  • Incentive pay should be aimed at senior managers or those long enough in their roles or those whose responsibilities can directly impact results.  Senior managers can often typically influence more organization-wide topics than a lower level or front-line manager.
  • Senior managers can also have group goals set (goals that they pursue as a group) as well as individual goals for their own units.

Guidelines for what/how to incent:

• You Get What You Reward:
  • Reward the behavior you want, not simply target attainment

• Amount to Incent:
  • The percentage of incentive compensation commonly linked to employee engagement surveys is typically between 5-15% of the total incentive compensation. Other items such as customer satisfaction scores, achieving financial targets etc. make up the rest.

• Create Baseline First:

• The first time out, goals should be kept simple, learn the process, create basic action plans and make any critically needed changes.  Second time out, goals can get more complex and are set for both action taken and score movement.

• Numerical Goals Need not be Uniform:
  • Those at 25th percentile or lower, need to improve more (i.e. move their scores further) than those at 75th percentile or higher. Those at top of distribution can have maintenance goals. Specific goals are best set in consultation with supervisor, rather than by rote formula.
  • Base the program not just on improvements, but on attaining and maintaining a specified level of favorability.  In this way, the managers who are already good at fostering a positive working environment are not punished.  It is always easier for those who need the large improvements to realize the largest gains.

• Goals Need Not Be Insular:
  • A Combination of Company Goal/Business Goal/Personal Goal can drive the message that both teamwork as well as personal achievement is required to achieve maximum benefit.
  • Goals can also be set only at an organizational-wide or BU level, and not at an individual manager level.  Lower level managers/supervisors can have goals related to activity (completing action plans) rather than numbers.

• Goals Need Not be Limited to Next Cycle:
  • Longer-term goals aimed at the “ultimate” desired end-state are often necessary. For instance, a 6-point change in score over two years rather than 3 points within one takes a longer-term view.

• Set Goals Against an Internal Benchmark:
  • Goals set against an internally derived standard often carry the most weight, and credibility, since the goal is to look like how other parts of the organization, or groups within the organization already looks.

Things to Avoid

• Blindly Chasing a Number – Score Attainment as Only Goal:
  • Targets are often set and people then can lose sight of what they should really be trying to accomplish as they chase the number. Hitting an engagement target represents potential, nothing more. The business does not magically take care of itself just because you hit a number.

• A Direct Connection to Non-Management Employee Bonuses:
  • Too often employees are encourage not to “screw it up” for everyone and to respond positively on engagement when their own and their immediate supervisor’s bonuses are simply tied to a numerical target.

• Unrealistic Improvement Targets:
  • If an unrealistic targets or behaviors are selected as goals, when most people don’t achieve goals, they will either look for “work-a-rounds” or the process and goals lose credibility.

• Statistical Significance as Driver of Goals:
  • As you go deep in organizations, groups get small and make statistical significance an inappropriate choice. Practical significance with a business orientation is best.

© 2010 by Jeffrey M. Saltzman. All rights reserved.

Visit OV: www.orgvitality.com

Changing Times and Employee Engagement

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What concerns organizations during times of change? Since organizations are nothing more than an amalgamation of people, organizations themselves actually have no concerns; however people within those organizations, at differing levels, with differing responsibilities, can have widely differing concerns. And since organizations are made up of people, they have all of the foibles of people, the shortcomings that can become painfully obvious and even exaggerated during times of change.

Change, especially transformational change is always spoken about in positive terms by an organization’s management, for who would want to implement change in order to make things worse than they are? Our goals are ones of improvement, yet the act of change carries with it significant risk that the change will not work out and will instead degrade organizational performance. Depending on where you sit within the organization your views towards a change might be radically different. What may be viewed as a very successful change from the point of view of someone within finance may be viewed as a disaster from the point of view of a customer facing employee, struggling to meet customer needs.

Is there a way to help assure that all within the organization or at least most view the act and outcomes of change in as positive a light as possible? If you can keep people engaged throughout the change process and in the change process itself the answer might just be “yes”.

People are much more similar than they are different in terms of the fundamental needs they are looking for work to fulfill and the characteristics they desire from the working environment (I exclude those with psychopathology). These needs cut across industry, geography, ethnicity, gender, generation etc. They are uniform because underneath it all we are all human. For instance you would be hard pressed to find a worker anywhere on the planet who did not want to be treated with respect and dignity.  Likewise a worker desires a sense of equity, that in general they get a fair return for the effort expended. A worker also desires meaningfulness that they are accomplishing something and they want to have a sense of pride emanating from their efforts and pride in what their organization accomplishes. These are among the fundamentals that are part of who we are as human beings. And part of who we are comes from our evolution. Millions of years of evolution have created characteristics are not erased simply because we moved from the savannah to the suburbs, or simply because the younger generation has taken up snowboarding or freak dancing.

