Strategic Change and Alignment

Friday, February 12th, 2010

I thought it might be good to take a break from my “preaching” on business philosophy for a post or two and get down to some basics on change (and maybe include a little shameless self-promotion).  Big or small, almost every organization is going through change for economic reasons.  The recession is driving business owners and leaders to rethink their organizations, processes, and even their fundamental purpose for being.

People and organizations are reinventing themselves.  People who have been out of work are thinking about starting their own businesses instead of getting back into the “corporate world”.  Some of you want more control over your own destiny and think with your own business you can take charge.  So maybe it’s time to prepare a new career plan.  If you believe in a God, maybe you’re doing a little soul-searching about what God’s plan might be for your life and work.  These are big changes, strategic changes, and it seems like no one can avoid them.

Two studies of North American businesses over the last thirteen years have validated that strategic change initiatives fail two out of every three times.  Our own data shows that employees are unaware of management’s expectations seventy percent of the time!  And we wonder why change initiatives fail!

My partners and I are in the business of “alignment”.  The first question everyone seems to have is, “What’s that?”  Alignment is the process of translating change into action, making change personal, removing assumptions, and getting people on the same page.  We believe we can improve the probability of achieving successful and sustainable change by getting down to the basics: communication and accountability.  Management can declare what change is needed and when it will happen.  But it will not happen unless the change is effectively communicated to and translated into action by someone who can deliver and chooses to be held accountable; in other words, when your people are aligned.

There are several steps in the process of change.  First you must define clearly and concisely what change you plan to implement.  We help our clients link the components of change to their mission and strategy to make it relevant.  Then you identify the key players in the organization.  Next, we help the leaders share the component definitions in their own words (the corporate language) with the key players so they “get it”.

Now comes the really important part, making change personal and translating it into action.  Each key player and leader writes the most significant tasks and behaviors related to the desired change that they expect of each other person with whom they work, and what they think each person expects of them.  They then meet one-on-one and discuss and resolve every significant expectation, agreeing, editing, discarding, or escalating the expectation.  When they agree, they define what success looks like for each expectation.  Then they execute, and hold each other accountable for what they agreed to, coaching as often and extensively as necessary.  If you don’t do these things, don’t expect your change initiative to be successful.

Note that there are two communication channels between each participant, what I expect of you, and what you expect of me.  Not a big deal when there are just two of you involved in a change, but if there are twenty of you there are 380 channels.  One of our big projects involves 100 participants; that’s 9,900 possible communication channels.  That’s a lot of data to manage, but we’ve created some web-based software that helps you manage it all.

And by the way, those channels exist whether you are peers, or leader and subordinate.  For you leaders out there, it is a two way street, and don’t you forget it!

As we like to say, “Change is hard, real change is real hard!”  This process sounds simple, but it isn’t.  My partners and I usually come in to facilitate this process in organizations where it has failed, often several times.  If you are struggling with change in your organization, whether you are a sole proprietor or one of the directors of a large corporation, keep these points about change in mind:

  • define and communicate it,
  • make it personal,
  • translate it into action,
  • coach like crazy, and
  • hold people accountable.

Businesses that don’t change don’t survive.  Change is an essential part of your business.  How you handle it is one of those better business basics.  Check out the resources on our web site, www.pdsgrp.net, and if you need help with alignment, don’t call your mechanic or chiropractor, call us!

The Philosophy behind Better Business Basics

Tuesday, February 9th, 2010

So what exactly are Better Business Basics, and where do we start?  How about we start with some philosophy and opinion?  The six rules mentioned in my first entry constitute my philosophy about business: make it people centered, servant led, principles or values focused, purpose driven, community friendly, and environmentally responsible.  That philosophy is rooted in thirty-five years of work experience, much of it analyzing processes, risks, and performance.  Add to that degrees in accounting and business administration, leadership experience and business ownership, and you’ve got what I think could be considered fairly good “common business sense”.  I believe better business basics reside in common business sense.  So there you have the perspective from which I speak, and the foundation on which my business philosophy rests.

I’ve also been exposed to many “current management theories” and done some pretty extensive business reading over four decades, so forgive me when I say that in my experience “fad management techniques” usually don’t work.  They fade into the woodwork and you’re left with the same problems you always had.  These “new” techniques rarely get integrated into your critical processes, plans, and work habits, nor do they become part of the life and job skills of your people.  However, at the root of nearly every fad management technique is a better business basic, a fundamental business principle that makes sense and can be easily and naturally integrated into the fabric of your organization.

Better business basics are the essential ideas and activities that drive business success.  The world of business can seem frustratingly complex, particularly in a free enterprise society.  Despite the complexities of business, when you drill down through it all you arrive at a few basic truths.  Every significant management approach; LEAN, Six Sigma, Balanced Scorecard, has at its foundation a relatively simple concept.  At the risk of over simplifying, for example; LEAN manufacturing: reduce waste and rework; Just-in-Time parts supply: optimize warehousing and supply chain costs; corporate strategic alignment: build goal oriented productive business relationships.

