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7 Principles of Culture Change

25 Nov

org culture 1

Employee behaviors are critical for the success of Business Transformation endeavors.  However, transforming the ingrained behaviors and mindsets of the workforce isn’t straightforward, and when tackled cause the enterprise’s emotional state to go down.

Leaders need to identify the components of Culture that are in line with their Corporate Strategy.  They have to ascertain and harness the positive elements of culture that can drive the desired Transformation and suppress those that obstruct it.

For the desired Organizational Culture to sustain, leaders should work on gaining acceptance of the transformed behaviors.  Leaders who do not give culture its due importance risk ruining their strategic endeavors, as they lack the commitment required from the employees to achieve success.

The real question is why senior leaders fail to use the positive elements of Organizational Culture constructively in the first place.  The answer is simple; there are 4 common yet wrong assumptions—or myths—regarding culture change that are deeply established in most businesses that are anything but facts.  Paying heed to—and acting on—these 4 myths results in grave consequences:

  1. Culture is the root cause of all our failures
  2. Changing our Organizational Culture is beyond us, forget about it
  3. Let Human Resources deal with Organizational Culture
  4. Culture is the responsibility of top management

When senior executives devise a strategy to transform the deeply entrenched organizational culture—by putting in place new policies, practices, reward structures, and performance management systems—there is strong resistance that outplays the strategy.

This is primarily due to employees’ reservations and uncertainties regarding the impact of these changes on their work, colleagues, atmosphere, routines, family, and their enterprise’s reputation.  Transforming the Organizational Culture using the individual’s actions and conduct necessitates seeking assistance from 7 guiding principles:

  1. Be Practical
  2. Reinforce New Behaviors
  3. Seek Out Role Models
  4. Identify Cultural Carriers
  5. Leverage Existing Culture
  6. Be a Role Model
  7. Explain Impact of New Behavior

Application of these guiding principles facilitates in transpiring successful culture change.  Let’s dive deeper into a few of these guiding principles.

Be Practical

The first guiding principle to changing the culture involves starting rationally and pragmatically.  It is not feasible to strive to change every behavior at once.  Leaders need to concentrate on the behaviors most critical for the organization.   The ones that reverberate with the existing company culture and have a key role in improving the organizational performance.  This entails ascertaining groups of employees whose behaviors should be transformed immediately.  A clear demonstration of the requisite changes goes a long way in reinforcing the desired behaviors and culture in the organization.

Reinforce New Behaviors

The 2nd principle to changing culture involves emphasizing new behaviors.  The desired behaviors should be reinforced using formal and informal mechanisms.  Formal reinforcement mechanisms include metrics, processes, appraisals, salary reviews, training, and incentives to reward new behaviors.  These formal mechanisms allow people to practice new behaviors repetitively, until they begin to realize their value.  Informal reinforcement mechanisms include support networks and associations to nurture sensitivity and devotion needed to cope with uncertainties.

Seek out Role Models

Organizational Culture Transformation necessitates distinguishing role models to demonstrate the desired behaviors.  Culture change begins when change practitioners act by modeling the new behaviors.  These change practitioners are pride builders for an organization.  The examples set by these practitioners assist in inculcating pride in others about embracing the desired behaviors.  This action is referred to as “positive deviance” or constructive non-conformity.  These pride builders in turn identify and develop more exemplars.

Interested in learning more about the other guiding principles of culture change?  You can download an editable PowerPoint on 7 Guiding Principles of Culture Change here on the Flevy documents marketplace.

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– Roderick Cameron, Founding Partner at SGFE Ltd

4 Processes of Sustainable Change

25 Aug

Initiatives aimed at improving performance are often launched with great uproar, costing an organization significant investments.  Such initiatives necessitate extensive changes in the Organizational Culture and the way the enterprise systems and processes function.

However, most initiatives fall short of realizing success.  Decades of scholarly research on Change Management reveals that the issues that contribute the most to the failure of strategic initiatives are:

  • Incompetence in sustaining process improvement.
  • Lack of trust on senior leadership.
  • Failure to embrace new ways of doing business.
  • Performance relapse.
  • Inability of the initiative to produce any positive financial returns.
  • Skepticism towards the desired behaviors and return of impractical employee behaviors.

Researchers have carried out scores of studies to isolate the drivers of lasting change.  Research published in MIT SMR in 2005 discusses how leadership can design and execute Transformation initiatives that bring lasting changes in the organization.The study entailed in-depth analysis of the strategic Customer Service Enhancement (CSE) initiative undertaken by a large clothing retailer, having franchises in multiple geographic locations.

The researchers conducted 20 semi-structured interviews with leaders, in-store operations and support function managers.  Detailed notes of the interviews were shared amongst the researchers alongside an exhaustive literature review.  A case study of the initiative was prepared using independent research to have an unprejudiced viewpoint, free from any bias.  Feedback from the organization’s management was gathered and incorporated throughout the study to seek clarifications or corrections.  Data analysis was carried out employing a coding scheme developed using Atlas.ti tool.  Comparative analysis was conducted and similarities and differences in conclusions were discussed.

