Unleash your company’s hidden performance
Stimulate recovery today.
After months of difficult containment and despite alarming and often alarmist forecasts, most Belgian companies are not ‘at the end of their rope’. But let’s be clear: the critical phase is coming now. In most cases it will be necessary to reorganize structures in order to control costs. But that will not be enough.
Tomorrow’s ‘winning’ companies must also look to the medium and long term. Transforming a company is of little use if it continues to be managed with pre-crisis concepts. One example: the freedom gained by employees through ‘forced’ teleworking will not disappear when the situation returns to normal. The classic hierarchy concept will be overturned.
It is therefore time to thoroughly rethink not only your structures and ways of working, but also your ways of functioning and internal cooperation, in parallel with everything you are currently doing to return to normal.
And to help you achieve this transformation, did you know that your company has a hidden source of economic and human resources? A real reservoir of performance that can be perfectly mobilized right now to activate the economic recovery and get out of the crisis?
Mobilizing hidden performance: within the reach of any company
Let’s start with an obvious fact…often forgotten in recent years. The level of performance of your organization is strongly linked to its ability to maintain sustainable cooperation between employees, teams, hierarchical levels, operational and functional units.
By interacting correctly, the ‘human’ organization develops and sells the products and services that keep it alive. But as nothing is perfect in this changing world, some of the interactions cause problems that need to be ‘regulated’. This regulation generates waste of time, energy, financial and human resources that it would be smarter to use to help your organization to (re)develop.
These losses of energy, human and financial resources are manifold. We will give a few examples, but check at the end of the article how your company fits into a more exhaustive list:
– Destruction of added value resulting from poor synchronization of activities
– Financial overloads caused by problematic operational implementation
– Overtime pay caused by shifts in functions due to a lack of delegation
– Time and resources consumed in the regulation of repetitive or predictable problems
– Over-consumption of resources due to a lack of steering of activities
– Losses in production and quality caused by a low level of responsibility of operators
– Implementation of change projects that are top slow, over budget or not meeting objectives because the strategy has not been cascaded throughout the company
More than 4,000 ‘dysfunctions’ of this type have been identified over 45 years of management research in companies and public organizations. They are also called hidden costs because they do not appear in balance sheets or management tools. However, they do have an impact on the final result.
These dysfunctions create losses of energy and means, but also create frustration and human disengagement. They undermine a company’s energy and strike force. Their economic impact has been calculated in several thousand companies. This real ‘source of additional performance’ fluctuates between €25,000 and €60,000 per worker per year, on a recurring basis.
Let’s take an example: a company with 100 employees has an additional source of economic performance at its fingertips, which is between €2.5 and €6 million per year. Amounts that could be used to finance digitalization, strengthen structures, improve competitiveness, invest in innovation, training, increase the investments necessary for successful transformation, support profitability.
So what are we waiting for to exploit it?
An approach exists. It places people at the centre of economic performance.
While models such as Lean Manufacturing, Six Sigma and Kaizen have been able to contribute to the optimisation of certain processes, they no longer meet the new needs generated by the impact of the pandemic on mentalities, behaviours, working methods and the new challenges taken up in a very large number of markets.
The future belongs to companies that have truly integrated human and economic factors into their DNA. Such an approach exists: it is called ‘socio-economic’.
This managerial approach applies itself to supporting growth by also continuously developing all the hidden sources of performance. The additional resources released by this approach are used to strengthen competitiveness, turnover, the quality of products and services, innovation, growth, the attractiveness of work… according to the strategic priorities of each company.
Why deprive ourselves of additional sources of performance that are just waiting to be exploited to get out of the crisis?
Experience shows that up to 55% of the hidden sources of performance that all companies, whatever their size or activity, can recover annually. Provided that the elements that give rise to them are clearly identified, precisely calculated, analysed for their root cause and ‘recycled’ into performance by means of a structured management method that mobilises all the company’s stakeholders.
A socio-economic approach gives management, supervisors and employees the means and tools to effectively manage the company’s resources in their own area of responsibility. Man is no longer considered as a cog in a big machine that needs to be ‘oiled’ periodically, but as a co-producer of added value and a self-controller of his own management by dealing with malfunctions in a way that is shared by all and in close consultation with his colleagues and superiors.
