Posts Tagged ‘cultures’
Full Service Professional Organization Failures: Why?
Full Service Professional Organization Failures: Why?
Professional organizations spend a great deal of time and financial resources advertising that they are full service; yet, I continue to find customers that are very dissatisfied with the services they receive. Relying on good faith and advertising claims, when selecting a full service Professional Service organization to support your needs, is not always enough to ensure satisfactory results. Here are a few thoughts to keep in mind.
The Deception
The deception, intentional or not, is that professional organizations advertise and represent themselves as being “full service” when they are not; at least not to the degree that the client expects. Examples of professional organizations that represent themselves as being “full service” are those entities that provide legal, accounting, investment, banking, insurance, engineering, and/or a variety of other consulting services. In most cases, these service providers are extremely professional, highly skilled and ethical. The client gets short-changed, however, when the service they need is a subordinate skill within the full service provider. The client receives results, but not to the level they expected based on the description that the “full service” provider promised. Why is this happening?
Hasty Diversification
Service Providers need cash flow to operate like any other business. Diversification is a way, if done correctly, that they can expand their revenue base. Those Service Providers that hold true to their core skill-set usually maintain exceptional customer loyalty. Those who diversify too quickly, into sectors they are not highly experienced in, run the risk of upsetting customers, losing business and ultimately suffering revenue losses.
When a Service Provider decides to diversify, it is important that they seriously consider and evaluate the risks associated with moving away from their core skill-set and operating culture. Often, when a firm diversifies, they choose not to make the financial commitments that are necessary in order to go first class. They instead put their “service toe” in the water to test the “revenue” temperature, before making a true commitment (i.e. allocating finances for research, training of existing employees and/or hiring experts) to the expansion. In the meantime, they advertise and prematurely represent themselves as “full service”.
Unfortunately, this is a common scene for many struggling companies. There are accounting firms that offer bookkeeping, tax, insurance, investment and retirement planning services. There are banks that offer banking, planning, investment, and retirement products. There are legal organizations that offer a wide array of legal services (personal, corporate, wills/trusts, real estate, etc.) and business development services. There are sales/marketing firms that offer marketing, web development, social media advertising, branding, graphics, and customer care support. Each of these companies may spread themselves too thin with hasty diversification. They all have a core skill set and operating culture that made them very proficient in a particular area, but not in all. So what to do?
Know that “Full” Service may not be synonymous with “Fully” Satisfied
As the prospective client, it is your responsibility to select the Service Providers that meet your needs. You may not need the “world class” provider, but you want to make sure you have selected a firm that will leave you fully satisfied with the results you receive. Here are a few steps you can take to improve your chances of receiving the services you need:
- Look to referrals from trusted colleagues that had a similar need and were satisfied with the results.
- Ask your other Service Providers for a referral.
- Regardless if a referral or not, provide the prospective firm with a detailed, written requirement of the services you need and the results you expect to receive.
- Interview the principals whenever possible.
- Ask detail probing questions about “how” and “who” will perform the service you are requesting.
- Ask if they provide frequent progress reports as to the status of your project.
- Have a written contract that clarifies the deliverables in detail.
- Don’t be afraid to question unclear situations or statements—YOU ARE IN CHARGE.
- If along the way, their weaknesses surface, try to get them back on track. If you are unsuccessful, don’t be afraid to terminate the relationship and move on.
Most enterprises gravitate to the “Full Service Provider” out of convenience. They do not want to take on the role of a “general contractor” that works with multiple Providers offering separate skilled services. This approach may initially require more time and energy, but long term it may also save you money (in fees and delayed revenues) and provide more desired results.
Organizations-Playing Offense or Defense
Organizations in today’s economic times are either playing offense or defense, whether they know it or not. What determines which style of play? Cash or operating capital availability. With the credit markets shrinking, cash on hand has become a significant criteria for survival and the opportunity for growth. Those organizations that have lived from month-to-month off their line of credit are now in trouble. Those lines of credit are being reduced or foreclosed on due to a lack of payment. Organizations that have kept their on hand cash balances in proportion to their debt have a chance to survive the current slumping economy. The organization that maintained a healthy cash position now have a chance to take advantage of that strategy and take advantage of great bargains on asset purchases, merger/acquisitions with competitors, product development, etc. Everything is discounted, and if you have the cash you can make short term deals that will multiply in the long run and make your organization more successful.
