Category Archives: Culture

Building a High-Performance Culture

Building a High Performance Culture

Continuing with our culture-related theme, we’ve found that the highest achieving organizations are those that have successfully planned and developed high performance cultures.

When helping clients build such cultures, our approach begins by identifying the underlying assumptions, beliefs and values that cause people to behave the way they do (the practices).

Key steps in developing a high performing/high achieving culture include:

  • Identifying a clear link between individual/team/department performance and organizational goals.
  • Helping people develop a clear sense of purpose.
  • Management devotes the necessary time and attention to a proactive and consistent performance management regimen.
  • A work environment that supports high quality and productivity.
  • People at all levels understand the core values and beliefs which drive behavior.
  • Leaders promote practices that are in sync with organizational values and beliefs.
  • Roles, responsibilities, and accountabilities are clearly defined.
  • Managers are skilled to coach for improved performance.

While these steps might appear simple, they are not easy to implement; and nearly impossible to achieve without significant contributions of time and energy from senior leaders. A well-defined performance management process is also a pre-requisite, which will be the subject of our next post.

The Best-Run U.S. Companies

A key focus of Conway Management‘s Continuous Improvement (CI) work has always been to help clients improve the way their businesses run; and, as noted in numerous posts, senior level management must provide support, exemplify desired behaviors and proactively lead the way in order to achieve a culture of CI.

Conversations about this reality often lead to questions about what constitutes a well-run company. While there are different ways to evaluate an organization, last year we shared a post about the Drucker Institute’s definition and listing of the “Most Well-Managed Companies” in the United States.

A most interesting aspect of this list was the holistic approach taken to rate the contenders. Data came from numerous sources, including employee ratings on Glassdoor to five-year shareholder returns and trademark filings, and the five criteria for placement were:

  • Customer satisfaction
  • Employee engagement and development
  • Innovation
  • Social responsibility
  • Financial strength

According to articles in the Wall Street Journal, these benchmarks represent Drucker’s core, as has always believed companies should exist for purposes beyond profits, stressing that they should care for workers and benefit society.

These factors are well-aligned with our way of thinking, as a clear vision to external customers along with innovation, workforce engagement and workforce development have always been components of our programming.

It is, therefore, reassuring to see these items on a list such as Druckers’.

If you’re curious, below are the “top 10” finishers on this year’s list which, incidentally, includes all of last year’s “top 5.”

  1. Apple Inc.
  2. Amazon.com Inc.
  3. Microsoft Corp.
  4. Nvidia Corp.
  5. Intel Corp.
  6. Alphabet Inc.
  7. Accenture PLC
  8. Johnson & Johnson
  9. Procter & Gamble
  10. International Business Machines Co.

Building a Culture of Continuous Improvement…

The “Elephant” in the Room?

Among the highest achieving organizations we’ve worked with are those that have successfully planned and developed high performance cultures of continuous improvement. A vitally-important tool for bringing about a culture of continuous improvement and engagement within a workforce is communication, which many people agree is the most frequently-used skill in today’s workplace.

Aside from standard team or project meetings, there are a number of ways leaders might go about accomplishing this. For example, employee forums are an ideal way to engage people around their work and contribute to the building of a high-performance culture of continuous improvement.

Consider that one of the most obvious yet often overlooked requirements for high performance is a setting for employees to share and discuss problems and ideas for improvement.

But too often, managers and leaders tend to believe that if someone has a really great idea for improvement, they will raise it.  Yet when we talk to people close to the work, we more often hear ideas they have carried around for months or even years but never found the right time or place to share; or felt their idea would not be welcomed.

Even worse, when no forum for sharing improvement ideas is provided, people adapt to the way things are and stop noticing the waste—the elephant in the room—and stop trying to think of better ways.

But it is important for business leaders to recognize that some forms of communication are better than others. In fact, as reported in a recent Society for Human Resource Management (SHRM) article, a survey of 400 companies with 100,000 employees each cited an average loss per company of $62.4 million per year because of inadequate communication to and between employees. The article also referenced another study showing that miscommunication in smaller companies of 100 employees cost an average of $420,000 per year.

For example, many organizations use suggestion boxes as forums. But the results are often disappointing. While a suggestion box requires little time or effort to initiate, its success relies on the ideas being completely and clearly expressed in writing.  Unfortunately, many people with good ideas simply cannot express them well.

