Effective Decision Making - The way of the future ...

Bain & Co surveyed 760 executives around the world in various industries and found a 95% confidence level or higher between decision effectiveness and financial results. (Harvard Business Review June 2010)

Ø  How effective is your decision making? 

ØHow is your decision making completed? 
ØWho gets the final say? 

ØWhat impacts are taken into consideration? 

ØHow long does it take your business to make a decision? 

ØAre all voices heard within the process? 

ØAs more money is involved within the decision does it take longer to make a decision?

All these elements play into effective decision making.  Our research has continued to highlight a staggering variance in decision making. It appears the larger the organisation, in many cases, the more varied and disparate the decision making is.  There is no set standard and agreement on how decisions are made.  It often comes down to each individual leader’s style and their interpretations of policy or budget constraints!  How many people are heard in the decision making varies widely and often comes down to those that talk loudest or have the most influence within the group get heard.  Decisions are often made in total isolation to other areas of the organisation, which often leads to competing strategies or deliveries which negate other deliveries.  The cost of this poor decision making is astronomical.  It is not only seen in bottom line results but also people and cultural impacts, broken processes, ineffective products and on the list goes!

Well believe it or not there are very effective decision making systems that support an organisation to truly achieve their strategies in a way that is not only effective but also dynamic.  Why dynamic?  Because our world is constantly changing and when we make a decision it will be based on the view of the world at that point in time.  However in one week, one month, or one year the view may well have changed and those decisions need to be able to be reviewed and changed to support the organisation to adapt.  This is absolutely critical.  If decisions are made and then ‘set in concrete’ the organisation will be like an oil-tanker that will take too long to be able to change direction.

Organisations need to be agile and dynamic and to be able to make decisions based on the current landscape at that point in time, but have the ability to revisit them at any stage!

The most effective decision making systems we have seen allow for all voices to be heard, are agile enough for decisions to be revisited quickly if the ‘landscape’ has changed and support an environment of ‘giving things a go’ rather than waiting until every possible what if scenario is covered.

When did your organisation last review your decision making process?  

Systems thinking is a great start but systems planning and action is critical!

What do we mean by that?  Well we have spent years listening to and witnessing organisations talk about systems thinking but not taking this thinking and turning it into action.  We often hear talk about “breaking down of silo’s” or “working together across the organisation” but rarely see the sustainable action around this.  We see evidence time and time again that if a total system approach is not considered, your newly developed strategy or transformational change will be short lived.  Multiple upstream and downstream impacts will be overlooked and will cause the approach to be unsustainable.

So what do we mean by systems thinking versus systems planning and action?  Well it really is not one versus the other.  It is about understanding that whilst it is appropriate to think about whole systems- it is even more critical to plan and implement the new system from a total systems perspective.  Think about the system but ensure when you act you create it for the system and the system should create that which you are trying to transform. 

Some key points to remember when building, transforming or changing any form of system:-

1.   Remember a system is dynamic and continually interacting with its environment.  The solution should not only depict this, but your implementation plan should allow for the capability to manage our ever-changing environment.

2.   There are many different elements that make up a system and all should be accounted for and managed throughout the transition.  From a scientific perspective these are often seen as energy, material and informational elements.  From a business perspective these elements include but are not limited to things like the way you communicate, the hierarchy of decision making, and the way you operate both culturally as well as organisationally.

3.   Your system not only needs to be able to interact and manage within its own environment, but also be able to interact and manage within other environments also.  These impacts need to be worked through and managed dynamically as well.

4.   All systems work to find a point of equilibrium or balance, but will often experience oscillating and chaotic behaviour because of their very nature.  These systems are composed of people who are operating within their own systems that are oscillating also.  Therefore it is important to acknowledge this fact but even more important to plan for and act on.

So ... Great that you are thinking about the system but don’t forget to plan and then act on it!

It may be an old adage but it still holds true today .....

“70% of transformational programs fail largely due to the lack of change management”!

