The creation of that other thing called “the organization” is often the stepchild to that exciting product or service on which the company was founded. But you can’t launch a successful business with a flawed product strategy; poor market timing; an inefficient resource plan; management teams in conflict; difficulties with key stakeholder groups; unstable organization structure; or a poor work culture for employees. On second thought, maybe you can. But who wants to?
An ineffective, inefficient organization isn’t a fun place to work—which matters to more people than you think. And, it doesn’t tend to be, or remain, profitable. Unfortunately, that’s status quo for far too many businesses.
Building a high-performance corporation depends on: 1) leaders who can manage complex systems, 2) clear strategic direction in dynamic market conditions, 3) a roadmap that sequences resources, 4) an evolved leadership team that truly teams, 5) stakeholder management, 6) flexible, scalable organization design, and 7) an Employer of Choice culture. These seven elements are the secret sauce of building a high-performing corporation.
Leaders who can manage complex systems
Managing a corporation in the 21st century “is” rocket science. Speed, multiple cultures, time zones, competitive pressures, technology, products and services are all blended together into a behavioral soup—called the workforce. Leadership needs to be able to act effectively on all dimensions: strategic, cross-functionally, and functionally.
We have just witnessed a phenomenal business collapse due to lack of functional expertise. Solyndra needed material science/manufacturing expertise to fully understand the true cost of manufacturing and better competitive intelligence to determine that Polysilicon, the key material used in competitor products, would soon be mass-produced cheaply—making Solydra’s product overpriced. The needed functional expertise wasn’t on board to prevent this oversight—a common organizational problem.
Clear strategic direction
When a start-up isn’t able to articulate a clear strategy a Darwinian event occurs: the company dies quickly. Yet, it seems almost endemic that established companies struggle to articulate that next cycle of business growth. Are the right visionaries on board to define growth? Has the company settled for executive consensus as a substitute for visionary thinking? Are the assumptions on which the strategy is based challenged periodically? Strategic planning is a dynamic process and must be nurtured continuously to remain viable.
A roadmap that sequences resources
Many executive teams create a vision and move to execution too quickly. This promotes silo behavior. A vision is only a half-baked plan. It is critical that the executives work together to translate a vision into a blueprint that provides context for execution. Further, when the key objectives of the organization are sequenced resource deployment becomes laser focused—because the organization is growing in an efficient manner: foundation first, walls second and roof last. Many planning algorithms don’t utilize sequencing. The result, by design, is inefficient resource deployment and flavor of the month initiative work.
An evolved leadership team that truly teams
Are you leading your company with a team or a group? There is a profound difference between these two concepts. While Bocce Ball and Ropes courses socialize people, team building has specific outputs: rules of engagement, clear interdependencies, conflict resolution, and decision-making protocol. If these constructs aren’t in place then you’re managing with a group (not a team) and playing roulette with company success. Executives are like thoroughbred stallions. It’s the nature of the beast to run, kick, and bite. Company’s need thoroughbreds to compete—but not with each other. Leveraging these smart, driven people in the confines of an organization can only be accomplished through effective teaming. If left to chance divisive behavior will prevail.
Nothing can derail an executive’s agenda faster than misunderstood and mismanaged stakeholders. What’s a stakeholder? “A person, group or organization that has a direct or indirect stake in an organization because it can affect or be affected by the organization’s actions, objectives, and policies.” Stakeholders in a business include: customers, directors, employees, agencies, owners (shareholders), suppliers, unions, creditors, and the community from which the business draws it resources.
Stakeholders have a higher level of sophistication and influence than in the past. So, it is hypercritical to know your stakeholders, and their expectations. Proactively manage the stakeholder landscape as part of your planning algorithm or the stakeholder landscape will manage you.
Flexible, scalable organization design
Organization redesign may be the most frequently performed planning activity. It’s too bad because it seldom achieves the desire effect. Why? Organization design has less influence on company performance than you might think and tends to be conducted for the wrong reasons: solving people issues, cutting costs, or just shaking things up hoping for a better result. If workforce disruption is your goal reorganization will do it and expect productivity to dive below 43% as a result.
Tips for effective organization design: 1) Save people selection for later, 2) Start with a clear strategy, 3) Form a design team with the right skills, 4) Maintain line-of-sight structures, i.e., Put natural working groups in close proximity to promote communication, 5) Match talent to the new design at the end, and 6) Don’t stop with a new org chart. Roles and responsibilities, decision-making processes, procedures, and education are needed to rewire the new organization.
An Employer of Choice culture
Companies that model Employer of Choice characteristics generate the best shareholder value. What are these characteristics? 1) A compelling company vision, one that draws and keeps talent. 2) Great people managers. “People join companies but leave managers.”3) Career trajectory. Everyone wants a career opportunity. 4) Total Rewards matters. Base pay, bonus, long-term incentives, and benefits must be competitive. Serious business leaders need to be students of culture—how to built it and keep it in tune.
Peter Drucker said, “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.” Building a high-performing organization is absolutely rocket science. It deserves that same level of passion, intelligence, focus, investment, and commitment as does developing that next great product or service. In doing so, you will create and sustain that sought after competitive edge your business.