A worker in a developing country who submits to sweatshop like or other horrible conditions does not accept those conditions because fundamentally they are any different from you or me. They accept those conditions out of economic necessity. They have pressing needs that make them accept conditions that you or I would not currently tolerate, needs like feeding themselves and their families and putting a roof over their heads.  If placed in circumstances with similar opportunities that you or I have, they would make the same choices that we would.  Because these uniform fundamentals exist, there is a methodology that can be used to make organizational changes more positively viewed in general and to keep employees engaged during the process.

What about perceptions of differences by generation, by occupation, by public vs. private sector employment etc? Do these claims of uniformity fly in the face of the common wisdom, the common wisdom for instance that says that younger generation employees care less about job security than those of previous generations? No they do not. A younger generation employee who grew up during a period of high employment has less concern about job security because they simply have not experienced a time where unemployment was high. If unemployment soared to 11-12% like it was when I was in college or hit the levels it is at currently 9+%, this younger generation who cares not about job security finds that it is very important to them and suddenly matters. They are not fundamentally different than previous generations; they simply have had different experiences and economic opportunities available to them.           

Let’s examine a case where among other things, the equity equation got out of balance and engagement declined. As reported in the Wall Street Journal (February 9, 2007), prior to 9/11 the US Air Marshall Service had 33 agents covering 26,000 flights. After 9/11 in an effort to beef up airline security it was decided that somewhere between 2500 and 4000 new Air Marshalls were to be hired (the exact number is classified). Two hundred thousand people applied for these new positions. The number of applicants can be surmised to be so high because people were feeling a sense of patriotism after 9/11 and a desire to do something to be of service to their country. They came into these jobs excited about the prospect of doing something meaningful and with a strong desire to do a good job. They did not take these jobs expecting extraordinarily high wages, fair wages would suffice. After joining the Service they found themselves faced with what has been described as grueling schedules, a lack of advancement, onerous rules affecting ones ability to get job done, and a lack of identity protection, resulting in “many” (in the words of other Marshalls) quitting the Service, the ultimate act of a disengaged workforce. 

The head of the Service at the time called these complainers “disgruntled amateurs, insurgents, and organizational terrorists”. I don’t know about you but I get the feeling that calling someone who joined the Air Marshalls after 9/11 an organizational terrorist is probably the worst thing you could call them. With the work situation including the equity equation being out of balance the Marshalls responded to these working conditions by joining a union. The head of the Air Marshall’s service has since been replaced and the new head has begun to make changes such as loosening the dress code so the Air Marshalls blend in better with other passengers and taking other steps to protect their identities.  Clearly the change that the U.S. Air Marshall Service undertook, that of vastly expanding their ranks and providing additional security on airline flights can not yet be called a complete success story. 

Just as aspects of organizational culture are not binary conditions, the success or failure of change and people’s concerns about it should not be viewed as binary either. In other words people are not either concerned or unconcerned, change is not either successful or unsuccessful and employees are not either engaged or disengaged. Treating and speaking about such concepts in a binary fashion is far too simplistic. Change and concerns about it fall along a continuum. The degree of concern regarding change can vary from a great deal of concern to no concern, depending on the individual and the change itself can be viewed as a ranging from complete success to complete failure.

The fundamentals of creating a work environment where change can be positively implemented and employees engaged can be depicted in the Message Performance Future^© (MPF^©) model which has been successful used at describing organizational culture and working through change.

Message: Is there absolute clarity regarding what the organization is about, how it will operate and how each person contributes to delivering on those goals? Importantly are the organizational communications delivering that Message consistent throughout all the levels of the organization? Are policies and practices in-line with that Message? During times of change is it clear how the organization is changing, what the expected benefits of the change will be and what each person’s role in the change effort is?

Performance: Are people getting what they need (in the broadest sense) to be able to deliver on that Message – to get the job done? US Air Marshalls who could not blend in with the other passengers were handicapped in their ability to deliver on the Message, to provide increased security on flights. Performance should be thought of in the broadest sense, including such areas as teamwork, communications, decision making, training, equipment, resources, processes and procedures.  

Future: Do people feel like they have a Future and a sense of belonging, of being valued by the organization? Is there a reason for them to stick around for the long-term?

As stated earlier organizational cultures are not binary and every organization will have varying degrees of each of these being present. Those most successful at implementing change and keeping their employees engaged during change are those that are strong in all 3 areas during the process of change. For instance, one client had some employees who viewed the organization positively in all three areas and as an outcome that group had engagement scores in the mid 80s (on a percent favorable scale of 1-100). Within the same client those who did not view the organization as clearly Messaging, as providing what is needed to get the job done (Performance) and a sense of Future had engagement scores in the low teens. Ensuring that Messages about the change process get out regularly and consistently, and about people’s roles during and after the change is critical, as is providing people what they need to Perform and giving people a sense of Future after the change.

