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Chapter 4: Organizational Transformation
In today's working environment everyone is having to recognize the need to embrace change. Change is everywhere. Having to work globally, virtually and in the face of new competition, leaders and individual workers are having to cope with new challenges daily. Helping people to cope with change and be flexible and resilient is an important part of any organization development and personal development strategy. Equally important is recognizing the need for organizations to embrace change within a context of constant improvement. Organizations and their management teams have responsibilities; they need to strive towards becoming employers of choice and taking a position of responsibility within their community. One way of doing this is to focus on developing an employer brand.
Developing An Employer Brand
'Branding' as a generic term is often assumed to belong to the marketing function. However increasingly organizations are waking up to the recognition that directly or indirectly most brand promises are delivered by people not products. Pick up any business magazine that talks about 'branding' and it is likely that it will be discussing the broader aspect of organizational, corporate or employer branding. There is also increasing emphasis on becoming an 'employer of choice'.
What is interesting is how this type of branding is defined. Terms like 'corporate branding', 'organizations as brands' and more recently 'employer branding' are different descriptors of basically the same process. What is clearly being recognized is that having strong consumer brands is not enough; organizations need to broaden their focus to consider other aspects such as:
people;
products/services;
processes/systems;
premises/environment.
'Branding' an organization means focusing on the key components and encouraging consistency across all functions. As with any piece of machinery, one part cannot operate without the other. Cross-functional working breaks down the traditional divisions between marketing, sales, distribution, manufacturing and HR.
The process links new service/product development and the development of employees. It links the distribution chain with the customer. It builds relationships not just agreements with external suppliers. It takes the most senior managers and involves them in the front line of the business. It puts customers in the center and heart of the organization and builds everything else around them.
The organization doesn't just service its customers; they become its lifeblood. People do not just make promises, but they deliver, not once but over and over again, consistently developing better and better service. The organization differentiates itself in the market place through its people, its products, its processes and its premises.
In order to develop an employer /organization brand it is important to articulate the image and vision of the future and to invite all employees to unite behind it.
This 'branding' process normally has a number of components (see Figure 4.1). In practice this means identifying the following:
Our vision (where we want to be). This must be a real statement that people can easily remember and identify with, not just words on a wall.
Our values (what we stand for - our integrity). If these are not daily demonstrated behaviourally by everyone in the organization they are worthless.
Standards and practices (what we demonstrate daily). This is the way we do things, the way our performance is measured; it applies to everyone and ensures consistency.
Working in partnership (the way forward). No person or organization can function for long alone. Working with people, helping others to be successful, building pride and self-esteem and sharing success are all important components. Equally, building close links with suppliers, encouraging the media with positive news and building links with your local community are positive partnership actions.
Showing our competitors (best practice). Be proud of your achievements, and demonstrate best practice. Be the organization that others benchmark against. This will have internal spin-offs for morale.
Measuring our success (real measures, which everyone recognizes). Never forget where you started; realize how much progress has been made.
Rewarding performance (based on success). Not just money, but personal recognition, which is best demonstrated little and often.
Measuring performance (be realistic). Not 'We promise to do our best' but 'We promise to respond within 14 days, on time, and to meet identified standards.'
Giving and receiving feedback (positive and constructive). From the bottom to the top of the organization (and vice versa), open up channels of communication.
Review and progress (continuously improving). Ask 'What have we learnt?' and 'Where can we innovate?' To prevent a distorted view of the organization, the process should be seamless from the front to the back and from the top to the bottom of the organization.
Organizational Brand Audit
Here is a way of translating the brand into day-to-day actions by identifying answers to the following:
Organizational objectives:
How are objectives developed and transmitted to employees?
How are the objectives measured?
What business planning processes are used?
Recruitment:
What messages are conveyed to potential employees?
What do our recruitment advertisements say about the organization?
How are unsuccessful applicants handled?
Induction:
What process is used to induct employees?
How is the company image conveyed? Is it easy to understand and assimilate?
How is ongoing induction managed? Is there the opportunity to test understanding of corporate values?
Performance review:
Are job roles clearly defined?
Have competencies been defined for the various roles?
Are line managers trained to assess?
Employee development:
Is there a clear employee development programme?
Does the training function liaise with personnel/marketing?
Is the achievement of competency rewarded in pay or benefits?
Are managers trained to coach and facilitate so that they can cascade new skills through to their team?
Do employees understand that they are responsible for the delivery of the brand promises?
Communications:
Advertising/PR:
Is the best use being made of marketing budgets?
Is there a systematic review of last year's advertising?
Are the results measured?
Do our employees deliver the promises that we make to our customers?
