Most businesses want to get to a place of sustained success. Where the whole organisation aligns behind a common purpose and delivers on it. Where people and processes are efficient and productive. Where customers are delighted and loyal. Where excellence is not just a steady state but also adaptive and agile enough to be continually on or ahead of the curve in terms of innovation.
Few businesses every really achieve this because it is extremely challenging to do. Some businesses lurch from crisis to crisis, some find it difficult to get the basics reliably right and otherwise good businesses get struck by unpredicted crisis. With the transparency of the digital world pouring ever more scrutiny on already stretched executives every leader and every team in every business needs all of the help they can get to gain the escape velocity from the gravitational pull of mediocrity.
Sustained success is possible and there are plenty of examples of such businesses at all scales. What these businesses have in common is leadership who curate a culture that delivers with minimal intervention, which in turn frees that leadership up to be at their best in strategic thinking and supporting their people to be the best they possibly can be.
The path to such organisational nirvana is clear and achievable for most businesses, as long as the building blocks are in place. This approach applies at team, department, divisional as well as whole organisation levels, the only thing that changes is the relationship with the stakeholders.
The first step is always to accurately diagnose the current state.
Then take the appropriate next step depending on which building blocks are already in place.
The diagnosis identifies the organisation or team at one of four levels of organisational evolution:
1 – Fix Create stability and predictability
2 – Reliability Deliver goals and promises
3 – Ensurance Purpose-driven, safe, and compliant
4 – Adaptability Vision-led, flexible, and adaptive
These levels also define stages on the way to sustained success – the path is linear and there is no short cut between “Fix” and “Adaptability”. If the diagnosis is that an organisation is in need of “Reliability” the reliability will have to be achieved and then Ensurance before Adaptability.
Fix is for organisations in some sort of crisis. The crisis may be as a result of internal or external factors. An organisation is in crisis when some of the foundations of the system change unpredictably – this could be some from some accident or event specific to the business, it could be market driven or it could be the loss or departure of a key individual.
Crisis is a good thing as it generates motivation and permission to change. As the saying goes “never waste a good crisis”, however we have to also be careful to avoid the “pyromaniac fireman” syndrome where we create crises in order to motivate change (or feel fulfilled.) The skill is to make sure that the solution to crisis is sufficiently strategic and not overly reactive. Fix is about developing stability in the organisational culture and reducing the overall level of stress in the business.
When an organisation is not in crisis the next diagnostic level is “Reliability”. Reliability is about understanding the promises that an organisation makes to it’s stakeholders (customers, employees, shareholders and others) and how good they are at keeping them. This runs from the macro promises around making decisions that actually align to a purpose and holding to overall values, or the ability to deliver on major projects, down to the micro promises like how people are treated on a day to day basis.
Reliability is the critical building block of sustained success, so it is worth looking at the components in a little more detail. In terms of diagnosing where your organisation is right now first think about the “promises” it makes – think about this in terms of both specific statements made to stakeholders and also implied promises in terms of market expectations.
1 – Promises made to staff in terms of values, development, leadership, autonomy, recognition etc
2 – Promises made to customers in terms of reliability, safety, quality, durability and so on.
3 – Promises made to shareholders in terms of performance and results.
4 – Promises made to society in terms of impact, risk, social value etc.
The order of this list is intentional:
– organisations that put shareholders first end up being short term and reactive in their thinking.
– organisations that put customers first end up being excessively demanding of their staff risking burn out and churn.
– organisations that put staff first end up having a people who are motivated to do the best for customers and customers who are loyal and not excessively price sensitive.
Having considered the promises that the organisations makes consider your own immediate experience how good it is at delivering on them – for example:
1 – What proportion of projects get delivered on time and on budget?
2 – What proportion of internal meetings start and end on time, follow the agenda and deliver expected outcomes?
3 – What proportion of customer complaints relate to reliability, safety, quality, durability and so on?