Sometimes change efforts impacting mission critical processes or change efforts involving critical processes can carry with it terrible consequences if the change effort were to fail. Failure for instance of a change process, when that process is one that protects the public’s safety or puts the life of an employee is at risk, is often times simply not an option. In those cases a change process that has multiple small steps with assurance check points along the way confirming that the change is working can be done. Another approach is to implement the change in an off-line fashion, running two processes in parallel, and not to implement the change in the “real-world” until it is assured that the newly changed process is functioning as planned.

Change is a never ending state of being as there is no such thing as a perfect organization, only a vision of perfection that one can strive for only to find that it is constantly somewhat out of reach.

© 2010 by Jeffrey M. Saltzman. All rights reserved.

Visit OV: www.orgvitality.com

Acting on Employee Opinion

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There are those who think only they know best when it comes to organizational decision making. And while it is perfectly ok to have strongly held opinions, it also behooves one to know when to listen to the wisdom of the crowd. Assuming that you have crossed the Rubicon and are ready to heed or at least consider the advice of those who are usually more than willing to share some, there are some guidelines that if followed can make the process not too overwhelming and perhaps increase the probability of success. This is a quick summary and the highlighted links will point you to more detailed discussions on each topic.

1. Don’t try to do too much. If every manager within an organization once a year picked one meaningful thing that went above and beyond and actually made it happen, significant positive change would occur. If two things were chosen, one should support an overall organization-wide initiative and one should focus on local conditions. By limiting the number you also eliminate excuse-making. You either did it or did not. Reference: The One Thing.
2. Every organization has strengths. Sometimes picking actions that build off of and are natural extension of the strengths, the skills and talents already in place will be more successful than actions that come out of left field. If you are trying something new as an action and do not know how to accomplish it, set a learning goal – how you will learn more about and develop the skills that enable you to succeed on the action. If you are very familiar with how to improve on a particular issue then set a specific measurable goal. Reference: Increasing the Wealth of Organizations.
3. People are people. We can spend our time searching for the differences between us, but when it comes to the world of work and what people fundamentally want and expect out of the work environment we are all much more similar than we are different. We all more or less want the same things. Find me a person on this planet, of any age, of any gender, of any ethnicity for instance, that does not want to be treated with respect and dignity. (I exclude those with pathology). Think about how the actions you are considering can help fulfill these basic universal needs. Reference: People at work: or it is Life and Searching for a gang in Nebraska.
4. There are no magic bullets – success, most of the time, boils down to some brain power, hard work and a dose of being in the right place at the right time. Those who spend their lives searching for magic bullets, elixirs, quick fixes will spend their lives searching in vain. Reference: Models, Representations of Reality
5. Don’t prematurely shut down the creative process. Create a lot of good ideas in a brain storming mode. On a second or third pass through the ideas generated, narrow the field. Pick the one thread that can be most leveraged, the thread that could unravel or hold together the whole organizational tapestry. Reference 40:1
6. Your actions are at risk for failure. As you plan them out, understanding common reasons why actions fail can help you avoid pitfalls. Actions can fail because of a. lack of knowledge/training, b. lack of correct business processes, c. lack of desire/support. Reference: Errors
7. It can be good to measure, to create metrics to measure your progress, but just because you are not measuring does not mean what you are doing is not good. Where you can create metrics, do so. Reference: Managing what you are not measuring, and Measuring what you are Managing.
8. You will make mistakes. It is a given. Mistakes and errors will occur as you pick and execute on your action plans. Don’t be so consumed with making the absolute right decision that you make no decisions or miss opportunities because of decision delays. Reference: Peanut Butter Anyone?
9. Change happens- look forward not back. Reference: Well I Guess that is not Going to Grow Back.
10. Openness and transparency regarding what you are doing is the best policy. If you cannot be open and transparent about it ask yourself if you should be doing it. Reference: Transparency and Organizational Success.
11. Aim High. Reference: Abnormal Change.

© 2010 by Jeffrey M. Saltzman. All rights reserved.

Visit OV: www.orgvitality.com

Abnormal Change

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“How far back can you remember?” a friend asked me the other day. I thought about it for awhile searching my old memories and finally responded “Maybe 28 or 30”. “Years ago?” he asked. “No, waist size”, I responded.  Change happens.

Dandelions are the perennial weed that are just about impossible to get rid of from your lawn. Tough as nails they show up everywhere you don’t want them to. Upon closer inspection the yellow flower of the dandelion is actually made up of numerous small flowers, each yellow petal being a separate flower capable of turning into an individual seed and in aggregate yielding the cottony ball that was so much fun to blow upon and scatter so long ago. I can remember that. Dandelions are adaptable. One study of them recently showed that in as little as 12 generations dandelions adapted from having that familiar cottony seed distribution system, with seeds drifting in the wind, to one that favored seeds that fell immediately around the mother (and father since they are asexual) plant. The plant was able to evolve, incorporating a new adaptation in as little as 12 seasons.  The new adaptation was the development of seeds without the white cottony tufts upon which to float in the wind. What was the reason for this change? When dandelions found themselves growing in urban locations with concrete all around, it became more advantageous to them to fall immediately next to mom, who was already conveniently gowning in a crack in the sidewalk filled with soil, then to scatter seeds in all directions looking for the next bit of dirt in which to put down roots.  In as little as 12 seasons dandelions took an evolutionary process that is often viewed as glacially slow and made fairly dramatic change.