The study brought to light 4 key processes necessary for change to stick in an organization.   These key processes assist in laying the foundation for successful institutionalization of change initiatives by creating a company-wide culture that encourages enduring change:

  1. Chartering
  2. Learning
  3. Mobilizing
  4. Realigning

Let’s delve deeper into the first 2 processes.

Chartering

Chartering is a process through which an enterprise classifies the purpose, scope, and the way people interact with each other on a strategic initiative.  Clear delineation of project boundaries, resources, responsibilities, and reporting lines are the elements integral for the success of a change initiative.

The Chartering process entails 2 critical components:

  • Boundary Setting
  • Team Design

Boundary Setting involves the key steps a team takes for accurate definition of change initiative’s scope.

The project team should clearly outline the problem(s) that the project is, and isn’t, going to tackle.  Ideally, while designing and executing a change initiative, the focus of the engagement should be on confronting the most crucial problem area.  The leadership should ensure not to confuse the core team by eyeing too many priorities to deal with through the strategic initiative.

The Team Design element of Chartering involves ascertaining the roles, accountabilities, and guiding principles for team’s collaboration.  Team design entails creating ground rules for team members to interact, devising mechanisms to manage conflicts.  The leadership needs to not only maintain diversity of the project team’s expertise, but also ensure they complement each other, and inculcate a standardized approach to decision making in project teams.  There needs to be fostered a culture of positive discourse and testing ideas amongst the team members.  Incorporating these guidelines helps spark thinking, learning, and decision making.

Learning

Learning aids in anticipating and dealing with hurdles during implementation of Transformation initiatives.  Learning enables the managers to improve the quality of the new processes.  it is a process through which managers develop, test, and refine ideas before full-scale implementation.  The process entails 2 critical components:

  • Discovery
  • Experimentation

For more information on Learning and Development and how to elevate your organization into a Learning Organization, check out the frameworks and tools on Flevy here: https://flevy.com/business-toolkit/learning-organization

The discovery element involves gathering data to identify the objectives of the change initiative and outlining ways to achieve those objectives.  Before rolling out a complete implementation of a change initiative, testing and refining the individual elements of the initiative immensely assists in the success of the initiative.  Gathering adequate information relevant to the initiative, setting up baseline metrics to measure performance, and identifying issues hampering customer satisfactions are the key aspects of this phase.  The team should learn from the failures of prior initiatives, introduce change in a systemic fashion rather than piecemeal, and encourage people to change rationally as well as emotionally.

Interested in learning more about the other processes critical for change to stick?  You can download an editable PowerPoint on 4 Processes of Sustainable Change here on the Flevy documents marketplace.

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– Roderick Cameron, Founding Partner at SGFE Ltd

Enterprise Architectures — Federal Enterprise Architecture Framework (FEAF)

6 Jul

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Enterprise Architecture (EA) denotes management best practices for lining up business and technology resources to realize strategic results, expand upon Organizational Performance, achieve Cost Optimization, and steer departments to achieve their core missions through Operational Excellence.

Federal Enterprise Architecture Framework (FEAF) was first introduced in September 1999 by the Federal CIO Council for evolving an EA within any U.S. federal agency.  FEAF assists through documentation and information that conveys a summarized outlook of an enterprise at various tiers of scope and detail.

FEAF offers a shared approach for the consolidation of strategic, business, and technology management as a component of Organization Design and Performance Management.  FEAF introduced a methodology for an Enterprise Architecture that transcended several interagency boundaries.

The Collaborative Planning Methodology suggested along with FEAF is envisioned as a complete planning and implementation lifecycle, for employment down all tiers of scope defined in the Common Approach to Federal Enterprise Architecture—i.e., International, National, Federal, Sector, Agency, Segment, System, and Application.

May 2012 saw a full new guide, called the “Common Approach to Federal Enterprise Architecture.”  The guide offers an overall approach to establishing and employing Enterprise Architecture in the Federal Government for expanding joint approaches to IT service delivery.  The Common Approach homogenizes the expansion and employment of architectures within and between Federal Agencies.

A 2nd version of FEAF was published in January 2013, meeting the criteria set forth by the Common Approach.  It underscores the importance of Strategic Planning and Strategic Goals as the source for driving business services, which consequentially provides the requirements for enabling technologies.  At the heart of it is the Consolidated Reference Model (CRM), which links 6 reference models and equips all departments with a shared language and framework to explain and evaluate investments.

The FEAF comprises of 6 interconnected Reference Models, linked through Consolidated Reference Model (CRM), each relating to a sub-architectural domain of the framework.

