#443  from Innovative Leader Volume 9, Number 1          January 2000

Creating a Focused and Flexible Organization
by Ian Jacobsen CMC, FIMC

Mr. Jacobsen is president of Jacobsen Consulting (Sunnyvale, CA; phone 408.244.6672; email ian@jacobsenconsulting.com), helping organizations create and implement changes.

The marketplace of the 21st century will be intense and competitive.  However, relations with employees, vendors and strategic allies will need to be collaborative.  Such an environment will require focused and flexible leadership.  We have only begun to see the effects of the information and internet revolution.  It promises to come on faster and have more impact than the industrial revolution.  In such an environment, the ability of people to work flexibly for common goals will be a deciding factor in the success of an enterprise.

What does it take to lead in such an environment?  First, let's consider leadership. Leadership needs to create an environment that inspires and enables people to perform at their best in the pursuit of common goals.  (This applies to virtual organizations and strategic alliances, too.) Leadership is more than a charismatic person with a cadre of followers.  It is essential at all levels and in all areas of a business.  It used to be that people in data processing were information "czars." Then the model changed.  Now everyone has a PC or workstation.  Information technology is now distributed throughout the organization.  Leadership needs to be distributed similarly so that people at all levels can take action to better the entire enterprise.

Do leaders need to be charismatic?  No! A passion for the organization's goals, values consistent with the culture, caring, fairness, support for people in their pursuits, and credibility are much more important for a leader than charisma.

Every organization has its own culture: values, purpose, mission, vision, and ways in which people relate to their work and each other.  In a start-up, these are determined by the founder.  Before a business grows beyond the scope of its start-up team, the team needs to define its culture. When Bill Hewlett and Dave Packard started their business they hadn't thought much about such issues.  As their business grew they realized that there was more to it than making oscillators.  They defined their underlying values and the way they wanted to do business - "The HP Way."

As a business grows, the role of the founder changes.  Initially the founder's focus is on establishing the business.  As it grows his/her role changes to that of a conductor who orchestrates the performance of the entire organization.  Orchestrating an entire organization requires attention to the following nine key issues.

1.  Business foundation. 

Know what business you are in.  Do your market research.  What is the outlook for your industry?  What quantum changes could dramatically redefine it?  Who are your customers?  What do they want/need?  What motivates them to buy?  Who is your competition?  What strategic advantages do you have (or seek)?  What "Achilles heels" do you need to work on?

The people who work for you can create your competitive edge.  Think of your business in terms of their competencies, not just products, services, and markets.  Honda started out in the motorcycle business.  Their competency was in building high performance engines.  That opened the door for them to make cars, generators, outboard motors, ATVs, etc.

2.  Organization. 

What structure, facilities, technology, policies, systems and processes are needed to focus attention on the critical issues and tasks?  What is the nature of the work needed to fulfill your purpose and mission?  What are the mindsets and competencies of the people you need?  How will you deal with intergenerational and intercultural differences?  How much of a physical organization is needed? What can be virtual? How will you create a sense of community among people in multiple locations? What work environment do you need to recruit, retain and motivate people?

Physical space influences how people interact.  If your organization depends on creative problem solving, create places conducive to dialogue and teamwork.  Pacific Bell, in their San Ramon, CA, facility, has conversation areas that invite people to meet, brainstorm and dialogue.

To promote market responsiveness, keep business units as small and focused as possible.  Large, bureaucratic organizations in today's world are like the Exxon Valdez or Titanic.  They were not paying attention to their environment. When they finally recognized danger, their communications system was too slow, and they had too much inertia to change course and avoid disaster.

3.  Hiring. 

Hire only people whose values are consistent with those of the organization, and who can help grow your business.  People whose values are at odds will always be out of sync.  It is presumptuous to think that they will change their values.  It is easier to hire the right people initially than to have to deal with the subsequent problems of people who don't work out.

If you want a "gold medal" in the "Olympics" of your market, hire "Olympians"--people with the potential to "bring home the gold."

4.  Team training. 

Teams are a fact of organizational life, and will continue to be.  Most complex issues require the diversity of perspectives and opportunity for buy-in afforded by a team.  Teams can be incredibly productive, but 90% of them that have not had team training fail to meet their objectives.  For teams that have been trained on how to work together, the failure rate drops to 5%.  Teams for "career-defining" projects need such training and sometimes a coach.

While training is valuable, coaching creates learning at the "teachable moment"--the critical time for learning.  People typically develop greater skill faster with individualized coaching.

