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Archive for September, 2009

Poised for growth, but do you have the right climate?

September 28th, 2009 by Forum Corporation

Trees in mistThe Conference Board reported last week that its global leading economic indicators are all positive and that both consumer and CEO confidence are rising.  The drumbeat of negative economic news we’ve heard over the past year seems to be fading.  Based on the headlines in the financial press, the debate among economists is now shifting from “how bad is the crisis?” to “will the recovery be quick or protracted?” 

 

What does the changing economic picture mean for companies and employees?  One trend that we’re seeing is executives re-focusing their efforts on driving growth (as opposed to cutting costs) by:

 

  • Creating growth plans that involve acquiring or forming alliances with other companies
  • Looking for ways to compete by means of offering innovative products and services
  • Aiming to differentiate the company by creating a superior customer experience

 

All of these paths to growth have one thing in common:  they are highly people-dependent.  That is, they require that employees be aligned and committed to the company strategy.  They also require that employees have the motivation and capabilities to carry the strategy out. 

 

Now is a good time for companies to take a hard look at whether their people are up for the challenge.

 

During the recession, companies took a number of actions that were necessary for their survival, such as freezing promotions, putting projects on hold, and implementing layoffs, furloughs, and pay cuts.  They asked the employees who they retained to bear with them, take on additional work, do more with less, and postpone some of their own career aspirations.  As necessary as this all might have been, it has undoubtedly taken a toll on the climate of the organizations.  Some of the ways we’ve seen this manifested:

 

  • Employees are worried about losing their jobs, which makes them distracted, risk-averse, and less innovative.
  • Some employees have become disengaged, and thus have exerted a negative influence on others.
  • Job stress is leading some employees to be less generous toward others at a time when “playing nice” is especially important. 
  • People’s stresses outside of work (such as family members losing jobs and mortgage or credit troubles) are making them less tolerant in relations with others at work.
  • Managers are finding it challenging to keep people focused and energized.

 

The good news is that the improving economic climate will allow many companies to get back on a growth track, if they can regain their employees’ confidence and enthusiasm.  The bad news is that those companies that don’t get back on a growth track are sure to see some of their best people leave them for more attractive opportunities.

 

How can leaders prepare their work force for growth? 

Consider three questions:

  1. What kind of climate is needed, if your company’s growth strategy is to succeed?
  2. What is the current climate?
  3. What are some ways in which managers can improve the climate?

 

Focusing on climate involves some major advantages: 

 

  • Managers have great control over climate (as opposed to, say, organizational change). 
  • Large investments (such as those that revising the compensation plan might entail) are not required—and there is an immediate payoff. 
  • Even simple actions (like taking time to check in with individual employees to express interest in their lives, their work, and their ideas about the business) can have dramatic effects on performance.

 

What are some ways that you are creating a climate for growth in your own company?

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Climate: Climate, the economy and strategy execution – what are our clients saying and doing?

September 25th, 2009 by Forum Corporation

Forum’s FieldVision enables us to capture recent insights and observations about the market directly from interactions with our clients. This month we share some observations about how the current economy is affecting organizational climate and examples of the impact a positive climate has on driving growth and strategy execution.

 

Top 10 ways we see the economic downturn affecting climate in organizations

  1. Employees are worried about losing their jobs, which makes them distracted, risk-averse and less innovative.
  2. Companies are trying to “do more with less,” which puts a strain on the employees they retain.
  3. Salespeople who have been highly successful in the past are finding that the rules seem to have changed (longer sales cycles, smaller contracts, more price pressure, etc.), which is de-motivating.
  4. Managers are findings it challenging to keep people focused and energized.
  5. Some employees have become disengaged and have a negative influence on others.
  6. Companies have fewer resources for rewarding high performance (such as, through big financial bonuses)
  7. Job stress is leading some employees to be less generous towards one another at a time when “playing nice” is especially important. 
  8. People’s stresses outside of work (such as, family members losing jobs, mortgage or credit troubles) is causing them to be less tolerant in relations with others during work.
  9. Managers themselves are questioning their personal commitment to the organization.
  10. Managers fail to recognize how their actions affect the motivation of their employees, especially when they fail to be authentic in their relations.

Examples of how a positive climate has helped accelerate strategy execution in organizations

 

  • A sales manager invested a lot of energy in improving his team’s climate, by going on co-calls, holding informal events (such as, picnics) to show he cared about them, strategizing about accounts and putting the recession in context as a time-bounded issue.  His people are motivated and staying with the company, even though their performance is hindered by a slow economy.

 

  • A residential property management company has invested in training for all employees, to engage them in creating a superior experience for residents.  The initiative has empowered employees to solve customer problems and built a climate of service that employees and residents find rewarding.  Even staff members on the low end of the compensation scale are willing to go the extra mile for customers because they find it intrinsically rewarding.

 

  • An insurance company provided training for its sales managers to create a motivating climate among their salespeople, who are not employees but work on a commission basis.  The teams with the best climate outperformed those with the weakest climate by a wide margin.  The company is ensuring that all managers have the tools and training to create a high performance climate.

 

  • A manager created a motivating climate by changing the way she manages.  Rather than telling employees how to solve a problem, or solving it for them, she now makes a conscious effort to always ask the person how they would solve it.  As a result, her people are not only more motivated but also more capable, as they are continuously learning.

 

  • A new leader of a business unit in an Information Technology company was getting increasingly frustrated by his team not embracing the new direction he was trying to set.  The team continued to hang onto the past.  He asked his team to arrange a symbolic funeral for the “old” business unit and at this funeral they buried the past business unit’s logo and conducted a wake, where people spoke of past glories and past heroes.  Within a week the leader noticed that this acknowledgement of their past was the single action that broke the team free to start look ahead instead of back.  The climate changed noticeably.  Strategy execution was about “letting go” to be able to move ahead.