These Reference Models convey word-based abstractions of original architectural data and deliver a structure for relating significant elements of the FEA in a collective and uniform manner:

  1. Strategy Domain -> Performance Reference Model (PRM)
  2. Business Domain -> Business Reference Model (BRM)
  3. Data Domain -> Data Reference Model (DRM)
  4. Applications Domain -> Application Reference Model (ARM)
  5. Infrastructure Domain -> Infrastructure Reference Model (IRM)
  6. Security Domain -> Security Reference Model (SRM)

CRM is intended to permit inter-agency evaluation and detection of overlapping investments, disparities and prospects for cooperation within and across agencies.

By means of the collection of reference models a common nomenclature and system is cultivated for describing IT resources.  Making use of this standard framework and terminology, IT portfolios can be managed more suitably and taken advantage of throughout the Federal Government.

A brief description of the reference models is as follows:

Performance Reference Model (PRM)

PRM relates agency strategy, internal business factors, and investments, presenting a way to measure the influence of those investments on strategic outcomes.

Business Reference Model (BRM)

BRM depicts an organization through arrangement of common mission and support service segments rather than through vertical lines of control, thus encouraging cooperation within and across agencies.

Data Reference Model (DRM)

DRM assists in detection of existing data assets located in solitary storages and aids in comprehending the meaning of that data, ways of accessing it, and means for leveraging it for supporting performance outcomes.

Application Reference Model (ARM)

ARM classifies the standards and technologies involving systems and applications that support the delivery of service capabilities, allowing agencies to share and reuse common solutions and benefit from economies of scale.

The Infrastructure Reference Model (IRM)

IRM sorts the standards and technologies relating to network/cloud to aid and facilitate the provision of voice, data, video, and mobile service components and facilities.

The Security Reference Model (SRM)

SRM offers a mutual language and approach for deliberating on security and privacy in connection with Federal agencies’ business and performance goals.

Interested in learning more about Federal Enterprise Architecture Framework (FEAF) and its reference models?”  “You can download an editable PowerPoint on Federal Enterprise Architecture Framework (FEAF) Primer here and FEAF associated PowerPoint series presentations on the Flevy documents marketplace.

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You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

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“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

Process Communication Model (PCM): Personality Types

12 May

Understanding others has a lot to do with collaboration, performance management, and building effective teams.

Developed by Taibi Kahler in the 1970s, Process Communication Model (PCM) is a prominent psychometric tool for individual and team development.  The main utility of the PCM model is in understanding others’ personality types, discovering one’s own personality, and personifying others’ personality types to have better relationships.

PCM allows the executives to understand others’ needs, influence others, find practical solutions to problems, and manage conflict.  The model has found its utilization in a number of Fortune 500 organizations.  NASA has used PCM for the training and selection of its astronauts for over 20 years.

As per the PCM model, each individual embodies an assortment of behaviors, each with its own set of psychological requirements, strengths, weaknesses, communication style, and motivations.  The Process Communication Model describes that each of us exemplify a combination of 6 personality types—each of personality type has its strengths and weaknesses—but one personality dominates the others in an individual.  The 6 personality types are:

  1. Harmonizer
  2. Rebel
  3. Thinker
  4. Persister
  5. Imaginer
  6. Promoter

Let’s discuss these personality types in a bit detail.

Harmonizer

Individuals with a dominating Harmonizer personality type are humble, quiet, and naturally gifted at forming relationships with others.  The Harmonizers care for their family and friends, are compassionate, and use their feelings to judge the world around them.  They treat others cordially, make them feel comfortable, listen to them attentively, and do not shy away from making physical contact.

Recognition of their personality and others’ amiable communication style motivate the Harmonizers.  Under difficult circumstances, these individuals tend to become apprehensive, lack firmness, act irrationally, and make grave mistakes / incoherent decisions.

Rebel

The individuals possessing a Rebel personality are generally creative, fun loving, and radiate positive energy for others.  These individuals respond promptly, reciprocate righteousness with virtue, and enjoy the present.  The Rebels are valued for their extemporaneous humor, interest in others, energy, and problem-solving ability.  They are a bit impulsive and judge the world around them through their likes and dislikes.

Others upbeat communication style and stimulation through playful contact motivate the Rebels.  Under stress, the Rebels tend to get confused, whine, irritate others, leave complex situations, and bounce responsibility to others.

Thinker

Individuals with a dominating Thinker personality believe in data, logic, and perfectionism.  They take on a methodical approach to doing things, ask too many queries, and only attend meetings when there is a formal agenda set in advance.  The Thinker personality likes to evaluate detailed information before drawing any conclusions.  These people are valued for their planning and organization ability, dependability, structuring ideas logically, and clear expression.

Recognition of their thoughts and accomplishments motivates the Thinkers.  Under stress, they reverse delegate tasks and start doing those themselves, try to gather as much detail as possible to understand the situation, and may start arguments or even attack others.  These people need time and assurance of their abilities to return to their organized selves.

Interested in learning more about PCM and its other personality profiles?  You can download an editable PowerPoint presentation on Process Communication Model: Personality Types here on the Flevy documents marketplace.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro LibraryFlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market. They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions. I strongly recommend FlevyPro to any consultant serious about success.”

