3.3.2 Survival! - Focus On The Things You Control!
How do you react when faced with massive changes in the environment in which your company or organisation operates? If these changes have the potential to inflict serious damage on your performance or even threaten your very existence, often the first reaction is one of denial - things will be OK again in a few months. When it becomes patently obvious that this is not going to be the case, the second reaction is usually one of frustration and helplessness. What have I done to deserve this and what the hell can I do about it?
Any organisation operates within three environments. Imagine three concentric circles. The outer circle represents the macro-external environment - the economic situation, consumer sentiment, social and cultural trends. You have no control over these forces. You can only adapt to them.
The second or middle circle represents the micro-external environment. Somewhat nearer to home, it includes such factors as market growth, customer needs and competitors. You can’t control these either - but you may be able to influence them to your advantage.
The inner circle - the bull’s eye - represents your internal environment. You should have total control over that so that’s what you need to focus on.
You can divide your internal environment into two - doing the right thing - strategy - and doing things right - operations. This article focuses on the second of these - doing things right.
Strategic planning
When businesses are performing well, I believe there is a tendency to overplay the contribution to this success made by the organisation itself. Conversely the part played by a benign or supportive external environment is often much greater than executive management is willing to admit. One only has to study executive performance for evidence of this.
The rapidity with which many blue chip companies have gone from boom to relative bust under the same CEO in the last 18 months or so must be an indication that their influence on the organisation’s performance is not as great as they would like you to believe. But of course, they have to justify their generous bonuses and share options. Curious how when fortunes fall the external environment is called to account.
So when it comes to doing things right - or strategic planning - how efficient is your organisation?
I recently asked a friend of mine who is a consulting engineer, if he would give me the conversion efficiencies for a range of engines and equipment. The results were as follows:
- The Flying Scotsman steam locomotive - 8%
- A flat solar panel - 14%
- A parabolic solar panel - 25%
- A Formula 1 race engine - 35%
- Black coal fired power station - 43%
- Nuclear powered power station - 50%
They make interesting reading, don’t they - particularly the conversion efficiency of a black coal fired power station? However, whereas the efficiency percentages for the steam engine and the Formula 1 engine are calculated at “point of use” the others do not include transmission losses as the power is distributed through the electricity grid. That’ll bring the efficiencies down with a bump, I thought. Not so - the transmission loss is about 8% of the percentages above so that reduces the conversion efficiencies at point of use to 13%, 23%, 39.5% and 46% respectively.
If that’s the best we can do with highly engineered machinery and plant, it does not bode well for the efficiency of organisations. A study by Franklin College in Indiana concluded that the average employee spends only 50% of his or her work time in value adding tasks. That’s one employee and it doesn’t account for “transmission losses” between the organisation as a whole and the point of use - which might be defined as meeting the current and future needs of every internal and external customer. Transmission losses would include:
- Lack of coordination and cooperation within and between workgroups
- Lack of goal clarity at a workgroup and organisational level
- Lack of essential three directional communication - up, down and sideways
- Non-availability of information required to manage and monitor performance
A combination of all the above factors adds up to a lack of organisational alignment, which is THE platform for successful implementation. In organisationally aligned companies:
- Everybody understands where the organisation is now
- Everybody understands the destination and the journey
- Everybody understands his or her role in getting there
So when times are tough and likely to remain so for many months, focus on survival and that means focusing on those things that you can control.
I am not for one moment advocating that you do not consider new business strategies but for many organisations the lead-time is long and there is no guarantee of success. There are too many factors outside our control or a lack of resources inhibits our ability to implement them.
So if the name of the game is survival in your existing markets, start by identifying “transmission losses”. Work smarter, not longer or harder. bpi has a tool that you can use for all three stages of the planning process of Now, Where and How.
It’s called Towards Ten Thousand workgroup performance accelerator. It’s made up of three components:
- The “Towards Ten Thousand” questionnaire
- The Workgroup Assessment Report
- The Workgroup Handbook
“Towards Ten Thousand” questionnaire
There are three aspects of the questionnaire that address the issue of transmission losses. The first of these concerns workgroup purpose and workgroup goals. Not only does the questionnaire probe the clarity of these and the workgroup members’ understanding of them but it also assesses the degree of alignment between the workgroup’s goal and those of the organisation as a whole.
Secondly, the questionnaire looks at the relationship between the workgroup in question and other workgroups in the same organisation. Do other workgroups understand what your workgroup does? Does your workgroup understand what other workgroups do? Who are your internal customers? Who are your internal suppliers? Do you understand their needs? Do they understand yours?
Thirdly, the questionnaire looks at the relationship between each workgroup and executive management’s role in reducing transmission losses. To what degree does executive management share the “big picture” with its employees? Does it provide the information and support for workgroup development?
The Workgroup Assessment Report
Based solely on the feedback from the questionnaire, the Workgroup Assessment Report (WAR) assesses the workgroup’s ability to work effectively together under 25 separate but related headings. “Working effectively together” is largely about reducing transmission losses within workgroups. However, the WAR also provides feedback on transmission losses between workgroups and between workgroups and executive management.
Each workgroup receives an overall assessment of its effectiveness – its position on the “Towards Ten Thousand” rev counter. There are six bands of revs representing a Group of Individuals at the lower end and a High Performance Team at the highest.
The Workbook Handbook
If the Questionnaire and the WAR represents the “How” and the “Where”, the Workgroup Handbook represents the “How”. It suggests strategies and activities that will further limit transmission losses.
The outcomes
The goal is organisational alignment where transmission losses are minimised throughout the whole organisation. The spin-off is greater productivity, greater customer satisfaction and the potential to reduce costs without affecting service, quality or delivery. And in the absence of opportunities to develop new products or enter new market segments, reducing costs might be the key to survival.
There are further potential benefits. Transmission losses of the types identified above are the source of employee frustration and lack of engagement. Involving your workforce in an organised and on-going program to eliminate them is empowering and benefits the individual as well as the organisation.
Furthermore you will never find it easier to introduce change. In 1993, “Managing the Innovating Enterprise” was published. Funded by the Business Council of Australia and written primarily by Rod Carnegie and Matthew Butlin, they identified four common triggers of change that they listed as follows:
- Fear of imminent death
- A new leader took charge
- The enterprise anticipated threats
- A dramatic opportunity appeared
While they didn’t specifically say so, I have no doubt that the triggers have been listed in order of their impact.
It would be contradictory of me to state that the adoption of the above program ensures your survival. Sometimes the adverse forces in the external environment are sufficient to overwhelm an enterprise, no matter how effectively and efficiently it is run.
Nevertheless, running and staying with a program like Towards Ten Thousand and using it to reduce the transmission losses within your organisation will improve your survival chances. Survival is a relative thing - you need to be better at it than your competition so you can hang in there long enough for the environment to improve or for your alternative business strategies to pay dividends. When this happens, your enterprise will be in a much better state to take advantage of the new circumstances.
Survival is one thing: quality of survival is another.