The double folly of life inside organisations and how we might end it
Most organisations put only a fraction of their capacity to productive use. People work hard, but in more and more organisations it seems ever more difficult to get things done.
Bureaucracy and complexity take its toll and require extraordinary levels of effort for rather ordinary results. No wonder so many of us, as employees and as customers, are disillusioned with the corporate world. That’s folly #1 and I find it heartbreaking.
Folly #2 may be even more heartbreaking. In most cases, we know exactly what the underlying problem is. We also know how to solve it. Yet we don’t, because we’re too busy and implicitly choose to spend all our energy on maintaining the status quo. What if there were a way out if this trap?
The symptoms of folly #1
Take almost any organisation and you are likely find one or more of these:
Organisational overload
There’s just too much going on: too many initiatives, projects and task forces. Few of them properly staffed and so they are bound to deliver poor results. Missed milestones demand re-planning and cause delays in other projects. Then new task forces are brought to life to correct delays and quality problems. All of which of course only adds to an already overloaded, stressed organisation.
Personal overload
A direct consequence is personal overload: long days, too many meetings, not enough time to think. You run around all day only to watch your unread email, to do list and unchecked voice messages grow in number and add to your stress level. People throughout the organisation are simply exhausted.
Silos and politics
Overload only accelerates a tendency already built into many organisations: to operate in silos. When resources are scarce you fight for your fair share. The big picture disappears, departments and teams begin to optimise for themselves. Decision making moves to the political arena, the level of conflict rises. The ability to assign blame becomes more important than actually solving problems. Trust and commitment suffer.
Pre-occupation with efficiency
When despite all the hard work you don’t get much done, it seems imperative to become more efficient. So organisations cut cost, outsource, implement best practice and streamline processes. People (customers and employees) become an afterthought and your ability to get things done is further undermined.
Pre-occupation with looking good
When you don’t achieve much, you at least want to make sure it’s not obvious. So you begin to spend time and energy on appearance. Results are artificially inflated, vanity measures become more important than true measures of value and progress.
When that doesn’t work you try something more dramatic: a new organisation structure, a re-branding, a new digital strategy. Or you engage in M&A from a “position of strength”. Actually creating value definitely becomes an afterthought.
The consequences and a flawed response
The consequences are seen in poor business results. Growth, profitability, customer satisfaction, market share and innovation are likely to suffer.
The consequences can also be seen in poor people results. As in low engagement, high turnover and difficulty to attract talent.
The typical response is to focus on these unsatisfactory results and launch an “improvement” programme, aimed at directly improving, eg, revenue growth, customer satisfaction or employee engagement.
There’s two problems with this. First, that’s now one more initiative added to an already overloaded organisation. Second, and more important, it does not address root causes. You’re still operating in folly #1 mode.
So what are the possible root causes?
The 9 possible root causes
Of course, organisations are human systems and as such are a complex matter. Easy answers are mostly an illusion. Still, in my work with clients, I have found that root causes can almost always be tracked down to one ore more of the following.
#1 Unclear purpose
Many organisations fail to answer a simple question convincingly: why do we exist? A good purpose defines an organisations’s reason for being in terms of a contribution to the outside world. It’s not about making money (although you need that to be able to fulfill your purpose). Purpose provides meaning to your team and is indispensable to remain focused.
#2 Fuzzy strategy
Too often what goes for strategy is wishful thinking, lofty goals or “motherhood and apple pie” mission statements. None of it is helpful to shape daily operational reality. Good strategy makes real choices and acknowledges you can’t be everything to everyone. Good strategy is helpful in day-to-day decision making. It is understood and brought to life by everyone in the organisation and as such has execution built-in.
#3 Accidental culture and values
Culture and its embedded values are an important driver of behaviour. Too often, though, culture emerges accidentally as a result of what kind of people you hire, how you make decisions or what kinds of systems you have in place. The resulting culture may help you achieve your goals — or it may not. While culture is of course difficult to build, let alone change, that does not mean that leaving it to chance is a good choice.
#4 An organisational design that gets in the way
Too often, an organisation’s design gets in the way. It’s not just that the typical design is too complex, too rigid or too hierarchical. It’s more subtle than that. It may undermine performance by inhibiting collaboration, slowing down decision making, killing accountability, diverting energy from value creation to bureaucracy or by making organisational learning virtually impossible.
#5 Dysfunctional management teams
Senior leadership teams are often TINOs — teams in name only. Besides reporting to the CEO, members of the senior team often share little in common. They represent their individual functions and follow their own agendas. It is very rare to find strong, cohesive teams of senior leaders who trust each other, work together to solve common problems and hold each other accountable. Yet without it, it’s almost impossible to eliminate the other root causes.
#6 Inability to change
Most organisations find it very difficult to renew themselves and respond to changes in their environment. Often it takes them too long to even see the need for change. And once they see it, they put in place massive transformation programs which are good at only two things: exhausting the organisation even more and failing to achieve their goals.