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“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value.”

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Post-Merger Integration Synergies: 6 Strategies

13 Mar

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A significant number of Mergers remain unsuccessful, because companies do not employ a thorough and disciplined approach to realizing Post-Merger Integration Synergies.  In reasons for failure, we hear remarks like:

  • Targets were set several months earlier by the top management without consulting the line managers, or taking ground realities into consideration.
  • Assumption base for setting targets was untested.
  • Targets were met but the timeframe for achieving them made them ineffective—in terms of diminished returns, shareholder disappointment, or depressed share value.
  • Desired Synergies were achieved but at a very high cost or fairly weakened morale.

A disciplined and rational approach to pursuing Merger Synergies is key to successful Post-Merger Integration (PMI).  Companies that authenticate and set pragmatic yet ambitious Post-Merger Integration Synergy targets do the following to exceed targets and achieve substantial share price premium and a significant Competitive Advantage:

  • Advise Integration Leaders on how to aim high.
  • Give managers—responsible for achieving targets—a say in target-setting process.
  • Create detailed plans with built-in accountabilities.
  • Pursue their targets aggressively.

Successful PMI Synergies—be it in Cost OptimizationStrategic Sourcing, Greater Revenues or any other Cost or Revenue realm—have the common characteristic of leaders pursuing synergies with speed, rigor, discipline, and pragmatism with lots of analysis, planning, preparation, and fine-tuning before the close.

Success can be ensured time and again if the 6 Strategies for Post-Merger Integration Synergies are followed to the letter:

  1. Link Due Diligence (DD) and Post-Merger Integration (PMI)
  2. Leverage Clean Teams
  3. Establish Stretch Targets
  4. Rapidly Iterate to Targets
  5. Pursue Both Revenue and Cost Synergies
  6. Institute Performance Management

Implementation of the 6 Synergy Strategies involves adopting High-Engagement and Rapid Iteration approach which yields effective Stretch Target Validation and High Level of Line Accountability.

Let us delve a little deeper into 2 of these PMI Synergy Strategies.

Link Due Diligence (DD) and Post-Merger Integration (PMI)

Linking DD to PMI ensures realistic estimates on part of the DD team thus avoiding formulation of broad-brushed and imprecise Synergies.  Linking also guarantees greater amount of ownership and accountability at the same time enabling more compelling Stretch Targets.  Linking of DD to PMI is necessary because:

  • Under pressure to complete the M&A, Due Diligence teams frame assumptions with little knowledge of the levers influencing Synergies or the challenges involved in achieving them.
  • Due Diligence teams typically project more value in Cost Reduction and enhanced Revenues based on erroneous assumptions—without taking into account either the Operating Model (of the former entities and the freshly created one) or the difference / overlap in Customer Base.

Successful Mergers ensure a harmonized hand-off from Due Diligence teams to Integration Planning teams by ensuring the following:

  • Placing members of the Mergers and Acquisition team on the Post-Merger Integration (PMI) team to produce a greater degree of ownership and continuity.
  • Involving Business Unit Heads in target setting at the Due Diligence stage and ensuring ownership and accountability.
  • Linking of Due Diligence and PMI to enable setting of more profound Stretch Targets.
  • Analyzing and detailing drivers of saving at a high-level for creating Synergy Targets and Ranges which make later improvements possible based on subsequent information. These targets and ranges enable evaluation of potential gains from new company’s Operating Model.

Leverage Clean Teams

Clean team is an independent group that is tasked with the collection and analysis of sensitive company data—pre-closure—with the guidance of management.  Clean team may comprise of third-party members or employees who can be reassigned out of business in case of deal failure eradicating the risk of compromising confidential information.  Clean team is formed by legal contract based on protocols agreed to by both company’s legal departments.  Clean teams help by:

  • Accelerating PMI planning.
  • Enabling the acquiring company to have a clearer picture of the target company without violating anti-trust regulation or confidentiality agreements.
  • Assessing risks and enabling companies to achieve Synergies faster.
  • Keeping sensitive information of both sides safe—pre-closure—yet embark on planning and preparation even before close in order to save precious time and keep customer confidence high.
  • Aiding companies accomplish 3 core integration activities before closing—compiling wide-range baseline data, vetting Synergy targets, and preparing options for key decisions.
  • Empowering companies to avoid / diminish confusion caused by overlap in client assignments and sales people.
  • Assisting provision of clear information to customers regarding products and services thus avoiding drop in sales.

Interested in learning more about the 6 Strategies for Post-Merger Integration Synergies?  You can download an editable PowerPoint on Post-Merger Integration (PMI): 6 Strategies for Synergies here on the Flevy documents marketplace.

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M&A is an extremely common strategy for growth.  M&A transactions always look great on paper.  This is why the buyer typically pays a 10-35% premium over the of the target company’s market value.