Organizations of course need to be able to change or they will eventually die out, advice that any dandelion can give. A critically important point about organizational change though is that the most successful organizations need to consider how to control the definition of what are the normal standards of performance for their products and services. Being able to control the definition of standard or normal can be a path to greatly increasing market share and profitability. This is as true for the little restaurant on the corner as it is for the global behemoth. Organizations that can control the definition of “normal” performance or “normal” service are the standard bearers in their respective markets. Being able to control the definition of normal is also how some upstart startup can shake up an industry and penetrate the traditional barriers to competition.

Federal Express changed the definition of “normal” delivery times for packages and letters, doing something that no one else seemed to consider and grew into an extremely profitable, very successful organization. They again changed the definition of what a customer could expect when tracking packages, greatly increasing transparency and again setting the standard which everyone strove to emulate.

Henry Ford with his concept of mass production changed the definition of what a “normal” car should cost, greatly increasing the ability for the average person to own a personal transportation machine. His working definition of affordability was that a Ford Motor Company worker on the assembly line should be able to afford the product which they were producing.

The Japanese car companies, Toyota, Honda, Nissan among others came along much latter and changed the definition of what normal quality was, tapping into a desire of the consumer to own a quality, reliable product with fewer defects at a reasonable cost and quickly captured enormous market share. (They did not start out that way but came to see the light as they evolved and adopted the six-sigma tools made available by Dr. Deming).

Apple, a company that takes the notion of owning the “norm” seriously, of course changed the definition of how we buy and purchase music, driving traditional retail record stores to near or into bankruptcy as they could not adapt their traditional retail model. Apple is trying to do that again with the iPhone.

Amazon changed the way we purchase products on-line and Google changed the norm by which we search for and access information. eBay forever changed the way  that garage or lawn sales happen and has spurred an entire secondary economy employing hundred of thousands.

Starbucks changed the definition of how you purchase and how much you purchase coffee for and for a long time now a cup of high octane coffee has cost more then a gallon of high octane gasoline, but I think gasoline is pulling ahead once again. I can’t help but wonder if part of what is happening with the new highs in gasoline prices is to establish a new norm around what a gallon of gas should cost. (I can remember back to the 60’s – cents per gallon).

Wal-Mart established a new norm around pricing models and Target and Kohl’s added in more of a quality and shopping experience component (where did I hear that before?). A similar battle rages between Home Depot and Lowes. The list goes on and on.

The challenge to organizations as they seek to improve their performance is not to simply incrementally improve but to strive for breakthroughs that allow them to leapfrog the competition – to create not simply normal change but abnormal change, change beyond what is expected; to reinvent not only themselves but their products in such a fashion that it creates a new standard, a new norm of performance and then to make it happen. That takes creativity and insight, it takes a workforce that is willing and ready to adapt to new ideas and concepts and can work outside the box. To paraphrase one company’s motto, “We have a better idea” – do you?

© 2010 by OrgVitality, Jeffrey M. Saltzman. All rights reserved.

Visit OV: www.orgvitality.com

The First Second

What makes an organization viable for human life? Does there exist a small number of organizational variables that have to be within acceptable range for an organization to support life? If they exist when do the values of those variables get set? And once set can they be changed?

“Everything should be made as simple as possible but no simpler.”

Albert Einstein (1879-1955)

The universe does not have to be the way it is. There are a small number of variables that should their values have come out differently, we would not be here and life as we know it would not be possible. Life exists in the universe because there are values in place for certain fundamental constants that allow for matter to achieve high levels of organization. This led to the creation of stars and galaxies and other structures that permeate the universe. Other variables allow for stars to burn at a rate that allows them to be around long enough for life to develop and for carbon, what life as we know it is based upon, to be found in abundance. Life and our universe are interconnected but it did not need to be that way, the values of the constants did not need to be exactly as they are. Why are they so? The simple answer is that it is the way it is because we are here to measure it. There could have been an infinite number of universes before ours and there could be an infinite number of universes after ours is done or according to M-theory, there could be an infinite number of parallel universes to ours currently in existence. The reason why we are in possibly the one universe that supports life is because we are here in the first place to ask the question, and we would not be able to ask the question in any other universe that did not support life – this notion is called Anthropic principles. 

“Nature does nothing in vain, and more is in vain when less will serve.”

