Some of the most complex problems in an organization stem from elementary errors that become practices over a period of time, practices that are hard to change, that meet with resistance with every attempt to improve. Ever given a thought to why that is so?
All processes, be they manual or automatic, at some level involve human interface. Human interface can either ‘add’ or ‘take away’ from a process and whether it does the former or latter, depends on several factors. Without delving deep into the multiple facets of human nature, we can safely say that not so surprisingly, human behavior is governed largely by risk or reward.
Organizations spend a significant amount of resources (time, money and commitment) in risk management, evolving good corporate governance, hiring advisors to assist with reengineering the business, review their processes, bring value to the table or if not all of this, enhanced brand equity from association! While all of these are essential, organizations tend to miss out on the most critical component that determines the success or failure of these initiatives – people.
To keep it simple and straight – an important starting point is to address the human angle, before any other. It could radically change the way organizations operate, the real role of advisors and more fundamentally contribute to optimal resource utilization.
Function of scarcity of resources and quality of work
When the economy is booming, there is a constant strife for attracting and retaining talent. In the downswing of economies, there is a need to have that foresight to tide through the bad times and bounce back on your feet. This is the real need. However, there are trade offs at all levels, where people are concerned:
Trade off of knowledge and expertise for hiring resources attached to a good brand (be it a B-school or a top notch Corporate)
Trade off of retaining employees by smaller, mid-sized organizations irrespective of how they perform
In either scenario there is a gradual deterioration in quality of work, level of risk and entrepreneurship demonstrated degree of respect and reputation that the organization builds within with key stakeholders and with the market at large. Is there a way to beat this unproductive cycle?
Risk, reward and the quintessential employee
People’s perception of risk and reward and what they seek for themselves varies with inherent behavioral drivers that impacts their behavior. A matrix of behavioral drivers and that patterns that result is given below:
Inherent factors / Behavioral driver
Behavioral pattern
Risk / reward barometer
Desire individual success
No desire to do better / Fear of losing status quo
Look down upon others
Risk
Reward
Satisfied
Status quo
Status quo
Overconfident
↑
↑
Insecure / Fearful
↓
Status quo
Ambitious
↑
↑
These behavioral patterns in turn lead to persistent organization challenges. Has your organization faced any of the following issues?
Deviation from established processes is the norm
Customer complaints on product quality, no repeat orders, sales returns, but these don’t get highlighted
Delayed accounting entries for complex transactions that are finalized and accounted at the end of the quarter
Insufficient explanations for un-reconciled accounts/inaccurate accounting entries that never surface
Checks issued to vendors and dishonored, however no record or report of the same
Delays in receiving materials ordered from the vendor, though there is no action taken on the vendor
Sourcing from single vendors though there may be more competitive options available
Continuous achievement of departmental metrics though there is no significant contribution to organizational growth
Discrepancies in sales reported
Lack of communication cross functionally
Continuing to do operate through banks/financial institutions that are inflexible in the way they operate
Hiring staff who are submissive
You will find that there is a distinct trend within these issues. These are not issues with the business of the organization or even external factors that are uncontrollable, but are issues that surface on account of its people. Any organization is only as good as its people.
If these issues were to be categorized to its root cause, these can be related to the behavioral patterns, discussed earlier.
Inherent factors / Behavioral driver
Organizational challenges
Cover up mistakes
Maneuver situations
Functional silos
Passing on the buck
Slow / no growth
Satisfied
Overconfident
Insecure / Fearful
Ambitious
People mix in organizations
There are people who can ride the wave of success along with a growing brand and there are those who have the endurance to start from scratch and explore new territories. While every organization needs healthy percentage of leaders, the stage of growth that an organization is in, will largely determine the mix of people* that may form its majority, for it to thrive – believers or followers.
* The graph does not depict an optimal mix, but is merely illustrative of a key factor.
Skill of people management
People come with their respective inherent nature. They can’t be changed. But can be motivated and managed. For an organization to manage its people well, it needs three foundational pillars that will garner change:
Management buy in and commitment
Encourage honest, straight dealings
Do the basics right irrespective
Managing people can lead to a dramatic change in the organizational climate as illustrated below:
Inherent factors / Behavioral driver
Behavioral pattern
Convert to
Admit mistakes
Willing to learn
Focus on organizational goals
Positively influence others
Satisfied
Content
Overconfident
Confident
Insecure / Fearful
Ambitious
Aspirational
Driving change
While there is no best way to do a thing, there is always subjectivity and judgment involved. Yet, what weaves an organization together is its oneness of purpose and its ethos. Aren’t’ all Chief Executive Officers looking for the perfect paradigm to get their people to identify with one common goal, the way to achieve it and unity in diverse sub-goals? It’s neither an easy journey nor a short one.
Six overriding themes that should be embedded into all initiatives driving change – be it a new strategy, a new culture or just doing things right. This can not only help implement the five year or annual business plan of the company, it can help companies attract and retain those people who matter.
People first in any initiative
Focus on outcomes
Believe and be committed to change
To beat the limitations of real human capital
Do the basics right irrespective
No trade off on hands on expertise and mechanism for sharing innate knowledge
People first in any initiative
Before deciding to undertake a new project, step back and ascertain who the stakeholders who would be influenced are and who would influence the project.