Marketing:
Is the marketing strategy regularly reviewed and measured against outcomes?
Who is responsible for briefing marketing on the HR/training/ personnel issues and vice versa?
Premises:
Does the building reflect the brand?
How are visitors greeted and received?
When customers/suppliers arrive are the organization's values clearly presented?
Quality monitoring:
What systems are in place to monitor and evaluate the success of the business?
If standards are set, how are they measured?
Is responsibility for quality delegated?
Does each employee feel ownership for quality measures?
Having identified answers to these questions you should be able to put together an action plan, which you can share and discuss with the rest of your colleagues in your organization. This is also something that could be used as part of a climate audit, and the results could form part of the agenda at a workshop for your senior executives.
When asked to describe the brand of the organization, there should be a common belief based on shared vision, goals, aspirations, behaviour and practice.
Everyone who is touched by your organization brand should share these common perceptions. Importantly this is not just an internal process. In the broader context of employer branding it means the way organizations position themselves externally as well as internally. This will have a particular relevance in the way organizations promote themselves in the recruitment market place or in supplier contracts.
The most fundamental part of the process is built on behaviours, based on self-esteem, confidence and pride in the organization. People must take responsibility for meeting challenges and providing innovative and creative solutions to problems. They will then rise above the mundane and gain tremendous personal and team satisfaction from providing excellent customer service.
These concepts are not fundamentally new. What is different is gaining senior-level commitment and linking all the stages together in a holistic way. By bringing all the initiatives together under an organization's 'brand concept', not only is there more coherence but there's a constant benchmark. All employees should ask the question, 'Does this action, this behaviour, this response really reflect the brand?', and in doing so they create an organizational conscience so powerful that organizational success has to follow.
A strong brand image is as relevant to an organization as it is to a product or service. The people offer behind the product has to be consistent with the brand and the commitment has to be reflected from the top of the organization to the newest recruit.
Importantly if you and your organization really want to be seen as a great organization, you need to create your own template of excellence and rigorously apply it, not just once in a while but every minute of every hour in every day.
The businesses that will succeed in the 21st century will recognize that there is a need to do things differently. Value-based leadership, emotional intelligence (EI) and intuition are no longer seen as being outside of the corporate agenda, but are to be understood as an important part of individual and organizational development.
Do World Class Organizations Really Exist?
In our research for this resource one of the enduring facts to emerge was that there is no magic formula to enable you to become world class. If we review any of the 'great' companies we will find that each has had to adapt to changing circumstances. Sometimes this was done proactively; however, more often it was as a reactive response to an increased threat, which the company had first ignored.
This is dramatically illustrated by Jim Utterbuck, author of Mastering the Dynamics of Invention, quoted in Tom Peters, The Circle of Innovation: 'Time after time the industry leader reacts to the threat of change by polishing yesterday's apple.' This was further endorsed by Robert Heller in his book In Search of European Excellence:
The call for cultural change is resounding among the bastions of big European business...
Companies like Daimler-Benz evolved a culture brilliantly suited to circumstances, common to most companies until the 1960s that will never be seen again. Market shares used to vary little over time; competition was domestic and played largely by the rules. You made money by maximizing production runs to get the longest possible service from capital equipment and design expenditure. This meant extending product life spans and production technology to the limit.
Economies of scale, rather than economies of method, was the target of top managements. To obtain those economies, centralized control was essential. Individual businesses and brands existed mostly in name. The corporation itself was the real business, and it created a whole caste of managers who served only management itself.
Heller then lists six key factors that today's organizations have to face, which are summarized as follows:
Volatile market shares, including fluctuating segments within markets.
Global competition, including new players who break all the rules.
Variety in production including short runs, marked differentiation, briefer life cycles.
Rapid changes in technology of product and process, generating sudden and decisive shifts in competitive advantage.
Changing demands of customers have dominated production and altered the nature of selling; distribution has become a crucial component in the ultimate price to customers.
Economies of method and exploitation of powerful 'brands' are the joint keys to superior profitability.
Charles Handy in Beyond Certainty also lists similar changes:
I sense we now stand at the top of the pass. Spread out below is a vast expanse, with no roads through it. We can, I suppose, each take our individual buggies and drive off alone into the night for good or ill. Worse we can jump with some friends into a tank and forge together through the future, and damnation to the rest. Better it would be, I am now sure to build roads on which we can all travel, but that means giving up some personal gain so that all may benefit more in the end. We won't do that, I fear, in our society, in our cities or organizations, unless we have a better idea of what the journey is all about. The Meaning of Life comes to the top of the agenda again, even if organizations want to call their bit of it a Vision Statement... The future for us too is in our own place, if we can learn to see it differently, and are 'strong in will' to change it.