Sir Isaac Newton (1642 – 1727)

The constants, the values that those critical variables adopted were determined within the first fraction of a fraction of a second that this universe existed. At the very beginning of our time, our universe, a course was set. This course determined whether the possibility existed that we would be here now. If the numbers had not come out the way they did, I would not be sitting here writing this and you would not be reading it. In fact, there would in all likelihood be no life anywhere in this universe. The moment of origination was critical.

“Behind it all is surely an idea so simple, so beautiful, that when we grasp it – in a decade, a century, or a millennium – we will all say to each other, how could it have been otherwise? How could we have been so stupid for so long?”

John Archibald Wheeler (1911-2008)

What about organizational life? Can we draw a parallel to life in the universe or are humans and our societies more complex than the universe? Does there exist a relatively small number of variables or factors that creates conditions within an organization, allowing employees to flourish, possibly according to Maslow to self-actualize?  And when do these variables become part of the fabric of the organizational universe?

Each organization has a unique history, a unique story about its origins. Within a fairly short time span of its origins the initial culture of the organization may be set, not necessarily in stone, but in fairly strong stuff never-the-less. I am constantly amazed at how in high turnover organizations the cultures can be as robust as they are, resistant to movement in one direction or the other, even though they constantly fill with new people.

If you asked me to define the initial variables that determine whether an organization can support life I would choose the following:

• A clear and compelling Message regarding what the organization is about, what it stands for, what it hopes to accomplish and knowledge of how each individual can support that Message in a meaningful fashion
• Performance enablement – the organization providing what you need to accomplish your tasks in a way of which you can be proud and alignment of the Performance expectations to the Message, as well as:
  • Working for a management team that is effective and puts sensible business processes in place and positions itself well within its markets  
• A sense of Future – compelling reasons to stick around including:
  • Fair and respectful treatment – you get out what you consider to be fair for what you put in, covering pay, benefits, recognition, rewards and advancement as well as being treated in a respectful and dignified fashion
  • The ability to stay current in your skills or to develop new skills

I think the leadership of an organization needs to make up its mind regarding how they will operate against these variables during the initial formulation of the organization. While I do believe these variables can change, they are much more difficult to change later on in the organizational life-cycle than if they are set up appropriately at the beginning.  The moment of origination is critical.

 “What can be done with fewer assumptions is done in vain with more.”

William of Ockham (1285-1349)

 

The Mysterious Organization

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“Men are not prisoners of fate, but only prisoners of their own minds.”  – Franklin Delano Roosevelt

Those of us conducting organizational development or improvement efforts are making the assumption that organizations can change. Otherwise why would we bother and why would organizations bother to try and improve their performance? If the behavior of organizations was foreordained, collecting organizational, behavioral, or cultural information and rolling it out to the management team and workforce with our elaborate planning and improvement mechanisms would be a complete waste of time. It is implicit in the assumptions we make about our work that organizations should be able to improve, to change for the better if given the right tools to help them along. Makes a lot of sense, doesn’t it?

An organization is nothing more than a unifying concept that allows for common purpose and shared activity among its members. In order for the organization to be successful, membership in the organization has to be perceived as having benefits or no one would bother to join. Some business oriented organizations are so successful at creating common purpose and coordinating member activity that they go “public” which allows non-members to participate in the organization by the proxy of their investment. Yet organizations are essentially non-existent. Have you ever talked to an organization? No, you have not. You talk to the people who are part of the organization, who reside within the organization. Has your car ever been repaired by a car dealer organization, or an appliance in your house repaired by a home repair service organization? No they have not. They are repaired by the service technicians, the people who are part of, or representatives of those organizations. When sick and in the hospital, is your care, and your ability to get well dependent on the medical organization in which you are placing your trust or the people who work there? In addition to the successful selection and development of the best medical staff possible, you are hoping that organizational polices, practices and procedure have been put into place that will lead to a uniformly high standard of care, regardless of the staff person who is giving it, but those policies, practices and procedures were not derived by the organization itself, they were derived by the people who make up the organization.

The people that make up the organization, when it comes right down to it, are the only real asset that the organization has. Yes organizations can have buildings and equipment, patents and processes, but how was all that created in the first place? It was created by the efforts of the people of the organization. Let’s call people the “primary asset”, the asset by which all other assets are created.

So when we make the assumption that organizations can change, what we are really saying is that people can change. People can increase their knowledge, they can change the way they get work done, they can change the way they interact with others along with a host of other attributes. Our goal when we are attempting organizational change is to change the actions, the thoughts or beliefs of the people who reside within those organizations.  People can change the way an organization functions by changing the policies, practices and procedures that other members of the organizations follow, and it is people, organizational members who must take the initiative to create the change, for the organization itself is incapable of doing that. I am not splitting hairs here, for there is a critical distinction between those who are waiting for an organization to “act” vs. those who realize that it is the people within the organization that must “act”. Getting the people within the organization to realize that they must act is half the battle of organizational change.