However, when it comes time for the Post-merger Integration (PMI), are we really able to capture the expected value?  Studies show only 20% of organizations capture projected revenue synergies and only 40% capture cost synergies.  Not to mention, the PMI process is typically very painful, drawn out, and politically charged, often resulting in the loss of key personnel.

Learn about our Post-merger Integration (PMI) Best Practice Frameworks here.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.  Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over! The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

Warehouse Cost Reduction in Supply Chain Management: 6 Building Blocks

24 Feb

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Cut-throat competition in industries has driven companies to find ways to reduce costs while increasing efficiency.  To accomplish this, most companies have skillfully endeavored to streamline Sales, Operations Planning, Forecasting, Inventory Management, and Logistics.

One area that has still not grabbed industry’s attention is out-bound Supply Chain Management–from packaging to final delivery.  Companies generally neglect Supply Chain simply because they do not consider it their core competency.

Significant Cost Reduction in the Supply Chain can be achieved by focusing on 2 main cost categories:

  1. Warehousing Costs
  2. Transportation Costs

Warehousing and Transportation represent a significant portion of the total Logistics costs.  Implementing improvement programs, without any significant capital investments, can enable 20-50% cost saving in Warehousing, 40% in Transportation costs, flexibility, and better service.

Supply Chain Cost Reduction in Transportation and Warehousing has vast potential, not only in terms of costs, but also Process Improvement using Lean Six Sigma (LSS) techniques.

The approach to Supply Chain Cost Reduction in Warehousing encompasses 3 phases:

  1. Set the Baseline
  2. Determine the Gap
  3. Implement Lean Six Sigma (LSS)

Meticulous and persistent application of Lean Management and Six Sigma techniques is at the core of reshaping Warehousing Operations and eradicating sources of waste, variability, and inflexibility.  This article is an overview of the 6 building blocks used in Implementing Lean Six Sigma (LSS)—the 3rd phase of the approach to Supply Chain Cost Reduction in Warehousing:

  1. Business Processes
  2. People
  3. Performance Management
  4. Third Party Interactions
  5. Layout
  6. Ownership

Let us dive a little deeper into some of the building blocks.

Business Processes

Business Processes present a huge opportunity for improvement by eliminating redundancies and sources of waste in Warehouse operations (e.g., unnecessary motion or double-handling in Manufacturing).  Each source of waste represents extra costs and inflexibility that can be reduced or eliminated.

Business Process Improvement can help reduce:

  • Handling steps
  • Motion
  • Transportation
  • Space requirements
  • Effort
  • Time spent

People

This building block of Implementing Lean Six Sigma aims at avoiding overstaffing of full-time employees and at the same time maintaining a well-trained, efficient workforce.

Streamlining this building block leverages the following benefits to organizations:

  • Refined Recruitment process reduces Employee Turnover.
  • Facilities can more closely match on-site staffing to demand by reducing notice periods.
  • Efficiency can be raised by about 15% through regular training.
  • Overstaffing of full-time employees can be avoided.
  • Productivity can be improved by 5-10% by focusing on appropriate facets of Performance during training.

Performance Management

This building block aims at using existing Performance Management levers to improve Employee Performance through morale boosting and awareness exercises.  A laser-focus on the performance element helps the leadership achieve the following benefits:

  • Constant reminders and display of current performance give employees a sense of competition and drive.
  • Quick daily discussions highlight the significance of good performance and helps employees focus on essential aspects of their work.
  • Productivity is improved up to 20% by linking pay to performance.
  • Real-time feedback supports pay-related performance.
  • Measuring and rewarding the “softer” elements has long-term benefits.
  • Recognizing employee of the month can increase staff satisfaction.

Given the existing industry cost and performance demands, wasteful or unpredictable Warehouse operations lose more than money.  This can do rapid and permanent harm to a company’s reputation with customers since distribution is the logistical interface with the customer.

Improving Warehouse Operations is a significant area not only for Cost Reduction, but also a source of refining Customer Value Proposition.

Interested in learning more about Supply Chain Cost Reduction in Warehousing and Lean Six Sigma?  You can download an editable PowerPoint on Supply Chain Cost Reduction: Warehousing here on the Flevy documents marketplace.

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Supply Chain Management (SCM) is the design, planning, execution, control, and monitoring of Supply Chain activities.  It also captures the management of the flow of goods and services. 

In February of 2020, COVID-19 disrupted—and in many cases halted—global Supply Chains, revealing just how fragile they have become.  By April, many countries experienced declines of over 40% in domestic and international trade. 

COVID-19 has likewise changed how Supply Chain Executives approach and think about SCM.  In the pre-COVID-19 era of globalization, the objective was to be Lean and Cost-effective. In the post-COVID-19 world, companies must now focus on making their Supply Chains Resilient, Agile, and Smart.  Additional trends include Digitization, Sustainability, and Manufacturing Reshoring.

Learn about our Supply Chain Management (SCM) Best Practice Frameworks here.