In these times of major change and transformation, we still find that the people element is seen as the ‘fluffy stuff’ and a nice to do, not necessarily a need to do!  How wrong this view continues to be and those that ignore it suffer the consequences accordingly.  Often millions of dollars down the drain!

Many organisations are running major transformational programs to enhance their overall performance.  This may be to reduce cost, improve productivity through new technology or develop a more efficient process, just to call out a few.   If the people element is not managed throughout, the change will struggle to embed and have the potential to severely impact the overall desired results.   Why?   Well let us use the following analogy to explain this.

Today we are driving a vehicle that was designed and built in 2001.  It is a good vehicle and takes us on the journey that we are going.  However it is not efficient anymore and there are far better cost effective vehicles available that will get us to our destination faster and more efficiently.  We therefore go and buy the latest vehicle on the market.  It has many new features that enhance the ability for the driver to be more effective when they drive.  Wonderful we think.  However let us now assume that our current driver loves their current car and is not interested in changing!  Even though the car is there he is not interested in driving it and reverts back to what he knows.

Well we can solve that can't we!  We will take the car off him and make him drive the new car!  Our driver gets in but is very reluctant.  He doesn't know this new car!  He doesn't want to drive this new car! He doesn't understand why he has to change!  Even though it may have lots of new features they take a long time to learn, or he is not interested in learning them. 

Too many transformational programs leave it until the last minute to not only engage people, but to help them make the emotional leap required to transform.  It may be the latest vehicle out but your people still need to operate it and if they are not motivated and capable, it will take some time to get to the point where optimal results are being achieved. 

In any change it is implicit that people move to the new desired state.  This is not only from a physical aspect but also from a mental and emotional state.  If this is not managed as a priority it will delay the move to the new state.  For optimum performance to be achieved there must be a willing and motivated 'driver' not just a flash car!

“Future organizational performance is inextricably linked to the capabilities and motivations of a company’s people.”  Thomas H. Davenport  - Harvard Business Review

Strategy made simple ....

Over the years I have had many queries and questions on how to do a high level strategy.  It appears that it has become a complicated science!  Well in my mind it is not!

I don’t believe in overcomplicating things.  The answer always lies within the simple not the complex.  So what about strategy then?  My view on most of the critical components to complete a high level strategy are captured below.

1. Start with the picture

What is it that you are trying to create?  A good analogy here is a jigsaw puzzle that you are about to put together.  Do you have the picture in front of you?  Do you know what it is you want to build?  Have you got a clear view on what this is going to be?

2. Build in the critical elements for your business

Once you have the picture sorted then decide what are the critical elements you want to ensure are managed along the way.  A good example here are the elements within your business that are critical drivers to its success.  Some examples are below but these are by no means exhaustive:-

o   Your People:  What is in it for your people?  Why will they want to be a part of this? What organisational capabilities will you need to build this?

o   Your Customers:-What are you going to do for your customers?  What will these elements mean for them?

o   Your Community and Shareholders.  Are these elements important?  If so don’t forget to build them in also.

o   Your service offering.  What is this going to look like as you create your picture?

o   Third parties or alliances that you may want to include.

o   Technology.  Is this a critical element to create your picture?

3. Create your stepping stones (your projects and initiatives). 

Now we have our critical drivers, what are the elements or projects that we need to get underway that will help us create the picture that we are building? Our stepping stones!  How do we want to put this together?  What is the timing to do these things?

Now as you work through this a few thoughts to the wise.  If you follow De Bono ... don’t put the black hat on first!  Start with a clear board and create all the possibilities.  This enables more creative flow and thinking.  Think of it as a brainstorming type session. 

4.  Timings and reality check

Once you have all your possibilities you can start to work through the critical elements that need to be considered around why you may or may not be able to conduct these activities now or in the future.  This may be due to funding, regulations, economic environment or any other elements that you feel appropriate to your business. You could employ a methodology like a PESTLE analysis.

5.  Create a visual one page map. 

A visual depiction of what you are creating.  Plot your initiatives on this map so you can see what you are creating.  One page is great.  This is your map of how you are creating your future!

