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Organizational Effectiveness

Survey Finds Optimism about Productivity, Issue 70

More than half of organizations were optimistic about the likelihood that their productivity would rise during the first half of 2009, found a survey conducted by the Institute for Corporate Productivity and HR.com. The January 2009 poll of 339 firms reported that 56% of respondents predicted their productivity would rise in the coming six months. Only 17% predicted a decrease; the remainder anticipated productivity would remain at the same level. Of those respondents predicting a rise in productivity, 51% expected it to rise to a moderate extent, 13% to a high extent and 1% to a very high extent, while 35% said the increase would likely be to a small or very small extent (Institute for Corporate Productivity, 2009 Productivity Pulse Survey Results, 2009).

Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue 70

Which Workplace Factors Engage Employees?, Issue 70

Where should firms invest their resources in order to best influence positive employee work behaviors? The 2008-09 version of a biennial survey by talent retention firm Employee Hold’em polled 2,368 full- and part-time workers age 18 or older in the U.S. workforce and determined several factors that affect employee engagement levels. The firm grouped the factors into those that may be strengths that a company can leverage and those that may warrant critical improvements. Two of the top factors that are strengths which a company can leverage and which had the most impact on employee engagement are a good fit between skills and interests and a good relationship with the supervisor. There were several factors that were deemed to be areas of critical improvement that also had high impact on employee engagement: whether employees enjoyed coming to work, their sense of personal accomplishment, whether they considered the firm highly ethical, perceived differences between what the employee and the company respected and valued, whether policies were carried out fairly and whether they felt valued as an employee (Employee Hold’em, “2008-09 Employee Hold’em,” 2008).

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Making Flex Work … Work, Issue 60

Flexible work arrangements can offer organizations such benefits as “increased productivity, lower employee turnover and lower absenteeism,” asserts a 2008 article in Strategic Direction. The publication notes that flexible arrangements include a variety of options, such as telecommuting, compressed workweeks, alternate work cycles, and the like. Key to making flexible arrangements work for both employees and employers is a clearly defined program that spells out how flexibility ties to corporate objectives. The process must be planned, says the article, and must have the benefit of organizational resources, including good communication about program availability and functionality. Along with improvements in productivity, the article credits flexible work approaches with supporting increased efficiency, lower costs in recruitment and retention, a positive impact on the work environment and improvements in worker loyalty and morale (“Flexible Working,” 2008).

IABC Profiles Effective Users of Social Networking, Issue 60

Organizational cultures that are geared to support the use of social media in internal communications are characterized by five attributes, according to researchers from the International Association of Business Communicators (IABC). A 2008 IABC survey of 2,500 of its members, along with 1,149 individuals who attended the organization’s 2007 conference, identified social networking applications as online technologies that enable people to interact on a conversational basis for the purposes of exchanging information and opinions. The five factors found to be predictors of organizational cultures amenable to social networking included the following:

o        transparency: willingness to share information internally;

o        control: the view that employees can be trusted to accomplish their work with minimal supervisory governance;

o        knowledge-sharing: individual workers’ willingness to share their know-how with others;

o        democratic orientation: a minimally hierarchical organizational view that all employees have valuable opinions to contribute;

o        conversational communication style: top-level leaders are open to two-way communication with employees and express value for worker input (Williams & Williams, “Adopting Social,” 2008, p. 35).



Changing to Cope with the Economy, Issue 59

"Business leaders are responding to the economic slowdown by launching more change programmes and spending more money on them," announced the Economist Intelligence Unit (EIU). The organization polled 607 senior leaders and noted that 57% cited a desire to improve their firms' flexibility in order to improve efficiency. The EIU, which conducted the survey for Celerant Consulting, noted that 58% of global executives said half or fewer of the organizational change initiatives they'd attempted over the past five years had been successful. For U.S. executives, the EIU pointed out, the average was worse: three-fourths of those leaders said that half or fewer of their changes had been successful (Economist Intelligence Unit, "Economy Won't Dampen," 2008).

Authors Say Customer Benefits Drive Company Growth, Issue 59

Organizations seeking to raise their profitability at the same time they're working to achieve growth should place their customers front and center, say Dominic Dodd and Ken Favaro, authors of The Three Tensions: Winning the Struggle to Perform Without Compromise. Dodd and Favaro maintain that companies have only a 40% probability that their growth in revenue or market share will also be profitable. The answer to the growth/profitability problem, they say, is centering on benefits for the reward that customers actually receive from choosing a firm's products or services. Emphasis on customer benefits also enables growth in a company's market, not simply in its share of the market. Finally, say Dodd and Favaro, expanding customer benefits helps an organization achieve a stronger presence in the market. Taken together, those several nuances of a customer-benefit approach are more likely to boost profits and growth concurrently (Johnson, "Boost Growth," 2008).


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To Boost Performance, Help Employees Succeed, Issue 58

"Companies seeking to improve their performance should focus more attention on their employees, giving them the tools, resources and autonomy they need to do their jobs well," declared a 2008 article on the Web site of the Economist Intelligence Unit. A 2007 survey conducted by the organization and sponsored by Microsoft polled 1,351 senior leaders worldwide on the topic of enablement, which was defined as a firm's providing workers with the tools and resources needed to do their jobs well. "The study clearly shows a positive correlation between employees' degree of enablement and [the employer's] self-reported financial performance," noted Economist Intelligence Unit director of research Nigel Holloway. While the study concluded that many workers already feel well enabled, organizations could do significantly better at providing technology, facilitating teamwork, offering workers sufficient autonomy and ensuring adequate financial support for the work to be accomplished (Economist Intelligence Unit, "Study Links," 2008).

Customer Metrics, Growth May Be a Mismatch, Issue 58


Trying to link customer metrics to company growth may be an attempt to oversimplify a complex relationship, say marketing and academic researchers who set out to study the popular Net Promoter Score (NPS) methodology from Bain & Company's Fred Reichheld. In MIT Sloan Management Review, Timothy L. Keiningham of market research firm Ipsos Loyalty, Lerzan Aksoy of Fordham University, Bruce Cooil of Vanderbilt University and Tor Wallin Andreassen of the Norwegian School of Management dispute claims that the NPS (based on the "ultimate question" of "How likely is it that you would recommend this company to a friend or colleague?") is the best predictor of customer loyalty. The authors point out that loyalty factors are "varied and distinct from one another." They write, "Continuing to be a customer is not the same thing as increasing (or decreasing) the amount of money someone spends on a company's products. And both of these behaviors are different from recommending a company or a product to friends." In studying the link between various customer metrics and revenue growth, the researchers found none to be good predictors. They conclude that such measures are tools that can aid in decision-making but won't lead to definitive answers on their own. "A metric can't reduce complex, multifaceted constructs to one or two dimensions," the researchers warn, "and if it does, there's a good chance it will ignore one or more important aspects of the equation" (Keiningham et al., "Linking Customer Loyalty," 2008).

Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue 58

Company Leaders Say They Need Better Information, Issue 41


More than three out of four (76%) of operational managers and executives in the U.S. and UK say that they have to make business decisions without the information they need, according to a survey conducted by market research firm Dynamic Markets. The poll of 218 executives and front-line managers, conducted from November 2006 to August 2007, found 66% of respondents acknowledging that they didn't get the information they needed on time and/or the intelligence they did receive was no longer valid. Sixty-three percent of poll participants said their firms' business intelligence was relegated to reference-document status, consulted only to support actions already taken. Fifty-eight percent of the business leaders and managers said that they'd missed business opportunities simply because the information they needed just wasn't there or wasn't accessible when needed. (CRMToday, October 4, 2007)


European Study: 4 Principles Make Good Firms Great, Issue 41


Four concepts contribute to lasting success for business organizations, according to a four-year study of European firms led by Christian Stadler, Hans Hinterhuber and Franz Mathis. The three authors of Enduring Success: What We Can Learn from the History of Outstanding European Corporations examined performance data on Fortune Global 500 European companies in business for a century or more. The team designated long-term financial high-performers and compared them with the firms in the group that had done well and endured but had less impressive financial outcomes. Sadler and his colleagues identified four "principles of enduring success" that differentiated the great firms from the good ones:

 

"Exploit before you explore" refers to a firm's ability to maximize its use of existing resources and abilities instead of pursuing new ones.

 

"Diversify your business portfolio" expresses the great firms' use of wider groups of vendors and suppliers, along with their focus on broad customer pools.

 

"Remember your mistakes" speaks to great companies' ongoing strategy of reiterating and learning from past errors.

 

"Be conservative about change" emphasizes great firms' tendency to avoid drastic changes and to enter into change initiatives carefully.

(Harvard Business Review [Stadler], July-August 2007, pp. 62-72)


Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue 41


Staffing Strategies Drive Organizational Success, Issue 40

 

 "Effective staffing . is at the core of organizational productivity, growth and sustainability," declared the Society for Human Resource Management (SHRM) in its 2007 study The Impact of Benefits and Health Care Coverage on Staffing and Productivity. The study pointed out that 56% of the 421 U.S. organizations polled for a SHRM strategic management survey confirmed that they had staffing strategies in place. Nearly all (96%) of that group noted that their staffing strategies aligned with overall business strategies, and 89% of the respondents pointed to the strategic contributions that recruitment and selection processes can make to support business functions. ("The Impact of Benefits" [Lockwood], Winter 2007, p. 2)

 

How Does Your Company Create Value?, Issue 40

 

Five types of organizational activities contribute toward creating value, either by building current value, maintaining value or creating future value, according to academicians from the UK's Cranfield School of Management at Cranfield University writing in a 2007 edition of Management Decision. Corporate strategy decisions should include the consideration of how "loosely or tightly coupled [these] value-creating activities" should be. The first type of activity is one that creates a product or service. Since the value of this kind of activity cannot be determined until and unless a sale occurs, the value "can only be identified in retrospect." The second type of activity is the marketing, sales and customer relationship management that seeks to generate revenues from the products or services. The third type of activity, also one that contributes to current profit, is obtaining input to the firm, such as raw materials and labor. Saving money in this type of activity helps offset the costs of other activities. The fourth type of activity is "directed at the creation of future value." Investments in R&D, market research and employee training are examples. The final type of activity includes infrastructure support that maintains an organization, such as tax-related and legal activities. (Management Decision [Bowman and Ambrosini], 2007, pp. 360-363)

Click here to view and download the full pdf of HRPS Strategic Agenda Update Newsletter - Issue 40

Study Finds BI Falls Short, Issue 39

Organizations expect their business intelligence (BI) systems to provide timely information on upcoming problems and opportunities, but often what those systems deliver is too little, too late, according to a 2006-2007 study commissioned by SeeWhy Software and conducted by market research firm Dynamic Markets. Interviews with 218 operations/frontline executives in the U.S. and the UK found that the majority of these BI systems users said they didn't receive notice of potential business opportunities (78%), they were forced to make decisions before needed information became available (76%), they weren't alerted to potential problems (74%), BI data was already out-of-date when received (66%) and BI reports ended up as "reference documents that are only consulted to justify decisions already made." A real-time approach to BI based on "event intelligence" would likely produce a number of benefits, with the majority of those surveyed citing improvements in efficiency, revenues, profits, customer service, compliance and ability to compete. (CRM Today, October 4, 2007)

Top Organizations Are Better at Customer Service , Issue 39

Top-performing firms are more likely than lower-performing firms to demonstrate specific attributes of an internal customer service culture, found a national study of internal customer service at 1,266 firms conducted by the Metrus Group. These top-performing firms were more likely to agree that their top leadership was "committed to superior quality in deeds as well as words" (86% top performers versus 41% lower performers); that they had established standards for internal customer service (72% versus 54%); that internal customer service was "important to their organization's business success" (95%, 79%); that employees recognized and supported the need to improve internal customer service (93%, 80%); that they formally tracked internal customer service (69%, 43%); that they used benchmarking to evaluate internal service (60%, 37%); and that they regularly surveyed their internal customers (60%, 35%). (Quality Progress [Seibert and Lingle], March 2007, pp. 35, 38-39)

 Click here to download the full pdf version of the Strategic Agenda Update Newsletter, Issue 39



The Ingredients for a Healthy Organization, Issue 38

A "healthy" firm is one that "shows resilience to shocks, executes well, aligns employees around a common purpose, focuses on renewal and ensures that its practices complement one another," according to principals at McKinsey and Company. Resilience is enhanced when a company understands how to manage risks and has the means, such as "cash reserves or backup IT systems," to deal with them, so that changing markets and unexpected disruptions don't have to lead to setbacks. Execution is enhanced when a company excels at its basic business, its decision-making, its forecasting and its clarity of communication. Alignment is enhanced when employees share a vision and sense of purpose even if they are physically dispersed around the world. Renewal is enhanced when firms know how to generate ideas, leverage them and adapt to change. Complementarity is enhanced when communication flows horizontally and vertically and when "assets, processes, relationships and management practices act in concert." (The McKinsey Quarterly [De Smet, Loch and Schaninger], May 2007, pp. 2, 4-5)

Challenges Today, Challenges Tomorrow, Issue 38

Competitive pressure, growth/expansion, and skill shortages were noted as top organizational challenges in 2007 and are expected to remain top challenges in 2010, according to the 2007 Corporate Issues Survey from The Ken Blanchard Companies. Representing multiple industries and countries, 1,091 training and HR leaders and line managers responded to the e-mail survey in 2007. Respondents were asked to choose the top four organizational challenges among eight issues. Competitive pressure was the issue receiving the largest proportion of votes in 2007 (65%), just as it was in previous surveys conducted from 2003 through 2006. Other issues that are projected to rise into the top five organizational challenges in 2010 are changing technology and global challenges.

