Leadership : The Mind, Body and Soul: Leading the Way through the Challenges of Growth
Martin O'Neill know a lot about mid sized companies, having spent much of the last twenty five years operating, consulting to and researching companies in this market. As a business operator, he started and sold a company, positioned another for a leveraged management buyout and helped a third sell for a significant premium. Today, Martin runs Corsum Consulting, which focuses on one thing: helping companies build value.
He is a member of the National Speakers Association and frequent speaker and consultant on leadership, corporate culture and building enterprise value and is the author of “The Power of an Internal Franchise” (Third Bridge Press), “Building Business Value” (Third Bridge Press) and the co-author of "Act Like an Owner" (Wiley). He holds a number of board level positions with mid sized companies, sits on the Business Advisory Board for the University of Maryland Baltimore County (UMBC) Tech Center and lectures in UMBC’s Entrepreneurship Program. Martin lives on the Magothy River in Maryland with his wife and their three children.
He can be reached at firstname.lastname@example.org.
Growth is essential to the survival of any organization. Just as any organism will die without growth, so organizations will stagnate and eventually suffer if they are not constantly growing. But growth is the most difficult day-to-day task facing an executive. How much to grow, and in what directions, seem to be life-or-death decisions. But growth can be managed in ways that achieve objectives effectively and organically.
The biggest detriment to growth is the need for money to finance it. Financial stability, then, is the first step in creating a situation in which effective growth can occur. Much attention has been focused on the difficulty of financing new projects today. Much of this difficulty has been exaggerated. Financing is still available for good, sound business plans from solid companies. What there isn’t is money for wild ideas. The money is there, but people are much less willing to risk losing it. The situation is different than it was a few years or even a few months ago; only safe and sure ideas will fly in this new environment.
A useful way to view the implementation of strategies for effective organizational growth is the image of three rocks held together by a rubber band. The rocks represent the mind, body and soul of an organization. All three must move forward at the same time or else the rubber band will snap back, stymieing progress and leaving you, at best, in the same position as when you started the growth initiative.
The mind of an organization is its leadership. The leadership is defined as those making decisions, including but not limited to those “in charge” of the entire organization. Leadership resides, in other words, at all levels of an organization. Leaders of an organization are the ones who are setting strategy, articulating vision and giving direction. As we will see a bit later, every member of an organization should be certain of these leadership qualities.
The body of an organization consists of the key components of the organization’s functions — the process, structure and even finances of the organization. It is the nuts and bolts and guts of an organization.
The soul of an organization, informing both the mind and the body, is the corporate culture — what is accepted in an organization, a kind of code of ethics. Any growth strategy has to move all three of these components forward in near unison if it is to be successful.
In moving the mind of the organization forward, first consider leadership development. The first step in this type of growth is a critical skills assessment of the leadership itself. It is crucial that this assessment be more all-encompassing than some kinds of superficial assessments you might have experienced. Some sort of team-based assessment, called a 360 degree assessment, is probably advisable. A 360 degree assessment is an evaluation of leadership capability in general. It addresses all the classic leadership attributes, from establishing vision to setting direction to motivating and inspiring. A thorough leadership assessment also evaluates classic management skills like controlling, monitoring and directing. A 360 degree assessment shows the level of functioning of both a leader and that leader’s circle of influence. Everyone who is influenced by the leader is part of the assessment, from supervisors to coworkers to subordinates. It may very well be that a leader is good at certain parts of leadership—say, the intellectual or financial side—but lacks certain key qualities of emotional intelligence or vision.
Not just the singular leader goes through this process, but everyone within the group, because the goal for growth is not just for one person to have the skills to move forward, but for the entire leadership group as a whole to have those skills. The most important part of an organization’s growth is the advancement of the mind, though it cannot happen without the simultaneous growth of the other sectors.
Developing the Mind:
Leadership assessment is generally very successful if it is approached enthusiastically and in an environment of trust. It can be tied to new planning initiatives and the development of weaker leadership skills. And it’s important to remember that the identification of strong skills is just as important as the identification of weaknesses. Strengths, after all, will be your leverage points. But the assessment of all these aspects is the most important step and is crucial to preparing for corporate growth.
As mentioned above, it is important that “leadership” not be a perceived as a quality only residing in a few individuals at the top of an organization. Growth becomes much easier and more effective when sound business decision making is practiced throughout the organization. It is very useful to teach everyone in the organization about the organization; when all the employees know how the business works, they understand their role in the business’s success and, with reason, think that their work is integral to that success. Leadership, then, becomes ubiquitous throughout the organization. If even lower management knows how everything impacts the bottom line, it will be easier to make managers aware of how to be more productive and cost-effective. This form of transparency can be a huge benefit for the organization, especially when a growth initiative is seeking to change deep-seated ways of operating.
