Philosophy Establish a common value set, and build real commitment to clear targets for the improvement of all aspects of the company's performance. Companies that have developed a real sense of values and philosophy in their organisation appear to have established a strong focus in a number of the following areas:   Build Shareholder Relationships They endeavour to build a sense of partnership with their shareholders which goes beyond pure financial return   Define Clear Objectives They inspire a shared vision of the future which serves to guide everybody's efforts, and deploy this into clear practical objectives and standards   Align the Business They work as a team at the top level, pursuing collective goals in preference to personal ones   Manage Culture They develop a clear value system which is consciously reflected in management behaviours Ensure Commitment They build commitment to challenging targets and the plans by which they are to be achieved Achieve Results They understand the real impact of management efforts and decisions on behaviours, and actively manage success through this To understand these in more detail please click on the relevant image above, or scan through the explanations below Build Shareholder Relationships Endeavour to build a sense of partnership with your shareholders which goes beyond pure financial return Do you have an active relationship with the owners of your business? (The following has been written with a focus on public companies, but can be interpreted by the reader to reflect the position of subsidiaries as well.) Principle A lot has been written on the short-termism of the City. But companies themselves tend to reinforce this by maintaining an arms length position from their investors. By seeing their investors as men in grey suits, and basing the relationship on financial ratios they fail to build anything but a superficial focus. But investors too are people of dreams and values. They make their own choices about what is important. What do they use the returns you give them for? In many cases you would be right to say “to make more money?”, but in some cases this is because you have given them nothing to break their paradigm. Could you make the investors in your business clearly partners in your dreams and aspirations, and could you reinforce this by treating them as such? Benefits While you are unlikely to move your investment base entirely away from the purely money focused investor, you can stack the deck to attracting more investors who have built a degree of loyalty toward your aims and plans. The benefit of this is to make you less susceptible to the uncertainty and volatility of take-over, and to provide you with more stability and opportunity to make longer term investments in your business future. Approach The first step is to break the investor paradigm. This paradigm is one where the objective of the business is to make a profit, and all profit is for the purpose of the shareholders - it is, after all, their right. So what is wrong with this paradigm? If you provide a return that is worthy of the investment and the risk involved, and you build confidence in continuing to do so, then you provide a valuable service to your investors - one worthy of their investment. Any variation, up or down, from this makes speculation a more profitable approach for the investor, and this leaves you with new investors with different expectations. In short it is better to maintain a prudent stability in your returns, and thereby your investors, and to use this stability to build loyalty through developing their ownership of your aims and ambitions. [Return] Define Clear Objectives Inspire a shared vision of the future which serves to guide everybody's efforts, and deploy this into clear practical objectives and standards How clear are your aspirations and intentions for your business? To what extent are the statements you may have around your walls an accurate reflection of a picture that is consistently in the minds of all your people? Principle In the days of ‘command and control’ where people did precisely what they were told, and nothing more, an understanding of ‘why’ they were doing it was largely superfluous. These days there are other Economies that compete more economically on this basis, and we have to compete through employing more of the minds and ideas of our people on a day to day basis - a system of empowerment. If people’s unplanned contributions are to be efficient they must be clearly focused in the same direction, & this direction must be clear & unambiguous. Objectives need to be specific, measurable, agreed, realistic and timebased (SMART) and yet broad enough to allow for constructive creativity. Benefits Clear and agreed objectives can provide an excellent platform for teamwork and creativity across the business. Teamwork can be helped through the removal of different agendas and interpretations that arise from ambiguous or unclear (non-existent?) objectives. And with clearer objectives, traditional practices and strictures hold less value, and can more easily give way to more creative solutions for achieving the objectives (particularly stretch ones). Clear objectives also help add value to the quality of work-life that your people have. It is clearly more fulfilling and satisfying for an intelligent and capable individual to know why he is doing something, and to give him the opportunity to find his own way to contribute to it. Approach There are a number of approaches to developing clear objectives - these vary from the unambiguous left-brain approach of SMART to more right-brain techniques such as visioning. A good approach is to ensure a balance of both and to involve your people in the process. This helps win peoples hearts and minds. The biggest danger though, is from developing a vision and objectives that are only words on paper. Clear objectives need to be written in the hearts and minds of your people for them to be effective. Getting them involved in defining the vision may start this process, but maintaining it requires that it is an intrinsic part of management values, decision making, and day-to-day conversations. [Return] Align the Business Work as a team at the top level, pursuing collective goals in preference to personal ones To what extent is your business harnessed in meeting its objectives? How well do your meeting structures, decision making processes, planning work etc. support your objectives? Do they ensure that all levels and areas of your business are harnessed in efficiently fulfilling your objectives? Principle Writing your objectives clearly on the hearts of your people (see previous principle) is key to making those objectives a reality. But if those same people are required to work in systems and structures that reflect and reinforce the paradigms of older objectives, then: they will clearly be less than fully efficient - the constant reinforcement of the old model will cause them to drift back To avoid this it is important that the operating and decision making procedures/structures of the business are amended to ensure that they are aligned with the new objectives, and in turn align other things to them. Benefits The