The survey also asked respondents to indicate the top four management challenges of eight issues. Nearly two-thirds (64%) of respondents in 2007 selected developing potential leaders as the top management challenge, making it the number-one response, just as it had been in surveys conducted from 2003 through 2006. By 2010, however, developing potential leaders is expected to take a back seat to selecting and retaining key talent as the top management challenge. (2007 Corporate Issues Survey [The Ken Blanchard Companies], 2007, pp. 1-2, 4)

Click here to download the full pdf version of the Strategic Agenda Update Newsletter, Issue 38


Intangibles Add Value for Organizations, Issue 37

Analysts can't properly value organizations when annual reports fail to reflect "the full value of companies' innovative activities," according to research from Cass Business School funded by the Economic and Social Research Council. The academic research team studied nearly 700 firms in the manufacturing and services sectors, focusing on three innovation factors and how they linked to corporate performance: "human capital (people and teams), structural capital (the processes, information systems and patents that remain when employees leave), and relational capital (links with customers, suppliers and other stakeholders)." Without meaningful measures of these intangibles, analysts lack the data needed to determine "true market value," a situation that has an impact especially on the most innovative organizations. (Personnel Today.com [Berry], June 12, 2007)

Best Practices Apply Across Business Sectors, Issue 37

Some of the strategies used by financial institutions - often recognized by DiversityInc as leaders - to penetrate multicultural markets may be applicable to other industries. Following are several best practices explored in a 2007 issue of DiversityInc.

Do the research. It will produce a better understanding of customers' needs. For example, The Center for Financial Services Innovation studied underserved banking consumers in Chicago, Los Angeles and Washington, DC and discovered that they represented "a wide array of sub-segments with different demographic profiles."

Earn trust. Be the first to reach out to consumers, and it might be the beginning of a long relationship that grows as extended family members are also drawn in. Consider expanding eligibility requirements so that a larger proportion of the population can be served, an approach that banks have used for loans and credit.

Be welcoming and relevant. Offer familiar products and in-language services, and ask for customer input on new product design.

Commit to the community. Take the time to educate customers, and invest in the economic development of the community and the building of relationships with its leaders. (DiversityInc [Millman], July/August 2007, pp. 18-24, 28-30)

 Click here to download the full pdf version of the Strategic Agenda Update Newsletter, Issue 37



Leaders Foresee Variety of Challenges, Issue 36

Growth ranked second in global leaders' 2007 list of organizational challenges, according to a survey conducted by The Ken Blanchard Companies. The poll of 1,091 global HR and training leaders and line managers across a variety of industries found the leaders emphasizing the strategic aspects of growth. Blanchard noted focuses on efficiency, streamlined work processes and quality as facets of growth. The top organizational challenges and percentage of leaders citing them were competitive pressure, 65%; growth, 60%; workers' skills shortages, 51%; pricing issues, 41%; technological changes, 30%; governmental regulations, 29%; global challenges, 24%; and industry consolidation, 12%. Looking ahead, respondents named the same top-three concerns for 2010, but ranked technological changes and global challenges as greater challenges by decade's end. ("2007 Corporate Issues Survey" [The Ken Blanchard Companies], 2007, pp. 1-2)


Does Flexibility = More Productive Workers?, Issue 36

Forty-eight percent of surveyed workers said in 2007 that they'd be more productive if they could change where they work, according to T-Mobile. The telecommunications firm polled 1,025 office employees, finding that 46% of respondents said a change in work venue would also boost their work/life balance. Sixty-five percent of poll respondents said they wanted greater flexibility in their work situations in the future, and more than a third said they felt hampered because they were tied to a specific work location. "The ability to change locations, or work from home when appropriate, can enhance productivity, motivation levels and general wellbeing," commented Derek Williamson, T-Mobile UK head of business marketing. "Providing staff with the right technology and services to work effectively on the move means they can gain inspiration from new surroundings and make better use of unproductive 'dead-time.'" ("Working Away from Office," August 13, 2007)

 Click here to download the full pdf version of the Strategic Agenda Update Newsletter, Issue 36



How Some Firms Achieve Higher Earnings, Issue 35

Companies that understand and effectively practice "strategic workforce planning, workforce development and organizational effectiveness" performed better than similar firms that were less accomplished at talent management, reported a May 2007 article in HRO Today. The article described a study by consulting firm The Hackett Group that compared financial data on its own client firms and on S&P and Fortune 500 companies over three years' time. The study found that leaders in talent management (those that excelled in workforce planning and development, staffing and organizational effectiveness based on metrics that gauged efficiency in those processes) achieved up to 15% higher earnings before interest, taxes, depreciation, and amortization, along with higher returns on equity and assets. Hackett concluded that the talent management leaders derived greater efficiency from outsourcing, enabling their HR departments to focus less on transactional processes. At the same time, leaders invested more in workforce planning and development. While Hackett acknowledges the need for further research - and especially the development of reliable benchmarks - study leader Steve Joyce said that Hackett "came away convinced that this is an important finding, and the data supports it." (HRO Today [Teng], May 2007, pp. 14-16)


Keeping Workers Productive During Change, Issue 35

In the face of organizational restructuring that involves workforce downsizing, managers can take a number of actions to encourage employees to remain loyal to the company, says Steven V. Cates, a graduate professor of HR management at NOVA Southeastern University in Florida. Cates urges leaders to begin their strategy for maintaining worker loyalty by crafting a careful plan and by openly communicating about the reasons for layoffs. Follow through with communication throughout and after the restructuring, he says, so employees know what's to come. Help departing workers with outplacement, and aid remaining employees with the range of adjustments they must make, including providing counseling if needed. "Discuss the need to re-focus on the future for the remaining employees," Cates advises, and help them "adjust to new job demands by drafting new job descriptions that clearly articulate expectations and job duties." ("Surviving Layoffs" [Cates], June 1, 2007)

 Click here to download the full pdf version of the Strategic Agenda Update Newsletter, Issue 35



HR Can Help Smooth Transitions, Issue 34

In the face of an organizational merger or acquisition, HR should be involved from the outset to help facilitate the assimilation of new employees and the development of the resulting new team of workers, says Graeme Hobbs, director of the UK chartered accounting firm Titcheners. "The main challenge when acquiring a company is the communication of the vision and the culture to the staff of the company being acquired," says Hobbs, pointing out that HR staff can be instrumental in imparting to new team members the reasons for their acquisition and the new roles they'll play in achieving business goals. Hobbs advocates an orderly and well-planned process for uniting the two companies, including many opportunities for direct communication between senior leaders and employees. "Mergers and acquisitions give HR the opportunity to change the direction of people's careers," Hobbs says, "thus motivating them to want to be part of the new team." Involving HR to manage transition communications empowers organizations to "enforce a sense of pride, culture and responsibility in all staff for the new company," he advises. (Strategic Direction [Hobbs], 2007, pp. 3-4)

