Most organisations are overloaded with performance improvement initiatives. Recent research reveals that the average operating division is running 160 initiatives. We have just been contacted for help by one division of a major global bank that has 1600 initiatives running and they are out of control!
A recent study of ours illustrates the general position that we find in most companies.
We worked with a major global computer services company who had lost control of 173 major initiatives. Most initiatives were substantial with budgets measured in £ millions. We found that :
A review of the overall position showed that virtually no business benefits were likely to accrue for what was a significant investment Worse than this, we showed that they had resources sufficient to run just three initiatives in circumstances where they were trying to run 173. They are now making good progress with three initiatives!
Initiative overload is symptomatic of a much bigger problem which is worsening as Year 2000 bites, the Euro emerges and companies wake up to the power of technology to give them competitive advantage.
As organisations press for better performance, middle managers are the ‘meat in the sandwich’. Senior executives fire off initiatives. Very few are properly thought through with a clear view of business value, how it is to be measured & delivered and what the resource implications might be.
Many middle managers have neither the time not the skill to meet the challenges of both maintaining operational services and delivering performance improvement initiatives. They do their best but, in the final analysis, many seek refuge by trying to appear busy and by avoiding being accountable.
Corporate strategies are rarely thought through in detail or communicated effectively down through the organisation.
Initiatives are fired off without a clear articulation of business value or resource requirements. People believe that they have argued the case but the reality is that those that put the case together are rarely those who have to deliver it. As a consequence, problems of perception, do-ability and accountability arise.
Middle managers and operational staff are therefore caught in a situation where they :
This results in a great deal of E-Mail as people look for guidance, reassurance or for someone else to make a decision for them. In a confused situation where you are out of your depth and sustaining a high level of stress, it is very difficult to be a clear thinking risk taker. In these circumstances most people run for cover and E-Mail is a great place to hide. One study of ours for a major global airline showed that middle mangers were spending 25% of their time on E-Mail. The same study showed that 45% of their time was spent on non- productive activities.
This is terribly easy to achieve and takes about thirty minutes of clear thinking. Simply ask the question ‘where’s the value? What is it that will increase the value of my business or the value of me to my business? A set of business value drivers will emerge very fast. Example attached for a property services group down in Australia.
We now have a touch stone. If I want to take a course of action, I simply test it against my business value drivers. If I am moving one or more drivers I am more likely to be doing something valuable. If none of them are affected - forget it - I’m doing the wrong thing.
Once we have located something of value on which to expend our effort, we have to be able to measure it, otherwise we have no way of gauging our progress or effectiveness. Beware measuring the wrong things. Measure those things that contribute to ‘business value’ not those that are easy to measure . If the issue is well enough defined, it becomes almost mechanical to produce the right measures - but measure what you need not what you can!
By team I mean everyone on the organisation, or relevant subset.
Very little will happen unless the team speaks the same language, unless everyone understands how they are to contribute and if they have a means to signal up the chain of command either that they are in trouble and need help or that they have found a better way of doing things.
All of this is now possible but only with the help of technology. This is because organisations change so fast that paper based systems are unable to keep up. It is now possible (with the Lucidus Integrated Performance Measures System as used by a great many blue chip companies [sorry - don’t mean this to be a plug but it is only one of three systems available and came out a long way in front when reviewed by Information Week magazine]) to create a visual representation of the change issues, their relationships, implications, measures and responsibilities.
So - how does the team get engaged? Using the relevant technology, it becomes possible to build visual models of the change agenda starting with the business drivers and decomposing each one down to specific actions, projects or programmes. If small groups of people are used to build their bit, a common language emerges as they argue about alternative constructs and the labels we all put on things - we say the same words but we don’t always mean the same thing. Building the model forces a common understanding. (Lots of war stories here from our work with BP Chemicals if required - subject to their approval)
Now we have broken the ’change’ problem down into manageable chunks, we have a better chance of delivering some tangible benefits. The computer model helps because we can assign responsibilities, plans and actions and link them directly to our measures which, in turn, have been derived from our business value drivers. More importantly, as our understanding grows, those at the operational level can build alternative models and share them, risk free, with the boss. This means that we can build down from the top and up from the bottom. We should, of course, meet in the middle but we never do. We have therefore exposed the ‘gap of understanding, and can manage it shut.
Line managers have no time - the pressures are enormous. The conundrum is that they have to ‘own’ the change agenda. We therefore advocate what we call an innovation team. This is a highly skilled but small team who are free from the pressures of operational activity. Working with line managers, they locate potential business value and work up a proposition. This can then be tested by operational managers who will then own the programme of work to deliver the value. If they get stuck, the innovation team are there to help do some problem solving to keep the programme moving.
Summary It boils down to this. There has to be a minimum critical mass of the right activity to harness all the resources in an organisation and focus it on improving business value. All of the following things must be got right if the change agenda is to be met :
Miss any one of these issues and the chances of success are greatly reduced. Get them right and the impact on performance is remarkable. This is because most people want to perform well. Once the source of a great deal of frustration is removed, as it is if the change agenda is in place, the sense of well being and job satisfaction rises significantly. We measured this effect for one major corporation and found that members of staff at the operational level were delivering a full 25% more effort - beyond their contracted terms - without cost to the organisation
Do give me a call for any further clarification.