Friday, November 15, 2013

How to Ruin an Organization While You Keep Making Money

How to Ruin an Organization While You Keep Making Money

The Situation- Doing Things Versus Doing Enough

I once worked with a CEO who tried to convince everyone he cared about creating a great culture. I believe he even thought he was doing what it takes. The problem came from what really drove his decisions and his behaviors.

The company was full of great people. The business had grown over the years to the point where relying on people to figure out what to do was no longer efficient. Departmental barriers started to form based on what key individuals wanted to do instead of the business processes that created the products and services. Gaping holes were left open and waste was created in the form of re-work and "extra" inventory which kept piling up. The great people started pointing fingers at each other.

It was an opportunity to put systems in place that would ensure safety, quality and efficiency were maintained as the company scaled. The CEO stuck to what he knew, the numbers. He made decisions primarily based on revenue and profitability. The conflicts got worse as frustration levels increased with each recurrence of waste-creating incidents. Meanwhile, the CEO kept his head down, crunched the numbers, made decisions based on what the financial statements were telling him and celebrated the company's success at being profitable. A few times a year, he held company events: golf outings, holiday dinners, barbeques. He was going through the motions. He believed he was "Doing" the right things. Meanwhile, people who'd worked closely together for years, people who'd once been the best of friends inside and outside of work, stopped talking to each other altogether. Hourly employees were consistently expected to work 60-hours a week. Everyone was getting burned out. The things the CEO was doing to create the culture he said he wanted weren't wrong, they were just not enough. 

The Company was Making Money. Isn't That Success?

People join organizations as employees or volunteers for one reason: The believe they will realize a net-positive value from the relationship. The form, or combination of forms, the net-positive value is made-up of is different for everyone. From the CEO's point of view, the view from the financial statements, the company was making profits, employees were getting paid a lot of overtime money. He perceived the net-positive value was being satisfied for the employees because of the financial results. Leading an organization with the financial statements as the highest priority for making decision-making is like using the speedometer as the only means to control a car. 
A car can only travel so far with the needle pegged before it runs out of gas or the driver loses control. 

What happens to the car happens to the passengers. What happens to the organization happens to the people.

Sooner, or later, resources reach their limit and things just stop working. Or, the situation changes in such a way that damage is done. The severity of the damage depends on the conditions present in the situation. It's easier for employees to exit the organization than a speeding car, so when some of them realized they were not realizing a net-positive value, some great people left.  As new employees came and went, safety incidents increased, more quality defects created more rework, profits tapered off. 

The company needed a leader more than anything, someone who knew where they wanted to go and were willing to control the speed based on what was going on all around them. The company had a person who was willing let the speedometer control their behavior. 

Organizational Values- More Than Just Financial Transactions

When people join an organization expecting a net-positive value it's not just because of the money. Let's think about this: if everyone viewed money as the only measure of achieving a net-positive value, we'd never see any organizations form. Everyone involved couldn't realize a net-positive value because one party would always give up something. The very best-case scenario would be a net-neutral result where everyone comes out even. There would be no incentive to join, or remain in, such a situation. 

As a Success Engineer, it's frustrating to be in a situation where the person who ultimately leads the organization is unwilling to do what it takes to create the culture they say they want. It makes me sad to think about those great people and how their situation changed for the want of a leader. I wish I could tell you a story about how I was able to help them do great things. I'd prefer to tell you the truth. Yes, I was there. Yes, I got out of the car. I chose to end the
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relationship. I want to help people achieve Life-Long Success, I couldn't accomplish what I wanted so there was no incentive to remain. The net result was neutral, at best. We can't always get what we want and be the person we want to be. We have to choose sometimes. I chose the latter. I'm certain the business will remain financially salient for some time...their CEO is a smart and capable man. The culture has been severely compromised and until something changes it will continue to degrade. Only one person can lead that change.  

Set the Conditions for Organizational Success

The key to creating an organization that can provide a net-positive value for all stakeholders is creating a value proposition that represents a mutually beneficial relationship for the type of people who can reciprocate based on something they have to offer (leadership, skills, expertise, etc.).  

Organizational Success happens when:
  • The Organization Knows What it Values
    • Leaders promote Organizational Values
    • Employees (including Leaders) align with Organizational Values
    • Organizational Values are translated through the business processes that create value for Customers.
  • The Organization Does What it Values
    • Leaders exemplify Organizational Values
    • Employees (including Leaders) live Organizational Values
    • People, Processes, & Resources combine to create Products & Services that:
      • Reflect Organizational Values 
      • Create value for Customers
Only when the organization Knows What it Values & Does What it Values can it Be What it Values.

Are you a leader in an organization? What do you WANT? Do you KNOW what to DO to get it?


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