How do leaders position an organization successfully for the future? - part #1

It had been a good day of training when I walked up to the second floor to sit down with the CEO in his office to share my thoughts. As I explained to him, first, you need to unpack the organization’s mission statement as the majority of people who are currently in leadership positions were not around when it was first created back in the mid-90’s. I know this because they do not reference it in their language when describing what is most important. If they do not use the language of the mission statement, then they are not using the mission statement in their work as a leader.

Second, you need to make sure you are cascading clarity in order to increase focus rather than fear about making mistakes. When I asked those in training what was the definition of success, they replied “making the CEO happy”. Quality customer service was a distant third in the group discussion.

Third, you need to connect coaching with goals and professional development rather than coaching as punishment. Currently, coaching is infrequent and mostly a complaining session.

Fourth, you need to define your brand better. If today’s leaders can not articulate a concise message about what they want the organization to be known for within the communities where they offer services, then today’s problems are just going to get bigger.  As a wise leader once told me, “the past is the prologue.”

He thanked me for my comments and we explored the key words within the mission statement that needed to be leveraged more. Then, he shared an observation and a question with me.

His observation was that “Our culture is not as constant as it should be. Our key leaders are not as strong at building that culture as they should be.” And his question was “How do I change this? Because what I am doing currently is not work very well.”

As we discussed his observation, the following line from Jim Collin’s Good to Great came to mind: “Confront the brutal facts but never lose the faith.”

There are three problems within the business world currently, namely cognitive dissonance, hubris born of success, and chronic inconsistency. Cognitive dissonance is the disconnect between what we believe in our minds and what we experience or see in reality. As Marshall Goldsmith in his book, What Got You Here Won’t Get You There: How Successful People Become Even More Successful, Hyperion, 2007, explains: “the more we are committed to believing that something is true, the less likely we are to believe that the opposite is true, even in the face of clear evidence that shows we are wrong.”

The second problem is hubris born of success. Hubris is historically defined as the excessive pride that brings down a hero. “Great enterprises,” notes Jim Collins in his book, How The Mighty Fall and Why Some Companies Never Give In, HarperCollins, 2009, “can become insulated by success; accumulated momentum can carry an enterprise forward, for a while, even if leaders make poor decisions or lose discipline.” Problems can occur “when people become arrogant, regarding success virtually as an entitlement, and they loose sight of the true underlying factors that created success in the first place.” I agree with Collins that “many organizations are loosing sight of the true facts that created their success in the first place.”

The third problem right now is chronic inconsistency. Again referencing the work of Jim Collins in his book, Great By Choice: Uncertainty, Chaos, and Luck - Why Some Thrive Despite Them All, HarperCollins, 2011, the big question is the following: “Does your primary flywheel face an editable demise within the next five to ten years due to forces outside your control - will it become impossible for it to remain best in the world with a robust economic engine?” As he explains, “The signature of mediocrity is not an unwillingness to change; the signature of mediocrity is chronic inconsistency.”

When we zoom out and look at the bigger picture this spring, we continue to operate in a VUCA environment, which is a term borrowed from the US military. It stands for a work environment that is volatile, uncertain, complex and ambiguous. As Jim Collins and Morten Hansen pointed out in the aforementioned book: “… instability is chronic, uncertainty is permanent, change is accelerating, disruption is common, and we can neither predict nor govern events. We believe there will be no “new normal.” There will only be a continuous series of “not normal” times.”

At the same time, we continue to struggle balancing continuity and change at the day to day level and at the strategic levels. The challenge for many leaders this spring is to balance continuity and change, plus innovation and transformation.

The upshot of this big picture is that we must continue to execute on our strengths. “Success for our company is not going to take a new strategy or an entirely new business model”, notes Blake Nordstrom. “Instead it’s taking what we already do well and continuing to execute those strengths.”

This week, I encourage you to watch out for cognitive dissonance, hubris born of success, and chronic inconsistency. Now is the time to execute on our strengths. It will make a world of difference in a world that feels chaotic.

Geery Howe, M.A. Consultant, Executive Coach, Trainer in Leadership, Strategic Planning and Organizational Change Morning Star Associates 319 - 643 - 2257

Focusing on Collaboration Rather than Heroics

The senior management team and I were sitting around a table discussing a variety of new strategies for coping with the impact of the Affordable Care Act, when I commented that I did not think the organization was well positioned for long term success. In particular, it had to stop focusing on only trying to fix all of the immediate problems and instead began defining and then solving the more pressing adaptive problems. The COO’s head popped up from his folder full of charts and graphs, and said, “Our major problem is that our leaders are mostly focused on counting things. They have a ‘just tell me what to do and then I will do it’ mentality.  We need to change this first before we can move forward.”

So many organizations today are suffering from the hubris born of success, to refer to a phrase from Jim Collin’s writing.  As Arie de Geus, the former head of Shell Oil Company’s strategic planning group, wrote: “The signals of threat are always abundant and recognized by many. Yet somehow they fail to penetrate the corporate immune system response to reject the unfamiliar.” 