Don’t Confuse Efforts with Results
Recently I heard a couple of client employees commenting on how hard they are working to be noticed. I could tell by their conversation that they were both trying to position themselves for a favorable performance review and consequently, a raise or promotion. I never once heard them talk about their accomplishments. Effective employees (leadership or workers)work to achieve desired results in the least amount of time. They fight through Murphy’s Law (problems will happen)and they recognize the benefits from knowing how to use Pareto’s Law (80/20 rule)by applying it to their efforts versus the results they achieve. Lets explore this further:
It is important to an individual to be the most effective person they can be, whether in relationships, parenting, associating with friends and co-workers, as a volunteer within a non-profit organization, being an employee, or being an entrepreneur. One very important principle should be kept in mind – “don’t confuse efforts with results”. This may sound like common sense, but it happens to be a situation that is very unfamiliar to many people striving to be more effective. There are many periodicals, articles and books written about time management, which normally comes to mind when a person is asked what they believe “don’t confuse effort with results” really means. Time management can be defined as “a process for making best use of the time available in order to use that time in a desired manner.” Being more effective with the time available often gets lost in the process of daily activities. In the past 50 years, the average work week in the United States has been declining from the previous 50-year period. The cause of this decline is brought about by governmental intervention over the number of hours one can work without receiving overtime, and the advancement of the industrial and technological ages. No longer are a majority of Americans working from dawn to dark to earn a wage. Evidence of this reduction in the work week is the growing industries that now cater to people’s spare time, such as hobbies, recreation, entertainment and hospitality.
Time is precious. What’s new about that and what does that have to do with “don’t confuse efforts with results”? It has little to do with the actual time available and more to do with what is done with the time available. “To be effective with the time available” implies that the time is used in a very productive way. Being more productive can mean there is more time for doing fun things: to finish a home improvement project faster, launching of a new company sooner or getting more done in the workplace.
Focusing on what is being accomplished rather than how much time is being spent is the key issue for being more effective. How can understanding this principle make a person more effective? People improve most when they decide to make a change, focus on what it takes to make that change, provide the discipline to follow the steps set before them and then take the necessary action. This assumes a person wants to be more effective!
The next time you encounter a co-worker complaining or (surprise) bragging about the extra hours they are putting into their job or project without increased measurable results, ask yourself, “why are they saying this?” If they are paid by the hour, that may be part of the answer. Parkinson’s Law seems to have evolved within many workplaces through less than motivated employees with no differentiation as to whether or not it is focused on staff or management. Parkinson’s Law states, “work expands to fill the time available.” An interpretation of this law is that a person will make sure that they fill the time allotted to the task even if they can complete it sooner. The person following Parkinson’s Law is not the person searching to be a more productive individual. There are clear signs of organizations that are infected with this Parkinson’s Law cultural disease and following are some of the disease’s symptoms:
- Projects are always completed on schedule, because schedules are always changed to meet the anticipated completion date.
- People work more than the normal work week to meet deadlines.
- People work more than the normal work week in order to impress their leadership that they are strong performers.
- Those performing tasks have a lack of accountability.
- Leadership that focuses more on how things are being done rather than on what is being done.
- Higher levels of headcount than necessary to perform the organization’s mission.
These symptoms reflect many of the attributes of less than productive people and organizations. Parkinson’s Law is able to infect people and organizations because they both respond to activity and not results. Ah ha! There is the code to unlock the secret to the phrase “don’t confuse efforts with results”. The key here is that “results” should drive the person or the organization and not the activities directed to achieve the results. In many situations, the biggest excuse used is that people or organizations are so busy trying to get things done that they cannot actually get things done.
This sounds a little like what comes first, the chicken or the egg? How do you get results without the activities? The answer is that you don’t. The important fact to understand here is that the results are the most important items here, not how hard or how long people are working to achieve those results. If people or organizations hold themselves accountable for getting results, they become more productive. That means getting the task done the first time and on schedule. No extensions, no excuses, no wasted time and no confusion about priorities.