This approach is neither a democracy nor a concept of self-management. On the contrary, it brings management back to its essential mission: to look after the employees so that they can look after the machines, the internal and external customers. In other words, it puts into practice the fact that in a company we are all ‘salesmen’ or ‘producers’.
A self-financed approach,
It is therefore in your company’s best interest to mobilise its hidden performance potential to reconnect with customers and markets, improve its competitiveness, its attractiveness to employees, its commercial strike force, its ability to innovate and to face the competition in full possession of its resources.
The socio-economic approach is entirely self-financed. The economic gains obtained in the very short term largely finance the relatively light investments in the training of management and the piloting of the method. Experience shows that self-financing is achieved on average over a period of 6 to 8 months, and very often over a much shorter period.
With this self-financed approach, a successful exit from the crisis on a budgetary level is within the reach of every company. Take the step! Join the thousands of companies that have already integrated this approach into their growth and development strategy. Hidden human and economic resources are at your fingertips.
Implementation of socio-economic management.
The approach can be started as a pilot project in one or more departments or as a strategic project for a site, a factory, a company as a whole. It offers great flexibility in its implementation.
The first step in its implementation is therefore to define the scope of its application. This step allows management to concretise precise expectations, expected progress and to define the scope of intervention, which can be sequenced over time.
Second stage: start of training/concertation of management and supervisory staff on the socio-economic management method and tools.
At the same time, conducting a horizontal diagnosis and vertical diagnostics to highlight the sources generating hidden costs, monitoring groups of projects and the implementation of actions to transform them into economic and social performance.
Six areas are covered: working conditions, work organization, time management, communication-coordination-concertation, integrated training and strategic implementation.
A specific and unique software program allows to classify the sources of hidden costs by domain and reveals the convergences or divergences of opinion between management and management.
An expert’s opinion is issued together with a proposal for dealing with malfunctions by ‘baskets’.
The dysfunctions are then dealt with through project groups and priority action plans over 6 months, mobilising workers at all levels of the company.
The method allows each employee to continuously assess the progress achieved and ensures that socio-economic know-how is passed on throughout the organization, in order to achieve sustainable results.
The first concrete results can be expected within the first 2 to 3 months, sometimes even earlier.
Most of the companies that have adopted socio-economic management have gradually integrated it into all their structures, creating a real continuous dynamic of human and economic progress.
Does your company also encounter this type of problem? They form a hidden source of performance ready to be mobilised!
A non-exhaustive list, to date, over 45 years of research, approximately 4000 dysfunctions have been identified.
- Poor consultation and coordination between people, teams and departments: maintenance of ‘silos’, loss of flexibility, cumbersome decision-making processes, additional costs of strategic implementation.
- Unsuitable working conditions: impact on concentration, motivation, productivity and the quality of the work performed, additional cost of operational implementation.
- Deficient communication: partial information and lack of feedback to steer change, insufficient valorisation of the skills potential present in the company, fixed corporate culture, strong resistance to change.
- Weak management of working time: recurrent loss of time leading to overtime, multiple and unmanaged meetings, loss of quality in decisions, loss of time and efficiency in strategic implementation.
- Fragmentation of working time: frequent interruptions due to inefficient work organization, chronic emergency work with impact on the quality of work, services, products, loss of productivity, cost of overtime.
- Deficient or uncoordinated programming of activities: additional cost due to loss of time and energy, over-consumption of financial and human resources.
- High staff turnover: loss of efficiency, additional recruitment costs, negative impact on the implementation of change and strategy.
- High absenteeism: additional cost of temporary staff.
- Lack of versatility in teams: failure to adapt teams to new and future needs, cumbersome and over-costing strategic implementation.
- Insufficient, poorly adapted or poorly used programming and monitoring tools: lack of ‘steering’ of teams due to the lack of suitable indicators.
- Non-integrated training: difficulties in developing skills, additional cost of training that is not adapted to the needs of the company.
- Poor implementation of the strategy: failure to disseminate the strategy at all levels, failure to achieve the required transformations and the company’s objectives, chronic underperformance of management and staff in implementing the strategy and making changes.
These dysfunctions have two types of impact:
Economic impact: lower productivity, quality problems, loss of competitiveness, higher financing costs, reduced capacity for innovation, poor strategic implementation, increased costs, failure to achieve economic and financial objectives.
Social impact: Insufficient mobilisation of human potential to achieve change and goals, corporate culture frozen by strong resistance to change, lack of staff flexibility, under-utilisation of talents and skills, increased absenteeism and staff turnover, increased costs of strategic implementation.