Jim Collins in his book, How The Mighty Fall and Why Some Companies Never Give In, HarperCollins, 2009, wrote, “Great enterprises can become insulated by success; accumulated momentum can carry an enterprise forward, for a while, even if leaders make poor decisions or lose discipline. Stage 1 [of organizational decline] kicks in when people become arrogant, regarding success virtually as an entitlement, and they loose sight of the true underlying factors that created success in the first place.” He points out that when an organization neglects it’s primary flywheel, i.e. when the “what” replaces the “why”, then the rhetoric of success replaces understanding why. This results in a decline of the learning orientation within the organization. As Collins explains, “leaders lose the inquisitiveness and learning orientation that mark those truly great individuals who, no matter how successful they become, maintain a learning curve as steep as when they first began their careers.”

Therefore, we as leaders must have the capacity to work with complexity and uncertainty. It will all come down to improving the decision-making process throughout the organization. Noel M. Tichy and Warren Bennis in their excellent article called “Making Judgment Calls: The Ultimate Act of Leadership” in the October 2007 issue of the Harvard Business Review, note that there are three stages to effective decision making. In Stage #1, the Preparation Phase, effective leaders  sense what is happening in the internal and external environment and identify the problems. Next, they frame up the issue that will demand a judgment call, and then align their team members so that everyone understands why the call is important. From my vantage point, this is the stage in which most leaders are doing a very poor job. Rarely do they frame up the issue and then mobilize and align people well before the call.

In Stage #2, the Call Phase, the moment of decision has arrived. While many think of this as a single moment of rational analysis based on knowable and quantifiable variables, in reality it is a “dynamic process influenced by multiple variables which are often outside of a leader’s direct circle of control or influence.” However, “the best leaders make decisions that influence now but also set up a framework for others to make successful decisions.” I wish more people grasped the depth of the authors’ insights and realized that setting up a framework for making a decision is as important, if not more important than making the actual decision.

In Stage #3, the Execution Phase, once a decision has been made, a leader needs to mobilize resources, people, information, and technology to support the decision. Furthermore, they need to make it happen while learning and adjusting along the way.

I believe there is a critical Stage #4, the Evaluation Phase. Here we routinely evaluating our strategic choices and decisions as a large group and during 1/1 coaching sessions. This strengthens the level of understanding and improves the overall framework for strategic and operational decision-making. 

For us here today, I end this morning’s thoughts with a wonderful question written by Jon R. Katzenbach, Ilona Steffen and Caroline Kronley in their great article called “Cultural Change That Sticks” in the July-August 2012 issue of the  Harvard Business Review: “If we had the kind of culture we aspire to, in pursuit of the strategy we have chosen, what kinds of new behaviors would be common? And what ingrained behaviors would be gone?” It is time we answer this question so we will have greater collaboration and less heroics.

Geery Howe, M.A. Consultant, Executive Coach, Trainer in Leadership, Strategic Planning and Organizational Change Morning Star Associates 319 - 643 - 2257

Some of the Major Problems in Creating Organizational Clarity

Currently the greatest external challenge to most companies is the high degree of strategic ambiguity. More and more organizations are doing a PESTEL analysis, i.e. the study of political, economic, social, technological, environmental, legal trends, and finding too many variables and uncertainties within the service delivery environment. Furthermore, these same companies are finding a lack of strategic clarity within the organization and a lack of strategic flexibility in systems and people also within the company. In short, many companies have discovered that they lack clear systems for managing or creating strategic adaptability. Overwhelmed by the complexity, they also are not proactively creating a system for building and maintaining an adaptive strategy.

From my vantage point, the underlying causes for organizations not being able to build and maintain an adaptive strategy starts first at the senior team level.  More and more of these teams are becoming dysfunctional. Rather than acting like teams, they often default to being senior leader work groups. Built around status and ego with a dash of artificial harmony, these so called teams avoid accountability and show little commitment for holistic strategic success. Furthermore, most are afraid of conflict and only talk about commitment, but show little behaviors related to it.

Second, most of these same organizations and their leaders are showing the hubris born of success, a problem first identified in Jim Collin’s book, How The Mighty Fall and Why Some Companies Never Give In, HarperCollins, 2009. As he writes, “Great enterprises can become insulated by success; accumulated momentum can carry an enterprise forward, for a while, even if leaders make poor decisions or lose discipline. Stage 1 kicks in when people become arrogant, regarding success virtually as an entitlement, and they loose sight of the true underlying factors that created success in the first place.” By neglecting their primary flywheel for success, these leaders allow “what” to replace “why”, not realizing that when the rhetoric of success replaces an understanding of why, there will be a decline in the learning orientation of successful people and the entire company.

Third, these same leaders also lack a clear understanding of the relationship between culture and strategy, resulting in a lack of “institutionalizing” a clear definition of their culture and not leveraging their organizational core values to their competitive advantage. The result is that the company and in particular the senior team tolerate people in management and leadership positions whose behavior is out of alignment with the stated culture, core values and strategy.