6.  Congratulate yourself

Now give yourself a pat on the back.  You have a high level strategy of what you want to create and how you will get there, along with critical elements that you want to manage on the journey.  Yes there is more detail that will come after this but for now .... Well done!!  You have a high level strategy on where you are heading!  You are already a step ahead of most!

The soft stuff that's really the hard stuff!

Wow, I don’t know about you but I am so over hearing people talk about the ‘soft stuff’! Of course what they are referring to is the people element of business.  The reason I believe it is often referred to as the soft stuff is because in actual fact it’s the hard stuff!  It’s the element that is often left out, or actioned at the last minute when it comes to major projects or programs.  It’s the element that is often referred to the HR team ...  why because it’s the soft stuff the People piece!!  When I hear people talk about the soft stuff the first thing I know is that they actually don’t know what to do with it or how to address it.  It has become an easy line to use to make an excuse for ignoring it or getting someone else to manage it!

Well I am here to tell you that the soft stuff is actually really the hard Stuff.  Why hard?  Because you’re dealing with people and all the emotional elements that come with this.  Get it right though and this is often the difference between a change that works and a change that doesn’t!  We know most change programs fail!  Why because this is the element that is not well managed. 

It is really time for business to stop referring to the people element of business as the soft stuff.  People are at the heart of business.  If you don’t get it right at this level, whatever you are doing will never really be sustainable.  It is people that actually make our business run.  It is people that interact all day long with customers.  It is the results of the actions people take that determine our overall business performance.

Most of the top performing companies around the world now understand this.  The people element has become one of the most critical measures that they now monitor.  This is what Thomas H. Davenport from the Harvard Business Review had to say “Organizations that have used data to gain human capital insights already have a hard-to-replicate competitive advantage.”

It’s time to move on from referring to the ‘soft stuff’ and acknowledge that this is the stuff that will make a difference to whether your business is here in a few years or not!

Good Luck.

True Value ...What is that?

True value .... what is that?  With the recent devastation around the world I couldn’t help but sit back and consider what is true value and who decides what things are worth?

Take property prices for example.  Banks like to value your property and then decide how much they will lend against that.  But then let’s take a step back, it is Valuers that value the property for the bank.  They base their values on a set of assumptions and market data.  Well where does the market data come from?  Well of course from people buying and selling their houses.  Well what drives these prices?  Is it the Real Estate agent who tells you how much he thinks your property is worth?  Or is it the media, who tell you when the market is having a major price rise, or plummeting due to interest rates.  What do you think your property would be worth if there was no media to cause speculation around what is happening in the market?  How would you value your property?  What would you decide were they key aspects that you would measure the value of your property against?  Is it lifestyle?  Is it location?  Is it status? 

When we look around the world and see the devastation you can’t help but sit back and say what is value?  For those that have been in earthquake affected areas.  Many of whom have lost everything ... what is it that they now value?  How would you prioritise what is of value to you and what is not?  If I look at Christchurch in New Zealand, what has happened to the property prices there?  What about all the so called experts that have valued properties at certain prices.  What do their values now mean to those that owned these properties?  Someone else’s value does not equate to the value you place on it.  The question is, in these situations should the value even be a monetary value.  Is it not more about a home and shelter?  As more of the world continues to unravel, value as a whole is being called into question.

True value resides with the owner.  Whilst others may give us opinions, thoughts and their views at the end of the day it really comes down to what value we place on things.  What does it mean for us?  No one else can really answer that question.

How Sustainable is your Strategy?

So you have a strategy, well done but how sustainable is it? If it doesn’t start with People and Leadership, you’re in trouble! Why? Well read on!

People are the critical element of your business!  People create your customer satisfaction; people create your business results.  It is not your processes, it is not your products, it is not the price, it is not your technology, it is not your marketing!  All these mechanisms may draw the customers to your door but it is your people that complete and close the sale!  The other components support your people but they don’t complete the process!