Scoring strategies versus boring strategies
Will your organisation’s vision save your business or sink it?
A butcher that sells vegetarian products. An insurer that wishes only the best for you. A public transport company that works for Amazon. Open prisons that protect society… Behind winning strategies, there’s always a strong vision. But what can we do to get there?
What is needed to establish a strong vision?
Knowing that winning strategies are always off the beaten path, what can you come up with to anticipate and control developments in your field of activity?
An example: if, in your company, artificial intelligence (AI) is regarded as a way of ‘digitising’ internal processes that your IT department will need to gradually learn to master, you have already lost the battles to come. Because artificial intelligence has an ability that all of your engineers, financial, commercial and logistical experts combined can never equal, even if they were to work for 100 years: deep learning. It enables the continuous learning from the initial intelligence, by integrating millions of interactions from gigantic databases. For example: it was recently confirmed that AI can currently detect signs of breast cancer much better than doctors by reading mammograms. Doctors will have to keep on their toes. In the coming years, AI will be extended to all diagnoses and will radically change the way we think about medicine and our health as a whole.
Can you imagine today what AI could do for your business?
Have you ever analysed how technological developments, shifts in consumption habits, climate change, demographics and its societal impact, the evolution of knowledge and education, environmental protection and mobility will influence your customers’ demand and therefore the vision that you will need to develop for the products and services you offer?
Unfortunately, due to a lack of vision, many companies are still implementing ‘replication’ strategies. With the electrification of the car fleet, major automotive brands worldwide are offering last century’s models, adapted to run on electricity, while we ought to be completely rethinking the concept of the car.
How to escape these all too pervasive limitations? How to step away from the ordinary? How can you develop a strong business vision, even if your name doesn’t happen to be Steve Jobs, Larry Page or Sergey Brin? If Thomas Edison, Henry Ford, Elon Musk, Jeff Bezos and so many other innovators have always gone against the way their contemporaries were thinking, it’s because they were convinced that staying on the beaten path wouldn’t get them anywhere!
A brilliant idea is of little value
Let’s start with the first obvious fact: an idea of genius has little value. All of its value depends on its implementation. And to put this idea into practice in a business context, there may be competent people on all floors of the company. What is needed is a well-functioning elevator.
Second obvious fact: when something is standing still, it deteriorates. It is in making things move that we keep them intact. Elon Musk has recently acknowledged this. The over-automation of his factories almost ruined his business. Fortunately for him, he was able to count on a responsive organisation – and a strong one – to deal with the problem and rectify the situation.
In other words: defining a strong vision that will lead to winning strategies requires not only being able to move outside of your comfort zone, but also the innovation process to be integrated within the entire company.
A vegetarian butcher, an insurer who only hopes for the best for you
An industrial group that is specialised in meats has every interest in positioning itself on the vegetarian hamburger market, considering that climate change, the protection of water resources and agricultural land have become societal issues that are turning more and more meat-eating consumers into ‘flexitarians’.
A public transport company such as STIB, De Lijn or TEC could contribute to the transport of packages resulting from e-commerce, considering that hundreds of buses, trams and metro trains regularly travel tens of thousands of kilometres every day, both in cities and in the countryside.This would greatly reduce the carbon impact of e-commerce while generating new resources to invest in improving the vehicle fleet, extending the network in the countryside, and increased comfort that would attract new customers.
An insurance company could absolutely stand out from its competitors in terms of its customers’ needs for protection, by focusing its activities chiefly on prevention rather than claims management, thanks to online applications that are already widely used. This Google of prevention-insurance who hopes for the best for you will be able to better manage its customers’ risks by reducing the number of claims while improving its financial results and its ability to attract new customers.
All this can be achieved thanks to three crucial elements: the core purpose (mission), vision and values of the company.
Mission, vision, values… a cocktail that can be difficult to handle
What would drive the industrial group specialised in meat, the transport company and the insurer to implement winning strategies, is the need to anticipate the market trends, to ensure the growth and profitability necessary to secure the future.
Any winning strategy absolutely depends on a strong vision that is based on the organisation’s core purpose (its ‘mission’).
Plus, the implementation of a strategy is necessarily supported by human values that mobilise employees and let them all work together towards the same goal: to give value to brilliant ideas!