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Digital Transformation: 2 Distinct Models to Manage Key Talent

20 Oct

Traditional Talent Management practices fail to meet the high-potential talent requirements imperative to compete in the digital world today.  In fact, they disappoint the key talent available in the market.

A 2016 Digital Business research by MIT Sloan Management Review and Deloitte on 3700+ executives reveals attracting and retaining talent as the most pressing concern for organizations large or small.  The study indicates that organizations that are still using traditional approaches to manage Talent face a number of pressing challenges, including:

  • Building new competencies within limited resources.
  • Alignment of culture, strategic initiatives, human capital, and hierarchies with organizational objectives.
  • Attracting, selecting, and retaining key talent.
  • Creating robust Performance Management, compensation, and benefits systems.
  • Finding and developing talent with critical capabilities—such as forward thinking, transformative vision, and change focus—alongside technical skills.
  • Providing opportunities that require digital skills, to attract and keep critical Talent engaged in the organization.

One of the findings of the 2016 digital business study demonstrate that it’s both the younger as well as middle management people who tend to look elsewhere in case they don’t find opportunities to develop digital skills in their existing organizations.  Such results call for senior management to identify, evaluate, and implement more immediate and appropriate digital technologies methods to attract and retain key talent.  Leading organizations are now incorporating these Talent Transformation efforts into their Digital Transformation programs.

Research on 3700 plus Digital-native respondents further reveals leading organizations to be using a combination of 2 distinct models to manage their Talent:

  1. Talent Markets for Contractors
  2. Digital Tools for Employees

Let’s discuss the first approach to Talent Management in detail, for now.

Talent Markets for Contractors

Acquisition of right talent necessitates fostering linkages with on-demand talent markets for the timely availability of required talent.  Many organizations seek help from on-demand Talent Markets to attract and sustain talent in the digital business environment.  These organizations pursue a flexible recruitment model using digital platforms to attract skilled contractors and consultants.  Digital talent markets can be expanded or contracted depending on the quantity of work and skillsets required.

Digital talent markets can coordinate the work of full-time employees as well as cover live activities of contractors more nimbly and reliably.  Digital platforms offer superior talent markets to assess and manage large talent pool of contractors.  A few organizations are experimenting with developing their own on-demand talent markets while some have cooperated with other organizations to share talent markets.  It’s up to senior management to decide if they want to leverage existing on-demand talent markets or cultivate their own to ensure availability of required skills when needed.  Talent markets can be nurtured using 3 best practices:

  1. Manage on-demand talent markets as a community
  2. Strike a balance between full-time and part-time talent
  3. Create an environment where the best people want to work

Manage on-demand talent markets as a community

To make the availability of required key talent certain:

  • On-demand talent markets should be considered strategic resources and cultivated carefully with future talent requirements in mind.
  • Companies should devote resources and efforts to develop their own talent pool.

Strike a balance between full-time and part-time talent

Talent markets are meant to manage freelancers.  However, a few organizations have also begun collaborating with them and deploying their full-time employees to project work that is critical to build new competences.  A few considerations in this regard include:

  • Companies need to strike an equilibrium between full-time and part-time talent.
  • Some people prefer full-time employment while others fancy flexibility or work from home options.
  • Some workforce providers even offer services of retired people with expert skills, who have proved to be a valuable asset.
  • Firms can choose on-demand workforce providers to have full-time employees to maintain a steady employee base, or pick part-time contractors to handle workload surges.

Create an environment where the best people want to work

Setting up the right environment is central to attracting and retaining the best flexible, on-demand talent.  A majority of companies consider freelancers or independent contractors inferior to their permanent employees.  Organizations that want to attract great talent should think of contractors as valuable resources and treat them as such.  To get top talent, organizations need to:

  • Nurture an Organizational Culture conducive to support on-demand workers.
  • Devise remuneration and reward systems that value contractors and full-time employees equally.
  • Create an atmosphere that offers attractive work experiences for the employees.
  • Deploy people on interesting projects and allow them to experience job rotations to improve their skills sets, problem solving abilities, cross-departmental team collaboration, and improve their engagement levels.

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Performance Management Maturity Model: 5 Key Stages Simplified

14 Jun

Performance Evaluation serves as a health check on operations and individuals’ work.  The organizational maturity notion signifies the progress of an organization in terms of developing its people, processes, technology, and capability by implementing quality practices.  Organizations aiming to achieve the highest maturity levels in performance need to take care of the intricacies involved in deploying a Performance Management system and the relationships it has with the other key organizational activities.

Performance Management processes in organizations can be assessed using maturity levels, by measuring the implementation of Performance Management tools, analyzing the availability of internal Performance Management processes in place, assessing the structures, procedures, and interactions utilized to direct Performance Management systems.

An organization’s performance maturity is assessed on 5 levels of progressive growth.  These 5 stages present a valuable dashboard to gauge the implementation of the corresponding levels of the Performance Management Maturity Model.