Why then do so many strategies focus on technologies, products, channels and marketing, with little to no mention around their people and environment?  Is it that the people and leadership element are taken as a given in any strategy and transformation?  It is our belief that this is the case and our research continues to highlight this.  No wonder so many strategies fail to deliver the desired results!

We saw many of these examples during the Global Financial Crisis (GFC).
The strategic focus immediately went to cost cutting measures, risk containment and mitigation of more losses.  Whilst each of these elements is important, especially at times like the GFC, even more critical were the people elements.  How were these addressed and managed?  Was there a strategy around people, or was the only focus on how to manage and minimise people cost?  They are clearly not the same thing!  What strategies were put in place to support Leaders through this time of turmoil and transition? 

Again our experience indicated very little.  The major focus on people tended to be under the lense of minimising cost.  Communication to people and leaders was at best, average in most cases, as organisations battled to understand what they were going to do to rectify the situation.  Lack of communication resulted in wide spread turmoil, fear and worry about what that meant for the business and their people.  Leaders were confused on what to position with their teams, which continued to create further turmoil.  It is well known that at times of crisis culture takes over.  The GFC continues to be an interesting case study for organisations on this.

Clearly the GFC was a unique situation however something that dramatic will highlight any weaknesses within strategies.

Major transformations bring about the same concerns for people and their leaders.  During these times communication, unity, alignment and clarity are critical to ensure success of any major transformational strategy.

If People and Leadership are not at the forefront of these strategies, then any improvement seen will often only be short-term, if they eventuate at all, and definitely won’t be sustainable!

Why?  Because people are the foundation of your business! If you do not have a solid foundation, forget about trying to build or change things you are on totally shaky ground.

If you consider your business like a house, then the foundation of that house needs to be solid to continue to build.  People are your foundation in business and just like your house; the people foundation must be strong!  If they are in turmoil or all running in different directions then you have a problem!

First and foremost before you start to build you need to lay the foundation, or check that the foundation is solid. What is happening at this level? If plans have been derived around cost cutting, new revenue generation, new processes without any clear focus on the people component you are in trouble! You are building on shaky ground!

During any transformation, your people, the leaders and the environment that you create are critical to be able to sustain any ongoing change.  Has this been accounted for and managed within your strategy?

People and leaders are the key to ensuring strategies are sustainable.  Ignore them at your peril!

Human Capital Insights

 

“Organizations that have used data to gain human capital insights already have a hard-to-replicate competitive advantage.” Thomas H. Davenport  Harvard Business Review October 2010  - Article ‘Competing on Talent Analytics’

Leading edge organisations have realised the value that human capital data provides.  In most organisations it is your people that create your customer experience and your business results.  It is your people that are a major input into your overall return on investment.  Why then would you not track data on your people as rigorously as you track business and customer results?

There have been thousands of articles written on talent management and why this is critical. Although we agree with this, just managing and monitoring the top 10-15% (talent) out of your total workforce will not give you enough information to understand your human capital!

Human capital data continues to be under-utilised in most organisations and is rarely used when assessing the overall performance of a business.  In most cases it is still considered a secondary measure and is viewed in isolation to other business measures.

Human capital data can give invaluable insight into what is happening with one of your most critical components of your business.  As we have highlighted in our article Health vs. Wealth - Building a Sustainable Future http://gordianglobalsolutions.blogspot.com/2011/01/health-vs-wealth-building-sustainable.html it is critical that the organisation understands what is happening with their people, especially when it is your people that tend to make up around 60-70% of your cost base!

There is a large amount of data that can be captured to give business a strong insight into their human capital and the potential to sustain performance, however it appears that this is still not well understood or completed.  Why would this be? Is it that..

·       The data is just too hard to capture? 

·       That human capital data is still considered a secondary measure to business and customer data? 

·       The business is unsure what data to capture?

·       Data is captured but there is no real understanding what to do with it or what it is being captured for?

·       That the annual engagement or cultural survey is considered enough!

In most cases we have seen it appears to be a combination of the above factors. The research we have completed has shown that those industries that are doing well in this area are still continuing to learn the strength of this data and build on their understanding as they progress.  Like any form of data, trend analysis is critical.  Therefore the longer this data can be captured and tracked the stronger insights that can be gained.