Against this backdrop organizations that want to become world class need to be fleet of foot, able to flex and adapt to changing circumstances. Established routines, corporate hierarchies, traditional human resource management methods are all being challenged. Senior management who have grown up with their organizations still resist change; CEOs and their executives react to adversity by going 'too tight', clinging to past successes rather than recognizing the need to build on the past and to create new ways of building for the future.
One of the key features in today's corporate climate is the opportunity that exists for new and innovative organizations to ascend quickly into a prominence as high as that of any of the traditional 'great' organizations. Jack Welch of General Electric once said, 'Great leaders create a vision, articulate that vision, passionately own that vision and relentlessly drive it to completion.'
In our research we found that the challenges remain very much the same. We still need great leaders, and organizations still struggle to create the climate and culture where change flourishes.
How To Become Great
Key characteristics:
Know where you are going; understand the big picture; develop an over-arching plan.
Temper this with compassion - recognize your position in the community and address your corporate social responsibility.
Be entrepreneurial - seize opportunities to do business and make money.
Have a desire and drive to succeed - be energized, committed.
Recognize and respect your employees' strengths, talents and emotional intelligence; look to identify the great leaders.
Be positive, optimistic; overcome setbacks.
Be imaginative, inventive, curious; what shall we do next?
Be able to learn from the past, reinvent, regenerate, draw from what is good and discard what doesn't work.
Benchmark, measure and celebrate success.
Network and partner with others.
Leaders Who Coach
How many great leaders do you know? One very real issue for organizations is identifying leaders who have the capacity to lead, motivate and stimulate the workforce of an organization. Leading an organization is no simple task, not least because of the issue of needing to satisfy the business drivers as well as the people drivers.
Daniel Goleman's book The New Leaders emphasizes this point and some of the challenges faced by leaders in today's business environment:
At 'built to last' companies, which have thrived over decades, the ongoing development of leadership marks a cultural strength as well as the key to continued business success. In a time when more and more companies are finding it difficult to retain the most talented and promising employees, those companies that provide their people nourishing development experiences are more successful in creating loyal employees. In short the coaching style may not scream 'bottom-line results' but, in a surprising indirect way, it delivers them.
What is the Impact of Leadership Style on the Retention of Talent?
In Goleman's earlier book Working with Emotional Intelligence he quotes a landmark study of top executives who have derailed. The two most common traits of those who failed were:
Rigidity: They were unable to adapt their style to changes in the organisational culture, or they were unable to take in or respond to feedback about traits they needed to change, or improve. They couldn't listen, or learn.
Poor relationships: The single most frequently mentioned factor; being too harshly critical, insensitive, or demanding, so that they alienated those they worked with.
He contrasted this with star performers: 'Superior performers intentionally seek out feedback, they want to hear how others perceive them, realising that this is valuable information. That may also be part of the reason people who are self-aware are better performers. Presumably their self-awareness helps them in a process of continuous improvement.' Knowing their strengths and weaknesses and approaching their work accordingly was a competence found in virtually all star performers in a study of several hundred 'knowledge workers' carried out by Carnegie-Mellon University. The authors of the study stated, 'Stars know themselves well.'
Goleman further develops this theme in The New Leaders, suggesting that the singular talent that set the most successful CEOs apart from others turned out to be a critical mass of emotional intelligence competencies. He suggests that the most successful CEOs spent more time coaching their senior executives, developing them as collaborators and cultivating personal relationships with them. From a business perspective, he suggests that those companies where the CEO exhibited EI strengths were the ones where profits and sustained growth were highest, significantly higher than for companies where the CEOs lacked those strengths. He also cites the following research:
In a tight labor market, when people have the ability to get an equivalent job easily, those with bad bosses are four times more likely to leave than those who appreciated the leader that they worked for... Interviews with 2 million employees at 700 American companies found that what determines how long employees stay - and how productive they are - is the quality of their relationship with their immediate boss. 'People join companies and leave managers' observed Marcus Buckingham of the Gallup Organization who analysed the data.
Traditionally organizations have struggled with innovative and creative people, yet look what James Dyson, Ricardo Semler, Richard Branson and Julian Richer have done for their people, their customers and their businesses. Another question in the Managing the Mavericks research was: 'If you could change one aspect of organizations that would encourage the nurturing of talent, what would you recommend?' Here is a sample of the responses:
'Trust people.'
'Senior managers being prepared to step outside their conventional modus operandi and/or being prepared to tolerate and/or support others to do so.'
'Leadership needs to drive the harnessing of human talent - most companies don't have leaders that understand how to do this.'
