How to make cultural change and corporate transformation projects work, effortlessly.

A recent survey of companies around the world has confirmed that the majority of corporate culture change and transformation initiatives don’t achieve their objectives. However, the companies that were successful in their transformational initiatives tended to do certain things well, whereas the organisations that weren’t successful tended to not do those things, or not do them well.

3% – 6% complete success
It’s been well recognised during the nineties and the naughties that the success rate of large scale organisational culture change and transformation projects is less than 40%. The recent survey involved over 1500 companies worldwide that had engaged in corporate transformation initiatives in the past 5 years. Only 6% reported complete success with their initiative, and 32% reported that their initiative was ‘mostly successful’. The remainder stated that their attempts to transform their organisations were ‘somewhat successful’ (33%) and varying degrees of ‘unsuccessful’ (29%).
Success was measured against improving the organisation’s performance using factors such as profitability, return on capital, market value and inventory reduction. The success rate was even less (3% ‘completely successful’ and 27% ‘mostly successful’) when measured against the success of the initiative at equipping the organisation for sustained, long term performance (organisational health using measures such as a positive shift in organisational culture, upgraded capabilities, closer relationship with customers or suppliers). 

Success factor – mobilising and maintaining energy
Some of the findings of the survey were that:
• 55% of the top performers reported that they were completely or mostly successful at mobilising the energy of their people (compared to 30% of overall respondents) and
• 57% of the top performers reported that they were completely (5%) or mostly (52%) successful at sustaining that energy, compared to only 28% of total respondents.
• 64% of the companies that were less successful at effecting the transformation were also less successful at sustaining organisational energy during the transformation.

Which mechanisms were used to successfully mobilise personal and organisational energy?
The respondents whose transformation initiatives were ‘completely’ or ‘mostly’ successful applied the following elements significantly more than the unsuccessful respondents:
• offered an inspiring vision of the future
• integrated goals into budgeting, performance management and recruiting and other key processes such
• used compelling stories of  transformation as their communication process
• acknowledged successful transformation activities on a regular basis , and publicly
• built new capabilities
• created new incentive systems
• established a team to implement and monitor the change process.

Other factors
They were also significantly more successful at the following activities compared to unsuccessful respondents:
• significantly raising the bar for future performance
• improving short term performance
• engaging people at all levels of the organisation, from front line to top management
• designing a clear, coordinated change process
• demonstrating substantial, observable changes
• building strong capabilities for delivering future high performance
• enabling the organisation to operate at a faster pace
• aligning people’s mind-sets and behaviours with transformation goals
• creating recognisable  themes  for channelling the various change initiatives into the thread of the transformation story
• ensuring that leadership capabiliy existed at all levels in the organisation.

Negative and positive emotions
As would be expected, negative emotions such as anxiety, confusion, frustration, fatigue and resistance were experienced to a greater extent by participants in the unsuccessful initiatives than by those in the successful initiatives.
On the other hand, positive emotions such as a sense of focus, enthusiasm, feeling of momentum, hope and confidence were experienced substantially more by participants in the successful initiatives.

Energy as a key factor
I was pleased to see that survey, as it focuses on some of the key factors that make corporate transformation initiatives successful. In particular, it highlights the importance of energy being raised, directed and maintained.
That might sound like ‘new age’ waffle, but it is, in fact, one of the most important factors for success in transformation initiatives. The energy may be difficult to define, but it is palpable when you walk into an organisation that’s doing it the right way. By raising energy in the organisation, the organisation can more readily change state to a much higher level of performance.
Have no doubt – high performance is a function of state of awareness. High states of performance produce phenomenal amounts of energy.
If done correctly (with less effort as opposed to massive effort) the process builds energy without burnout.  Instead of depleting personal energy, it replenishes energy. Watch an athlete in a peak state of awareness and you’ll see a personal best performance, in ‘the zone’. The same thing happens in any sphere of human endeavour, including business.
The sad fact is that most companies miss the point and put a lid on that power. That lid costs the company a great deal of money – money that will never be seen because it remains as unfulfilled (or lost) potential.