It is our belief that the organisations of the future that will create sustainable performance will be those that measure and monitor human capital data as often as they review business and customer results. 

Human capital data has the ability to give the organisation a 360° view of their business and allows valuable insight into any form of deterioration.  This enables the organisation to move from reactive management of problems to proactive management.  To be able to monitor and measure any forms of weakness early and remedy quickly, supports the organisation to create a strong foundation that can create sustainable performance. 

Leading organisations such as Google, Zappos, Wholefoods have seen the value and are generating great value from the insights that people data can deliver.

The leading organisations of the future will be those that understand the value of human capital data, and can utilise this data to create more sustainable solutions for the business.

For more information on this or to understand how you can utilise human capital data more effectively for your organisation please contact us at info@gordianglobalsolutions.com

Technology - Is it the Solution?

It never ceases to amaze us how often we see companies bring in new technology with a belief that this will fix problems they have been experiencing.  Technology definitely has the ability to take a business to a whole new level; however this relies on a number of factors! 

1.       The new technology integration is managed to support and fit the culture of the business.

2.       Strong dedication is committed to the change management aspect of delivery and embedding of the technology.  Well in advance of any transition!

3.       The technology has a strong and stable platform (meaning the people platform) to embed the system into.

4.       The technology is not being utilised as ‘the fix’ for the unknown problem/s they are currently experiencing.

Why are these aspects critical?  Because they all involve the People Interaction!   Technology at the end of the day is a ‘tool’ to assist people in their daily operation; people do not assist the technology!  The People element is critical to the success of any form of technology solution!  The best design and strategic fit, without management of the people element opens up any business to major problems!

1.       The new technology integration is managed to support and fit the culture of the business.

Culture, just another ‘fluffy’ word!!  If you believe this you are truly in trouble!  The culture of your business is critical to create sustainable solutions.  If you do not understand the environment that your solution is being integrated into and managing this environment throughout, you run the risk of spending millions of dollars with very little return.  The best way to think of this is the old story of putting a square peg into a round hole.  The peg being your technology and the hole being the culture.  Are they going to fit nicely together?

2.       Strong dedication is committed to the change management aspect of delivery and embedding of the technology.  Well in advance of any transition.

How often does change management come up in respect of successful and unsuccessful delivery of programs?  The statistics are there for all to see, pay little attention to this area and you will totally suffer the consequences!  As with our article A quantum view of change management (http://gordianglobalsolutions.blogspot.com/2011/01/quantum-view-of-change-management.html) all aspects of the change need to be managed.  Do not scope your responsibility so tight that you leave upstream and downstream impacts for others to manage.  If you want the solution to work, then manage all dimensions!

3.       The technology has a strong and stable platform (meaning the people platform) to embed the system into.

How strong is your people platform?  Do you have a stable foundation to build off or are your people moving around like quick sand?  Think of your people platform like the foundation of a house.  It is critical before you build the house that you have a strong foundation; otherwise as you build you open the opportunity for your house to ‘crumble’ under the pressure at any time!

4.       The technology is not being utilised as ‘the fix’ for the unknown problem/s they are currently experiencing.

Is technology being utilised as a strategic solution, or as the ‘fix-all’ for the unknown problems.  If problems exist either known or unknown it is critical that they are addressed prior to the technology solution being integrated.  Why, because to gain the maximum benefit from the technology solution it is critical that all other factors are operating as effectively as possible.  To use technology as the ‘fix-all’ runs the risk of creating just another layer of complexity that will need to fixed in the short term also.

Technology solutions that are well designed, strategically fit, and integrated fully, offer business the opportunity to move to new dimensions. 

How are your technology solutions being managed?

Performance Management Systems – Do they work?

How often do we stop to review how effective our performance management systems are and if in fact they have a causal relationship with high performance or in fact whether it’s part of our natural state for some people to perform better than others.