Focus on Time May Impede Productivity, Issue 34

U.S. businesses should "rethink using hours [worked] as the measure of productivity," says the American Association of University Women (AAUW) in its 2007 study "Behind the Pay Gap." The organization examined Department of Education data on nearly 20,000 graduates over a decade and found a gender earnings gap beginning as early as a year after college graduation. In recommending actions employers and others could take to help alleviate the gender wage gap, the AAUW pointed out that "in most other countries, annual [work] hours are declining, while in the United States the trend is in the other direction." Viewing the number of hours employees work as a gauge of productivity, the organization says, actually can cause workers to work inefficiently in order to pad their hours. Further, the AAUW noted that basing career advancement on hours worked placed women at a disadvantage because they typically assume more family responsibilities than men do. ("Behind the Pay Gap" [Dey and Hill], April 2007, pp. 2, 32, 38-39)

 Click here to download the full pdf version of the Strategic Agenda Update Newsletter, Issue 34


Does Resilience Trump Efficiency?, Issue 33

"Companies that cannot make money from a hundred small adjustments and some occasional big wins will hardly be profitable at all," writes Michael Hugos, author of the book The Greatest Innovation Since the Assembly Line. Hugos suggests that the pace of change engendered by the growth of the global economy has made an organization's ability to be resilient and responsive to change more important to its future success than its ability to work efficiently. Among the tools that resilient organizations can apply in their efforts to become more agile, Hugos says, are service-oriented architecture that enables IT systems to be reconfigured from parts of outdated systems and greater integration of business information systems to enable more expedient data collection and sharing. (Industry Week, June 2007, p. 20)

Customers Driving Organizational Efforts, Issue 33

Customers are the primary source driving the high demand for quality and speed, say the majority of executives - a demand they expect to increase significantly in the next three years, according to a 2007 survey conducted by the Strativity Group. Participants in the Web-based study were 385 executives, 65% of whom pointed to customers as the primary source driving the demand for quality and speed. Other sources noted were the competition (15%), market trends (13%), executives (5%), superior/boss (1%) and spouse (1%). Surveyed executives said the demand for high quality and customized solutions was extremely high (50%) or high (38%) and that the demand for speed in business interactions was extremely high (37%) or high (48%). Most respondents (51%) indicated they expected customer demands for speed and quality to increase significantly over the next three years, while 42% expected such demands to increase moderately. Fewer expected it to stay the same (5%) or decrease (2%). (Doing Business Right Now [Strativity Group], 2007, pp. 2-6)

 Click here to download the full pdf version of the Strategic Agenda Update Newsletter, Issue 33



Use Coaching to Boost Performance, Issue 32

"You will get a significant boost in productivity and performance when your supervisor employs a coaching culture," observes Ritu Agarwal, a professor at the University of Maryland's Robert H. Smith School of Business. Along with fellow Maryland professor Corey M. Angst and Massimo Magni of Italy's Bocconi University, Agarwal conducted research on coaching benefits in an organization that used coaching to develop sales staff and other personnel. "Coaching works well," says Agarwal, "because [it] is set up to address specific performance deficiencies or gaps, as opposed to general purpose training." The researchers differentiate between the developmental coaching that Agarwal defined and executive coaching that is provided by senior leaders and aimed at helping leaders hone their management styles. Says Agarwal, "At higher [organizational] levels, coaching needs to be more and more individualized and customized. While at the lower levels, performance gaps are more closely performance related as opposed to behavior related." (MIT Sloan Management Review [Yu], Winter 2007, p. 6)

Strong Culture Underlies Improvements, Issue 32

"To differentiate themselves from their competitors, companies need to leverage their secret weapon: corporate culture," says Jeffrey M. Saltzman, global survey practice leader in New York for consulting firm Kenexa. Noting that culture can affect many workplace variables - including "employee morale, performance, absenteeism, safety, recruiting, retention . and profits" - Saltzman encourages employers to make clear to workers how they can and do contribute to the company culture. Strong cultures that provide employees with knowledge about what's expected of them and the tools and resources needed to accomplish their work will position a firm to enhance its overall well-being. Says Saltzman, "A well-developed corporate culture improves morale, performance and engagement, and it offers significant competitive strength when competing for customers, as well as talent." (Talent Management [Saltzman], April 2007, pp. 18-21)

 Click here to download the full pdf version of the Strategic Agenda Update Newsletter, Issue 32

 



Can Corporate Culture Drive Performance?, Issue 31

"Companies that demonstrate higher levels of performance in key areas of organizational culture . tend to deliver better results in return-on-assets, sales growth and shareholder value," according to Denison Consulting, a Michigan-based firm specializing in organizational culture and leadership development. Denison research analyst Ryan Smerek headed a 2007 study of data from 102 companies that responded to a Denison culture survey over an eight-year period. The Denison Organizational Culture Survey (DOCS) assesses culture in terms of a firm's adaptability, consistency, mission and involvement, examining such characteristics as customer focus, change initiatives, team orientation and company values. Smerek's study compared companies that scored highly on DOCS with those that scored poorly. "Companies with the best organizational culture scores earned an average return-on-assets of 6.3 percent, vs. 4.5 percent for firms with the lowest organizational scores," Denison reported. Top-scoring firms also achieved higher shareholder value: "market-to-book values of 440 percent as compared to 350 percent for firms with the lowest culture scores." ("Latest Study" [Denison Consulting], press release, January 25, 2007)

The Productivity Connection, Issue 31

"Creating emotional connections to employees is what truly matters because this is where organizations can dramatically boost employee productivity and business outcomes," said Kate Feather, executive vice president of the Philadelphia consulting firm PeopleMetrics. The company surveyed more than 5,000 U.S. employees in 2007 and reported that levels of engagement among high-performing workers were double those found among low performers. In forming that conclusion, PeopleMetrics looked at Fortune 500 firms, noting that the most-profitable companies had two times the engaged workers the least-profitable firms had. "The concept of feeling love or passion for one's company is gaining ground," Feather said, "because a passionately engaged workforce is becoming an important differentiator in the marketplace." She urged employers to focus on building their relationships with employees and recommended that firms communicate compelling visions of the business, along with a "sense of meaning and purpose" that workers could understand. (Management-Issues [Amble], May 25, 2007)

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Poll Says Customers Shouldn't Be #1 Priority, Issue 30

The way to make a business successful is to place employees above customers, said CEOs who lead the top 50 businesses in Europe. BusinessWeek polled the leaders of the 50 firms the magazine ranks as the top businesses in Europe, noting that the executives said that their firms' well-being relied most on having able workers who possessed knowledge of their jobs and who were innovators. Andrew Minton, author of the report on the survey, said, "This turns on its head the old maxim - put the customer first. Businesses can only keep the customer happy if their people are nurtured and respected." (Strategic HR Review, January/February 2007, p. 15)

How to Spot High-Potential Job Applicants, Issue 30

"Hiring employees with the potential for growth . seeds the workforce with change agents who can help the organization evolve along desired lines and shape the future of the company culture," says Dr. Irving H. Buchen. A senior research associate with Canis Learning Systems, a firm that develops distance learning curricula, Buchen advocates pre-employment testing as a tool to help recruiters identify and select candidates who are likely to become high-potential employees. In particular, customized tests - including work simulations - that are designed to assess specific characteristics may be quite effective. Buchen also says that some employers ask applicants to participate in a "voluntary exercise of self-study and self-review" - a type of assessment meant to gauge candidates' value systems, behavioral traits, learning styles and other variables. Accurate pre-employment tests, Buchen maintains, can help employers build "a workforce that can perform well today, as well as grow and develop along with the organization." (Talent Management [Buchen], February 2007, pp. 18-21)