Let’s leave the ‘missions’ to the military and James Bond
When it comes to developing new strategies, the first step is always to check whether your company’s ‘mission’ is still intact and… up to date.
But first of all, a word of advice: replace the term ‘mission’ by ‘core purpose’.
The core purpose of an organisation is much more explicit than the word mission, which has an outdated connotation. Ask your receptionist what the core purpose of her job is and she can answer it with words that reflect her concrete experience. Talk to her about her mission and she will look at you in bewilderment. Ask your workers about their mission and they will look at you like you’re an alien. Talk to them about the core purpose of their work and you will find out all the details of their machines, of their fantastic job and how proud they are of what they do. This applies to all functions at all levels of the company. So replace the word mission once and for all with core purpose!
Why look for the core purpose? Because this is the reason why your activity was created and that your organisation exists. This is what will give meaning to the work of employees. Without roots, we don’t know where we’ve come from and even less, where we can go. A core purpose should inspire your employees. Creating shareholder value is of course very important for the growth of any business, but it has never motivated any employee to go above and beyond in their work day to day.
A core purpose does not have to be unique. Feeding people is the core purpose of many food companies. But if your core purpose is to feed people healthily and sustainably, your ‘business model’ has to be completely different! And what will make you unique is the way in which you will develop this core purpose by working on your vision.
The core purpose is therefore crucial for defining what kind of company you want to become! Without core purpose, there can be no vision.
To illustrate this point, let’s go to prison.
Open prisons to better protect citizens
The state is building new prisons to deal with chronic prison overcrowding. It is doing so based on the core purpose of a prison: to protect society from individuals who could be a threat to citizens. Only, there is a problem. These prisons are all the same, a ‘single’ model: a modern version of the prisons of yesteryear, a version that is nevertheless universally considered ‘criminogenic’ by specialists. Should we question the core purpose? Absolutely not. But we should add a fundamental nuance here. For over a century, we have been progressing in our knowledge of the psychological and social mechanisms that lead to delinquency. We also have electronic bracelets for confining an individual at home. Integrating into the core purpose the notion that the protection of society will be much better served if we pay attention to the psychological profile of each prisoner opens up new possibilities for the state to review its vision of the prison sector.
In this case, a first way of implementing the core purpose is to ensure surveillance to such a degree that no ‘irredeemable’ prisoner can escape, in order to protect society from those individuals who constitute a threat to it, for the duration of their sentence. In this case, we could build high-tech prisons to ensure zero escape.
A second formula would rather aim to allow many prisoners to be sustainably reintegrated into society socially, thus protecting it in the long term. In this case, prisons could be more open and could become places of work, learning, psychological support and detoxification while confining individuals in a semi-open environment for the duration of their sentence.
Of course, a state needs both types of prisons and it should stop building the single type we know today. A core purpose therefore significantly shapes the subsequent formulation of a vision.
Trust the team to develop the mission
A good way to define your organisation’s core purpose is to put together a team of 4 to 6 employees chosen in a broad and non-hierarchical way. Working from the existing activities, they will question how these activities meet a specific need. In the course of several sessions they will go back over the history of the company, and talk with customers, suppliers and other stakeholders, each time asking: why? They will formulate a core purpose that they will share and discuss with other colleagues but also with customers to arrive at a final validation by the senior management of the company.
You will see that well-orchestrated group work will help you to (re)discover the authenticity of your core purpose… which may be undergoing changes unbeknownst to you! Each time this exercise has been done, we have seen companies considerably enrich their initial core purpose. It offers a particularly stimulating basis for developing a strong vision and values that are truly capable of mobilising an entire organisation.
In a second article we will see how to develop this type of strong and mobilising vision. We will also start from the reality of today’s businesses to see how to formulate the shared values that will allow your organisation to implement its own winning strategies.
A vision, a vision, my kingdom for a vision!
Paraphrasing Richard III’s famous line in Shakespeare’s play, nowadays, the presence of a vision is considered the key aspect when people talk about the relevance of a winning strategy. And… the main reason people point to in the failure of a strategy for growth or a project for change is… lack of vision.
A recent example, the cessation of activities of the Blokker brand is there to remind us. So, we can therefore conclude that vision is an essential factor in implementing winning strategies. But how to develop it?
In a previous article, scoring strategies versus boring strategies, we emphasized the way that a company’s core purpose (its “mission”) influences its vision.