There has been some great behavioural research done in the last 50 years that doesn’t appear to have made its way into the mainstream corporate workplace.  Dan Pink the author of “A Whole New Mind” has put a great read together around what really motivates us to perform and shows that some performance management frameworks in fact drive us to lose our innovation and de-motivate us from performing at our peak.

Some of the experiments performed showed that in fact when people were offered monetary reward to complete a puzzle performed poorly compared to the test group which completed the puzzle out of what appeared to be pure interest and problem solving.

Then take the story of the encyclopaedia. In 1995 if we had been able to gaze in to the future we would not have predicted that Wikipedia would have outlasted MSN Encarta. Think about it – Microsoft hired professional writers and editors that were overseen by competent project managers. Microsoft was a very successful company and I am sure most of us would have predicted that their encyclopaedia was here to stay. Yet Wikipedia has outlasted it, Wikipedia, where no-one is getting paid to update the content, there is no-one project managing the work being done. People are giving up their own free time – some 20-30 hours a week - to update the content and it’s free to all of us!

What is going on in both of these cases?  The inherent view of human motivation where reward produces performance cannot explain this! Perhaps instead an inherent motivation in all of us to have fun, contribute, to innovate, to problem solve or, as Dan Pink puts it, we are “intrinsically motivated purpose maximisers” not only “extrinsically motivated profit maximisers.”

Does that mean we don’t have to pay people? Unfortunately it is not quite that simple. The starting place for building good relationships between employees and employers in the workplace has to address what we call base needs. This requires that our need for housing, clothes and food are taken care of as part of our base salary.  Any extras or perks should be incorporated into those salary arrangements.  The point at which it becomes interesting – and sometimes complicated – is when performance management systems with potential for bonuses are introduced. Do these systems actually produce better performance leading to greater business results?

There is definitely some great research that shows that for repetitive tasks such as production lines in factories money will motivate people to perform faster and be a lot more productive. However, there is a lot of research  - as demonstrated in the stories above -  showing that if the job you are doing or getting your people to do requires problem solving and innovative thinking (most corporate jobs nowadays) extra bonuses and performance pays can actually have a negative effect on innovation and business results

Take the experiment done by a quartet of Economists performed to understand how much reward was needed to increase productivity and performance. The experiment was conducted with three groups; the first group earned a small reward equal to a day’s pay for reaching their performance targets, the second group received two weeks pay and the third group nearly 5 months pay. So what happened? Did the size of the reward impact the productivity? Yes it did, but not as we would expect! The medium reward group never outperformed those with the small reward and even more surprising, those with the largest reward fared worst of all! Their performance lagged behind the other groups in every way.

There are many many experiments conducted by Economists, Psychologists and even Art Directors that show that we are less creative and appear to be less motivated to produce our best work when we are paid incentives to complete it.

It’s worth thinking about for your organisation. Is your performance management system motivating people to get the best out of them or in fact is it producing less than the best possible results? When did you last review it? It might be worth taking a closer look and/or doing some research to see if it really is helping your business achieve the desired results.

The Ripple Effect of Communication

As we all know communication is critical to an organisation.  What we often don’t understand though is how well that communication is being sent and received!   We often use the analogy of the ripple effect when we explain the impacts of communication.  Most people are familiar with the ripple effect that emerges from a pebble being dropped in a pond.  Well this is the same with communication.  How well do you understand what type of ripple is being sent out when you communicate and how well it is being received?

There are many different styles of communication. People wanting to communicate a need to get something done communicate on a scale from very direct to very indirect. There is a range of styles and often when people are communicating in different styles they tend to misinterpret or talk past each other.

Take for example a couple at home and one is communicating to the other about the need to get some milk. A very informative or indirect person (who is seeking buy in) might say “we are out of milk” and a very direct person (who is all about issuing directives and timely-task accomplishment) would say “get some milk”. When you look at these two extremes you can see the possibility for problems. The indirect person may find the direct person incredibly bossy and impolite and the direct person might find the indirect person way to vague and manipulative (“why don’t they just say what they mean?”).