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Vigilant Leaders Enable Firms to Thrive, Issue 29

Leaders who regularly assess their organizations' performance and take action to restructure strategies in ways that address identified risks may "save jobs, retain shareholder value or even save [the] company," declares Allan Nackan, a partner in A. Farber & Partners Inc., a Canadian firm specializing in business restructuring and financial advice. According to Nackan, manufacturing firms often face their greatest risks from external sources - availability and cost of materials, competition, and the like. On the other hand, most types of organizations that experience financial risks can trace the problems to internal factors, such as "management difficulties" or "shareholder disputes." According to Nackan, leaders may be able to foresee and forestall financial problems or other "crippling business events" by monitoring such factors as cash flow, ability to make payroll, status of accounts with external vendors and continuity of key contracts with customers. "While each situation is unique," Nackan points out, "early intervention is key." (Advanced Manufacturing [Nackan]. Obtained March 15, 2007)

Learning Culture Can Drive Productivity, Issue 29

"A learning organization is perhaps better described as a learning culture," observes Andrew Mayo, president of the UK's HR Society and associate professor of human capital management at London's Middlesex University. Mayo points out that learning organizations are characterized by both processes and behaviors that support sharing and perpetuation of knowledge. Processes "encourage and stimulate learning at all levels," he says, and are designed to enable individual, team and organizational learning. Behaviors - ideally modeled by senior leaders - include knowledge sharing, curiosity and open-minded pursuit of better ways to accomplish work. According to Mayo, organizations that successfully build learning cultures may benefit through more efficient use of financial resources, are likely to provide better customer service through enhanced understanding of customer needs, and can expect to see productivity increase because optimal work methods are constantly being pursued. (Strategic HR Review [Mayo], January/February 2007, p. 4)

Click here to download the full pdf version of the Strategic Agenda Update Newsletter, Issue 29


Recognizing Obstacles to Performance, Issue 28

Organizations sometimes encounter "systemic problems" that can not only adversely affect change initiatives but also impede overall progress, observes Bob Prosen, author of Kiss Theory Good Bye: Five Proven Ways to Get Extraordinary Results in Any Company. Many impediments are ingrained in corporate culture, Prosen says, and are reflected in workplace behaviors. Five common problems he identifies are failure to establish and clearly communicate objectives, failure to assign responsibility for outcomes, acceptance of poor performance, overemphasis on planning versus acting, and unwillingness to manage risk and embrace change. Prosen suggests that leaders examine their organization's individual and teamwork processes for negative habits that can be addressed. He also recommends an analysis (and overhaul, if needed) of organizational culture and reward systems to ensure that positive behaviors are facilitated and recognized. (SuperVision [Prosen], December 2006, pp. 6+)

Adapting Good Ideas to Your Organization, Issue 28

Not all firms can support full-scale innovation centers such as the ones established by McDonald's and Xerox, but the techniques such leading companies use can be adopted, posits Chris Penttila, "Smart Moves" columnist for Entrepreneur Magazine. For example, Xerox Innovation Group's vice president of strategy and alliances, Tom Kavassalis, recommends building an incubation fund to set aside dollars earmarked for developing employees' ideas that might not receive attention in the normal R&D budget. Xerox also seeks to build on the synergy of ideas with the hope that, in combination, they may lead to "a next-generation offering." McDonald's Innovation Center in Romeoville, IL, houses some 70 employees devoted to testing new ideas. Ken Koziol, senior vice president of worldwide restaurant innovation, credits rapid prototyping for getting ideas "from the blackboard to 3-D as fast as we can." McDonald's also uses a "backcasting" technique, where the innovation team starts by envisioning the end product and then works backward to a solution that fits effectively in the cost and technology framework. Other ideas, contributed by Anthony Warren, director of Penn State's Farrell Center for Corporate Innovation and Entrepreneurship, include focusing on innovation continuously and using idea management software. (Entrepreneur Magazine [Penttila], March 2007)

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A New Organizational Outlook, Issue 27

Just as manufacturing benefited from lean production, consumers - and companies - may benefit from applying those same concepts to "lean consumption," suggest James P. Womack and Daniel T. Jones, coauthors of Lean Thinking. The principles of lean consumption center on providing consumers with what they want, when and where they want it. If organizations can align their processes to ensure "that all the goods and services work, and work together," they can "solve the customer's problem completely" without wasting the customer's time or creating hassles. Womack and Jones predict that consumers "will be quick to learn their role in lean consumption" but that retailers, manufacturers, suppliers and service providers will have a steeper learning curve. These stakeholders "are not used to looking at total cost from the standpoint of the consumer and are even less accustomed to working with customers to optimize the process of consuming," warn the authors. (Harvard Business Review [Womack and Jones], March 2005, pp. 58-68)

How Turnover Affects Corporate Performance, Issue 27

Turnover generally causes loss of productivity on several fronts: after the employee announces an intention to depart, during the time the position is vacant and while a replacement comes up the learning curve, according to a 2006 Hanover Research Council paper. In addition, other workers lose productivity as well: co-workers who must shoulder a heavier workload and hiring managers who must spend time recruiting, onboarding and training a new hire. But eliminating turnover is not the goal; optimizing it by managing "quality of turnover" is, suggests the Hanover Research report. The replacement of lower-performing employees with higher-performing employees can produce productivity gains in the long term, and the net effect could lead to improved corporate performance.

The quality of turnover, an often neglected measure, holds more strategic value than simple quantity measures, suggests the Hanover Research paper. This metric can be calculated by comparing "the percentage of departing employees who are top performers versus the percentage who are below-average performers" as well as by considering the "net productivity effect" of the loss of employees based upon level of performance. Since long-term productivity varies with turnover quality, managing turnover quality can have an important impact on business success. (Human Resources: Performance Metrics and Auditing [The Hanover Research Council], May 2006, pp. 15-24)


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Communication Pros Key to Lasting Change, Issue 26

Failing to gain senior leaders' support and championship for change initiatives can sabotage transformation efforts before they begin, according to Deidrea Booher, training and development manager for EquiFirst Corp., a multi-state mortgage lending firm. Booher cautions that another practice that can derail change is failure to appropriately manage one of the most critical aspects of any initiative - communication. She observes that some organizations look to company leaders to take sole responsibility for change communications. This is a mistake, she says, because leaders must first devote their attention to organizational functions and to carrying out change plans. Therefore, communications professionals within the firm should step in to assist with planning and disseminating messages. In the post-change stage, says Booher, "organizations can maintain change by offering updated information, sustained learning events, and coaching tips and tricks." (Talent Management [Whitney], January 2007, pp. 38-39)

