Why firms trip up on their big change efforts
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As a child, I would dissolve into giggles every time I heard the tale of the emperor who graced his subjects with his unclad presence, believing that he was clothed in finery that only the worthy and intelligent could see. I would feel a vicarious frisson at the monarch’s embarrassment when the weavers’ swindle was revealed. How could anyone, especially an emperor, have missed the obvious fact that he was naked before he stepped out in public? He even ignored the warning cry of a child who pointed out his nudity. Clearly this was a fairy tale and such things didn’t happen in real life.
With the hindsight of three decades in corporate life, I now realize that overlooking the obvious isn’t limited to fairy tales. There are live parallels from the power corridors of firms. Management often takes decisions or displays behaviour that is so out of sync with logic or their people that observers wonder, “What were they thinking?”
Essentially, there’s a disconnect between intent and action or a clouding of stated objectives that confuses employees and confounds end objectives.
The hype circus comes to town: Push new initiatives, but with care
As organizations grow and reinvent themselves, overcoming system inertia and entrenched mindsets while bringing in required change is a critical manoeuvre. To overcome this resistance, leaders build momentum with massive effort on education, social awareness and marketing communication. End objectives, the path to get there and the related benefits that would accrue, are all part of the marketing blitz and hype that unfolds. Leaders speak to the employees, posters spring up around the scenery and the intranet is abuzz with the new religion. Putting explicit numbers to the Promised Land is a great approach as it crystallizes change initiatives as nothing else can.
However, as many politicians have realized to their chagrin, the ghosts of promises past can return to haunt. It’s the same with organizations. Expectations, once inflated, have to be delivered on. The same numbers that helped focus the organization’s attention and excitement will become the scale against which progress (or lack thereof) will be measured. Slow or no progress precipitates a loss of credibility that can hamstring the change initiative. More dangerously, it can lead to a loss of faith in future change initiatives too.
Take the case of talent management initiatives that typically segregate employees into smaller groups of overachievers and underachievers, with a larger mass in the at-par group. While communicating this initiative, organizations go to great lengths to explain the rationale and benefits of this system. Overachievers are assured multiple benefits—greater fiscal returns, accelerated growth and greater responsibilities. Expectations are set high and the excitement to do well is palpable.
Sadly though, few organizations carry through on the promise. Not for lack of intention, but often due to other constraints like slower-than-expected business growth, varied fiscal limitations or most likely, mismatch between skill requirements and availability. Regardless of the reasons, over time the talent management initiative becomes a “good to hear” initiative that is not translated into reality. Overall credibility in the system diminishes, and there is a drop in morale and participation levels.
A more calibrated path would be to temper the expectation building by also stating the challenges that need to be met along the way. All of this ought to be supplemented with an ongoing dialogue that answers queries and dissent as they arise.
Build the hype around new initiatives with care. Too little and there won’t be enough momentum to make progress; too much and the organization could face a credibility gap in future.
Watch out for process worms: When process overshadows end objectives
The holy trinity of storming, forming and norming—or ideation, selection and standardization—is a time honoured technique as organizations seek new solutions to challenges. In the standardization stage, it is typical to build processes that can be rolled out across the organization to deliver objectives. It’s a great way to communicate and ensure adoption of a specific way of operating across a large mass of people.
Over time, this logic can get derailed as the focus on the process overtakes and crowds out the end objective—when “what we are doing” shines more than “what we need to deliver”.
Take the case of an engineering organization that launched a Six Sigma initiative with much fanfare. The objectives were to drive incremental improvements and improve fiscal metrics. One of the prerequisites was to train personnel in the techniques of Six Sigma and measure the progress in training through numbers of personnel trained and projects launched.
In a few months, most progress updates on the Six Sigma initiative were about the number of personnel trained and projects logged in. Gradually, the focus grew hazy on how effective the trained personnel were or the potential of the projects. As a result, the projects undertaken were of poor quality and there were insignificant savings. The process had overtaken the end objective.
As another illustration, let me narrate my personal experience while dealing with the helpline of a reputed bank. I needed to electronically transfer a sum of money that exceeded the threshold amount set by the bank for the first 24 hours after setting up an account. The young lady on the phone kept parroting the bank policy and threshold limits. I didn’t disagree but kept pleading for an escalation to someone who could help break the deadlock. Sadly for me the discussion ended without resolution; perhaps her standard operating procedure guide didn’t contain guidance for such a request. I had no option but to wait the 24 hours to transfer the funds. It took me 72 hours to then transfer my account to another bank. The bank employee scored a perfect 10 on following the process. The bank lost a customer.