benefit of alignment will be increased efficiency and effectiveness in achieving the objectives. But that efficiency is not only through the straightforward focus of activities on the objectives. The alignment of the business brings more subtle efficiencies through the clarity of focus that is reinforced in your people: - increased congruence and mental health - reduced conflict and stress Approach The approach is essentially one of planning a strategy to fulfil the objectives. This in the first instance requires that those factors (both human and organisational) that are critical to the success of the objectives are clearly identified. Then it is a matter of developing plans to ensure those factors are created and/or managed. Force field analysis can provide a great insight into the human factors, and can thereby help to align policy influences with the objectives. In the initial years however, much is likely to be missed in the plans, and a key feature in practically aligning the business is setting in place those processes which can learn from where misalignment exists, and put it right (eg Review & Audit)   [Return] Manage Culture Develop a clear value system which is consciously reflected in management behaviours What behaviours and attitudes does your organisation reward? How do you ensure the attitudes and behaviours that the organisation wants and needs for its future success are reinforced by the culture of your organisation? Principle One excellent text on motivation* concludes: “Organisations get the behaviours they reward, which are very rarely those they desire” An organisation is the sum of its peoples behaviours. And the behaviours it gets are the behaviours it rewards. The principle of getting the behaviours that you want is one of ensuring that you deliver the right ‘rewards’. While this is far from straightforward, due to the complexity of human interactions, much can be done by being totally clear and explicit on the behaviours that you want, and ensuring that your managers have an active strategy that constantly reinforces them. *Taken from “Expectancy Theory” by Nadler & Lawler Benefits Where there is a greater alignment of behaviours with the organisational objectives there is greater efficiency: - Contributory and constructive behaviours are encouraged - Destructive or conflictual behaviours are discouraged - Teamwork improves through more supportive interpersonal behaviours - Confusion and resentment are reduced through increased clarity of the fairness of the reward system - And, the organisation can feel a much more rewarding place to work in. Approach People will often do what is important to their manager, irrespective of what that manager says is important to them. Further, managers can work out what impression they create in their people about what is important. In a recent exercise 15 managers had a 90% accuracy on identifying themselves and their colleagues from what their people said was important to them, even though it wasn’t what they wanted their people to see as important. We need to become aware of the impression we create, and the implications of that. And then we need to set about redesigning the way we interact with and influence our people to create the right impression. Useful tools in doing this are: - defining a clear and explicit behavioural standard - modifying formal and informal reward systems to reflect this standard - exaggerating your style to ensure the standard is adopted [Return] Ensure Commitment Build commitment to challenging targets and the plans by which they are to be achieved How committed are your people to the organisation and its objectives? What do you do to build and ensure peoples commitment to undertaking responsibility for the objectives you have set yourselves? Principle It is quite rare for the objectives of an organisation, and those of the individuals working for it to precisely align themselves at the outset. There may well be some degree of common ground, but very often even this limited hope is not the case. Commitment is therefore built by explicitly linking the objectives of the organisation to the objectives of the individual by means of a contract - eg organisational success will be used in part to provide you personal success. Commitment is maintained by frequent reference to the contract in the ongoing nature of business and decision making. Benefits The contract allows everybody the opportunity to clarify their expectations, and their responsibilities. While this might seem mercenary in one respect, it does not need to be so in practice. All we are attempting to do is to be fair, and to make that fairness explicit. The benefits of this is that it reduces the time and emotional energy that might otherwise be expended in ‘looking out for number one’, and it increases all round confidence in the delivery of the responsibilities. Approach The main element of ensuring commitment is through developing an explicit contract. Such a contract may be through the appraisal process, or through some other form of personal objectives. This contract is made easier by allowing individuals to contribute to the definition of the organisations vision, and by clearly understanding their personal objectives. By starting in this way there is scope to find natural alignment between the organisations needs of the individual, and the individuals objectives. Initially this scope may be small, but as the individual grows and the organisation matures in its approach, this scope will increase. Beyond the natural alignment however there is almost always a need to consider the distribution of the benefits between the organisation and the individual. (Note: these will not always be financial). All of this should be collected into the contract. [Return] Achieve Results Understand the real impact of management efforts and decisions on behaviours, and actively manage success through this Is all that you are doing really making a difference to your bottom line? How do you compare in the performance of your business against your competitors; local, national and global? Principle We can sometimes deceive ourselves that we are doing all the right things in the right way even if we are not. This is especially true in business. The principles outlined in this document, applied diligently, will make dramatic differences to the performance of your business. If they aren’t, then first of all you need to know this, and then you need to know why. This principle is about benchmarking yourself against the financial performance of your competitors. Benefits The benefits of this principle are largely financial. As such they can be what you want them to be, depending on what you want to invest that finance in. But the benefits are also peace of mind. If you are comprehensively beating your competitors then you can have some degree of confidence that you are getting things right. Approach The EFQM model provides a scale, representing different thresholds of performance that the model would assess in the area of Business Results. [Return]   Home - Load frames - About us - Resources - Contact us © Tesseract Management Systems Ltd 2003

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