Survey Respondents Say Change is Predictable, Issue 26

In 2006, only 18% of international organizations said that the pace of change in their firms had remained static or had slowed, according to the Human Resource Institute's 2006 survey on organizational agility and resiliency. Conducted online in midyear, HRI's poll included 1,472 responses from global firms. Thirty-nine percent of respondents told HRI that changes were occurring faster but remained predictable. The same percentage said changes were both faster and less predictable. Four percent of the organizations participating in the survey called the pace extremely fast and impossible to predict. (Agility and Resiliency Survey Results [Human Resource Institute], 2006, p. 8)


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New Elements of Effective Organizations, Issue 25
 

A more globalized business environment is causing leaders to focus increasing attention on sustainability, social issues and diversity, according to PricewaterhouseCoopers' (PwC) 10th Annual Global CEO Survey 2007. Through interviews with 1,084 CEOs in 50 countries, PwC found that 51% agree and 30% strongly agree that their organizations' development programs are increasingly focusing on preparing leaders to take a role in creating a sustainable business environment, and the majority (71%) say such leadership programs generate tangible business benefits. In addition, nearly two-thirds of interviewed CEOs said that active engagement in social issues would be a key success factor in employee recruitment and retention (65%) and that their organizations were as good at identifying, retaining and promoting female talent as male (64%). (10th Annual Global CEO Survey 2007 [PricewaterhouseCoopers], 2007, pp. 59, 62)

 

Poll Finds Change a Threat to Firms' Survival, Issue 25


From 2005 to 2006, about two-thirds of global organizations acknowledged experiencing some sort of disruptive change, reported the Human Resource Institute in its 2006 survey on organizational agility and resiliency. HRI conducted the online poll in June and July of that year, receiving 1,472 responses from organizations worldwide. Thirty-one percent of survey respondents said that their firms had not encountered disruptive change - defined as a severe surprise or unanticipated shock. Seventeen percent said that they had experienced such change and that it had forced a major strategy shift on their part. Disruptive change that affected core operations occurred in 18% of the organizations participating in the poll, while 29% said the change they experienced had minor operational consequences. Three percent said that disruptive change was so severe that it threatened their organizations' existence, and the same percentage said change had challenged their core missions. (Agility and Resiliency Survey Results [Human Resource Institute], 2006, p. 9)


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The Building Blocks of Effective Organizations, Issue 24


"Organization development can cause a lot of pain as different issues are confronted . [but] in the long term it will create a much stronger organization, creating a competitive advantage in the way the organization does business both externally and internally," says consultant Hilary Rowland of CPCR, a UK consulting firm specializing in leadership and organizational development. Rowland explains that organization development (OD) takes a holistic approach to the interactions among "systems, cultures and people" with the objective of enhancing overall effectiveness. She points out that HR leaders play a pivotal role in OD by stepping in to help secure senior management support for the change initiatives OD prompts. Making sure that a firm is capable of making the improvements needed to accomplish OD is integral to the success of such programming, Rowland notes. Further, she says, "successful OD must support and work within the organization's overall business strategy." (Strategic Direction [Rowland], 2007, pp. 3-4)

 

Companies Plan to Acquire Knowledge, Issue 24


Intellectual property issues are an important component of business decisions such as acquisitions, joint ventures, and investments, according to PricewaterhouseCoopers' Trendsetter Barometer survey of the CEOs of 339 fast-growing private U.S. companies, which inquired about intellectual property (IP). The 2006 survey found that "22 percent choose to directly acquire strategic businesses" in order to obtain intellectual property and "14 percent participate in joint ventures for development of new IP." Some companies take a farm team approach: "7 percent invest in smaller, independent businesses as an extension to their own R&D program." (Trendsetter Barometer [PricewaterhouseCoopers], May 2, 2006)

Click here to download the full pdf version of the Strategic Agenda Update Newsletter, Issue 24

Creating a business model for strategic innovation, Issue 22

 

Thoroughly understanding the customer and structuring the organization to deliver value can combine to create a business model for strategic innovation, according to a 2006 article in European Business Forum. The authors, strategic management professors Bertrand Moingeon and Laurence Lehmann-Ortega, of academic institutions in France, posit that strategic innovation equates to "radical business model innovation," incorporating modifications to both its customer-value proposition and its value-chain structure. When such changes are moderate, incremental innovation occurs. If either one undergoes radical modification, it is a disruptive innovation strategy. When both undergo radical modifications, it is a breakthrough innovation strategy. In addition, the authors contend that strategic innovation can beget "economic growth, even in slow, flat or shrinking markets." (European Business Forum [Moingeon and Lehmann-Ortega], Spring 2006, pp. 51-52)

 

Talent management and global competition, Issue 22

 

A commitment to talent management and the willingness to invest in an infrastructure to support it can be important factors in an organization's ability to meet global competition.   A 2006 study from PricewaterhouseCoopers surmises, "Innovation, flexibility and agility are key attributes required of organizations to compete successfully in the global economy." Since these qualities arise from a firm's human capital, organizations must be willing to invest in research and development and training to support workforce productivity. A succession pipeline promotes readiness to carry on and also supports productivity. (Key Trends in Human Capital: A Global Perspective - 2006 [PricewaterhouseCoopers], 2006, pp. 23-25)

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Align Learning with Business Goals, Issue 21

When a strategy for a firm's learning organization is developed, it should tie in to the firm's overall business strategy and objectives, suggests corporate solutions consultant Josh Bersin of Bersin & Associates. The learning organization's business plan should begin with aligning the learning strategy with the corporate strategy. Next, consider operational issues such as staff and budgets needed, program initiatives and time frames. Outline how the learning plan supports and aligns with the company's overall business plan. Commit to specific accomplishments, and show how results will be measured. Know what investments are needed, and be prepared to demonstrate how they will translate into returns. Bersin also recommends that the strategy be built with a three-to-five-year window and that results be compared to the plan regularly. Tap company officers for input, and allow them the opportunity to review a rough draft. This demonstrates that the learning organization is "being run like a business operation," writes Bersin. (Chief Learning Officer [Bersin], August 2006, p. 18)

CEOs Rise to Global Challenges, Issue 21

CEOs say that globalization is making business more complex but is having a positive impact on their organizations, according to the ninth annual survey of 1,410 CEOs in 45 countries, published in 2006 by PricewaterhouseCoopers. Both internal and external factors led to the increased complexity. Internally, the factors that led to increased business complexity for CEOs to a large or very large extent included expanding their operations into new territories (65%), engaging in mergers or acquisitions (65%) and launching new products or services (58%). Externally, complexity was driven to a large extent by international, national or industry-specific regulations, laws, standards and reporting requirements as well as by competitors' actions. Global growth is often centered on what Goldman Sachs has named the "BRICs" economies - Brazil, Russia, India and China.