So when thinking about the communication going on in your workplace - could there be a mismatch in styles? If you are thinking about your workplace- what is your style of communication? Are you more direct or more informing? What are your colleagues or your team members’ styles?  Have you ever found out how your communication style is received/viewed by others? Most of us have heard the adage “message received is message perceived” – so what are people taking from your communication style?

We believe communication is the life blood of an organisation and we also believe it’s the lifeblood of a good healthy relationship – personal or professional. Many times when coaching people we have come across what is merely a mis-communication that has ended up ruining a relationship or creating huge stress in the business.

Of course communication is far more than the words we use, it’s the tone, the body language, the eye movement – in fact the current thinking suggests that up to 95% of what we communicate is not the words we use but in the delivery tone, body language and energy we are giving out.

If you do use a more direct form of communication you could be implying a relationship of “one-up” or in other words you do what I tell you to do because I am the boss, the parent etc. This may be appropriate but there may be opportunities even in those relationships to communicate in more of an informing way that implies a relationship of equality! Of course the informing style can also communicate to someone that you know more than I do or I have no power in this situation.

If you do spend time reflecting on your natural style of communication – don’t confuse the relationship-defining aspects of your role(s) with what comes naturally for you as a person.

To become really good at communicating a message the use of storytelling can be incredibly powerful. Our ancestors used verbal storytelling to pass down the stories, myths, and legends and to teach others the way of their tribes. Look for more on storytelling in one of our future newsletters.

Want to read more? Some good references you can read to gain a deeper understanding of communication are

Understanding yourself and others: An Introduction to Interaction Styles, Linda Berens

How to Win Friends & Influence People, Dale Carnegie

A Quantum View of Change Management

Each year there are more and more views on the “right” way to carry out change management in organisations.  For the last few centuries we have seen the Newtonian view of the world take centre stage.  This is viewing the business as a machine that can be separated into parts and managed accordingly.

More recently the systems thinking approach was developed. This approach sees the organisation as an entire system with many parts that make up the whole. Each part requires focus and attention and all parts are interdependent and cyclically linked.

We believe there is now an even broader and deeper perspective that needs to be considered.  This is the Quantum multi-dimensional view of the world that takes the level of interconnectedness and interdependence to a much more critical level.  Quantum physics has progressed the idea of interconnectedness over the last 80 years. It promotes a perspective or world view of seeing the whole (business) as an integrated, multidimensional and deeply interconnected organism. The impacts of this are profound and far reaching. Generally speaking you cannot separate an organism -a living creature - into many pieces and then put it back together hoping it all fits properly!

Using the Quantum view of the world we in fact need to move from our paradigm of linear thinking and cause and effect to one of multi dimensional interconnectedness - one where many dimensions are impacted instantaneously.  When we look at change management in this light it is evident that change will need to be managed differently.

There are many papers and theories written on change management and it is well known that most change programs fail.  A 20 year study of change programs shows that 10% of them have a negative impact on an organisation, 53% no impact and 37% a positive impact (UNSW, Managing Change,2009).  When we take a quantum view of change management we can now begin to understand more fully why this has been happening.

Clients often ask us our view on the best time to bring in a change management strategy.  The answer to this question is simple ... as soon as you think you want to change something you need to be working on the change management component.  We often see major transformational programs take the Newtonian view, where they work in parts, often in isolation to each other.  They work across a very linear project plan, which does not allow for flexibility of change as the environment changes.

Where systems thinking is already introduced in an organisation, we often see a far more integrated approach to change management. Generally though, change is still managed in a very linear fashion.  There is often a set project plan that may cover all aspects of the change and this is essential. However once the change has been integrated and perhaps a review completed, the project team will leave, hoping that the embedding has worked.  How often do we see that 12 months later the change has failed and people have reverted to the old way of doing things?