Additionally, we encourage also the different departments within an organization to think about their core purpose and define a vision that is in sync with the company’s changing needs. This is the best way to allow people to open their minds and ensure the optimal contribution of the department to the business strategy.
A concrete vision
To illustrate how the vision can be developed, let’s take a look at the case of an American company that specializes in the manufacturing of concrete that is used in civil engineering structures and airstrips. Out of a desire to prepare for the future, the company decided to update its core purpose (formerly known as its “mission”) and to develop a vision for the next 10 years.
In line with the methodology that we recommend, a multidisciplinary internal team was entrusted with the job.Their conclusion: the core purpose of the company is not so much to manufacture concrete as to guarantee the safety of tens of millions of Americans who make use of the civil engineering structures every day or who use the landing strips constructed with its special concrete, safely and in all weather.
Guaranteeing safety. That’s the core purpose. Through its know-how in the manufacture of highly specific concretes, this company will be able to turn safety into a competitive advantage that will position it at the forefront of the market, far ahead of its competitors.
How to build the vision of a company that guarantees the safety of citizens by manufacturing concrete?
A strong and operative vision is not just the result of creative brainstorming. Above all, it needs to describe the company’s attitude in the face of evolutions that will have an impact on society and therefore on its activities or in the face of opportunities that will arise from technical, technological or societal progress.
A vision is built on “pillars”, which may vary depending on the activity or the market. It is made up of “strong and ambitious” goals that need to be defined for each of the pillars. A strong and ambitious goal is the kind that gives you goosebumps, excites you and motivates you.
Safety, a golden business
Our concrete specialist defined three pillars on which the company could construct its 10-year vision.
- Technological developments in the field of sensors, artificial intelligence, 3D printing and composite materials in the field of civil engineering.
- Continuous investment in the know-how and knowledge of the staff in order to allow them to handle increasingly complex projects in technological terms, including the development of the company’s expertise in the area of the design of the structures. This is an essential aspect in the development of the first pillar.
- A growing need for safety linked to the following trends:
- The accelerated aging of many bridges, tunnels, walkways, viaducts and other concrete or metal constructions, across all continents.
- An increased need to protect the public from the consequences of climate change: rising seas, greater number of storms and hurricanes in certain areas, drought.
- The new needs brought about by increasingly intensive migration from rural areas to cities.
The common thread in the vision: safety
Everyone’s thinking is guided by a common thread: in all applications, safety (in the broadest sense) must play a major role.
Working groups were set up to define ambitious goals for each of the pillars. They worked together on the integration of technology in order to enhance safety in concrete structures, the ongoing quest for excellence in the development of the employees’ knowledge and skills, the diversification of activities towards the construction of very large yet thin towers, floating cities and other complex structures that will still have to be invented, but also towards technologies for capturing CO2, producing green energy, recycling wastewater within a closed circuit, etc.
Here are just a few of the many potential concepts that were discussed:
- “Smart” bridges clad with sensors that provide an early warning if there is a defect or if maintenance is required.
- Building civil engineering structures in such a way that defective parts can be replaced at a lower cost by using 3D printing.
- Continuous training programs for staff using “holographic immersion”, which allows you to visit any structure in real time.
- Thin, giant towers linked together by ultra-light concrete aerial walkways to create new cities on land that has been flooded by the sea.
- Introduction of new materials to replace rusting steel.
- Composite concrete that generates solar electricity.
- Concrete produced using solar towers, enabling the production of CO2 neutral cement.
- Monitoring of all civil engineering structures in a country in real time using sensors integrated into the structures.
- Using artificial intelligence to predict, assess and address, in real time, the stresses on civil engineering structures.
The world of new possibilities opened up by the development of the vision becomes tangible and exciting. The vision moves the company forward towards the future and will guide the strategic choices that will ensure its growth.
How to define a vision? Draw upon the knowledge and creativity of your employees!
This is what the company that manufactures concrete did. It’s also the approach we recommend because it never fails to deliver exceptional results.
Starting from the “pillars of the vision” you have first defined (the areas that determine the evolution of your activities), working groups of 5-6 employees will do extensive prospective research. All scenarios can be considered at the start. There are no bad ideas, but they all have to incorporate the notion of “progress”.
After numerous iterations, discussions and analyses, each working group distills a synthesis of strong and ambitious goals for its pillar. This synthesis will form the substance of the vision which can be established for a period of 3 years, 10 years, or more depending on the type of market in which the company operates.