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Why focussing on Strengths and Weaknesses will weaken the organisation

Words have impact, shape our consciousness and influence our potential. Which is why I prefer not to use the words ‘strength’ or ‘weakness’ in  relation to performance appraisals, as they do not tell me much about what is happening and they tend to limit people and strategy. The word ‘weakness’ has an element of negative self worth and implied lack of power in it.

A slight change of language will enhance learning and performance considerably.  Consider the difference in feeling and awareness that you experience when you say ‘ I have a weakness’ compared to ‘I don’t have the full set of skills to do X, at the moment’.  The word ‘weakness’ has a connotation of something to overcome. The words ‘I don’t have the full set of skills yet’ mean that you do not have to overcome anything, but rather to learn something further, in addition to what you already know. The phrase ‘at the moment’ immediately opens the possibility for learning.

A fellow once came to my workshops because his 180-point performance appraisal from his boss showed 10 areas of ‘weakness’  that limited his chances of promotion.  His focus was on the ‘weaknesses’, not the 170 ‘strengths’. The weaknesses were causing him anxiety. I told him ”They are not weaknesses. You simply don’t know, at present, how to do certain things as well as your boss wants. What you definitely have is the ability to learn what you don’t currently know, and that’s a real skill that will be with you all your life”.  That completely changed his view of himself. In two days he learned those skills and immediately applied the skills to gain his boss’s approval for an initiative that he had struggled to have approved previously. His boss was so taken aback by this sudden leap of skill and competence (beyond the boss’s own skill level) in shifting the boss’s mindset and decision that he asked “How did you do that?” .  The boss later contacted me to learn how to do it himself. The first fellow later left the business because he outgrew it and has since grown a thriving business based on what he learned at the workshop.

 ’Strength’ is basically what you do well. ‘Weakness’ is basically what you do not so well. Considered from that viewpoint, we can then easily match a person to the task and clearly see where else and how else that person can develop to meet their own needs and the needs of the business.  In other words, the things that they don’t necessarily do so well at the moment and which they will need to be able to do in the future.

Cheers
Christo

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Money down the drain

A German pensioner caused havoc in the sewers of the northern German city of Kiel recently when he flushed nearly Aud$50,000 worth of deutschmarks down his toilet in the mistaken belief that the currency was worthless since the introduction of the Euro.

Sewerage workers were able to recover about half the money from the man’s plumbing system, and most of the remainer was recovered from blocked local sewers.

The man, aged 64, apparently lived a spartan existence, and dried the notes out before taking them to his favourite bank teller to be counted and exchanged for the Euro.

It was not clear if he had laundered the money first.

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Company Secretaries asking the hard questions: Ensuring quality information reaches the Board.

Changes to governance and compliance requirements over the past decade have placed greater demands on boards. One of the consequences of those changes is that the role of the Company Secretary is evolving from an administrative/compliance function to embrace a broader leadership and strategic role, and to play a crucial part in linking the board and management.

Company Secretaries are becoming more involved in developing the board’s process, to enable the board to be more effective.

This evolution can be challenging and exciting, and requires Company Secretaries to develop an expanded skill set and a different way of thinking, influencing and communicating.

A study by Chartered Secretaries Australia in 2004 identified the top 5 responsibilities of Company Secretaries as:

  • managing the board of directors
  • handling continuous disclosure responsibilities
  • managing board committees
  • ensuring compliance with governance standards
  • dealing with AGMs.

One of the key skills that highly effective Company Secretaries must possess, or develop, in order to carry out those roles, is the skill of asking the right questions.

Little training available for questioning skills in business: Incredibly, as important as it is to be able to ask questions in business, business schools do not teach the skill of knowing when to ask a question and which question to ask.

Although the legal profession is well represented among Company Secretaries, legal education generally does not include questioning skills, especially the skill of asking questions on non-technical issues, which form by far the majority of issues both in and out of legal practice.

Most ‘at risk’ business communication deals with subjective reality: The majority of written and verbal communications in business relates to facts, strategy, solutions, beliefs, opinions, assumptions, perceptions and interpretations. Many ‘facts’ are, in reality, beliefs, assumptions, opinions and interpretations wrapped in language that is designed to appear factual, but which is actually a representation of personal, subjective reality that often bears little resemblance to the truth.