While the above is taking place at the senior team and cultural levels, the next challenge for many leaders and their companies is how to successfully capitalize on expansion and growth opportunities. Most think of it as an effort problem when the vast number of problems actually fall into the area of strategic infrastructure to support expansion and growth opportunities. 

As we all know, new innovations compete for company resources, i.e. time, talent, and management attention, with the cash generating projects during any fiscal year. When all of the company’s budget, reporting and management processes are focused on the current fiscal year, they also define the compensation and incentives systems and thus focus everyone on accountability to the current fiscal year’s goals. If people do look ahead during the current fiscal year, they look to R&D and their long range strategic options by reviewing research, data and trends. The result is that any new innovations fall into a Bermuda Triangle where they are considered to a degree strategic but not yet fully implementable because the resources of time, talent and management attention are not fully given to them. In this no man’s land, the “new projects” here fail to be embraced because they can not deliver like the current fiscal year goals and systems. And because they can not show a fast ROI like current fiscal year products and services, they also are then hampered by lack of full operational support. Therefore, the new innovations become “demo bait” for selling more of the current fiscal year projects and services. 

Finally, there is one other problem that is causing many organizations to struggle at this time period. They do not understand the real challenge of talent management and performance management. They consider them to be something different but do not recognize that they are also interconnected. For example, many leaders do not recognize that talent management and development is about preparing an individual for future positions within the company, i.e. building bench strength, while performance management is about managing their current performance as it relates to agreed upon annual goals and 90 day plans. 

Given the aggregate of the aforementioned issues, many organizations need a clear strategic infrastructure which helps them to adapt strategically, manage talent and performance, and prepare for and implement strategic innovation. The sum of the above problems are hampering many organizations who are seeking a better future.

Geery Howe, M.A. Consultant, Executive Coach, Trainer in Leadership, Strategic Planning and Organizational Change Morning Star Associates 319 - 643 - 2257

Positioning For The Future

THEME: New Year, More Challenges

FOCUS: Positioning For The Future

Monday morning: March 1, 2010

Dear friends,

One of the hardest things we have to do as leaders is to cultivate the ability to “look over the horizon.” While day to day operations can trump all strategic initiatives, completing strategic goals can at times blind us to what is happening just over the horizon.

When I teach people about strategic planning in our year long course called the From Vision to Action Leadership Training, I spend considerable time explaining the concept of strategy. I point out that strategy is an extensively premeditated, carefully built, long term plan designed to achieve a particular goal. I also explain that strategy is adaptable by nature due to unforeseen variables presented by an ever evolving market place. Rather than presenting a rigid set of instructions or tactics which has the potential to create organizational vulnerability, strategy needs to promote ongoing evolutionary success.

One important lesson from the last two years is that we live in a more complex and inter-related world than we have often thought about in the past. As The Law of Whole of states, “Change in one part influences and changes all other parts.” We now know this to be true because change in another part of the world or another part of the country can influence and change our world immediately and profoundly. We live at a time where the whole is in motion.

The result of this level of complexity often is contextual blindness. There are days when we get too wrapped up in focusing, monitoring and fixing the parts that we miss seeing the whole. At other times, we can see the whole organization and understand how it is moving strategically. But for me, the critical element in strategic planning and strategic level leadership this winter is to not only to see the whole organization but to comprehend how it is moving within the context of its market environment. It is both the organization and the environment that need to be monitored, because both are evolving, adapting, influencing and being influenced by internal and external factors. Being blind to context can cause the organization to enter into a period called the “hubris born of success”, a concept introduced by Jim Collins in his book, How The Mighty Fall. As he writes, “Great enterprises can become insulated by success; accumulated momentum can carry an enterprise forward, for a while, even if leaders make poor decisions or lose discipline. Stage 1[Hubris Born of Success] kicks in when people become arrogant, regarding success virtually as an entitlement, and they loose sight of the true underlying factors that created success in the first place.”

One of the underlying factors that we need to cultivate this winter is the ability to look over the horizon. We need to know what is happening today and we need to understand what will happen next year, but at the exact same time, we need to focus on positioning the organization for the future beyond 1-2 years out. We need to think about our customers and their changes. We need to think about the shareholders and their expectations and their evolution. We need to comprehend our employees, the ones we have today and the ones we will hire in the future. Because when we do this, we realize that the choices we make strategically this winter have a direct impact on who we will serve in the future, how we will serve them in the future, and whether or not we as a company will be viable in the future.

This week, sit down with your team and hold a “look over the horizon” discussion. To start the proverbial ball rolling, discuss how the make-up and actions of the families that have been created since 2000 are different than previous generations. Then, explore how teenagers now are not national as much as global in their actions and perspectives. Finally, consider what will need to change within your company over time if these millennium families were to become your future customers, and how these global teenagers will become your future employees. If you need help facilitating these discussions, give me a call. Until then, think about looking over the horizon and positioning your organization for the future.

Have a delightful week,

Geery

Geery Howe, M.A.
Consultant, Executive Coach, Trainer in
Leadership, Strategic Planning and Organizational Change

Morning Star Associates
319 - 643 - 2257