Profitability is at the core of successful businesses. Many markets do not allow as much top-line revenue increase as the companies would like. Therefore, organizations have to focus on improving the bottom-line.
Boosting the bottom-line entails raising Productivity. Productivity enhancement can be achieved by eliminating redundancies and improving processes that change the company. Process Improvement also means less people needed to accomplish the same tasks.
Change projects—as is the case with most other projects—almost always run over budget and over time, especially when new technology comes into the mix. Causes for failures in Change Management are many and one of them is heavy and bureaucratic teams.
Raising Productivity in teams designated for change projects is well-nigh impossible. A solution to this is Building Effective Teams by keeping teams small—a remedy that has shown its effectiveness time and again.
Smaller teams tend to communicate effectively, decide quickly, do course corrections more easily, work faster, and innovate more.
Large organizations have the tendency of deploying large teams because as the planning process goes on, the scope gets bigger and bigger. This practice is defeating in itself because sight of the goal is lost in the bureaucratic rigmarole.
For projects to be executed swiftly and successfully the following 10 best practices for smaller, more Agile teams are very effective:
- Break Down Problems
- Eliminate Indispensable Roles
- Adopt One-step Decisions
- Foster Trust
- Share Information Freely & Informally
- Increase Visibility & Accountability
- Minimize Conference Calls
- Track Less
- Increase Cross-team Collaboration
- Adopt Technology Faster & Effectively
Let us delve a little deeper into some of the best practices.
Break Down Problems
Dividing the project into distinct problems or separating business capabilities into converged organizational units makes it easier for smaller teams to deliver.
Assorting sizable, complex problems into discrete, attainable pieces and teaching members to develop a Problem Solving Mindset enables small teams to take them on easily and over deliver on them.
An alternate to making teams smaller without compromising on the structure of the organization is to separate business capabilities into focused organizational units.
Eliminate Indispensable Roles
Making sure that individuals with a certain type of skill or key people are not scarce in the organization lest they get pulled by different teams at the same time.
Essential people are wanted by all teams, consequentially their time gets split into such small chunks that no task gets done properly. Operational risk becomes prodigious when dependent on a single person.
It is vital to work away from such scenarios in a team.
Adopt One-step Decisions
Bureaucratic way of decision-making in large teams should be avoided by identifying types of decisions and the decision-making authorities, at the outset.
Trust speeds up progress, augments quality, and diminishes execution risk. Trust has to be built up by conscious effort.
Share Information Freely & Informally
One of the ways for effective Team Management is to keep communication swift and the only way of doing this is to keep it informal.
Interested in learning more about these best practices for Small, Agile Teams? You can download an editable PowerPoint on 10 Best Practices for Small, Agile Teams here on the Flevy documents marketplace.
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Organizations typically focus on Customer-centric Design in their Strategic Planning and overlook the critical driver of Performance, Growth, and Operational Excellence—their employees. With cut-throat competition now the norm the realization has become clearer that employees are:
- The face of the business and create lasting—or perishing—brand impression.
- Sources of innovation and organizational knowledge.
- Representation of the company’s service philosophy.
- Expected to live by its Organizational Culture and values.
Employee Engagement has emerged as one of the significant pillars on which the Competitive Advantage, Productivity, and Growth of an organization rests. What, exactly, does it mean when an employee is engaged? Employee Engagement, over the years, has been thought of in terms of:
- Personal engagement with the organization.
- Focus on performance of assigned work.
- Worker burnout.
- Basic needs (meaningful work, safe workplace, abundant resources).
- Attention on Cognitive, Emotional and Behavioral components related to an individual’s performance.
Although Employee Engagement is widely seen as an important concept, there has been little consensus on its definition or its components either in business or in the academic literature.
Kumar and Pansari’s 2015 study define Employee Engagement as:
“a multidimensional construct that comprises all of the different facets of the attitudes and behaviors of employees towards the organization”.
The multidimensional construct of Employee Engagement has been synthesized into the following 5 components (or dimensions).
- Employee Satisfaction
- Employee Identification
- Employee Commitment
- Employee Loyalty
- Employee Performance
The 5 dimensions of Employee Engagement have been found to have a direct correlation with high profitability, as substantiated by a number of research studies:
For instance, a study of 30 companies in the airline, telecom and hotel industries shows a close relationship between Employee Engagement and growth in profits. After controlling other relevant factors—i.e., GDP level, marketing costs, nature of business, and type of goods, the study found:
- Highest profitability growth—10% to 15%—in companies with highly engaged employees.
- Lowest level of profitability growth—0% to 1%—in companies with disengaged employees.
Research reveals that Employee Engagement affects 9 performance outcomes; including Customer Ratings, Profitability, Productivity, Safety Incidents, Shrinkage (theft), Absenteeism, Patient Safety Incidents, Quality (Defects), and Turnover.
The differences in performance between engaged and actively disengaged work units revealed:
- Top half Employee Engagement scores nearly doubled the odds of success compared with those in the bottom half.