Global expansion presents several challenges for CEOs to confront, including overregulation (64%) and trade barriers/protectionism (63%) as well as political instability (57%) and social issues (56%). But CEOs view globalization in a positive light, with 58% saying it will have a positive impact on their firms in the next year and 63% seeing a positive impact in the next three years. (9th Annual Global CEO Survey [PricewaterhouseCoopers], 2006, pp. 2-3, 6-8, 33, 35)

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Avoid Getting Stuck in Organizational Ruts, Issue 20

Failure to innovate is one of the top business challenges presenting key risks to organizations, according to a study by Mercer Delta Executive Learning Center in partnership with the Economist Intelligence Unit. Study participants included 223 senior executives from 44 countries. Six in 10 executives cited "failure to innovate and neglecting to exploit emerging technologies" as an important or critical business risk, while 23.7% saw it as a moderate risk and 16.3% said it posed a minor or no risk. Other challenges noted as bringing risks and exposing leadership weaknesses included competitive pressures, market conditions and customer expectations. (The Global Leadership Imperative: Capturing Competitive Advantage [Mercer Delta Organizational Consulting], 2006, pp. 3, 6)

Obstacles to Organizational Effectiveness, Issue 20

Competitive pressures, market conditions and customer expectations are some of the top business challenges presenting key risks to organizations, according to a study by Mercer Delta Executive Learning Center in partnership with the Economist Intelligence Unit. Study participants included 223 senior executives from 44 countries. More than eight in 10 executives (82.5%) cited "increased competitive pressures," both domestic and foreign, as an important or critical business risk, while 13.0% saw it as a moderate risk and 4.5% said it posed a minor or no risk. More than two-thirds (67.0%) of surveyed executives cited the "inability to respond quickly and flexibly enough to rapidly changing market conditions" as an important or critical business risk, with 24.4% calling it a moderate risk and 8.6% a minor or no risk. "Increasing customer expectations of greater quality, cheaper products and increased service" was also noted as a key challenge, with 51.8% saying the risk was important or critical, 27.5% saying it was moderate and 20.6% saying it posed a minor or no risk. Another challenge noted as bringing risks and exposing leadership weaknesses was failure to innovate. (The Global Leadership Imperative: Capturing Competitive Advantage [Mercer Delta Organizational Consulting], 2006, pp. 3, 6)

Click here to download the full pdf version of the Strategic Agenda Update Newsletter, Issue 20

The Manager's Mantra: Be Prepared, Issue 19

Creating a disaster plan to ensure that an organization can remain productive in the face of negative events requires participation by managers at all organizational levels, say Dennis Dawson and Tim Rice, partners in the change consulting firm People & Performance Solutions. Dawson and Rice note five elements involved in establishing a disaster plan. First, they recommend, senior leaders should identify risks by reviewing the organization's internal situation, while also examining its external business environment. Once risks are assessed, strategies to address them can be devised, and Dawson and Rice recommend involving managers throughout the organization by translating the strategies into goals their particular business units can act on. Training managers in any new skills they need to carry out the disaster plan goes hand-in-hand with providing financial and any other resources required to accomplish planned objectives, say Dawson and Rice. Prepared managers can, in turn, communicate disaster plans to their employees and provide them with the training and resources they need in order to carry out the directives. Finally, Dawson and Rice note the importance of metrics to capture data on preparedness and performance, and as a mechanism to ensure that disaster planning (and its refinement) becomes a continuous activity. (Workforce Performance Solutions [Dawson and Rice], July 2006, pp. 46-49)


Effective Organizations Pursue Winning Outcomes, Issue 19

Organizational change requires at least a degree of corresponding change in corporate culture, say HR consultants Linda Ackerman Anderson and Dean Anderson. In turn, they maintain that successful culture change requires leaders to take an approach that leverages "co-creating." The Andersons define co-creating as "working together across boundaries in pursuit of win-win-win outcomes." It may involve crossing the boundaries of organizational levels and departments. Leaders can encourage co-creating, the two say, by designing leadership retreats that emphasize personal growth, organizational performance and relationship-building skills. In addition, they recommend that leaders clearly communicate their visions for the future of their organizations. Through training, coaching and follow-up, the Andersons say, a shift to a co-creating culture can be achieved. (Workforce Performance Solutions [Anderson and Anderson], July 2006, p. 14)

Click here to download the full pdf version of the Strategic Agenda Update Newsletter, Issue 19

Building the "Soft Side of Business", Issue 3/29/07


Maximum organizational effectiveness can be achieved by developing a firm's social capital, says Whitney MacMillan, retired CEO of global agricultural firm Cargill. In the June 2006 edition of the Harvard Management Update, MacMillan defines social capital as "informal networks, accumulated know-how, mutual understandings and trust" that organizations create - in short, "the soft side of business." Companies can build up their social capital, says MacMillan, by doing the following:

  

Recruit and hire workers who are team players, naturally curious and willing to travel.

Train employees and help them build internal networks by having them work for short periods in all key business functions.

Behave, as a senior leader, in ways that model organizational values.

Provide internal networking opportunities and events on an ongoing and regular basis.

Develop a standardized approach to decision-making and train managers in its use.

Employ workers for the long term in order to retain their knowledge and foster engagement.

Require senior leaders to maintain contact with all organizational levels by requiring them to visit key business units regularly.

Communicate the organization's mission clearly and frequently to ensure all employees are working toward the same ends.

 

(Harvard Management Update [MacMillan], June 2006, pp. 1-4)

 

Keeping All the Plates in the Air, Issue 3/29/07


In order to thrive in the age of globalization and accelerated change, organizations must learn to balance and manage change across three dimensions,  asserts Kenichi Ohmae, president of public policy at UCLA's School of Public and Social Research, in the spring 2006 issue of European Business Forum. Change occurs, says Ohmae, in technology, in people and in organizations. Innovation in each area is required in order to support shifts in the others. As technology evolves, some products become obsolete or must take on new forms, requiring companies to adapt accordingly. Personal change, notes Ohmae, is required of managers and employees alike, from learning new skills to taking on responsibility for improving work/life issues. Organizations, too, are called on to change, sometimes in their processes, sometimes in overall structure. "The company - and the manager - that succeeds," says Ohmae, "will be the company that manages all three dimensions [and] all of them must be managed together." (European Business Forum [Ohmae], Spring 2006, pp. 25-29)


Click here to download the full pdf version of the Strategic Agenda Update Newsletter, Issue March 29, 2007

Link Learning and Performance for Results, Issue 3/15/07

Ensuring that an organization is capable of meeting its future objectives involves crafting an appropriate human capital strategy, yet 63% of HR leaders say their firms' workers aren't adequately prepared to achieve company goals, according to a survey by human capital software firm Softscape. Christopher Faust, Softscape's executive vice president, reported in July 2006 that 64% of the 650 HR executives polled recognized the importance of integrating human capital management into their firms' strategic initiatives. Faust says that efficient workforce planning and coordination of learning and employee performance also are important in preparing workers to meet strategic goals. In addition, he points out that firms can build toward the future by shifting their cultures to emphasize employee performance and by linking pay with performance. Finally, Faust says, metrics can support progress by gauging past performance and by "predicting workforce trends, modeling industry best practices and developing actionable plans [for tomorrow] today." (Workforce Performance Solutions [Faust], July 2006, pp. 40-41, 52)

 