Executives can make this sharing of knowledge more enjoyable for other members of the organization. It can be as simple as anecdotal, everyday stories that make it easier to understand how the organization works and how an individual employees’ work has an impact on an organization. In one company, the CFO came into a staff meeting and said the company’s average billing rate was less than the clown was charging for his performance at the company’s summer picnic. So, at the next staff meeting, the CFO dressed up as a clown and explained this embarrassing fact, and the move worked: it became a rallying cry for project members to move billing rates above the clown’s rate, adding four or five points to the gross margin and contributing to the bottom line. Higher rates were always in the marketplace; the company leaders just didn’t know enough to ask for it, and all it took was a clown costume to make the problem—and its solution—clear to the entire organization. It’s important not to use complicated business terms like “return on investment capital”; a key line to remember in this context is “turning Wall Street into Main Street.” It’s not just the content of a message that is important, but its medium. Approaches other than a serious, somber one can be taken, and often more humorous or accessible information is more effective. In general, though, however they go about it, executives should drive home from work every day feeling sick and tired of articulating the organization’s vision. If they’re not, they’re not doing it enough.
Working the Body of the Organization:
When approaching the body of an organization, it is important to remember the image of the three rocks held together by the rubber band. If the three rocks don’t move together, they will certainly not be able to move separately. An organization’s body is its processes and structure, the core business processes the company needs in order to work well. These can range from inventory control to sales turnover to professional services delivery, to name just three at random. These processes must be looked at critically—just as the organization’s leadership is analyzed—to make sure that they can handle the extra pressure of growth. Are the organization’s structures aligned with the vision for the organization’s growth and future? It may well be that business transformation and reengineering may be necessary to support the growth load, and it is crucial that these determinations are made before growth initiatives begin.
When changing the processes of an organization, it is also important to align those processes with one another (in keeping with the image, the little pebbles within the rocks must be held together, just as the big rocks are held to each other). Reorganization is not the only change affects the body of the organization. The elements, in other words, may be fine, but their alignment may be problematic. In that case, it is just as important to realign the elements appropriately to ensure that the processes will not be overwhelmed by growth. These realignment plans should be made using a collaborative approach. The factors that will make the organization work well should be discussed and articulated in a workshop format. This kind of change is not about one person imposing swift changes but is about the organization itself making the change. Outside consultative help can manage or facilitate the process, but it should not impose solutions. Internal input should be maximized.
Caring for the Soul:
The underpinning of the mind and body is the soul, the culture of an organization. Culture consists of the norms of the organization. Though many workers may think that their workplace lacks a culture, it is crucial to remember that every organization has a culture. It can be quiet; it can be an outrageous, noisy sales culture. Whatever the particular culture is, it is defined by a set of norms and behaviors, a code of what is accepted and not accepted. A culture is the glue of the organization. It holds the business together when other structures and processes fall apart at the leadership or process level. But this inherent cultural stability can be detrimental during times of change. An effective culture comes from a sense of shared ownership, which comes out of the shared sense of an organization’s vision and operations, a line of sight between what happens day to day and the general performance of the organization. Such a line of sight leads to a sense that people’s contributions are valued by the organization, an ownership culture in which everything is important to the bottom line. Creating this ownership culture is extremely valuable; if you think and act like an owner, you are comfortable with growth. Everyone should be thinking like an entrepreneur, a mindset in which what is good for the organization is good for the individual workers.
Useful methods and techniques for assessing the soul of the organization can be applied, and once this code of values is established, it should be publicized. Most organizations should have their values posted. This justifies tough decisions because such decisions—over hiring and firing, for instance—can be persuasively articulated when they can be connected with the organization’s value system. In most organizations, the code of behavior—issues like lateness and timeliness, dress and approach to customers—is left largely unspoken. This is a great potential problem, and it is imperative that important aspects of the culture be clear and documented and that new people are brought into the organization in accordance with this code. It can even be used as a selling point, attesting to an organization’s commitment to its customers and employees. Documenting these previously unspoken codes can be very effective. Keep this in mind in regard to the issues of organizational culture: If it’s not written down, it doesn’t exist.
An Environment of Trust:
In sum, from a leadership point of view, this mnemonic links all the aspects that should be in place before major changes are initiated: TRUST.
Teach as many people as possible in the organization how the organization works; make all information ubiquitous.
Establish a system to Reward individuals for their performance.
Always provide Unconditional support for mistakes made during growth periods; mistakes are inevitable during periods of change, and you do not want to squash initiative by aggressively punishing these mistakes.
Share as much information as possible; be as open as possible.
As a leader, be Trustworthy yourself; make and keep commitments.
As you lead during a time of change, you need to be strong, consistent, and unambiguous from the beginning. Transitions require all leaders to take a critical look at their skills to make sure the skills are growing and changing, just as they would like their organization to change. This can encompass professional development, reading, seminars, books on tape and many other strategies. The key is to remember that if the organization is going to change, its leaders must change, too.
Copyright 2011 Martin O'Neill