Results-oriented people understand that they should and will be evaluated based on what they contribute to the project or the mission of the organization. In organizations that are infected with the Parkinson’s Law cultural disease, the leadership may not be astute enough to recognize that these results-oriented people even exist. Results-oriented people may even be challenged by peers to back off and quit making everyone else look bad because they are more productive. In some cases, leadership does recognize the results-oriented person and then wrongfully takes advantage of them by redistributing more work from the “infected” employees to the “immune” employees. As a result, the infected people then coast even more. This is not a healthy situation for either side. In this case, one of two things will happen to the results-oriented people. They will either find a way to extricate themselves from this situation by moving on or they will also become infected as a cultural casualty. That would be a shame.
What does one do to become a results-oriented person?
- Decide to make a change.
- Keep desired results in sight at all times.
- Set priorities for key factors that contribute most to desired result.
- Determine resources needed to support priorities.
- Stay focused on priorities.
- Manage activities required to support priorities.
- Strive to exceed results expectations, such as quality and time duration.
There are two other Laws that have an effect on how to become a results-oriented person. First, Finagle’s Law of Dynamic Negatives is usually recited as, “anything that can go wrong, will—at the worst possible moment” and is a corollary to Murphy’s Law, which states that ““if anything can go wrong, it will.”. This law is used by infected people as an excuse for not getting results.
When things go wrong, infected people often give up and decide they cannot get the results they want in the time frame originally planned. Either they either decide that the result was not important enough to pursue and move to a new project, if they are working for themselves; or, they go to leadership and leave the issue with them to resolve. On the other hand, results-oriented people realize that there are going to be problems and these issues have to be addressed. They know that problems are a part of the process of getting results. They do not become paralyzed by these issues. They work through the issues, because the desired results are more important than the effort it takes to achieve them.
Secondly, Pareto’s Law or Principle, also known as the 80-20 Rule, states “80% of the effects come from 20% of the causes” If applied properly in any given situation, Pareto’s Law may be one of the most effective tools for increasing a person’s productivity level and there are no technical gadgets required. Applying Pareto’s Law to any area of life means that time and resources used to generate results are used in a very productive manner. Always remember that the “results” are the target, not just how well we manage the activities. Let’s explore a few examples of applying Pareto’s Law:
- Meetings- 80% of the needed information comes from 20% of the meeting attendees. Shorten the meeting by inviting only the 20%.
- Sales- 80% of all sales come from 20% of the sales force. Redirect the efforts to higher quality hiring and training of the top 20% of the sales force and reduce headcount and expenses.
- Customer Care- 80% of complaints or calls come from 20% of the customers. Implement techniques to address the 20% with less labor-intensive means - email/voicemail, etc.
- Operations- 80% of the problem symptoms are caused by 20% of the actual problem issues. Search for the 20% causes and achieve a multiplier effect for reducing problem symptoms.
- Results- 80% of the results achieved are generated with 20% of the efforts and resources. Evaluate the remaining 80% of efforts and resources and scale back to reduce costs.
Results-oriented people are the stars of any group or organization. They are the leaders in their area of expertise. They are successful entrepreneurs. They are individuals who don’t confuse efforts with results.
Using Debt to Finance the Organization
Organizations can finance their missions in several ways, but the two most common methods are equity and debt. Equity means you sell a portion of the organization in the form of stock or units of ownership, and the buyer now owns part of your organization. The other way to finance your organization is by Debt. Many organizations use bank loans and lines-of-credit to support their working capital needs to finance the day-to-day operations. There are pros and cons to using debt, the biggest pro is that you are not selling a part of your organization, you are just borrowing the money. That is also the potential down fall. Borrowing the money means you have to have a plan to repay the principal and the interest that are due at a future date. The key factor for determining if you finance the operation with debt is whether or not the organization has adequate cash flow to repay the loan and interest.
A New Organizational Model
There is a new model that organizations need to consider in order to function successfully for the future; The model is summed up in two words- “Relationships” and “Collaboration”.
Relationships are key for your success, whether a supply chain or wholesale, retail or services organization. The “relationship” you have with the stakeholders of your organization will determine the difference between success, mediocrity or failure. Your stakeholders are your customers, employees,vendor/suppliers, support resources (accountants, lawyers, consultants, banker) and owners.
The three “C’s” of collaboration are Cooperation, Communication and Commitment. Cooperation is the willingness to work closely with others to the benefit of both you and them. Communication is the willingness to share sensitive information needed to streamline both organizations to increase effectiveness. Commitment to the stakeholders means that you genuinely want your supporters to be successful and you are willing to do your part to make it happen. They may be vendors/suppliers, they may be your banker, they may be a competitor if you or they need assistance and one of you can help.