4 – To what extent do staff feel that the values are lived by senior management?
5 – To what extent do staff believe that decisions are taken in the wider long term interests of the organisation.
Truly successful organisations achieve promise adherence rates of over 90% both internally and externally.
Interestingly Apple’s fortunes started to take a serious turn for the positive when they got serious about their operations and delivering on their promises – the man in charge of that transformation was one Tim Cook, perhaps their post Steve Jobs success is not so surprising.
The key to promise adherence is the prioritisation of promises and leadership’s attention to it, including developing the systems and incentives that make promise adherence easy and rewarding for all employees.
Even with high levels of promise adherence and corporate reliability there is still the risk of crisis, organisations like BP or VW were not bad organisations at the time of their crises, but risk existed within their culture. Ensurance is about understanding what risks exist within a culture and an industry and taking steps to mitigate them as the cost of such a crisis can run into billions of dollars and risks the survival of the business.
When the news of such a crisis breaks the vast majority of employees are truly shocked. Typically the companies have strong recruitment practices and hire those who were successful at school and university. They have codes of conduct and disciplinary processes designed to keep them safe. Senior managers are usually decent, clever people with great integrity. So how are businesses so apparently vulnerable to these situations?
If we look at a very high level we can see some well known commonalities:
1 – Short term focus
2 – Detached Senior leadership
3 – Difficult for less senior people to escalate concerns
4 – Focus on transactional rather than relational conversations
5 – Prioritisation of results over other considerations
6 – Poor internal communication
7 – Mistrust
If you notice these cultural traits in your organisation it could be vulnerable.
Ensurance is not a matter of additional controls or policies, it is not a matter for lawyers or compliance officers, it is a cultural challenge that falls disproportionately on the leadership. Ensurance is about creating a culture which has the opposite cultural habits to those listed above;
1 – Effective balance between long and short term
2 – Connected leadership
3 – Excellent communication channels for concerns.
4 – Honest and trusting relationships
5 – Incentives and recognition around qualitative and behavioural areas as well as performance
6 – Excellent internal communication
7 – Valuing of robust conversation.
For organisations to be safe they need to have cultures where colleagues really look out for each other. Where if they see things that concern them it is easy to escalate them. Where everyone is very clear what the values and the behavioural boundaries are and that these are reinforced daily, by the behaviour of leaders and by the policies and practices of the business.
Which brings us to the objective, Adaptability is possible only when organisation stress is under control, when there is a high degree of reliability and low levels of systemic risk. It is only under these circumstances that the leadership have the bandwidth and the employee base have the trust (in leadership and each other) and commitment to create truly sustainable success.
Just because an organisation is profitable does not mean it is sustainably successful. It is relatively easy to be profitable by stealing from the future or riding the wave of a trend, for example. What is much harder is to have a culture that is forward looking enough and agile enough to continually redefine the trends and ride them successfully every time, while also investing in the future in terms of people development and innovation.
Adaptability is just that – the ability to continually define the future and adapt reliably to it. It is the place where businesses grow and profit year in year out. The key to achieving adaptability is leadership and the key leaderships skills required are culture curation and change leadership.
The results achieved by any business or team, positive or negative, are realised through the agency of the culture and the culture is defined by the leadership. Investing in the development of high quality leadership at all levels of the organisation has a disproportionate and long term benefit to the business in terms of increased returns, increased reputation and reduced risk.
Holos works with with leaders at all levels to help them understand their challenges and develop their skills so that they can change and curate the kind of culture that leads to sustained success.
Holos has a wealth of specialist leadership and culture coaches and consultants with decades of experience working with a huge variety of leaders. Holos can help you or your organisation to upgrade it’s leadership to flourish even in a challenging business environment.
To help make using Holos easy we offer inspiring standalone sessions on Megatrends, Leadership, Culture and Change that give organisations a chance to see us in action and helps to get a wider process started.
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