The beauty of our society is that individuals privately own the means of production and distribution, in other words, capitalism.  We can build organizations unencumbered by unnecessary and self justifying processes, and uninhibited by oppressive regimes, save for a few necessary regulations to help define the playing field and maybe the rules of the game; in an attempt to keep things equitable.

What we tend to do though is build organizations on something other than a firm foundation.  We get wrapped up in producing profit for profit’s sake.  We take unnecessary risks in search of greater performance.  Common business sense takes a back seat to the drive for success and personal gain.  We start thinking that business is a zero sum game.  And we lose sight of people, of our own humanity in the pursuit of wealth, power, and material things.  In many ways capitalism has become greed based.  That “private ownership of the means of production and distribution” has come to mean “private accumulation of personal wealth regardless of the cost”.  I’d like to see capitalism become need-based.  I’d like to get back to that original definition and add to it “to satisfy individual or collective needs, with success measured by financial or non-financial reward”. That may sound a bit altruistic, but consider the potential for making business a positive influence in our culture and world.  It’s worth the effort, don’t you think?

Business has become a negative influence in our culture and the recession stands as stark evidence.  We’ve set people up to fail, in home ownership, in business endeavors, in personal growth, in relationship building, you name it.  I believe it’s time to begin turning business into a positive influence in our culture and society, and in the world at large.  Again, I’ll grant you that vision is a bit altruistic, but the idea is to start small and make it happen one business at a time by practicing a little common business sense, and getting back to some better business basics.

Principles or values and purpose or mission make a good starting point for business basics, because they, along with vision, philosophy, and core competencies, form the firm foundation necessary for any business to be successful.  These components become not only the foundation, but also the culture of your organization.  They drive every decision you make and action you take.  Your organization can become one of character and integrity, given a firm foundation with the highest values and principles.  In fact, a firm foundation is one of five key performance drivers, along with strategy, systems, structure, and people, essential for the success of your organization (“The Performance Driver Model”, Timothy Kight).

Remember, businesses don’t create businesses, people do.  No matter how large the organization, it began in the mind of a person, it was organized on some legal basis, it began fulfilling its purpose, it may have incorporated, and ultimately may have become self-sustaining, able to survive independent of a specific individual. But it started with a person, and even the largest organizations are still directed by people.  That person brought certain gifts, talents, passions and core competencies, along with an entrepreneurial spirit to the marketplace.  That person experienced a calling and responded much as a person may feel called, and responds, to serve as a pastor or minister in a house of worship.  That person may have been you, or it may have been someone you work with or report to in your organization.  Regardless, enhancing your organization’s chances for success begins with better business basics, and with one person.  That person may as well be you.

So now you know where I’m coming from.  Even if you don’t agree with the opinions offered, stick with me on better business basics.  I know they’ll enhance your chances for success, because I’ve seen them work.

Next up, some of the whys of better business basics…

Better Business Basics

Thursday, February 4th, 2010

Consider me new to the blogging world, but passionate about building better businesses, hence the blog name.  I’m a business owner and consultant, former internal auditor and audit manager, former Air Force officer, a closet web site and application programmer, and an avid reader of business and management books and blogs.

I’m disturbed about the nature of business and the state of our US economy today, and even more concerned for the business situation in my home state of Michigan.  So, instead of sitting back and complaining, I thought I’d contribute a few things I’ve learned about running successful businesses, some ideas for improving personal and organizational performance, and throw in a few opinions along the way.

The impetus for this blog can be found in part in the mission statement for the Wyoming-Kentwood Area Chamber of Commerce, “Building Better Communities by Building Better Businesses.”  I’ve been associated with this southern Kent County Michigan Chamber for about 13 years, and found it to demonstrate a truly great attitude about businesses and communities working together.  It is also a great place to network, and develop business relationships and friendships as well.

I began asking the question, “How do you build a better business?”, and realized its a matter of getting down to basics.  You can’t just all be friends on the baseball team and expect to accomplish anything.  You still need to hit, field, and run to be successful.  You get down to basics.  And that’s what we’ll do here; talk about better business basics.  If you’re an entrepreneur, we’ll share with you some fundamentals for running your business.  If you’re a small business leader, we’ll talk about key techniques for growing your business by focusing on the human aspects of business.  And if you’re on a corporate or non-profit organization team, we’ll explore how you can fully engage your team members, get them all on the same page, and develop productive business and personal relationships.

After all, performance is personal before it is organizational.  If you (and your people) are not free to achieve their full potential, your business will never achieve its full potential.

Ultimately, we’ll focus on these six critical success factors.  Keep your business:

  • People centered
  • Servant led
  • Principle focused
  • Purpose driven
  • Community friendly, and
  • Environmentally responsible

We’ll explore all this and a lot more on this journey; so please join me for the long haul, and share your reactions along the way!

Peace my friends,

Terry