Clinical focus on the “lag measures” (what we need to deliver) while still driving the “lead measures” (what we need to do) ensures effective outcomes. Processes are meant to be enabling levers, not limiting ones.
Living in a glass house: The gap between stated intent and action
It is often said that leading by example is the best way to build loyal followers. Yet, organizations unconsciously propagate dichotomies between stated intent and action. That’s a path that can derail management direction and organization-wide initiatives.
For example, it is natural for organizations facing a downturn in business to restrict and cut down on discretionary spending. It is a move that is self-explanatory and easily understood by employees. The credibility challenge arises when the same yardstick isn’t applied across the organization—for instance, when senior management retreats to a luxury hotel to discuss strategy or when there is indiscriminate spending on staff functions even as the organization struggles to manage with less. Though the actual money spent may be a pittance in relation to the overall business scale, the message that goes out is loud and clear: there are different rules for “us” and “them”. Employees will see it as deviation from the script and it will lead to loss of confidence in the system. The word is forgotten, the action isn’t.
Likewise, when leaders encourage employees to take risk and stretch for ever higher objectives and then punish aggressive target seekers for failing, but reward the sandbaggers for meeting flat/nominal targets, they will end up propagating a culture of mediocrity across the ranks.
Coming back to the talent management process I spoke about earlier, several organizations strive for the holy grail of growing their own talent from within. The virtues of this approach are easy to see and employees eagerly extend support as they see opportunity for career growth. This positive response can turn to apathy just as quickly if, for whatever reason, an increasing number of vacancies are filled by outside hires over a period of time.
At all times, it is vital to maintain explicitly visible alignment between stated intent, objectives and actions. Anything else means a less-than-adequate engagement of the organization’s resources, diluted focus and passive partnering by personnel.
The fault in our numbers: Fix the root cause, not the symptom
In the right hands statistics can be a wonderful tool, instantly enlightening and pointing the way to solutions. Done incorrectly, the same statistics can cloud problem identification and drive management down the wrong resolution path.
Most organizations value and jealously guard their human capital. The right talent can make all the difference between success and failure. It is no surprise therefore, that attrition is a much studied and tracked metric. It is also no surprise that in most exit interviews employees state “better job prospects/salary” as the leading reason for leaving. This would seem to imply that the majority of the workforce is a bunch of mercenary pirates who are largely excited and driven by fiscal returns alone. Organizations that can, throw money at the issue. Those that can’t, shrug resignedly. However, this doesn’t explain how some organizations that are not the best paymasters, still command employee loyalty and exhibit low attrition.
The truth is, “better salary” is a convenient reason, easy to understand, explain and face up to. It is when exit interviews are supplemented with findings from anonymous employee engagement surveys that the real reasons for discontent get highlighted: limited opportunities to participate and grow, lack of recognition, neglect of certain functions, ineffective leaders, political climate, high stress levels, etc. These are the nuclei of discontent that, left unresolved for long, will lead to attrition. They are not convenient to acknowledge or to resolve, but often they are the real reasons that lead to separation. The “better job prospects/salary” that employees quote could well be the outcome of a decision to leave, not the prime reason for leaving.
Finding and facing the real, less apparent reasons for a symptomatic problem, no matter how prickly they are, will lead to better resolutions, rather than accepting convenient, in-your-face reasons that can at best lead to band-aid solutions.
What causes these disconnects
Examples like these abound in organizations. Obvious pitfalls, discontinuities and aberrations are often overlooked, resulting in initiatives getting delayed and mission failure. Why does this happen? Why do otherwise wise professionals miss obvious danger signals?
To my mind the three major factors that create this mental fog are:
• A non-inclusive approach in decision-making where leaders presume they or their inner circle know best, even if they aren’t experts on the subject matter.
• A hands-off approach once the initiative is launched, where leaders distance themselves from the frontlines involved in execution and depend on trusted lieutenants to carry back news of progress and problems.
• When leaders fear that their decisions will prove unsatisfactory, they refuse to acknowledge weak outcomes and negative feedback, and refuse to make mid-course corrections, often until it’s too late to make a correction anymore.
Leaders can take learnings from the fairy tale of the unclad emperor: Seek wise counsel before deciding a path, stay connected to the feedback and reactions of the employees and finally, be open to mid-course corrections in your strategies. The alternative to this could mean terminal embarrassment, at the least.
Sanjay Handu is a corporate consultant focusing on supply chain strategy and business transformation. His most recent role was with TE Connectivity, where he led the aerospace, defence and marine business unit and prior to that was the global head of strategic sourcing across several emerging economies.
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