Goals can be both qualitative and quantitative.
For the concrete manufacturing company, the following ambitious goals were chosen:
Ambitious goal 1:
In 10 years, we will be producing engineering and civil engineering structures that will be 2 times more resistant, 2 times more durable and half as expensive – both in terms of construction and maintenance – than those of today. We will also build them twice as fast.
Ambitious goal 2:
Based on the experience accumulated in engineering structures, in 10 years, we want to become the “SpaceX” of the construction of carbon neutral cities on land and sea, that are safe for the inhabitants and sustainable in terms of energy consumption and environmental impact.
Ambitious goal 3:
Starting today, we will make a concerted effort to ensure that engineers around the world put our company at the top of the list of the companies they would like to work for, thanks to our continuous focus on the development of knowledge and innovation for the safety of the public.
Let’s get to work!
We believe that a company should include the following elements in its reflection on vision today:
- Technological evolution in the widest possible range of areas because we anticipate revolutions in technologies that will have a direct impact on our lifestyles. For example, Google has just announced that it has manufactured a “quantum chip” capable of performing a calculation in 200 seconds that would take 10,000 years to be performed by a supercomputer.
- Global societal changes such as demographics (climate refugees will soon be a reality), the aging of populations on some continents and the explosion of populations on others.
- Protection of the environment and the climate (carbon footprint, green energy, responsible agriculture, etc.).
- The notion of the sustainability of activities in all senses, including a business model that maintains the “moral” commitment and motivation of the men and women who produce the goods and services.
- The consumption patterns resulting from the quest for well-being outside traditional economic circuits.
- The needs for protection in a broad sense: health, social life, security, privacy.
- The needs and pressures that come to bear in the area of mobility, with regard to people as well as products, machines and facilities.
- The impact and the opportunities created by all of these changes amongst current and future competition.
Developing a vision is fascinating work because it forces you to imagine yourself in the future, to open yourself to the world and to come up with bold ideas… which are essential for your future dynamic!
In a third article, which will be published very soon, we will analyze the role played by corporate values in the implementation of the vision – values translated into behaviors that will allow you to implement winning strategies that will differentiate your business over the long term.
Does your business have a personality?
Could you describe the personality of your business, in just a few words? And how would your customers describe it? But, hang on a moment, does your business actually have a personality? Because without personality, it’s difficult to stand out from the crowd. Difficult to shine. Difficult to attract the best employees. Difficult to realise a vision.
In two previous articles (Vision, mission, values), (A vision, a vision, my kingdom for a vision) we showed you how the ‘raison d’être’ (mission) and vision of a business are interconnected. Together, they can truly transform a business and align it with the future needs of the market. As long as attention is also paid to the values that will create a personality that will allow the business to consistently stand out from the competition.
A mission, a strong vision and… too many values?
Shared values are a key element in building a personality through the mission and vision of the business.
Values should be worn like a suit, not kept in a suitcase that you only open when you need it. You embrace values because they are personally meaningful and because they add something to the way you work as a team.
The best method for developing the values that will bring your business to the forefront of its industry is to once again trust the intelligence and intuition of your employees.
Starting from the values that everyone finds essential in their own lives, our methodology leads to the formulation of fundamental values that help to create a solid foundation for individual and collective behaviour.
It is interesting to note that, as expressed by the staff themselves, the values currently most cited in companies are respect (of the person, of opinions but also of commitments), transparency (honesty which leads to trust, open and frank communication) and team spirit (being involved in the work, having the right to participate, to be heard).
Three fundamental and deeply human elements that are not always explicitly reflected in the values promoted by many companies. You would almost think that those who formulate the values and those who bear them out do not even work in the same organisations!
Values… that are not actually values.
What does that all too familiar trio found in many companies of leadership, innovation, customer centricity actually mean?
That the CEO demonstrates leadership in his ability to mobilize and manage his organisation, no question there. This even extends to leadership positions. But a business is not just a team of leaders – it’s an artful blend of multiple skills that together form the perfect mix for success.
According to a survey done in the United States, 90% of the most talented and best paid employees in companies do not create new products or contribute to increasing profits. In Europe, only 17% of workers are involved in initiatives that create added value, and only a fraction of these are through innovation.
Talking about innovation as a value for all employees is, therefore, in a sense, wasted breath!