There is a subtle difference though that must be drawn between what people in an organization can do to help institute change and what others within the organization must do to allow that or facilitate the change. While everyone in an organization can act like a leader and can take the initiative to improve aspects of organizational functioning, for instance challenging dysfunctional dogma, not everyone in the organization has equal ability to access the necessary resources (funds, people, space etc.) needed to make meaningful large scale changes. As you interact with organizations, you interact not with the organization itself, the organization as abstraction; you interact with the people who make up the organization. Yet if the people within the organization are not given the proper tools, equipment, messages, etc, if they are not enabled to perform their respective jobs, your interaction with the organization will likely be less than satisfactory regardless of the quality of the people you are interacting with.

Selection of the best and the brightest people is critical to the overall health of an organization as is the appropriate goal setting for those who are organizational members. Irrespective of whether that organization is a manufacturing organization, a services organization, a research organization or one of the branches of the US government where we elect organization members into their positions, we need to select the best and brightest, those capable of learning and adapting to changing circumstance, those not tied to failing dogma and those who believe in openness and transparency, a lack of mystery. We then need to make use of their ability to adapt to changing conditions by setting appropriate organizational goals and each member needs to be aware of how they can contribute to those goals. Each member as well needs to know if their actions are in fact viewed as appropriate by the organizational leadership in helping the organization to achieve its goals.

An organization, including a governmental organization, is nothing more than an amalgamation of people, bringing to bear their respective talents and skills for common and shared purpose. Organizations do not make decisions. Organizations do not provide recognition or feedback. Organizations do not hire or fire. Organizations do not provide equipment and resources. People do, people who happen to reside within the organizational structure. I think we all intuitively know this however that concept can make some people uncomfortable, people who prefer the anonymity or mystery that the word and concept “organization” can confer.

Some people draw their influence, their power not from their personal knowledge or ability but from the “mysterious” organization. Organizations can seem all powerful, omnipotent, the creator of the rules by which others must live, yet organizations are nothing more than people. Often times knowing little about an organization can create an aura of mysteriousness or an illusion of power or invulnerability surrounding the organization. Think of the CIA, the National Security Administration, or the FBI. Creating mystery around the organization’s structure, about just who is making what decisions evokes a sense of “decisions being made from up on high” from omnipotent knowledgeable beings, beings that are in reality only as capable as many others.

What are some of the consequences of allowing the “mysteriousness” of the organization to continue, to have a lack of transparency in the day-to-day functioning of the organization? When an organization is sheathed in a veil of mystery, created by a lack of transparency, upon the slightest tremor in performance, the slightest crack in the shield of mystery protecting the organization (which is only a matter of time) the illusion of invulnerability will vanish and the consequential reactions of customers, of shareholders, of employees, will be severe. The mysteries of our financial institutions come to mind with most of us not even coming close to understanding what they did, how they earned money. Those organizations and their actions were veiled not so much in secrecy but in mystery generated by complication. Think of Lehman, Bear Sterns, AIG, etc.

Warren Buffet, the head of Berkshire Hathaway and a fairly successful investor (that is a purposeful understatement) in a recent PBS interview described how if he can’t get his head around what a company actually does, how they earn their money, he walks away from that opportunity or divests from it. He is looking for a lack of mystery, an easily understood simplicity in the business model and complete transparency. There are lessons to be learned there, lessons that apply not only to which organizations to invest in, but lessons on how people within organizations should be managed.

Moving from the organizational level down to the individual level, the behavior of people who hide behind the mysterious organization can exhibit some very troubling patterns. If we start at an extreme there has been found to be correlations between tribal groups that disguise themselves with masks, mud, war paint etc. and the consequent amount of cruelty and torture that they apply to their war victims. They are hiding behind the anonymity of their warring organization and the consequent is a higher degree of cruelty than those who go to war with less anonymity. You may be familiar with the caricature of the sheriff, after catching you for speeding, approaches your car with impenetrable sunglasses that hide their eyes. This creates a sense of mysteriousness about them and makes them less of an individual and more of a uniform that is part of the “organization”. This sense of detachment on their part creates circumstances allowing for behavior that is less personal and more anonymous and detached, and perhaps less friendly.

Hiding behind organizational anonymity is utilized by various levels and positions within the organization by members who are looking for the organization to provide them position power, a higher level of authority than what they would get on their own, or to obfuscate the responsibility and accountability for various decisions and/or behaviors. But the mysterious organization is taking a tremendous risk that eventually the majority of its customers, its employees and shareholders will become alienated with its way of conducting itself and they will abandon it when given an opportunity.

© 2010 by Jeffrey M. Saltzman. All rights reserved.

