In my consulting work one of the areas that perplexed managers raise with me is a variation of the following: “I know there are parts of the business where we could equip everyone better but I’m not sure how to get a grip on these areas. Our management team has been tossing around little straws in the wind that are telling us that we should be doing better but we’re not getting much traction. The general mood across the business doesn’t seem to be as positive as it used to be.
“There’s really nothing we can measure that’s helping here, except our overall performance measures aren’t kicking along as well as I’d expect.”
This is a ‘soft’ management facet of the business. So I question along the following lines:
“What are you hearing from your people?” “Have you done staff satisfaction feedback work?” “Any 360° surveys at various responsibility levels?” “A customer health check?” “How much formal coaching and less formal mentoring are in place?” “In practice, do your people readily bring up new ideas – whether valuable or not?” “Do you and your team regularly review whether you demonstrate the values of the business?” “Do your staff adhere to these values?”
Often it seems that the areas with which managers are struggling to be better in touch are intangibles: facets of culture, processes (not technical processes) and structure.
“So what have you and your management team done in the last little while, to get in touch with these three important elements in the working of your business?”
Sometimes, I hear comments such as, “We did a staff satisfaction survey earlier this year but honestly, I don’t completely trust it. Every time we do this survey, the responses we get don’t line up with what we experience day-to-day with our staff. Survey results are bitterly disappointing, for instance only 23% are satisfied whereas day-to-day interactions in practice show the reverse; the great majority show as positive, enthusiastic, willing when we call on them.”
So at this point, frequently-asked question back to me is disarmingly simple, “How do I find out more about what’s really going on in these areas?”
A business can deploy tools to evaluate culture. Well-informed people can gain insights into structural effectiveness by reviewing and revising the org chart. Again, there are consultants with insights who can review and advise on management and relational processes. However, how often do we hear from the people working at all levels in the business, that the structural effectiveness or process remapping exercise seems to have been sold well to the CEO and board – after all, these advisers often have an international name and a substantial fee attached – but missed a lot of the point?
Untapped Sources of Insight
The people working in a business know a lot about how it is travelling and how the innards are functioning. If carefully and respectfully asked, they contribute a lot to understanding what can beneficially be done to get things working better. The staff collectively don’t know it all but they work in the business and are familiar with the innards.
There’s some interesting work being done to examine within which business model a business operates and to test correlation between the business model and its performance data. ¹
The advantage of a business model approach is that it enables clustering of intangibles and drawing valuable granulated guides to action from considering them together and in a business model context. Rather than numerous studies of culture, effectiveness, communication, and delegation; all of necessity performed in an uncoordinated manner, a well-structured business models approach examines such facets of the business in a coordinated manner which generates insights for improvement in specific elements of operation.
There are various categorizations of business models; here are overviews of three business models which I use.
Isolation Model
People work in silos, isolated from each other and customers. Hierarchical, authoritarian structure. Production orientation, rather than the customer’s requirements. Vendor outlook.
Cooperation Model
People consult each other and the customer but with lesser focus on customer requirements. A loosely-defined ‘family’ in a largely isolation-type structure. Service outlook.
High Engagement Model
The business functions as a whole, organically, energized; it embraces flexibility and complexity. Shared authority within a performance framework. Discovery and full engagement with (‘line of sight to’) the customer. Performance outlook.
There’s a set of characteristics associated with each of these Models.
Typically, most businesses operate differently between Models in most of these characteristics, for instance being stronger in client engagement (tending towards the High Engagement Model) and less strong in optimizing opportunity for talented staff (tending towards the Isolation Model). As well, typically most businesses also vary their application of any one characteristic depending on circumstances – for instance having a bigger appetite for business risk when competition is strong and the order book is short.
An Example of Insights Gained
Here is a summary of points revealed in a recent business models study, from the overview section of the report to the client.
We recommend attention to several facets of the business, designed to transition from a passive and reactive leadership and management style to an informed one. This will require leadership, effort and change on your part; your senior people tell me they are ready for such improvement. Here are some specific things to do.
- Examine your desires and options as owner/director, settle a strategy to optimise your exit from the firm, develop and implement a plan to better prepare the firm for transition. Expand this into a full strategic plan.
- Approach strategy as a dynamic. Engage your team in regular broad reviews, environmental scans and futures discussions; evolve strategies, goals and action plans as the environment and events change.
- Develop a pattern or performance reports to keep you and your senior people in touch with key operations and deliverables of the firm. Don’t report for reporting’s sake; identify those specific functions where value will be added in an active and positive management system, explore this with your senior team. There will be some trial and error in this; we have some information about performance reports and templates which we can discuss with you.
- Set up a framework of accountability, authority and responsibility; in a firm of your size, this doesn’t need to be heavily-structured or overly-formal. Your senior people recognize the need for this and are ready to take on more responsibility. This will be an important plank in your transition.
- Make a capability and capacity review of your senior team and use this to inform the framework of responsibility and authority. Engage with your senior staff on their personal growth and development, in the context of a new management model. Let them work with you to design delegation models and resource flexibility processes.
- Devolve client engagement; you can no longer be the anchor. Train your staff in the three levels model and active High Engagement Client Relationship Management.
- The firm as a whole isn’t risk-averse but its approach is based on informal and intuitive elements. Develop a risk model and engage your senior staff in this.
- Engage your seniors about their aspirations and intentions, develop a feeling for their interest in a potential buy-out. If this progresses, engage a third-party business adviser to develop the concept with the individuals and possibly collectively.
¹ Frederic Laloux. Reinventing Organizations: a Guide to Creating Organizations Inspired by the Next Stage of Human Consciousness, apra, 2014.
About the Author
Ian Mathieson – Managing Director, MATHIESON MANAGEMENT PTY LTD
Drawing on his experience and learning as consultant, business owner and manager, Ian Mathieson has developed, helped by other experienced professionals, the Data+Scorecard® Instrument.
Data+Scorecard®: The complete package solution to create a highly engaged organisation
The Data+Scorecard® Instrument identifies areas in your business that you can focus on to effectively manage the shift towards the High Engagement Model, which supports longer-term performance and sustainability. This simple yet powerful three-step analysis and recommendation package gives you valuable insights to drive positive change in your business.