Unfortunately, many decisions at all levels of management are based on that type of ‘fact’, and result in financial loss for the company, job losses for employees and loss of share value, especially when those decisions are made at executive and board levels.

Many, if not most, of those losses could be avoided, if the right questions are asked.

One-Tel and NAB are two recent Australian examples where the right questions might have made a significant difference. One-Tel disappeared; and NAB lost $360m, its principal executives and most of its board members as a result of its currency trading debacle. And, of course, HIH developed a culture (reflecting the leadership style) that strongly discouraged questioning what was done at the top, and finally imploded, impacting many thousands of families and businesses and almost bringing the residential building industry to its knees.

Questioning skills are time- and cost-effective, and high ROI: The pity of all this is that it is so easy to ask the right questions. They only take a few seconds to ask and can save a great deal of money, time and effort.

Why aren’t the right questions asked more often? Generally, questions are not asked because the opportunity and need for a question is not recognised. There are a dozen or so  patterns of language commonly used in business that demand questions. I can guarantee that those patterns, and the risks associated with not challenging them, are present at every board, executive and management meeting. The fact is that most business leaders are only vaguely aware (if at all) of those patterns, and how to challenge them. However, the most highly effective business leaders are very aware of those patterns, and know the questions that challenge or counter those patterns.

Test yourself: Consider the following example:

“At the time of writing, [global] trading operations continue to manage risk responsibly in changing market conditions. Adherence to risk discipline is good.”

On first reading, would you ask any questions? Or would you pass on to the next item on the agenda?

Look at the quote again. They are the sentences written in a report* to the NAB’s Risk Management Executive Committee in November 2003, not long before the NAB discovered that it’s trading desk had lost  $360 million – roughly 10% of the Bank’s annual profit.

There are at least 8 elements of those two sentences that, individually (and in combination), might be of interest to a Director or Executive – patterns of language that can very easily and subtly slide your mind away from the key issues that, as a caretaker of the company’s assets and brand/business, you must be vigilant in considering. Patterns that set alarm bells ringing.

Did you spot the eight?

Powerful Questions BookOne shot at asking a question: It is critical to be able to identify, at normal speech speed and in the midst of a lengthy conversation, the language cues that flag potential problems. If you have to pause and think about what the 8 elements are, you’ll stand little chance during a normal conversation or whilst scanning documents.

Have you spotted the 8 yet? If so, (or even if not), what now? Having identified the 8 elements, how, specifically, will you tackle the language and deal with the issues raised by those 8 items. Which of the items will you tackle? How will you do that in a few seconds, and effectively? Which will you tackle first, second or third so that the potential problem is identified and a risk strategy implemented to prevent the problems causing damage? How do you do that in a way that works best?

The value of an effective Company Secretary: Company Secretaries are ideally placed to ask the right questions and positively impact the success of the board, executive team and business. These days, they often have access to the board/chairman,  the executive team, to meeting agendas and decision-making processes in a way that was not possible a couple of decades ago.

One Company Secretary, whom I’ve known for some years, takes the view that his duties include asking the questions that will assist the board  and executive team to be properly informed, so that they can make informed decisions. He considers that to be necessary to enable the board to comply with their legal duties, and also to ensure that the business is as effective and competitive as possible.

He works both behind the scenes and in meetings to effect that outcome, quietly and unobtrusively. For instance, if he spots a possible flaw, ambiguity or omission in board papers submitted for an agenda item, he may contact the author and ask questions that enable the defect to be corrected prior to a formal meeting; or chat with the Chairman and highlight the issue if the Chairman has not spotted it.  He doesn’t play politics, is objective, even-handed and respectfully assertive. As a result, he has the respect of the company’s leaders and has been instrumental in saving the company many millions of dollars, as well as making the board and executives’ jobs easier.

There is a simple art to asking the right questions that make a real difference, every day, in every business. It is an art that has such impressive and immediate benefits that I call them Powerful Questions that Every Director, Executive and Manager Must Ask.

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