On the other hand, innovation can or should be part of the mission of many organisations, and not only in relation to technologies or products and services. Social innovation is just as impactful in a globalised world in order to ensure a company’s growth in a country or a continent.
Another value… which isn’t really one! This notion should be at the heart of your company’s mission, not presented as one of the values. And by the way, it’s always smart to describe what this notion means in concrete terms for employees. Chances are, everyone will give a different definition of it. So good luck putting it into practice!
Values on paper, words, words, words
A value that does not briefly describe the rights and obligations that it sets up between employees… is of little value.
An example. A company wants to promote a spirit of entrepreneurship internally and defines one of its values as ‘daring to do’. It hopes to encourage employees to take more initiatives, at all levels. But there’s a problem: taking more initiatives means that from time to time we are going to make mistakes.
During the discussion of the value, the right to make mistakes is mentioned. An initiative that was initially well thought out, but which did not lead to the expected result and which could have a negative impact, should not be held against the person or people who took it. Everyone has the right to make mistakes, but also the duty, when an error is made, to report it as soon as possible to their line manager and colleagues in order to ‘fix it’ if possible and to put everything in place to prevent it from happening again.
Without rights and obligations linked to the value of ‘daring to do’, nobody will ever take an initiative for fear that it will be held against him.
So do not hesitate to fundamentally review your values, and involve your employees in the process, in order to (re)formulate them and clarify these rights and obligations. You will see how energizing this is!
Also be aware that, generally, few people can formulate more than three or four values that can be concretely translated in terms of the behaviour they involve.
So, if you believe that 5, 6, 7 or 8 values are effective, perhaps you are overestimating the capabilities of humans in this area. Three or four is good, more than that is often useless… in terms of achieving your goals!
From values to behaviour: there’s only one effective recipe
The recipe, in a word: proximity management.
What do you think of our definition of the word ‘management’: ‘If you take care of your employees, they will take care of the machines, products, services and customers’?
The loss of economic value attributable to ‘faulty’ management has been calculated for more than 40 years (in more than 2000 companies and organisations) by our partner ISEOR (Institute of Socio-Economics of Companies and Organisations), one of the most important centres of management research in France. It is between 20,000 € and 60,000 € per person per year! We find the same figures in Belgium.
Faulty’ management is management that does not pay enough attention to human interactions within its team or vis-à-vis other teams. Management who have failed to grasp that economic performance is generated by men and women, not processes.
We wrote an article on this subject on the TFW virus which plagues many companies (see The TFW virus, the slow killer of companies?).
Values should be promoted ‘from the top down’. By applying them. By talking about them regularly at team meetings. By emphasising ‘good’ behaviours. By being very direct with those who do not apply the values. Sometimes even imposing sanctions for glaring shortcomings that have an impact on the team.
There is no other recipe for implementing a company’s values than proximity management. You have to think about them every day. Talk about them regularly. But isn’t this also true for the implementation of the vision? The strategy? Any other project for growth?
When the winds of change blow, some build shelters, others, wind turbines.
The function of the leader in the implementation of a truly ‘meaningful’ vision and values is crucial. It’s management’s responsibility too. But have management understood it?
A study carried out among 3000 managers in the United States and Europe confirms what we have long known, without always applying it in practice: the greatest potential for creativity and dynamism can be found at the level of middle management and among the employees immediately below them. This is where most of the added value is realised. And this is where you can tap into the greatest energy to implement the mission, the vision and the values.
The companies that stand out have dared to question hierarchical models and involve their employees as essential drivers of lasting change. They have become more real, more authentic and therefore able, as a result, to evolve and adapt much better and faster than all the others.They have developed the right reflexes, the antibodies to free-floating cynicism. They have convinced the majority of their staff that when the winds of change blow, it is better to build wind turbines than shelters.
The men and women who make up these companies speak a true language. They speak truthfully to each other, but with respect. They recognize mistakes and missteps and learn from them. They take initiatives even if it means falling flat from time to time.
In short, they get involved in the work, they do, knowing that if the team wins, everyone also wins individually. And that has an impact on customers and those around the organisation.
It’s the personality that sets a business apart. It comes from having a clear mission, an ambitious vision, shared values.
And this is something that is increasingly well understood by consumers and customers, as well as employees and investors!