  1. Initial 
  2. Emergent
  3. Structured
  4. Integrated
  5. Optimized

To achieve maturity in performance management, organizations need to build capabilities in 5 core elements—referred to as “Operational Levers”—Tools, Processes, Governance, Architecture, and Integration.

Initial Stage

The organizations at the first performance maturity level are not acquainted with—or totally unfamiliar of—the tools necessary to implement the Performance Management system.  The Performance Management processes are typically inconsistent.  Organizations at this maturity level do not practice employee empowerment, development, and innovation.  There is a dearth of appropriate KPI calculation approach and the performance architecture is in its budding stage.  Roles and responsibilities, importance of KPIs, and individual/organizational indicators are unclear to employees.

The level is characterized by casual strategic planning practices—dependent on top management experience—with ill-structured communication mechanisms.  The initiatives lack alignment with organizational goals.  Leadership involvement in mentoring and developing employees is at sub-optimal levels.  Staff motivation and increasing their engagement levels is not given due importance.

Emergent Stage

The organizations at the second level of Performance Maturity have a strong desire to improve performance.  At this stage, organizations begin exploring Performance Management tools, but have uncoordinated and un-standardized internal processes and systems.  Initiatives to integrate performance management procedures are planned with clearly defined objectives and expectations.

However, at this level, strategy does not deliver value and is not more than formal documentation.  Managers are assessed based on performance results, but not the lower hierarchical levels.  There is unclear articulation of company goals, misalignment at various organizational hierarchical levels, and incompetent communication.  A few basic performance measurement methods—e.g., KPI selection and documentation are embraced by the organization.  The KPI selection process, however, lacks appropriate yardsticks, tools, standardized forms/templates, and approaches.  Performance evaluation and reporting processes exist but are deficient in clear communication by the leadership.  Leadership possesses a basic understanding of performance measurement processes.  Measuring performance at the individual level is uncommon at this maturity level.  Performance review meetings are short of delivering the insights required to make critical decisions.

Structured Stage

The “Structured” stage of the Performance Management Maturity Model is characterized by well-coordinated and carefully regulated Performance Management processes.  Organizations at this stage have a defined set of Performance Management tools.  There are standardized Performance Management practices with well-defined and improved process flows.  There is typically an inconsistent approach towards adopting an aligned Performance Management architecture though.

Organizations at this level employ strategy monitoring tools—e.g., scorecards and dashboards—but do not cascade these at the lower ranks and files.  KPIs are selected based on a clear-cut criteria, established tools and methods, and agreement across the board.  Standardized forms are used to document and report KPIs.  The KPI targets are established utilizing data, benchmarking, and comparing market figures.  Organization-wide performance evaluation data is gathered and disseminated at all levels.  People, largely, have a fair understanding of their personal and organizational performance goals.  A well-defined Performance Management system is in place with appropriate templates, procedures, and governance structures ready for each Performance Management cycle.  Incentives and training and development opportunities help improve performance.

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4 Organizational Design (OD) Elements Essential to Inculcate the Desired Behaviors Across the Organization

27 Mar

Inculcating productive workforce behaviors is of utmost significance in Business Transformation, successful Strategy Execution, and Performance Improvement.  However, making people embrace productive behaviors involves a concerted effort across the organization.

The realization of Transformation, Strategy, and Performance improvement goals can become a reality by developing a thorough understanding of the 4 components of Organizational Behavior.  These components act as powerful levers in shaping the desired behaviors in the workforce:

  1. Organizational Structure
  2. Roles and Responsibilities
  3. Individual Talent
  4. Organizational Enablers

These Organizational Design levers work effectively when combined and aligned.  Let’s discuss the first 2 levers in detail now.

Organizational Structure

Organizational Structure represents the management reporting lines that create the organization’s spans of control, layers, and number of resources.  Organizational Structure is a foundational driver to Organizational Design, which also has a strong positive bearing on promoting the behaviors critical to improve the overall performance of the enterprise.  This is owing to the power that a position exerts on the subordinates based on factors that are important for individuals—e.g., work, compensation, and career ladder.

The Organizational Structure indicates an enterprise’s priorities.  An organization is typically structured in accordance with its top most priority.  For instance, functional organizational structure is adopted by enterprises having functional excellence as a priority.  In present-day’s competitive markets, most organizations have to deal with several priorities at a given time, which could be conflicting.  However, this does not mean adding new structures on top of existing ones, thereby increasing unnecessary complexity.  Creating overly complex structures to manage multiple priorities results in red tape and delayed decisions.  All roles are interdependent, necessitating cooperation.  This means taking care of the needs of others—instead of just watching over personal priorities—and encouraging individual behaviors that boost the efficiency of groups to achieve collective objectives.

Roles & Responsibilities

Roles and responsibilities deal with tasks allocated to each position and individual.  Organizational Design depends heavily on redefining clearer and compelling roles and responsibilities—to avoid any duplication of efforts or creating adversaries among team members.  In a collaborative culture where cooperation is the mainstay of an organization, individuals should not only be aware of what is required of them, but also appreciate the responsibilities of their team members, the authorities their roles exercise, the skills required, and the metrics to measure success.