Furthermore, if a suggestion requires more explanation or development before it can be turned into a really great idea, the suggestion box does not offer an opportunity for clarification, debate, or refinement. Even worse, when the initial ideas are not fully formed or expressed, and management doesn’t have an opportunity for clarification, the ideas are harder to act upon, and often management loses interest.  When people notice nothing comes of the suggestion box, they stop offering ideas.

Here are some additional examples of costly miscommunication in business environments identified by Helen Wilkie, a consultant and author specializing in profitable, applied communication:

  • Long, boring, poorly planned unproductive meetings that reach no conclusion and serve no purpose
  • Sales presentations that show no concern for, or understanding of, the client’s needs
  • Wasted time due to miscommunication about time or scheduling
  • Badly written e-mail messages that cause misunderstandings, ill will and wasted time
  • The email habit of unnecessarily “replying to all”
  • Employee alienation caused by managers who don’t listen
  • Lack of understanding between people of different age groups
  • Lack of understanding between male and female employees

Ultimately, the best forums are regularly scheduled gatherings in which people can surface and discuss problems, waste, and opportunities for improvement.

Examples of effective discussion forums were shared during one of our Partners in Improvement sessions, which included:

  • Monthly safety talks at the end of which the company president discusses pertinent issues with team members and provides input as well as support
  • Weekly one-on-one session between management and team members during which leaders not only offer ideas and support, but also gather feedback on successes and challenges
  • Regular “town hall” meetings where he shares information about what is going on and what to expect, and also provides an opportunity for people to raise questions or concerns

The CEO & Enterprise Engagement

Leadership

Since our inception we have stressed the fact that an organization’s leadership must champion a Continuous Improvement (CI) effort if it is to become cultural and if it is to succeed in a sustainable fashion.

Along similar lines, the Enterprise Engagement Alliance has shared data as well as experiences indicating the same holds true for engaging employees and customers; and just like a culture of CI, a culture of engagement generates a measurable return on investment.

“A CEO-led strategic and systematic approach to human capital management can enhance performance and create a better experience for all,” an article on the Enterprise Engagement Media website states.

“Without the leadership of the CEO, it is impossible for an organization to fully engage all its stakeholders in its brand, mission and goals—customers, employees, distribution partners, vendors, communities, shareholders, etc.—or to achieve measurable ROI.”

The Enterprise Engagement Alliance was the first to give a name to this strategic and systematic process to connect and align all stakeholders toward a common brand, mission, values, and goals, naming it “Enterprise Engagement.”

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.

A Business “Secret” Weapon?

You might call it a “secret weapon” but, to be honest, it is the exact opposite. Because unlike a weapon, it is constructive rather than destructive; the only harm it could do a competitor is to leave them behind.

And it is anything but secret!

Trust — the soft concept producing hard to beat results

In his recent book, WorkInspired, How to Build an Organization Where Everyone Loves to Work, Aron Ain openly shares the pivotal role it has played in Kronos’s amazing growth story.

This “secret weapon” is trust — the soft concept producing results that are hard to beat.

The role that trust plays in an organization’s success has been written about before by keen observers of human and organizational dynamics.

  • Patrick Lencioni in The Five Disfunctions of a Team identifies the lack of trust among a management team as the root cause of most poor performance.
  • Stephen M. R. Covey in The Speed of Trust: The One Thing That Changes Everything passionately echoes this view, citing research indicating high-trust organizations out-perform their low-trust competitors by 300%, because a lack of trust increases costs while simultaneously reducing an organization’s speed and agility.

What’s different about Ain, CEO of Kronos, a leading global provider of workforce management cloud solutions, is that he can tell us how trust is working in action today and about the tools and methods in place to support the practice and enhance the effectiveness of trust.

At Kronos, everyone is expected to give trust both within and outside their functional areas and to practice behaviors that earn the trust of their employees, teammates, and managers. According to Ain, the culture of trust contributes to much more than high engagement and retention, as important as those are, but to amazing business results.

And the results Kronos has achieved are great! Revenue has tripled; Kronos has surpassed 35,000 customers worldwide, innovations are rolling out faster than ever, and employee engagement scores are through the roof. Kronos once again occupies the #1 spot in the Boston Globe’s Top Places to Work list in Massachusetts. It received an award from Fortune Magazine for Best Workplace for Millennials – 2018. It is on both Glassdoor’s and Fortune Magazine’s lists of top 100 places to work and has received numerous other awards for workplace engagement.