 

  • An energy company was trying to embed two-way communication as part of the routine of how managers and employees work together.  With the introduction of daily and weekly “line ups,” teams were able to hear firsthand what was going on in the business, as well as provide input and ask questions of their leaders.  Conducting the line-ups up and down the business, with cross-functional visits, allowed people to be more engaged in the business and their work.

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Trivia, Anyone?

September 17th, 2009 by Steve Barry


Occasionally, I get together with my dad and a good friend at a local bar to compete in its trivia contest. The beer’s cheap, the Red Sox are on, and it’s a great time. What blows me away, though, is how the team dynamics of making decisions under time pressure and in total ambiguity emerge. Before I explain what we’ve learned works, take a few seconds to consider the following trivia questions. (I’ll provide the answers further on.)

1. What award for TV/movie actors in the science fiction genre is named after a planet?
2. What are the top two solar-powered products? (Millions of these have been sold worldwide.)
3. What NFL coach has had the most wins, all time?
4. What animal’s milk was originally used to make mozzarella cheese?
5. Which California-based band’s original three members started a band called Mother McCree’s Uptown Jug Champions in 1962?

Now, here is what we’ve learned helps us make higher-quality decisions as a team:

• Establish loose guidelines to deal with the unknown
− Reason why: There are four questions in each round, and we must assign a point value to each answer (1, 3, 5, or 7 points) without knowing what the next question will be.
− Example: We created a rule: 7 points if we are sure, 5 if we’re 75-80% sure, 3 if we’re 50%, and 1 point if less than 50% sure. This enables us to prioritize and respond quickly.

• Reframe the question
− Reason why: Reframing enables thinking about it in a different way, particularly when we have no expertise in the content matter.
− Example: “What award for TV/movie actors in the science fiction genre is named after a planet?” Both my dad and I guessed Mars. My friend said Saturn. His answer (which was correct) was outvoted, sadly. What if we had turned the question around to ask, “What planet would look good on a trophy?” Definitely Saturn.

• Have specialists to cover a diversity of knowledge
− Reason why: The questions come from all angles.
− Example: As a kid, I read comic strips. My dad gave me a hard time. Now when questions about Beetle Bailey come up and I know the answer, I can smile at him smugly.

• Write down all the options and review them together
− Reason why: When all answers are on paper, we give possible responses more consideration time. Also, we use different parts of the brain.
− Example: Asked to name the top two solar-powered products, we quickly guessed a calculator. Then my dad said wristwatch. We paused briefly—and then kept brainstorming. Calculator and wristwatch were correct, but we ultimately guessed wrong. Later, asked to name the NFL coach with the most wins, we wrote out all our guesses (Landry, Noll, Gibbs, Lombardi, Shula) and studied them. Shula just looked right, and it was. Had we done the same with the wristwatch, we would have gotten it.

• Keep the group fairly small
− Reason why: Under time constraint, getting agreement quickly is key.
− Example: Three or four people is a broad enough base of knowledge to make intelligent guesses on most questions. More people can lead to over-thinking and needless debate—and slow you down.

• Consider all possibilities, no matter how goofy they sound
− Reason why: You’re probably right.
− Example: “What animal’s milk was originally used to make mozzarella cheese?” We thought about what animals produce milk. My friend said buffalo. I chuckled, we moved on. The right answer? Water buffalo. Another question: “Which California-based band’s original three members started a band called Mother McCree’s Uptown Jug Champions in 1962?” My first thought was The Grateful Dead. But I didn’t say it. It sounded too crazy to be true. We went with The Mamas and the Papas. I don’t need to tell you the right answer.

• Finally, when it’s over, talk about what worked and what didn’t work

Now you know some new tactics for making decisions—and also which animal’s milk originally produced mozzarella cheese. Perhaps the decision you yourself need to make under time pressure and in total ambiguity involves responding to a competitive threat. Then the questions and answers are not at all trivial. Do any of these tactics work for you in your settings?

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Are You Momentum-Minded?

September 2nd, 2009 by Forum Corporation

By Jocelyn R. Davis, Executive Vice President, Research & Development

momentumIn a recession, the great danger is not that your company will go under; most leaders know how to ensure that their firm survives tough times.  In fact, the great danger is that your company will lose momentum.

In a quest for efficiency or simply for survival, many organizations facing tough times cut back, slow down, or go “back to basics.”  As a result, they lose all the momentum they’ve gained over the previous few years in customer satisfaction, employee engagement, innovative products and services, leadership development, and/or competitive differentiation.  When the recession eventually lifts, they find themselves back at the bottom of the mountain and facing a long climb just to regain parity.

A few firms, however, manage to sustain or even increase momentum:  they emerge from the downturn miles ahead of their competitors.

We can look back 90 years to find an example of a momentum-minded firm:  DuPont.  In 1930, in the midst of the Great Depression, DuPont’s sales fell by 15 percent.  Nevertheless, that year the company actually increased R&D spending in order to pursue Wallace Carothers’s discovery of neoprene, the first synthetic rubber.  Neoprene, first sold in 1937, went on to become a huge success for DuPont, showing up in every automobile and airplane made in the United States after 1939.  Although hunkering down and relying on existing products would have been a natural response, DuPont chose to maintain R&D momentum even in a severe economic downturn.  The bet paid off.

Now that there are some signs of life in the global economy, take a look around:  How is your organization’s momentum?

Have you slipped backward down the mountain and lost some energy?  If so, what can you do to begin an upward climb sooner than any of your competitors

Or are you one of the fortunate few who never slipped back—and if so, how can you keep your momentum going while most of your competitors are still regrouping?

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