Visit OV: www.orgvitality.com

Diagnosing Organizational Ills

“To help, or at least to do no harm” –

Epidemics, Book I, Section V of the Hippocratic Corpus

A few weeks ago I had a chance to try out the heath care system in New York.  I went to bed with some lower back pain. Thinking it was from stretching for burned out light bulbs I changed earlier in the day I ignored it. I woke up at 3:00 am with the back pain intensified and now intense stomach pain as well.

I had a client presentation that morning so I took some aspirin and thought I could run into the city do the presentation and get home and be sick for a while with whatever this was.  At 5:00 am with the pain continuing to intensify, I woke up my wife and said that something was going on. She took one look at me and said I had to go to the hospital.

We got to the hospital at about 5:30 am and I saw the ER doc. He ran blood tests, a CAT scan, EKG, took X-rays. Everything seemed within normal limits. The pain was now under control because of the meds I was getting through an IV.

He was ready to release me, and since it was now about 3:00 pm, I was ready to go home, but I started to throw up (reverse peristalsis if you want to be proper), so he called in a surgical consult. They guy on duty happened to be the head of surgery for the hospital. I described the symptoms and he was able to immediately diagnose me saying it was likely my gall bladder, he ordered an ultrasound to verify it. It showed an inflamed gall bladder with stones lodged in the ducts. So after spending the entire day in the ER without a successful diagnosis once someone familiar with the illness asked the right questions, heard the problem and examined me a diagnosis was had in relatively short order.

Does this kind of experience transfer over to diagnosing organizational problems and enhancing organizational performance? I think so, but let’s examine it a bit.

Over the years I have been asked to use surveys to accomplish many differing organizational goals as well as diagnostics. The rationale has ranged from measuring employee satisfaction, commitment or engagement to enhancing effectiveness and decision making, improving quality (TQM), or communications,  decreasing turnover, evaluating merger effectiveness/success, senior management effectiveness, strategy effectiveness/implementation, and customer service ability or providing organizational assurance against policy objectives, and even providing a platform for dialog. These are the more generic reason why organizations have hired me to do surveys there also exist more topic specific reasons such as: measuring ethics/SOX compliance, assessing benefits (types and levels to be offered through conjoint analysis), transparency of practices, communications vehicle evaluation, even employee personality traits.

What always struck me as odd were that the companies came to me with these specific rationales, often times saying something like “we want to measure effectiveness, we are definitely not interested in measuring satisfaction – sometimes derogatorily called a ‘smile survey’ ”, (the well done satisfaction surveys were never smile surveys). And yet if you looked at a well done effectiveness survey and a well done satisfaction survey you would find 95% or so item overlap. In other words, the items used to measure satisfaction and effectiveness are the same survey items. Going further, it always seems a bit ludicrous to me to think you could measure effectiveness without measuring satisfaction as though dissatisfied employees could be effective or create an effective organization, or that those things that make an organization effective may be different from those that make an employee satisfied. They are the same! And in fact many if not all of the organizational goals listed above are so intertwined that measuring one component without taking into consideration the larger context will run the risk of not being able to properly diagnose or will results in a misdiagnosis and hence inappropriate action being taken on the part of the organization (they may go home rather than having their gall bladder removed). This would be the case if you are examining the results from a very high level, say total line or whether you are delving into the bowels of the organization.

This is also closely related to my reluctance to rely on indices. Indices are attractive, they are sexy (as much as that is possible for a number), an index gives you something to hang your hat upon and say “we were 63 last year and this year we are 66, we are improving”. But the index number can hide a lot of complexity going on beneath the surface. At the hospital 4 out of 5 of the tests ran upon me were in the normal range, if they were placed into an index I would probably have been sent home. But the last test, the ultrasound showed a problem that needed to be resolved. Just as a single survey item might show a problem that needs to be resolved within an organization, a survey item that can get lost within an index. And even if the index was low and a cause of concern, it would not be known what actions should be taken based upon the index, what should drive corrective action is the individual item score, the individual item that indicated that safety or customer focus or constipated decision making were in need of improvement. The individual items if worded well are very directional.

I believe that there is one underlying rationale of all of the rationales given to me for the reason for conducting employee surveys that allows them to hang together in a commonsensical form; that rationale is one of organizational effectiveness. Organizations have many different constituents and are pulled in many different directions at the same time, but from what I have seen those organizations that have effectiveness as an overriding paradigm generally excel in many other areas as well. Effectiveness and in general organizational culture I believe is driven by 3 main components and one outcome: Message, Performance, Future and Outcomes. A very simplified depiction of the MPFO framework:

• Message: Am I sending the right message in a consistent fashion throughout my organization? Do people know what they are supposed to be accomplishing?
• Performance: Are people getting what they need (in the broadest sense) to be able to deliver on that message – to get the job done?
• Future: Do people feel recognized and feel like they have a future with this organization?