Taking a Quantum view all aspects of the change program would be managed together and dynamically.  This would include reviewing and managing the total system the program was running within, as well as a review of the impact on people and culture.  The program would be strongly supported with a governance structure that is dynamic and flexible and allows for rapid changes and decisions to be made to support the new system.  In the past we would have seen days if not weeks go by before decisions could be made around change.  By then everything has continued to move.  What we highlight here is that not only does the change management need to be dynamic but all aspects related to the change do as well.  This includes such things as governance and decision making.

Take the example of the delivery of a new process.  The quantum approach would not only develop the process but would also assess, manage and monitor any impact on the people, culture and system it operates within. This approach takes in the total picture and as any environmental changes occur (as they tend to daily in businesses) these are also re-assessed as part of the whole. The system is dynamic and ensures rapid changes can be made as necessary without being cumbersome.   If the change is not managed from a dynamic perspective we would find that the process that is embedded will not match the environment that it needs to operate within.  This is why all elements need to be managed together.

We believe strong change management of the future will be those that can take a quantum view and have systems in place that support the multi-dimensional and interconnected nature of the business they are working within.

Health vs Wealth - Building a Sustainable Future

True Sustainability will only be gained through monitoring and managing the health of your business!  Businesses focusing purely on wealth will quickly find they are left behind!

For too long businesses have focussed purely on the wealth of their organisation.  While this is understandable when they are a business with shareholders who are expecting a strong return, a focus purely on wealth can miss critical aspects of deterioration within the business.

As we sit within the current climate, it is imperative that the rebuilding phase for many of our corporates includes a focus on their corporate health not just a review of strategies to rebuild wealth!

So what do we mean by business health and wealth?  Wealth for a business is its actual overall return from trading.  By today’s standards, this continues to be a primary measure of the success of the business.  Health however is not only measured by the business results but also includes what is happening at the people and cultural level.  It is the people and culture that contribute to the wealth of the business. 

Many would then argue that this is not new to business.  There are many articles around people and culture being critical to your business.  We do not disagree with this, however we are saying it is not enough!  We believe that health measures need to become a primary measure just as financial results are.  We also believe that to complete a survey once a year is not regular enough and that the measures being used are not broad enough. 

People and cultural measures in most major organisations continue to be secondary. They are measured or assessed annually at best.  Business misses a critical element of sustainability when these aspects are not monitored.  The reality is that wealth is an actual outcome of what the overall business is generating.  It is not a true measure of sustainability to simply review trends from financial results.  While these reviews show how an organisation is tracking financially, they do not take into account the people aspect – who and how are those results are generated? Is it sustainable?

A good way to understand this is to think of the business as a house.  It is important that before you build the house it has a solid foundation otherwise you will always be on shaky ground!

The foundation of business from a wealth perspective is its Capital, but from a health and sustainability perspective also includes its people – human capital  Both are absolutely critical to the overall success of the business.

Capital from a financial perspective is well understood but how well understood is the importance of Human Capital?  If we consider again that human capital is the foundation of our business, then how well and how often are we checking that foundation?

If the foundation is slowly crumbling without our knowledge, we are missing vital signs that will significantly impact our overall performance. If your foundation is not strong it not only impacts your current performance but it impedes your ability to grow further.

To ensure a clear and rounded view of what is happening at the foundation of your business, a number of aspects across people and culture need to be looked at.  They can be broadly categorised as:

• capability
• clarity
• motivation; and a
• unified sense of purpose. 

These aspects are critical and are interdependent.    For example if capability is shown to be deteriorating, over time it will impact each of the other areas also. 

By reviewing the foundation of the business at a deeper and broader level we are able to complete an overall health assessment.  The assessment highlights any areas which require remedial action. This will  ensure that a strong platform is maintained. Once the business is in a strong and healthy state it is then ready for further growth strategies to be put in place.  Until this level is reached the ability of the business to reach its true potential is limited.  Regular monitoring of the health of the business enables it to detect early deterioration and remedy accordingly.

So do we now change and put all our focus on people and culture?  No, but we do need to make these measures primary measures and report on them as regularly as we do finance.

The leading businesses of this century will be those that have sustainable results gained through monitoring their Corporate Health as well as their Corporate Wealth!