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New Releases. Description As performance improvement professionals, we clearly see the alignment between our initiatives and company goals, and we're passionate about it. But to get buy-in from decision makers, we need to communicate this connection in a language they understand - the language of finance. This Infoline will help you understand basic financial concepts and terms so that you can gain credibility in the eyes of stakeholders and prove the value of your training programs.
Just as anyone can compete in a 5K race if he or she trains properly, so too can companies be conditioned to improve their health in a short period of time—and those improvements can reinforce those mission-critical priorities. The key to speed is a rigorous approach.
This starts with making the quest for organizational health an integral part of forward-looking leadership: senior leaders need to consider themselves architects, not passive bystanders. Then it means integrating health into monthly and quarterly performance reviews, with data to show how both are trending versus targets. Supporting priorities include tying financial incentives to accomplishing health goals; creating and holding accountable a health team dedicated to embedding the right behaviors in the organization; and weaving health into the performance initiatives already under way.
So how do you make health gains quickly?
In our experience, there are four areas forward-looking leaders must invest in to build a healthy, performance-driven organization besides, of course, ensuring that they are fully aligned on the business strategy; strategic and organizational misalignment are a surefire path to poor health and general operating dysfunction.
These actions will help companies target resources on the right priorities, move swiftly, and make the new habits stick.
We call these four the Leadership Factory organizations that drive performance by developing and deploying strong leaders, supporting them through coaching, formal training, and the right growth opportunities ; the Continuous Improvement Engine organizations that gain their competitive edge by involving all employees in driving performance and innovation, gathering insights and sharing knowledge ; the Talent and Knowledge Core organizations that accelerate their performance by attracting and inspiring top talent ; and the Market Shaper organizations that get ahead through innovating at all levels and using their deep understanding of customers and competitors to implement those innovations.
They all sound pretty good, right? Our research shows that when organizations are closely aligned to any one of these four recipes, they are six times more likely to enjoy top-quartile health than companies with weak alignment or diffuse efforts Exhibit 2.
Achieving such alignment requires focus on a small set of organizational-health practices usually no more than five to ten that work in concert with each other. Three themes were central to that strategy: improving knowledge sharing across business units, developing innovation and entrepreneurship, and improving employee motivation. This consistent and coherent approach led to a nine-point improvement in health. When seeking to understand and address these mind-sets, we like to use the image of an iceberg popularized by MIT academics Otto Scharmer and Katrin Kaufer.
Above the surface the tip of the iceberg is the visible behavior repeated and reinforced by the organization every day. These below-the-surface factors have to be understood and addressed before shifts in behavior and culture can be realized to drive organizational health. Once a company has identified the mind-set or mind-sets it wants to instill in employees, it needs a set of actions to change the working environment and drive adherence.
Is there a clear change story to foster an understanding of why a new approach is required? What incentives should be introduced to reinforce that new approach? Are training programs required to improve the skills of people in the organization?
Are leaders across the business role modeling the appropriate mind-sets? Being clear on these four dimensions is likely to be critical to the long-term success of a program for improving organizational health. A global equipment manufacturer was under pressure from cost-competitive entrants, challenging its long run of dominance in a specialized, capital-intensive industry.
With the development costs of its most recently released product coming in at several times its original budget, the company needed to drive down costs to maintain its market position. Leaders had been trying to address this problem, but their lack of results only led them to more frustration. The breakthrough came when, supported by the OHI, they realized there were deeply rooted mind-sets across the organization that were holding it back. The leadership team ultimately identified five of these mind-sets—the most important of which was how, historically, the organization had prioritized on-time delivery and product performance, often at the expense of product cost.
In practice, engineers felt it was their job to design incredible products, with cost being an output rather than an input. To shift this thinking, the leaders set out to demonstrate that adding value for customers, as well as efficient processes, were just as important as on-time delivery and product performance. They launched a number of highly visible initiatives that gave them the opportunity to role model the appropriate new behavior and highlight the rewards associated with it, then rolled the initiatives out across key parts of the organization—especially in engineering, operations, and supply-chain management.
The company also found simple and low-cost ways to embed the new mind-sets. One of these included giving all employees who attended a health town hall or participated in an initiative a lanyard with a red and green card.
This simple reinforcement made it quickly obvious who had the lanyards and who did not, providing a constant signal for all employees to take part in the program. It requires strong leadership and role modeling for change to take hold quickly. But change is not a top-down exercise. Health improvement happens quickly and sustainably when you drive it top to bottom, bottom to top, and side to side. This is best done by engaging a committed community or network of formal and informal influencers.
Influencers exist at all levels of an organization, ranging from assistants to middle managers.
Such people often have an oversized impact on motivating colleagues. They may be rising stars or simply well-liked and enthusiastic team players with a positive attitude. And while in many cases they are not immediately visible to leaders, they can be unearthed via simple survey-based technology that asks employees to identify people who meet the characteristics of an influencer.
Companies that map them—the exercise should take no more than one to two weeks—are often surprised by how deep many of these people are within the organization. An electronics company in Europe successfully unleashed the power of a group of influencers as part of its drive to become more innovative and customer focused. Senior leaders therefore identified a minimum of two people in each location or function who were acknowledged and respected by their peers, regardless of their level in the hierarchy, and invited them to help communicate the progress of the transformation, to suggest ways to intervene locally, and to act as role models.
They assigned a project manager to coordinate this network of change agents, keeping in touch and checking in with them to facilitate knowledge sharing. Organizational health is organic, and, like the human body, it evolves over time. If health is to be nurtured and improved quickly, it needs to be monitored and measured regularly. The days of conducting a survey and then waiting 12 months to remeasure are gone.