In the center, of the overlap of Message, Performance, Future, is “Optimum Performance”, is where Organizational Effectiveness resides. There are specific survey items that can be used to measure each of the main circles above and to measure the outcomes that fall within the overlapping center.

Just as having an expert review your case and asking for the right test to verify a diagnosis, asking the right questions in the right framework along with a powerful analysis goes a long way towards correct organizational diagnosis and is the basic building block of organizational improvement.

The One Thing

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For many years, in manager training sessions which covered how to utilize your employee survey results, I always suggested to managers that they decide on which two or three issues were the most important and take action on that limited number. No more than two or three, not a long list of tasks, a long list that would almost certainly ensure that nothing would actually get done. Keep the list small, keep the list manageable. Everyone’s plate is already full and piling on to-do’s would simply become overwhelming. I am re-evaluating that advice, but my evaluation is not about whether managers should have a longer list of action items, but rather should the short list be even shorter.

While it may sound odd after spending so much time and energy on planning for an employee survey, collecting the data, analyzing it every which way and reporting it back, but I am beginning to feel that the best advice on what to do with it, in today’s environment is to pick “The One Thing” that rises to the top, that the management team feels will make a substantial difference and to go out and make a difference on it.

When you examine norm data and look at who are the top performers on a particular issue, which companies score most strongly for instance on customer focus, innovation, timeliness, cooperation, etc. or more broadly on Message, Performance enablement (against message) and Future related issues you find a somewhat different list of top performing organizations. Meaning that the list of top performers is a changing list, depending on which item you are looking at. It appears that a widely admired company for instance will not be the top performer across the board necessarily, but rather will excel in some areas, and be more average in others.

I would argue that no company has the time, energy or resources to simply come out and say that “we will be the best in the world on everything”, I would further argue that the logic doesn’t make sense. By definition resources are a limited commodity. No one has infinite money, people or time. Further there are relatively few cases where two companies exist in exactly the same market niche. In fact much time, money and people’s effort are spent in figuring out how to differentiate one’s products from the competition (both the products sold to your customers and the employee value proposition sold to your employees). Organizations need to choose which areas will be most critical to success in their niche. Will it be to become the most innovative, having the leading edge product to market before the competition, or to be the most responsive or to be the most value for the money spent etc? Sometimes these choices are somewhat contradictory. For instance if you are going to be the organization that provides the most value, stretching the consumer’s dollar, it can be difficult to be the most innovative, as innovation often carries a price tag as would concepts like being the highest quality or most responsive.

Companies that try to be all things end up having a confused Message that will hurt their performance, with changing directions and priorities the norm internally and customers seeing and experiencing inconsistencies. No one knows what the organization really stands for, including the organization.

Managers who are examining their employee survey results and require themselves to pick “The One Thing” are in essence defining what is important for their organization to stand for. What is the one thing that if done better than anyone else will enable the organization to succeed?

There is another aspect to “The One Thing” that is important and that is you can’t hide from it. When managers have picked 2-3 issues to tackle from their employee survey results they invariably go after “the low hanging fruit”, the easy fixes. While that is all well and good, sometimes after going after the fruit, they never quite get around to tacking the tough issues, the thorns higher up on the branch. Later on they can point to progress made in some areas, after all we got the low hangers, but the real challenges are still the real challenges, those thorns are still as sharp as ever. If managers pick “The One Thing”, when evaluating their progress they either did it or they did not, period.

The challenge is to pick “The One Thing” that has the potential for the greatest across the board impact, and that is where initial effort needs to focus. Which thing is the thread that if pulled will impact all the other threads that make up the organizational tapestry? Where do you concentrate? As you begin to think this through you rapidly come to the realization that picking “The One Thing” does not necessarily lead to any less work or effort to be expended in responding to survey results, it leads to a more focused, a more concentrated effort. In order to successfully accomplish “The One Thing” it is very likely that multiple other things need to be addressed as subtasks as well.  

Should an organization pick one standard thing, driven from the top so that everyone is working the same issue or should local managers pick the one that is critical to them at their level? I believe that Sr. Managers should pick “The One Thing” that is critical at their level and they should champion it. They should be held responsible for getting it done and for driving it through the organization. Other managers within the organization should be picking their one thing, which is in support of the top level one thing, within their control, if the organization is to have a concentrated effort in responding to the survey results and actually make a difference on an identified critical dimension. I believe that there are some nuances that will come into play here depending on where an organization resides across the board on some issues, but in general that is the concept.

“The One Thing” can be scary. It is much easier to pick a whole host of issues, knowing that if you do a bit of everything you will likely touch on the ones that are really important to your organization, but you will touch on them in a lukewarm, less focused way. If you are looking for maximal organizational improvement impact “The One Thing”, while likely the most challenging, has the most potential to deliver.

© 2010 by Jeffrey M. Saltzman. All rights reserved.

Visit OV: www.orgvitality.com