People want to master what they do.  As technology changes, or as people are expected to gain new proficiencies, they need education, training and support.  I was on the Board of Directors of the Sunnyvale School District Education Foundation when it introduced multi-media technology into classrooms.  One reason for the program's success was that not only did we provide teachers with the hardware and software they wanted, we also provided training and a support group.  Lacking such training and support, efforts elsewhere failed.

5.  Organizational climate. 

Treat employees as "customers" for your leadership and work environment.  Most whose skills are in demand have a choice of where they work.  In deciding to join your business, or stay, they consider not only monetary issues, but also the quality of leadership and the desirability of your work environment.  In treating employees as "customers," you will need to do "market research."  Find out what is most important to help bring out the best in them.  Then provide what will attract them and foster motivation.

People want to work for an organization that they believe in and can be proud of.  Create a sense of purpose and belonging, and communicate a consistent message of respect, trust, caring and appreciation.  Eliminate fear.  Trust is impossible in an atmosphere of fear.  People need to feel valued, important and included.

Class distinctions demotivate people who are treated less favorably than others.  No one wants to be "second-class."  The harm of such distinctions far exceeds their value as a recognition factor for a few people.

Show employees respect by treating them as business partners.  Involve them in issues that affect them such as the design of the work processes they use.  People who help design their work processes understand them much better, and have more commitment to making them work. Share performance and financial information widely.  Determine which measures are needed for self-management.  After employees have been trained in how to understand and use such information, make it available so that they can track their progress.  Yes, there is a risk in sharing it.  Someone might leave to work for a competitor.  But people who are treated as business partners are less likely to leave and more likely to perform better for you.

Create guidelines that make sense.  Define a strong set of values and a philosophy of business by which your business can live.  Communicate it to job applicants in their interviews.  Communicate it again in new employee orientations.  As you create policies and work processes, make sure they are consistent with your values.  And act consistently with them.  Your credibility depends on how well you live up to the standards you espouse.

Communicate clear, high expectations, and test for understanding.  Emphasize those aspects of work that are most important to customer satisfaction, and to the success of your business.  Involve people in setting goals that prompt them to stretch and grow.  To make sure that you are on the same wavelength, ask them to paraphrase their understanding of goals and expectations in their own words.

6.  Conflict. 

Establish a way to deal constructively with disagreements and conflict.  When two or more people work together, conflict is inevitable.  It is resolved more quickly and with better results when a process for dealing with it has been established before an issue arises.  Unresolved conflicts undermine morale and productivity.  I know a number of outstanding people who have changed jobs only because there was no accepted way to resolve issues that were important to them.

7.  Pay. 

Pay for results.  Split compensation between base pay and pay related to results.  Everyone can have some affect on growth and the bottom line, and needs to be included in a pay system that recognizes their effect on results.  People pay attention to what is recognized, measured and rewarded, so choose measures carefully.  Use base pay to cover ongoing obligations and incentive pay for what adds joy to their lives and motivates them.  While stock and stock options can be very powerful motivators in publicly held businesses, cash bonuses can be, too, in privately-held and not-for-profit businesses.

8.  Change. 

It is natural for people to resist change when they have not been a party to it.  Thus, involve people in designing changes that will affect them.  Another reason why people resist change is that during the transition period they move from competence in the old ways to temporary incompetence with the new.  Just think how long it takes to become proficient with a new software package.

To minimize resistance to change, introduce it as an "experiment."  An experiment tests a hypothesis.  The experimental environment frees people to try a change knowing that it will be revisited.  They are more open to new ways when they are involved in the process and have some influence.  If an experiment works for them, they will strive to make it succeed and be adopted.  I have seen people embrace a change introduced as an experiment that they never would have accepted if it had been introduced as a fait accompli.

9.  Effective use of time. 

Your time is limited and precious.  Use it in ways that give you the best return.  Get competent people (staff or consultants) to handle responsibilities that do not make the best use of your time or talents.  If you are not in control of your use of time, get a coach to help you.

The business environment of the 21st century will be intense and competitive.  Businesses will have a core workforce and a satellite of people they call on as allies.  Teams will be basic units for solving problems.  People will need to be skilled as leaders and team players, as they will serve in both roles on different teams.  To succeed in this environment, people, and their ability to work together flexibly for common goals, will be a major deciding factor in the success of an enterprise.  Attracting, retaining and growing "Olympians," and creating a motivational work environment for them, will be a management art form that distinguishes the winners from the losers.

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