#7 Counter-productive people systems
I find it amazing how often an organisation’s people systems help achieve the exact opposite of explicitly stated objectives. You want teamwork but reward individual performance. You want operational excellence but reward fire fighting and heroic efforts. You want innovation but punish failure. You want a flat organisation but celebrate status. You want values but fail to fire people who trample on them.
#8 Ineffective or even harmful support systems
From budgeting to KPIs, from making investment decisions to reporting. Often times these activities absorb an incredible amount of time and energy. Often without any real benefits: think of a management dashboard of 87 KPIs that triggers lots of discussion but almost never action. Sometimes even doing real harm: such as measuring success in terms of capital efficiency which leads to short termism and lack of innovation. A problem of epidemic proportion in large organisations.
#9 Flawed communication and information flows
We’re in the information age, yet communication and information flows remain a key problem in most organisations. There’s leaders who don’t communicate at all, and then complain that nobody gets their brilliant ideas. There’s Powerpoint all over the place but not much is being said and even less is being acted upon. There’s information actively being withheld because of its “sensitive” nature, when it could be so useful in the hands of employees to make better decisions. And there’s information that’s used for the wrong purposes, eg, using sales team performance data to punish underperforming teams instead of having everybody learn from the top performing teams. Room for improvement is abundant. Perhaps ironically, most organisations at the same time complain about information overload as they suffer from not having the right information in the right hands at the right time.
Why the problems persist: folly #2
At first glance, it seems easy, doesn’t it? Fix the root causes! After all, isn’t that what senior leaders are paid to do? Build and run organisations that achieve great results?
It’s not a coincidence that the 9 root causes correspond to what I call the 9 essential disciplines of management: Purpose, Strategy, Culture, Organisation Design, Teams, Change, People Systems, Support Systems and Communication.
These are the levers to create a healthy, high-performance organisation. It’s what senior leaders should spend most of their time on. It’s where they can make their biggest contributions. When they get these things right, the organisation thrives and performance goes through the roof.
Most senior execs I meet not only understand this but are also perfectly capable, with a little help, of working on these levers.
So why don’t they do it? First, like everybody else (and maybe even more so), they suffer from personal overload. They’re so busy and immersed in the day-to-day, there’s simply not enough time to even think of more fundamental topics. One of the most common desires I hear from senior leaders is “I wish I had more time to think and work more strategically”.
Second, these things are hard to do, take time to get right and even more time to ultimately show up in better business results. Problem is that senior leaders in most organisations (especially in public companies) are under an awful lot of pressure to deliver results tomorrow. And they’re human, too. In that situation, a program to upgrade strategy, organisation design and people systems with the promise to deliver first results in 18 months simply does not sound like a very attractive option. Even if they know it’s the right thing to do.
We might bemoan this, but at the same time have to accept the fact that this is a real problem, for real people.
So, if we can’t get better results without improving underlying organisational health but don’t have the time and resources to do so, what can we do? How might we break the vicious circle?
One way is to work on both at the same time but do so on smaller scale and in short cycles. Enter performance-driven, lean change.
Performance-driven, lean change to the rescue
We start with a performance goal such as improving quality or improving customer satisfaction. Then we work out a few different options for how to achieve our goal. But before we chose one and get on implementing it, we also look at the root cause categories (aka essential disciplines of management or levers of organisational health) and ask three questions:
- what barriers would currently get in the way of implementing these options?
- what catalysts could we build that would make implementing these options easier, faster, or both?
- for both categories above, barriers and catalysts, what small changes could we make that stack the deck in our favour as we start implementing our options?
Like this, we tie improvements in organisational health to working on specific performance goals. We don’t launch a massive organisational health initiative, but work on just a few, small changes that we believe will make a difference in reaching specific performance goals — goals that we pursue anyway.
In order to gain speed, we start small. Perhaps we start with a specific product line, a specific geographical market or just one of our divisions.
If it works, we can later scale it to the whole organisation. If it doesn’t, we’ll learn from it without having bothered too many people.
Of course we can further increase speed and flexibility by running these “prototypes” as agile, iterative projects rather than the more traditional, linear sort.
They key is, that we can see results quickly: both in terms of performance as well as in terms of health — and with minimal extra burden on an already stretched organisation.
Yes, the improvements in health may be small. Many barriers may remain intact and many more catalysts could potentially be built. But here’s the thing: it’s an improvement. And from the current state many organisations find themselves in, even small improvements can make a difference.
What’s more, it’s quite easy to repeat this cycle. Over many cycles, many small improvements add up to big improvements. And before you know it, you may have created a continuous improvement machine that’s hard to stop. When change becomes continuous in this way, you have built it into the DNA of your organisation — not because you’ve a had a grandiose plan to do so, but because you’ve let it happen. And that’s the ultimate sign of health: when an organism is strong enough to heal itself and becomes stronger from the inside.
We might just be able leave the madness behind us. All it takes is a first step. And then another. And then another…
Raymond Hofmann is an independent management designer and advisor. He works with clients to identify and remove barriers to high performance and implement better management models.
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