A methodical way to outline roles and responsibilities effectively—while minimizing complexity—that encourages cooperation and empowerment is through the “Role Chartering” technique.  The technique requires distinctly identifying all roles on the basis of 6 key factors:

  • Describing shared and individual accountabilities
  • Outlining indicators to track success
  • Specifying who has the right to decide what
  • Indicating the capabilities critical for roles
  • Assigning the leadership traits valuable for the roles
  • Charting the abilities required for accomplishing personal and team goals.

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10 Best Practices in Business Dashboard Design

21 Mar

Business dashboards are important tools to measure key performance indicators and data pertaining to an organization or certain procedure.  Just as a vehicle dashboard is powerful performance management tool in summarizing a performance of a multitude of processes, a business dashboard summarizes the performance or impact of a host of functions, teams, and activities; and assists in strategic planning and decision making.

Business dashboards simplify sharing and analysis of large data, and help users visualize complex performance data in simple yet visually aesthetic manner.  Dashboards aid in simplifying complex processes into smaller more manageable information pieces for the organizational leadership to focus on everyday operations.  They keep everyone on the same wavelength and prioritize display of facts based on their importance and potential impact.  The information on a well-designed dashboard is clear, presentable to enhance meaning, readily accessible, and dynamic.  A carefully-planned dashboard allows the leadership to identify and answer business challenges in real-time, develop plan of action based on insights, and inculcate innovation.

Proficient and capable dashboard designers and firms have taken the art of visualization of valuable indicators and insights through dashboards to the next level.  They have devised specific guiding principles, dos and don’ts, and time-tested development routines to accomplish this.  These guiding principles comprise 10 best practices, which can be segregated into 3 major implementation categories:

  1. Planning
  • Analyze your audience
  • Contemplate display options
  • Prompt application loading time
  1. Design
  • Exploit eye-scanning patterns
  • Restrict number of views & colors
  • Let viewers filter data
  • Ensure proper formatting 
  1. Refinement
  • Use Tooltips to reinforce story
  • Eliminate redundancy  
  • Review the dashboard carefully

Let’s discuss the first 5 best practices for now.

Analyze your audience

A careful analysis and understanding of the business dashboard’s intended audience is the first important principle to consider before commencing the development of such a dashboard.  For instance, a busy salesperson in need of quickly going through indicators, whereas senior management needing a deep-down review of quarterly sales results.  This gives the developers a thorough idea of what the audience wants from a dashboard, what data they will visualize utilizing this, and let them know the audience’s technical capabilities in terms of data analysis, theme, issue, and business understanding.

Contemplate display options

The second principle to follow in designing a business dashboard is to research your users’ device and display preferences beforehand.  Building a dashboard with desktop display options in mind when your audience prefers to use phones to view it could be a disaster.  The designers should set the size of the dashboard properly—allowing the users to view it on a range of devices, by building in automatic sizing option for the dashboard to adopt to the dimensions of the browser window.

Prompt application loading time

Your audience and viewers are busy people who hate long waits.  Therefore a stunningly designed dashboard would not get the right traction if it takes too much time to load.  The dashboard author should facilitate prompt dashboard loading by deciding which filters to add in the dashboard and which ones to exclude.  For instance, although filtering is useful in restricting the amount of data analyzed, it effects query performance.  Some filters are quite slower than others as they load all of the data for a dimension instead of just what you want to keep.  Knowing the Order of Operations is also beneficial in reducing the load times.

Exploit eye-scanning patterns

The dashboard authors should have a deep sense of the main purpose of the dashboard in mind when develop such a tool.  They need to be aware of individuals’ eye tracking patterns—typically when most people look at a screen or content, they start scanning the upper left hand corner of the screen first by intuition—and make the best use of the screen space to display the most important content at the right place.

Restrict number of views & colors

The designers often get over enthusiastic during their application designs and try to stuff the dashboard with multiple relevant views.  This is detrimental for the bigger picture.  They must include not more than 2 to 3 views per dashboard and create more dashboards in case the scope creeps beyond the 2-3 views range.  It is also crucial to ensure the content to be clearly visible to the viewer and to use colors correctly to facilitate analysis instead of cramming too many colors in the visuals, which creates a graphical overload for the viewers, slacken analysis (or may even prevent users to analyze data), and even blur the graphics.

Let viewers filter data

Allowing users to filter the data is another best practice to keep in mind while designing business dashboards.  This added interactivity encourages data assessment and permits the users to have their most important view act as a filter for the other views in the dashboard.  This helps in conducting side-by-side analysis, promotes involvement, and retains users’ interest.

Interested in learning more about the other best practices to aid in designing a robust business dashboard and knowing the most common mistakes to avoid in this process?  You can download an editable PowerPoint on Business Dashboard Design here on the Flevy documents marketplace.

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