Category Archives: Agility

Why Trust Matters

The Soft Concept That’s Hard to Beat!

Our previous post identified the role that trust plays in an organization’s success, and referenced it as “the soft concept producing results that are hard to beat.”

While trust may seem too soft a concept to produce a competitive edge, the facts indicate otherwise.

In fact, a high level of trust is essential to creating an agile, highly competitive organization and here are four reasons why.

1.) No Trust — No Speed
In a world where new challenges arise very quickly, it is the failure to act, failure to improve, and failure to innovate that poses the biggest risk to a company — not the risk of making a mistake. However, to an individual in a low-trust environment, by far the biggest risk is making a mistake. For these individuals, trying something new is much riskier than doing what’s been always been done. Innovation or even simple improvement is not going to happen. The whole organization slows down.

Covey, in The Speed of Trust, puts it this way: “When trust is low … it places a hidden ‘tax’ on every communication, every interaction, every strategy, every decision.” People don’t fully hear what their leaders are saying, because they factor in guesses about the leader’s intentions. They wonder how transparent their leader is being. Employees don’t buy-in to decisions that they don’t trust.

Aron Ain, author of WorkInspired, How to Build an Organization Where Everyone Loves to Work, and CEO of Kronos (a leading global provider of workforce management cloud solutions), points out that lack of trust places “a huge overhead burden on a relationship.” He insists that when you
employ someone, you should go ahead and trust them! Will you get burned on occasion when trusting people?

“Absolutely!” Ain says, “But almost always my trust in team members has proven well-founded. And the benefits are numerous.”

By building a culture where employees know they are trusted and where they trust their managers and teammates, Kronos has created an organization where it is safe for people to be creative and to aim for the best possible outcomes, continuously getting better and better.

2.) No Trust — No “Exposing Reality”
Exposing reality means trying very hard to look at things the way they really are, rather than the way we wish they were. As Ain points out, “the faster you see things as they really are, the faster you can get to work on improving them.”

But in a low-trust environment, people are especially motivated to gloss over uncomfortable truths and to declare victory and move on rather than checking to see if they did or didn’t get the results they expected. Trust enables us to admit what we don’t know, recognize and recover quickly from mistakes, and to put uncomfortable information, questions, and contrary opinions out in the open, where the team can work through them with honesty and passion to arrive together at the best strategies and decisions.

3.) No Trust — Poor Results
In a low-trust environment, employees hold back information or ideas that seem risky to share, so leaders make decisions based on incomplete information and without knowing all the potential consequences. And when employees believe their managers are making decisions without all the relevant input and information, they often question or even slow-walk the decisions.

Covey cites polls showing that only 45% of employees have trust and confidence in senior management. Lencioni, in The Five Dysfunctions of a Team, places lack of trust at the foundation of his pyramid of dysfunctions culminating in poor results. Without trust among a team, people keep their cards close to their chests. They are afraid to admit the limits of what they know, afraid to admit any vulnerabilities. Because they don’t trust one another, they fear conflict and withhold uncomfortable information and dissenting views. Without complete information, these teams make poor decisions, and the decisions they do make are poorly executed because they do not arrive at a shared commitment to the decision unless they have aired and resolved dissenting views. Thus, a lack of trust leads to both flawed strategies and poor execution.

4,) Trust Inspires and Engages
Covey observes that “trust is one of the most powerful forms of motivation and inspiration. People want to be trusted. They respond to trust. They thrive on trust.”

This is exactly what Ain sees happening at Kronos. “Because we place so much faith in employees,” he explains in WorkInspired, “they return the favor, placing a remarkable degree of trust in us. Their trust in turn leads to far better performance — more innovation, quicker recovery from mistakes, more energy and enthusiasm at work.”

The next step, of course, is identifying the best way to build a “culture of trust,” which will be the subject of our next post.

Is Bigger Better?

Is Bigger Better?

Conventional wisdom holds that bigger is better, and there are numerous factors that support this perspective. Consider that when you’re an organization or a business and you’re doing better, then you’re going to get bigger — so, therefore, bigger is better!

And certainly issues such as bulk buying discounts or other economies of scale favor size.

But, the tumultuous forces of an uncertain world might just favor agility. Consider that while a cost/benefit analysis will typically reveal that unit cost is much lower for a single large-capacity piece of equipment than for several smaller machines, rarely does that analysis incorporate the impact of uncertainty and variation on total cost; and, in reality, variation in either market demand or supply (such as machine downtime), or the relative inflexibility of a single large capacity machine can drive inefficiencies that greatly offset the lower unit cost that was calculated when a purchasing decision was made.

For example, a commercial bakery could purchase one large capacity mixer that could produce 100,000 loaves for far less cost per loaf than two smaller mixers. The large mixer produces large batch sizes; that’s how it gets its great efficiencies. But if the market is looking for variety, none of which is ordered in bulk, the large mixer results in the worst of both worlds: you either produce large batch sizes and have a lot of scrap if the demand does not materialize in time, or you waste the purchased capacity by preparing batch sizes more closely tied to current demand for the product variety. Either way, you can never really produce enough variety for the market, because the equipment produces only one variety at a time.