Based on a recent newsletter by our associate Sheila Julien, our next post will share four specific reasons why “trust” works and why it is essential to creating an agile, highly competitive organization.

Communication & CI Part 2: Hidden Costs?

As noted in our previous post, communication is an important, yet often over-looked tool for bringing about a culture of continuous improvement and engagement within a workforce.

But the effect of communication depends on its quality, and poor communication can be costly.   Even worse, these costs frequently go unnoticed!

For example, as reported in a recent Society for Human Resource Management (SHRM) article, a survey of 400 companies with 100,000 employees each cited an average loss per company of $62.4 million per year because of inadequate communication to and between employees. The article also referenced another study showing that miscommunication in smaller companies of 100 employees cost an average of $420,000 per year.

To determine or impact the quality of internal business communication, it is important to recognize that some communication forums are better than others.

For example, many organizations use suggestion boxes as forums. But the results are often disappointing. While a suggestion box requires little time or effort to initiate, its success relies on the ideas being completely and clearly expressed in writing.  Unfortunately, many people with good ideas simply cannot express them well.

Furthermore, if a suggestion requires more  explanation  or  development before it can be turned into a really great idea, the suggestion box does not offer an opportunity for clarification, debate, or refinement. Even worse, when the initial ideas are not fully formed or expressed, and management doesn’t have an opportunity for clarification, the ideas are harder to act upon, and often management loses interest.  When people notice nothing comes of the suggestion box, they stop offering ideas.

Here are some additional examples of costly miscommunication in business environments identified by Helen Wilkie, a consultant and author specializing in profitable, applied communication:

  • Long, boring, poorly-planned unproductive meetings that reach no conclusion and serve no purpose
  • Sales presentations that show no concern for, or understanding of, the client’s needs
  • Wasted time due to miscommunication about time or scheduling
  • Badly written e-mail messages that cause misunderstandings, ill will and wasted time
  • Employee alienation caused by managers who don’t listen
  • Lack of understanding between people of different age groups
  • Lack of understanding between male and female employees

Ultimately, the best forums are regularly-scheduled gatherings in which people can surface and discuss problems, waste, and opportunities for improvement.

When well-crafted, these forums allow for discussion to make sure each idea or observation is fully understood; any problems with an idea should be raised freely and discussed with the goal of improving the idea. In the end, the most effective improvements and innovations are often quite different from both the initial ideas and even the counter proposals. They emerge from listening to and incorporating different perspectives about barriers and unintended consequences to raise concepts to new levels.

5 Steps for Developing a Creative Culture of Continuous Improvement

In a previous post we shared some thoughts on how creativity can be a desirable trait of a good CI Leader, and how it can also be a tool for helping people to accept and adapt to change.

Although not often associated with a leadership goal, establishing a creative culture of continuous improvement can help managers at all levels to achieve higher-levels of performance.

Here are 5 specific steps managers can take to develop and sustain a creative culture, based on findings published by New Horizons Learning Centers:

    1. Encourage new ideas. Management must make it clear that they will embrace new ways of doing things. Managers whose default is to turn against new ideas will quickly stop creative ideas. This simple habit alone is a critical first step toward developing a culture of creativity and change.
    2. Allow more interaction. A creative climate thrives when team members are allowed to interact with their own team mates as well as team members from other departments. Useful information is exchanged, new ideas flow both ways and new views on old challenges are heard for the first time.
    3. Tolerate failure. We have often noted that a culture of CI is one in which people must be given amnesty… a culture in which people are not afraid to fail. This holds true in a culture of creativity as well. While new ideas can sometimes prove too costly or might simply turn out to not be feasible, management needs to accept that time and resources will be provided knowing that the idea(s) might or might not come to fruition.
    4. Provide clear objectives and freedom to achieve them. People or teams who are provided with clear goals will be motivated to meet them. The goals provide a purpose for their creativity. Set guidelines with minimal constraints gives managers a degree of control with regards to the cost and time invested the creative behavior.
    5. Offer recognition. Create individuals prefer to work on tasks that actual motivate them. This also means they, like all other staff, like to be rewarded for a task well done. Management must offer tangible rewards that send a clear message that creative behavior is encouraged, supported and recognized in their organisation.