Scenarios of change:
When a new ERP is implemented it has organization wide ramifications. The Sales Executive now has to set up a sales order instead of sending out an email indicating the order is received.
If an audit is about to commence, process owners are likely to believe they would be found fault with or penalized in some way.
If a new performance appraisal process is being initiated, there would be doubt and anxiety about its implications on compensation, promotions.
If changes are more strategic, such as the hive off of a division or re-structuring, this could imply changes in responsibilities, reduction in people and breed insecurities.
The cardinal rule – most people would do a job on hand if they knew its importance to the organization and how it would benefit them and if they knew how to go about executing the job. If it’s stuck with them longer than in the ordinary course, there is a strong chance they do not have the capability to do it or have come across a glitch they can’t fix or they can’t care less or they just don’t have the band width to take time off from their routine activities.
To keep people first for any initiative does not imply forsaking the initiative for people. It would mean one of several things given below:
Having clarity on what needs to be achieved and why
Communicating effectively to the right people at the right time
Creating room within people’s schedule to participate as needed in the initiative
Facilitate in building necessary skill sets that people need to contribute meaningfully
Address resistance to the initiative through honest answers, with preparedness to make necessary course corrections, if there is merit in the disagreement
Use the carrot or stick, of course, when needed to drive people to the goal.
Focus on outcomes
So often we get trapped in a plan or the way this was done earlier, instead of figuring out what’s working best in the current scenario. It’s therefore important to focus on outcomes and not just on the path that you have drawn out to reach an outcome. Defining outcomes is the key. So often we define outcomes as follows:
setting up a call centre instead of stating that you would like to enhance customer service
implementing an ERP, instead of integrating work flows, making information available real time across locations and so on
Focusing on outcomes would keep the energies expended on the right goals and every time project goes off-course, there would be a red flag.
Believe and be committed to change
Believing in change involves not just identifying change is needed, but taking the first step to bringing about change at the grass root level, being prepared to stick it out for a long period of time in order to bring about change that lasts.
As you have read through this, have you bought into the philosophy? Do you believe that building human capital in a radical way will create a demonstrable difference in the market place?
Are you willing to expend significant energies in taking an honest path to be on course to achieving organizational objectives? To cut a long story short, are you willing to believe in the people that your organization has? Just as they come. It’s quite usual to believe in those that perform. But to make those that do not perform, raise their performance level, is what real leadership and management is all about.
To beat the mental limitation about real human capital
Change is an absolute necessity, just as much as there is no other place to look for talent than within those that the organization has at its disposal.
Building human capital is clearly not just about fighting tooth and nail to attract a certain type of resources or working on multiple make shift methods to retain them.
It is more about:
Knowing your people - Evaluation, understanding capabilities, short comings and objective assessment of the existing people pool through formal and informal means
Understanding organizational vision, translating into assignable goals and sub-goals
Aligning people to maximize contribution to organizational vision
Using their limitations just as much as their skill sets to maximum advantage
Honing and show casing skill sets
Converting limitations into catalysts that strengthen team work
Reality check: The first two steps requires significant effort not so much in the actual modalities, but in gaining buy in of key stakeholders to drive consistent understanding, approach and deployment. The way ahead is to have a simple people strategy that takes into account constraints and not just the wish list of the organization.
Be realistic in expectations out of the resources in terms of timelines. Investments that you make would hinge on this critical element. There would be no point in biting off more than the organization can chew at any given point of time.
Do the basics right irrespective
Every report or red flag or mechanism of exception reporting should throw up indications of whether the organization is doing its basics right. Some of the basics for an organization would be -
Do we understand what our customers need?
Are our products or services aligned to customers needs?
Are we selling the products or services that we are competent in making or delivering?
Are we delivering as we promised every single time? If not, why not? Is there a mechanism to identify why not?
Every activity or sub-activity that directly or indirectly feeds into these basics should be done right, irrespective. For e.g. When a sales executive talks about the product, he should know exactly what to say, else he should not be doing the talking to the customer.
No trade off on hands on expertise and mechanism for sharing innate knowledge
Knowledge management is not a fancy phrase coined for an organization to build archives of complex data and theoretical training programs. It is about identifying those very things that will enhance the ability of the resource to contribute in his or her role operationally to the business.
What is hands on expertise? Would you give your car for servicing to someone who has never set his hands to task on the parts of an automobile? More and more often, we find people growing up the ladder without having actually done any of the grass root level activities.
And those that actually have this innate knowledge, have it stored away in a section of their mind, that no one in the organization can seek, when in need. Identify the real knowledge that is probably with someone at the bottom of the food chain. Value that knowledge, utilize it and reward those that share it effectively.
The journey ahead
Seek to aid your organization in identifying their ‘real’ problem areas as opposed to ‘perceived’ problem areas.
Do not set aside the critical element that weaves an organization to best advantage, the powerful people element in any of your initiatives.
Evolve processes for your organization through cohesive internal understanding and leadership.
Needless to say, when an organization has its founding principles well and truly aligned with its people, retention is only an after thought. For every resource breathes the strategy of the organization and executes it. They are no longer just employees, but are an inseparable team working towards a common goal.
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