Capacity to produce must be as flexible as the market is variable and dynamic. Often this runs directly counter to economies of scale. Optimizing the machine-cost-per-unit can sub-optimize the profitability of the process as a whole.

So, ultimately, to effectively answer the “is bigger better” question, we must go well beyond conventional wisdom or what we assume to be true, and instead consider a wider range of variables. Possibly this well-known quote, sometimes attributed to Mark Twain but also to Josh Billings, sums-it-up best: “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

Agility, Readiness & Change

Fear, Uncertainty, & Doubt!

Rapid acceleration in the pace of change has taken place within the business world over the past ten years. This fact has also accelerated the need for organizational agility, in both thought and behavior.

Agility and change are inextricably linked. The goal in most change efforts is not only a change in attitude, but behavioral change.

But of course change is not always perceived as being good. In fact, people at all levels tend to react with fear, uncertainty, and doubt (the “FUD” factor) when new ideas, processes, policies or procedures are introduced; and many cringe at the mere suggestion that there might be a different or better way to do their jobs !

Yet without change comes stagnation and potential loss.

The first step in any change effort, and in maintaining organizational agility, is to help people develop the right mental attitude and understand that timely change is a constant part of long-term success — this readiness for change will require:

  • Making continuous improvement a permanent part of the organization’s culture…
  • Getting people at all levels to change the way they think, talk, work, and act, and fostering a culture of open-mindedness and amnesty.
  • Establishing new perspectives on work, work processes and value-added work.
  • Effectively using various statistical tools to identify, analyze, understand and communicate variation.
  • Enlisting input from of people operating the work processes.
  • Quantifying how continuous improvement benefits all stakeholders.
  • Improving leadership and coaching skills that lead to increased employee capability and engagement.

Agility & Change: Are You Ready?

As noted in recent posts, the rapid acceleration in the pace of change that has taken place within the business world over the past ten years has also accelerated the need for organizational agility in both thought and behavior.

Agility and change are inextricably linked.  The goal in most change efforts is not only a change in attitude, but behavioral change.

But of course change is not always perceived as being good. In organizations of all types, people tend to look with skepticism at innovations and new methods, processes, policies and procedures; and people at all levels sometimes cringe at the suggestion that there might be a different or better way to do their jobs!

Yet without change comes stagnation and potential loss.

The first step in any change effort, and in maintaining organizational agility, is to help people develop the right mental attitude and understand that timely change is a constant part of long-term success — this readiness for change will require:

  • Making continuous improvement a permanent part of the organization’s culture… getting people at all levels to change the way they think, talk, work, and act, and fostering a culture of open-mindedness and amnesty
  • Establishing new perspectives on work, work processes and value-added work
  • Effectively using various statistical tools to identify, analyze, understand and communicate variation
  • Enlisting the help of people operating the work processes
  • Quantifying how continuous improvement benefits all stakeholders
  • Improving leadership and coaching skills that lead to increased employee engagement

 

How to Develop Organizational Agility

Many people say they would like to make their organizations more agile, but few organizations have a formalized strategy to do so.

For many leaders, the planning and management methods mastered on their way up the ladder were designed and effective in a different time, when change moved at a much slower pace.  Others, as noted in our previous post, might lean more toward the entrepreneurial side, exhibiting high-levels of vision and enthusiasm, but not the team-building or other managerial skills necessary to develop a truly agile environment; and others may simply fail to stay the course.

To gain agility, today’s leaders must incorporate these four “agility enablers” into their operating model:

  1. Fast and effective information flows so their enterprise can emulate  Wayne Gretzky and “just skate to where the puck is going to be.”
  2. Strong leadership and teamwork to turn insight into action; people at all levels must be engaged, involved, and accepting of ongoing change.
  3. Relentlessly streamlined and simplified processes in order to handle the more rapid pace of implementation. If the processes that comprise the value stream are held together by patches, expediting, and human vigilance, or are full of inspection, rework, delays, over-specification, redundancies, excess inventory, complexity, etc. it will be very difficult to execute the necessary changes.
  4. Flexible investments, as acceleration of change makes acquired assets obsolete faster, so both the investment and hiring strategy should reflect the need for flexibility.

Organizational Agility?

Our previous post summarized the rapid acceleration in the pace of change that has taken place within the business world over the past ten years, and how the speed of change in the markets, competition, and technological capabilities has increased desire for greater agility.

So, how might we define organizational agility?

Some tend to think of being agile as being synonymous with being entrepreneurial, because vision, leadership, rapid decision making, and an intense customer focus are all necessary for agility. But the concepts are really not the same, as many entrepreneurs are not overly agile. In fact, many tend to “go it alone” and fail to leverage their organization’s knowledge and capabilities to make the most of developing opportunities.

Organizational agility is the ability to identify the developing threats and opportunities to the organization’s mission, and to quickly align or realign resources to thrive in the new or emerging environment.

Agility requires these two components:

  1. The ability to see and understand the external developments and what they will mean for the organization
  2. The ability to quickly adapt resources to leverage the emerging opportunities and to avoid the looming threats

These two key abilities together provide a profound competitive edge in an era of quickly-accelerating developments, and enable an agile organization to truly thrive.