 

The Most Effectively Managed U.S. Companies

On Wednesday December 6, 2017, the Wall Street Journal published an article about the country’s most effectively-managed companies as ranked by the Drucker Institute.

Interestingly, the selections were based on a “holistic approach, examining how well a business does in five areas that reflect Mr. Drucker’s core principles.” These areas are:

  1. Customer satisfaction
  2. Employee engagement and development
  3. Innovation
  4. Social responsibility
  5. Financial strength

In case you’re curious, the top 5 on Drucker’s “250 most effectively-managed” list are:

  1. Amazon.com Inc.
  2. Apple Inc.
  3. Alphabet Inc.
  4. Johnson & Johnson
  5. I.B.M. Corp.

It’s encouraging to see customer satisfaction and employee engagement/development atop the criteria list, as these emerging measures have proved to be common threads among the most successful organizations we’ve encountered — these organizations tend to enjoy a safer, more productive workplace, with low team turnover, high safety ratings, and high customer retention rates; they operate with a culture of continuous improvement, and they are consistently able to achieve goals through people in a measurable way.

Motivating for Performance

Our previous post referenced how high-achieving organizations are able to develop and sustain high performance cultures in which team members are engaged and highly-motivated.

During a recent discussion with Continuous Improvement leaders, various approaches to the motivational component of performance management were shared. Some organizations focused on the individual quantitative measurements to motivate individuals and to encourage them to achieve important goals. For example, tying individual goals to the organization’s KPIs was cited as an effective way to align behaviors with goals and make sure everyone knows exactly what they are expected to do.

However, others said that group rewards and recognition were more effective than individual metrics. For example, one participant described how teamwork deteriorated to the detriment of the organization as a whole after his organization switched to individual metrics and rewards instead of rewarding everyone based on achievement of the company’s key strategic metrics.

We also discussed experience with financial rewards as opposed to intrinsic rewards, such as recognition. Financial rewards did not necessarily produce the best results.

One participant explicitly pays people for participating on improvement teams in some of their plants, while one of their Midwestern plants is prohibited from paying for participation. The Midwestern plant relies on intangible rewards such as recognition and “thank yous.” Surprising to many, the Midwestern plant had a much higher rate of participation than the others, seeming to demonstrate that intangible or ‘intrinsic’ rewards can be more effective than monetary rewards.

Another organization found recognition, sometimes coupled with small gift cards, was an effective method for their organization.

Generally, it was agreed that the keys to effective use of recognition as a motivational method are timeliness and making the recognition public.

One successful example involved a peer-recognition program, in which people were empowered to recognize one another by giving-out stars for helping an internal or external customer. When someone receives a certain number of stars, they get a gift card and the ‘star of the month’ gets a party, recognition, and a preferred parking space. It was noted that guidelines for the awarding of stars were set in advance.

Another perspective relative to timeliness involved making motivational and performance management activities an “everyday job,” and basing strategies on more than just past data.

Over-reliance on past data when crafting improvement or motivational plans was referenced as working through the “rear-view-mirror.” A better approach not only enables managers to identify opportunities for team improvement based on analyzing past activities and results, but to also identify preemptive action steps and strategies that can impact outcomes and future results.

Conclusions

  • Performance Management and motivation must be about much more than individual performance measurement. As Deming said, over 90% of problems are caused by the system not the person. To manage performance, we must manage the system by which people, plant, process interact to produce results.
  • Frequent observation and feedback is more helpful to people than more formal annual reviews. Motivation and engagement levels were consistently rated as “much higher” when team members received frequent, consistent feedback on their work, and also when they felt they had input to improvement plans.
  • Frequent communication about what an organization needs and wants greatly increases the odds that the organization will get what they need and want.
  • Group rewards encourage teamwork, while individual rewards encourage an individual to optimize his or her own goals even if it may sub-optimize the organization as a whole.
  • Tying money directly to performance appraisal can be a two-edged sword – raising stress and reducing the intrinsic rewards and personal satisfaction from doing a good job for the team.
  • Intrinsic rewards tend to increase motivation over time as opposed to financial rewards. Recognition is among the most effective. The keys to effective use of recognition as a motivational method are timeliness and making the recognition public.
  • Avoid performance management in the “rear-view mirror.”