'Flexibility - understanding that following the "way we do things here" is a recipe for stagnation.'
'Recognition (not necessarily reward) for the value they deliver.'
'More honest feedback on a regular basis, to encourage and reinforce positive risk taking.'
'Let people work when and where they think they can offer the greatest potential. It always amazes me that more companies do not let their staff work from home now and again. So much more can be achieved and when they are away from the office and the confines of "its" thinking they can open their mind to thinking in other ways.'
'I can tell from my personal experience, the one thing that the organization must do to nurture talent is to provide challenge to the individual, continuous challenge of the individual that stretches him/her to their wits' end is the best "mantra" to nurture talent in the organization.'
'Keep management systems simple - the flow chart should fit on one side of A4 in a minimum 12-point font!'
'Reward on the basis of contribution to ideas and results rather than on grade/project profile/targets alone.'
'Values - which is a form of belief. If you believe your people are creative, then guess what? You act that way. Then guess what? They act that way.'
'Not overloading people with routine or administrative work. Giving them time to dream.'
In a talent management survey carried out as part of the research for Talent Management, when respondents were asked what support they wanted from a line manager there was remarkable similarity in their responses.
Open and honest feedback was high on the agenda, and there was an important link between freedom to operate and clear goals and expectations. Building of relationships between individuals and their manager is also important, particularly the nature of that relationship. Words used were 'ability to listen, to coach, to offer support coupled with loyalty, trust and integrity'. Alignment of values was also important. One very evocative statement summed up the thoughts of many: 'Foster an environment in which individuals are valued, talent is exposed, nurtured and allowed to fly.'
What is interesting is the balance between freedom and systems. One of the very real issues in large organizations is tracking people. Very often individuals feel that their talents go unnoticed. Equally there are very real concerns that the middle management layer hides and diffuses the impact of real talent. This frustrates both senior management despairing of the lack of initiative and potential within their organization and those new and embryonic talents that get held back because their views may be different from the accepted norm. This was echoed by one of the respondents who recognized that perhaps he hadn't shouted loudly enough - 'my reluctance to shout about my talents means that nobody notices'. What he was looking for was 'real appreciation of my worth by people who are interested in me'.
Equally the importance of ongoing conversations was highlighted: 'Clarity around understanding expectations of individuals and matching these to organizational requirements and having a "real" conversation about this.'
Leaders who coach naturally have an immense contribution to make, and not just in their day-to-day interaction with others, but the more senior they are the more influence they will have on the climate and culture of the overall organization.
Advice for CEOs
Another question asked as part of the research for Managing the Mavericks was 'What advice would you have for CEOs in terms of nurturing talent?' The common advice to CEOs was as follows:
Get close to your people; give commitment; follow through; don't give out mixed messages; allow communication to come up through middle management, but actively seek it; don't allow it to be changed and modified by those who do not want others to hear.
Use your people; they are your greatest asset; they are the lifeblood of your organization; much innovation can be generated within; light the candles; encourage the 'speak-up' culture for good or bad. Encourage honest feedback; develop real action from their views; don't ever just take it and do nothing; be seen to respond. Some CEOs find it easier to stick with what is known, rather than attempt to convince long-serving people of the need to change. Some executives are daunted by the size of the task, and the speed of change; some simply hope that, if they ignore it, by some miracle the market will change and the problem will go away.
Innovative organizations do not waste time polishing yesterday's apple; instead they are searching for the apple of the future. Be proud of your achievements; share the excellence and move ahead again.
What Is The Best Way Of Managing Talent?
Senior management are recognizing that their talent bank will be greatly depleted if they do not help people fulfil their potential.
Fundamentally talent management needs attention to make it happen. It also needs a holistic approach. As with customer service, quality standards and health and safety, you cannot just give the responsibility to one person. There has to be a belief and a commitment from the CEO and the executive right through the line management to the newest recruit.
Individuals joining an organization need to feel that they are valued and that their contribution will make a difference. It is easy to say that this is happening, but far harder to have concrete evidence.
In any discussion about talent management or management of high potential it is important first to emphasize the development of all individuals. No organization should focus all its attention on developing only part of its human capital. What is important, however, is recognizing the needs of different individuals within its community.
Talent management is not about a special few people. Real talent management is about playing to everyone's strengths; it is about championing diversity and encouraging creativity and innovation, but above all it is working to create an environment where the organization buzzes with energy and people have a sparkle of anticipation when they enter their workplace.
Being responsible for creative and innovative ways of managing and growing talent can be exhilarating. Individuals also need nurturing. Like plants they should be free to grow, but they need nourishment and daily watering with positive feedback if they are to thrive.
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