Firms Focus on New and Improved, Issue 3/15/07


Innovation in products, services and business models is the single most important factor contributing to the accelerating pace of change in the global business environment today, according to 24% of the 3,453 global executives responding to this item in The McKinsey Quarterly survey of March 2006. Other contributing factors noted in the survey were the greater ease of obtaining information (17%) and the availability and affordability of capital (12%). (The McKinsey Quarterly [Becker and Freeman]. Obtained September 26, 2006)

 

Click here to download the full pdf version of the Strategic Agenda Update Newsletter, Issue March 15, 2007

Human Capital Key to Business Success, Issue 2/28/07

Nearly half (48%) of chief financial officers worldwide said that managing their workforces' "skills, experience and knowledge" was among the top three elements necessary for their businesses to succeed, according to a poll of 249 senior finance leaders conducted in spring 2006 by CFO magazine. Forty-three percent of the survey respondents called human capital management the most important element in their firms' success. None of the CFOs said that managing their human capital was not important to business success. ("Hard Choices" [CFO Europe.com], March 2006)

HR Policies Must Evolve Over Time, Issue 2/28/07

HR policies may not be keeping pace with the fast-changing business environment, according to the authors of a 2006 Society for Human Resource Management white paper. Many policies were written solely with liability prevention in mind, but today's policies should be crafted with organizational success in mind. Too often, current HR policies focus on short-term issues rather than long-term goals and are not aligned with the needs of a more diverse workforce. While employees are more empowered to make decisions, "policies have not kept pace," write the authors. Policies also are likely to slow the organization's ability to respond to change and, therefore, are often "circumvented or ignored in the interest of expediency." (SHRM Information Center [Rubenfeld and Laumeyer], February 2006)

Click here to download the full pdf version of the Strategic Agenda Update Newsletter, Issue February 28, 2007


Surprising Strategies to Improve Performance, Issue 2/15/07

Underperforming companies that do not restructure actually improve more and faster than those that undergo some type of top-level restructuring, according to research by McKinsey & Company. The study looked at 45 global companies that were underperforming their competitors by an average of 21.5% one year prior to a major restructuring. A control group consisted of 13 companies that were underperforming by an average of 17.6% but did not restructure. The restructured companies were outperforming their competitors by 17% two years after the restructuring. The companies in the control group were outperforming competitors by 22.1% in that same time without restructuring. What's more, restructured companies were still slightly underperforming after one year, while those that avoided restructuring were already outpacing their industry averages by 19.6%.

The research also looked at the type of structures the companies were using. Each of the industries the companies represent has a dominant organizational design, whether it is centered around products, functions or geographies. For the most part, companies adopt this design or a hybrid derived from the design. Of the companies that had structures that were different from the dominant design, 58% had lower total returns to shareholders than their industry average. Meanwhile, those that used the dominant structure had a 7% higher shareholder return, and hybrid companies were 11% better. McKinsey concluded that restructuring is not necessarily the answer to a company's ills, unless the problems cannot be addressed by fixing processes and increasing accountability. (McKinsey Quarterly [Fraser and Strickland], No.1, 2006)


Involve Employees in Organizational Success, Issue 2/15/07

"A smarter employee can not only be more productive but actually come up with ways to help the company," says Training Magazine, advocating that companies view knowledge management not only as a peer-to-peer activity but also as an up-and-down flow, in which the organization keeps employees apprised of key metrics about organizational performance and uses their ideas about cost-cutting and improving processes. Training quotes open-book management author John Case: "When employees have the knowledge and a way to make suggestions and give feedback, then they can get involved in trying to move the needle." (Training Magazine [Dolezalek], April 2006, p. 42)

Click here to download the full pdf version of the Strategic Agenda Update Newsletter, Issue February 15, 2007

Knowing when Opportunities Might Knock, Issue 1/31/07

Enabling organizations to respond with agility to changing business environments relies on leaders who understand and take advantage of business cycles, says Peter Navarro, a business professor and author of The Well-Timed Strategy: Managing the Business Cycle for Competitive Advantage. Navarro points out several factors that make it possible for an organization to respond to business cycles strategically. First, he says, a firm must have the ability to forecast business cycles, along with a mechanism to communicate forecast information to the appropriate organizational staff. Lines of authority must empower leaders at various organizational levels to act on forecast data, and the organizational culture must be attuned to business cycles. Further, says Navarro, firms must learn to capitalize on the various cycles they encounter by exploiting the risks associated with each cycle. "To achieve excellence," says Navarro, "leaders must cultivate their own business cycle literacy and increase the business cycle orientation." (Leadership Excellence [Navarro], July 2006, p. 18)

Don't Lose Staff to Change, Issue 1/13/07

"Reduced-load work" arrangements - enabling employees to work less-than-full-time hours for lower pay and reduced benefits - are attracting interest as a potential retention tool in the face of organizational changes, A six-year study of 20 U.S. and Canadian corporate giants (such as General Mills, IBM and Starbucks) by Michigan State University professor Ellen Kossek and McGill University professor Mary Lee found specific corporate changes that increased support for the tactic that leaders of 60% of the firms studied called "smart business practice." Among those changes were increased globalization, growth that emphasized the need for retention of talent, changes in workforce demographics, advent of a new CEO, and economic uncertainty. Kossek and Lee point out that the strategy works most effectively with high-performing employees who are suited to working independently. They further note that employers need to communicate frequently with reduced-load workers, proactively plan work, and continuously refine such arrangements. (Employee Benefit News [Davolt], April 15, 2006, p. 19)

Click here to download the full pdf version of the Strategic Agenda Update Newsletter, Issue January 31, 2007


Capabilities Required to Effect Success, Issue 1/16/07

In the UK, two-thirds of organizations don't support their change initiatives with adequate employee training and development, according to a report by the Chartered Institute of Personnel and Development. The organization's 2006 survey on learning and development concluded that successful change relied as much on behaviors and attitudes as it did on the development of new skills. Said Anne Gammie, organizational development director at the UK consultancy ER Consultants, "What companies should be trying to do is creating a different capability rather than simply skills building. It needs to be about attitude." She recommends that organizations conduct "capability audits," to gauge existing workforce strengths against projected future needs. (Management-Issues [Paton], March 28, 2006)

Managing the "Whole Organization", Issue 1/16/07

Failure to embrace systemic thinking can undermine the success of organizational leaders, notes Dr. Harold Stolovitch, principal of HSA Learning & Performance Solutions. Stolovitch calls systemic thinking - the ability to look at whole systems and view how individual components integrate to shape it - a "critical" skill in "today's complex world." He lists two rules of systemic thinking for leaders. First, that a missing or dysfunctional element can adversely affect a whole system, and second, that altering any element of a system affects all other elements. Translating this to the business world, he uses as an example the notion that "you cannot change work hours or the work process without realigning and rebalancing a host of other factors." Stolovitch cautions leaders that, for any business process, "systematic analysis and systemically designed interventions" are precursors of a successful outcome. (Workforce Performance Solutions, May 2006, p. 16)


Click here to download the full pdf version of the Strategic Agenda Update Newsletter, Issue January 16, 2007
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