With each passing day, the buzz word “digital transformation” rises higher on the CEO’s strategic agenda. Business leaders are moving forward with digital transformation at varying paces. and with varying success. They attempt to integrate innovative digital technology into all areas of their business to deliver additional value to customers, reduce costs, implement new business models and make use of large scale data analysis (”big data”) to drive business decisions. Undoubtedly, more than ever before, IT is imperative to the implementation of the business strategy. Yet successful implementing digital transformation is as much a leadership challenge as a technical one. Aristotle famously structured deliberate intentions through 5 Ws – why, what, who, when, where. We will explore together how 5W can help business leaders approach the implementation of their digital transformation strategy with confidence.
Starting with the why and what, have you put all the wood behind one arrow? Or as we say in Dutch – are all the noses pointing in the same direction?
Members of the senior leadership team are expected not only to support the CEO on business strategies but also to offer their own insights and actively contribute to key decisions. To leverage the benefits of your digital strategy, it is however essential that the leadership team comes to agree on the “what” and the “why”. If the leadership team is not aligned, their direct reports will receive conflicting objectives, which will result in difficult decision taking and hence excessive hidden costs for the project.
- Do you agree on what your customers really need?
- Could a digital market entrant provide a better customer experience at a lower cost?
- Do you agree on which capabilities you need to develop in the company to outperform / reduce costs / obtain reliable data that can be used to further fuel your digital strategy?
- What will you execute first?
Once the strategic direction is clear about the what and why, the implementation addresses the who, where, when, and the how.
The Who – who are the stakeholders and who will drive the project?
Projects by their very nature are uncertain. Digital transformation projects, even if they seem relatively straightforward involve many stakeholders and a high level of complexity and task dependencies. It is therefore essential to have a digital transformation leader with the skill, knowledge and experience to plan and execute the projects on your roadmap.
Equally crucial is the early identification of the stakeholders in the project: on one hand the internal stakeholders in the organisation and on the other hand, external partners, customers and suppliers.
Any successful strategy implementation depends on whether your employees will be able and motivated to meet business goals and drive success.
- Have you communicated what will be expected from your managers and workforce?
- Do your management teams have priority action plans in place to meet business objectives?
- What new skills are needed to handle this change? How (early) can you identify who will need retraining?
- What’s in it for the stakeholders ?
If a majority of employees feel disconnected from the strategy and don’t understand why decisions are being made, resistance to change will be high. Which is why a communication and change management plan has to be worked out from the onset of the project – in the preparation phase.
Have you spent some thoughts about your approach towards external partners?
- Will you brainstorm with your partners, suppliers or customers around the new digital capabilities, do a pilot, test some ideas?
- Do you have an external communication plan and roadmap?
- Who needs to be working on this from your legal, M&S, Procurement departments?
The When – when will you pick the fruits of your project?
Often, it is thought that setting external deadlines creates urgency, and urgency is needed to get things done. In reality, setting a target date without having a sound project plan and schedule to base it on, is not a good idea at all. If an unrealistic target date is imposed, chances are that people on the team will be taking unacceptable risks, such as shortcutting test periods and keeping an eye shut on the quality of their work. Inevitably, this will end in a failed project that will not deliver the expected benefits.
- How reliable is your project schedule, what risks have been accounted for in the contingency?
- What are the important milestones?
- How will you know if the project is on track?
- How will you deal with escalations and inevitable roadblocks?
Urgency should not be confused with priority. Assign the right priority to the project, and kick-off the planning and risk management process as soon as possible.
The Where – where will your project be delivered?
The « where » question may seem trivial but is not. It applies to the data stream that drives your digitalised business processes, whether for manufacturing, industrial or information processing purposes. Having a clear picture of the data flows within your business and with external organisations (suppliers, customers, regulators, cloud applications, digital ecosystems) will help structure all the activities needed to implement the changes.
- Where (and by whom) is data and information captured, created, stored, used or transferred within the business or with external organisations ?
- Where is the part of the data flow that is critical for your business and drives your competitive edge?
- Which part of the data flow can be carried out with readily available software packages?
- Where do you need flexible but effective connectors – humans or technical API’s – to make sure the information chain remains uninterrupted as it crosses company and system boundaries?
And finally – How?
Having addressed the Why, What, Who, When and Where, you may be tempted to ask – How?
My advice would be : Hardily!
“To turn really interesting ideas and fledgling technologies into a company that can continue to innovate for years, requires a lot of discipline.” – Steve Jobs