The new organizational model requires a focus on lasting relationships, cooperation, communication and a commitment to their stakeholders. I call that new organizational model, the start of becoming a “Collaborative Enterprise”. More to follow on that topic.
Traning-Investment or Expense
Strategic Plan Failure? How to fix it!
There seems to be more evidence that strategic plans are failing. Why is that? Maybe it is due to more organizations finding themselves in survival mode, or perhaps corporation leaders are less certain of the future due to the current shakey nature of the economy. Strategic plans are still critical to any organization, so determining why they fail and what can be done to minimize the risk of such failures is this month’s topic.
Purpose of the Strategic Plan:
The purpose of a Strategic Plan is to establish a broad, long range set of objectives and goals that are specifically focused on the achievement of the organization’s Mission (the reason for their existence). The strategic plan can have a varied planning horizon (short-term, mid-term or long-term) depending on the needs of the enterprise. Many businesses, profit or non-profit, use the terms “objectives and goals” interchangeably, but I think it is important to separate them by using the following definitions;
- Objectives define the high level of WHAT the organization wants to accomplish in support of the Mission Statement during the planning horizon. These are broad high level statements (e.g. Increase market share in the Northwest region.);
- Goals define the lower level targets of WHAT, WHEN and WHERE activities need to take in order to achieve the higher level “objective”. There are one or more goals for each “objective” and they should each be measurable deliverables (e.g. Increase sales in King County by 20% over last period.).
The HOW in achieving Goals is a Tactic and is part of a separate tactical or operating plan supports the strategic plan.
Why Strategic Plans Fail:
The reason why strategic plans are failing is relatively unique to each organization, but my discussions with clients and colleagues have surfaced five common statements that seem to explain strategic plan failure:
1. “We are just too busy!”: The day-to-day operational issues have priority and strategic plans get shelved (probably next to the disaster recovery plan),
2. “We are not big enough yet!”: The leadership was never really committed to the process and desired results,
3. “Our company changed direction!”: The strategic plan was at too low a level, contained more tactics than strategic objectives and goals,
4. “I wasn’t even aware of it!”: The planning process did not involve enough of the workforce to gain their commitment to the plan objectives and goals,
5. “I thought we were on track, but I guess we missed the mark!”: The strategic plan objectives and goals were not reviewed throughout the planning horizon to track progress.
How to fix it:
Solutions to the five reasons for why strategic plans fail don’t require a lot of innovation, but it does take a corporation’s commitment to the strategic planning process. Below are suggestions for renovating the planning process in ways that will help reduce the risk of experiencing one of the above mentioned reasons for failure:
- There must be a top down commitment to the strategic planning process. The leadership must “believe” in the value that strategic planning brings to the enterprise and they must be able to evangelize this commitment to the entire workforce. It is important that this occurs at all levels of the overall operating culture and that a separation is maintained between strategic and tactical planning activities. At a minimum, perform a semi-annual review of the organizational Mission Statement; consider how well the existing strategic objectives support the Mission Statement; and, evaluate the relevance and progress of the existing strategic goals in relation to each of the objectives. If any of the objectives or goals need to be changed, then determine why they need to be changed (maybe a sign of weak strategy in the beginning) and then change them. Do not keep this a secret; communicate the change to all involved in the process.
- Open the strategic planning process to as many levels of the functional organization as possible- not just management. Select representatives from several levels within the operating functions of the corporation, and use them to communicate the strategic planning process and its results to their co-workers. This will improve their commitment to the objectives and goals and provide a rationale for the tactics deployed within these functions. Workforce involvement will improve the likelihood of an overall successful strategic planning process and will increase the probability for achieving the desired results.
The Influences of Organizational Cultures
Organizations are like societies, they each have their own culture that has developed over time due to the actions of their personnel (leaders and employees/volunteers). When working to bring about change within an organization, one of the biggest mistakes leaders make is they discount the impact that the existing culture has on their efforts. I believe “culture clash” is the number one reason for change failure. Knowing how to build a culture that does not impede your organization’s plan for change, requires a focus on seven areas. These seven areas are Hiring, Training, Goal Setting and Tracking, Communication, Responsibility, Accountability, and Advancement Opportunities. These areas must be addressed and taken seriously to create an organization and positive culture that is ready to support the organizations change plans.