- Companies with engaged workforces have higher earnings per share (EPS).
These 5 dimensions become the base for measuring Employee Engagement in a meaningful manner that permits managers to identify areas of improvement. To assess an organization’s current status of Employee Engagement, a measurement system is needed that includes:
- Metrics for each component of Employee Engagement.
- A scale for scoring metrics in each component.
- A comprehensive scorecard that pulls everything together.
Let us delve a little deeper into the first 2 dimensions of Employee Engagement.
Employee Satisfaction is the positive reaction employees have to their overall job circumstances, including their supervisors, pay and coworkers.
When employees are satisfied, they tend to be:
- Committed to their work.
- Less absent and more productive in terms of quality of goods and services.
- Connected with the organization’s values and goals.
- Perceptive about being a part of the organization.
The 5 metrics that gauge Employee Engagement in terms of Employee Satisfaction include:
- Receiving recognition for a job.
- Feeling close to people at work.
- Feeling good about working at the organization.
- Feeling secure about the job.
- Believing that the management is concerned about employees.
We take a look at another dimension central in significance.
Signifies what motivates the employees to do more than what’s in their job descriptions.
Employee Commitment is much higher for the employees who identify with the organization. This element:
- Develops over time and is an outcome of shared experiences.
- Is often an antecedent of loyalty.
- Induces employees to guard the organization’s secrets.
- Pushes employees to work for organization’s best interests.
Research has found that employees with the highest levels of commitment:
- Perform 20% better.
- Are 87% less likely to leave the organization.
The 3 metrics that gauge the Employee Commitment dimension of Employee Engagement include:
- Commitment to deliver the brand promise along with knowledge of the brand.
- Very committed to delivering the brand promise.
- Feels like the organization has a great deal of personal meaning.
Interested in learning more about these foundational pillars to Employee Engagement? You can download an editable PowerPoint on 5 Dimensions of Employee Engagement here on the Flevy documents marketplace.
Are you a Management Consultant?
The typical approach to improving productivity focuses on assessing variance in quality, time, rate, service, or cost, around which management systems develop incrementally or revolutionary.
Organizational Health Index, on the contrary, focuses on improving performance through improved alignment of organizational systems. For example, by improving competence of key components such as mindset, work design, technical expertise, or relationships; or through improving the interface between work processes, or the interaction between work practices.
Simply put, the capability of an organization to achieve its strategic goals and their alignment defines an organization’s health. The Organizational Health Index (OHI) leverages logical consistency to manage the organizational health. OHI entails quantifiable evaluations, diagnostics and recipes for success that allow the leaders to calculate and accomplish the organizational health goals, required to sustain long-term performance.
Organizational health refers to the need to address soft (leadership, direction or culture) and hard factors (accountability, reporting lines, or controls) affecting performance. The organizational health index is an ongoing continuous improvement system applicable across an organization. The OHI measures not only the current health level, but also determines the next steps for an organization. There are numerous advantages to the organizations implementing it, including:
- Benchmarking organizational health against the rivals.
- Aligning the organizational systems, units, and people by communicating shared goals and priorities; and highlighting and plugging the disconnects.
- Improving organizational performance by pinpointing variances and opportunities to improve health and drive business success.
The OHI Diagnostic Framework provides a road map for leaders and managers to improve organizational health. It measures the organization against the 9 most critical health outcomes; these outcomes comprise both hard and soft organizational elements. Careful measurement of these 9 elements has a proven link with improved financial performance and earning above-average EBITDA margins:
- Coordination and control
- External orientation
- Innovation and Learning
- Work Environment
- Shared Vision
- Strategic Clarity
- Employee Involvement
- Role clarity
- Performance contracts
- Consequence Management
- Personal Ownership
Coordination and Control
- People Performance Review
- Operational Management
- Financial Management
- Professional Standards
- Risk Management
- Customer Focus
- Competitor Insights
- Business Partnerships
- Government and Community Relations
- Authoritative Leadership
- Consultative Leadership
- Supportive Leadership
- Challenging Leadership
Innovation and Learning
- Top-down Innovation
- Bottom-up Innovation
- Knowledge Sharing
- Capturing External Ideas
- Talent Acquisition
- Talent Development
- Process based Capabilities
- Outsourced Expertise
- Meaningful Values
- Inspirational Leaders
- Career Opportunities
- Financial Incentives
- Rewards and Recognition
- Open and Trusting
- Internally Competitive
- Operationally Disciplined
- Creative and Entrepreneurial
Years of research have shown the healthiest companies to align with 1 of the 4 recipes for organizational health. These recipes constitute concrete management practices and activities for the organization to implement. Leaders need to acknowledge and align to the recipe that is appropriate for them. They can use these success recipes to plan and implement a change program that results in sustainable outcomes. The 4 recipes for organizational health are:
- Market Maker
- Continuous Improvement
Interested in learning more about the other recipes for Organizational Health and the OHI Diagnostic Framework? You can download an editable PowerPoint on Organizational Health Index here on the Flevy documents marketplace.