Business musings

Articles and thoughts about all things innovative and strategic

27
Nov
Posted by Debbie Stocker , stored in: Leadership  Psychology  

Picture in your mind a large, American manufacturing company. Here is their story…

[A group of experienced] managers sit in [a] meeting. Out on the plant floor, production on the new line stopped more than an hour ago. R&D and production are waiting for the managers to get a decision on that small mistake hidden somewhere in the specifications. In the office, a secretary is typing an overdue proposal for new business. In her hurry, she mistypes “Mr.” instead of “Ms.” The company will lose the job. Also lost will be more than 40 hours of preparation time.

With the managers tied up in their meeting, their overworked associates are bouncing a prospective customer around on the telephone. Asked by the third person to “please hold,” he is thumbing through his telephone directory looking for the name of a competitor. The company’s top sales producer, furious over the lack of prompt support from the back office, has declared a Mental Health Day. He’s working on his putting at the golf course. He can afford it. The company cannot.

None of these small acts—or hundreds of others like them—will appear on next month’s statement of financial results. They will not appear in the budget or in the managers’ performance appraisals. Yet together they form an invisible sieve, draining profit dollar by dollar.

Happily, hundreds of other equally small acts are accumulating profits. A sales representative drove 135 miles this morning to deliver a replacement part to a customer. Sometime next year, the customer will place an extra order. In the back office, three secretaries are meeting informally to balance their work so they can meet their deadlines. This cooperation gets three customer inquiries handled a day early and convinces the senior secretary to turn down another job. Replacing her would have cost $6,000 above budget in temp and recruitment costs.

Harry in maintenance has just uncovered a potential problem with machine number 3. He’s installing a $38 part that will avoid a $12,000 replacement plus three weeks of downtime this summer. Chris is training recruits on safety procedures. Accidents that won’t happen will lower next year’s insurance costs. Mary’s careful review of accounts receivable uncovers an invoicing error that will mean $950 in extra revenue.

Like their negative counterparts, none of these acts—or hundreds of others like them—will appear on next month’s statement. They will not surface in the budget or in the managers’ performance appraisals. Yet together they form an invisible bank account, collecting profit dollar by dollar.

I love the above quote. Taken from Playing for keeps by Frederick Harmon, it masterfully tells the story of the humanity that is foundational to every organisation around the globe. Whether big or small, for-profit or not-for-profit, multinational or local, startup or mature, every organisation is—in reality—the sum of its people and their individual acts.

Although we understand this perspective intuitively, all too often our organisations take on a life of their own. Brands have identities and personalities. Businesses become corporate entities. Organisations have moral and ethical responsibilities. Firms experience growth, maturity, rebirth and death—some are even seeking the key to eternal youth! Companies anticipate, adapt and recover. And organisations have views, attitudes, outlooks and opinions.

Photograph of a brown and white springer spaniel wearing a red collar and sitting in the garden on grey flagstones

As an owner of a springer spaniel and two cats, I’m familiar with the tendency to anthropomorphise our pets—Matt and I do it on a regular basis! Jess is happy, grumpy, jealous, naughty, worried, friendly, and she very definitely loves us!—can you see she’s smiling in the picture?!

In the same way—whether we work for them, consume their products or services, or simply have an opinion on them—we all emphatically anthropomorphise our organisations.

I have no problem with anthropomorphism as a pet owner and I believe it is an important and useful device in business. However, an awareness of our tendency toward it is vital.

Day in, day out, we read our organisations by the collective characteristics we endow them with. Our organisation is innovative, forward-thinking, ambitious and visionary. Or maybe it is stuffy, oppressive, backward and uncaring. What we actually mean by this is that as a group of people we have created a culture, brand, department or company that could be described as having these collective attributes.

Although it is necessary and important to form collective representations of our organisations, we must remain aware that these representations do not exist as concrete realities but are instead symbolic identities. Even within stakeholders of a single organisation, differing opinions will be found: some perceive Tesco as providing great value for money, others see it as an uncaring, corporate behemoth.

And even beyond our own perceptions, we can easily fall into the trap of treating other symbols, abstractions and representations as substantive. Balance sheets and key performance indicators, for example. “Surely those are more objective?” I hear you ask. Harmon would argue they are not:

All management meetings begin with the numbers. The numbers are the single best indicator of how the business is doing. The numbers are so real. So real, it’s hard to remember they are abstractions, macro reflections of the quality of thousands of individual acts.

When well-executed acts significantly exceed poorly executed acts, the numbers “look good.” When poor exceeds good, they “look bad.” Look is the right word. The numbers are always images of reality, never reality itself.

Such images and the organisational entities we relate to are in fact the result of a multitude of individual and collective decisions, cognitions, communications and actions. As Joe Leech (User Experience Director of cxpartnersobserves, “Data dehumanises”.

Please don’t misunderstand me. I am not for one second saying that the use of representations is wrong—in fact, I’m a strong advocate of key performance indicators, metrics, brand identities and the like—but we do need to look beyond these.

At the end of the day, the foundation of any organisation is us. People. Humans. Individuals and groups. In the words of Harmon, “The small individual act is the basic cell of all performance. Everything we call management ends there.”

We need to remember this as we interact with our companies. Frequently, Matt and I emphasise the importance of considering the bigger picture; in this instance, I’m asking you to instead zoom in from the macro to consider the individual.

In an organisation that is struggling with a negative culture, what are the differences within that culture? Who stands out at as a light in the darkness? Why is their attitude and behaviour different? Is the negativity truly organisational or are there subtle differences between departments, teams and individuals? What can you learn from these differing responses?

Take sales figures as another example. Over the last few years, it has been easy to blame any financial downturn upon the recession, but are there subtle differences if you dig beneath the numbers on your spreadsheets? Is one customer segment more loyal than another? Does a single customer bring you more referrals than any other? Why? What are the differences and what can you learn from them?

Such a perspective is vital at all levels within an organisation but, for leaders, it is of particular importance. In the words of Harmon, “In any serious analysis, managers manage neither results nor numbers. They manage the quality of individual acts.”

Leaders in particular need to be able to identify the subtle differences within a collective and capitalise upon them. What is it that your leading sales representative does differently that he or she could teach others? Are efficiencies and inefficiencies the result of processes and technology or are there unnoticed individual acts that contribute to overall effectiveness? Is team performance reflective of ability or, in reality, does one team display more effective communication patterns than another? For any leader and the techniques that they use, “their power to generate constructive change lies in their capacity to direct or redirect individual small acts.”

So, next time you’re pouring over a spreadsheet, analysing your target market or in the midst of a leadership meeting, take a moment to step into the detail—to consider the individual and their unique acts. You might just discover something surprising. You will certainly add value to your management. And you will definitely unlock the true source of your organisational capabilities.

And for those of you who like the research…

Harmon, F.G. (1996). Playing for keeps. New York: John Wiley & Sons, Inc.

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