In part II of his ERE post, Dr. John Sullivan offers some solutions for “Great to Good Slide” companies. I’ve shortened the article to just the highlights so please visit ERE for the full article.
Excellence matters, and technology advances so fast that the potential for improvement is tremendous. So, since becoming CEO again, I’ve pushed hard to increase our velocity, improve our execution, and focus on the big bets that will make a difference in the world. Google is a large company now, but we will achieve more, and do it faster, if we approach life with the passion and soul of a startup. — Google CEO Larry Page
20 Action Steps for Stopping or Preventing a “Great to Good” Slide Into Mediocrity
- Strategic goal and role setting actions
- Actions to increase innovation, speed, agility, and change
- People-management-related actions
Strategic Goal and Role-setting Actions
- Set a goal to create a performance/innovation culture — The first step is to set a clear corporate-wide strategic goal and provide an accompanying set of expectations that your organization will use to become and then maintain its status as a performance and innovation culture.Corporate leadership must make it clear that no matter what size your organization is, they want it to be “startup like,” which means being a first-mover leader, having disruptive products, and dominating any marketplace that you enter. In order to reinforce that expectation, leaders, managers and employees must be measured, recognized, and rewarded on their performance, speed, and innovation, rather than effort and seniority. In addition, rather than a vague target, leaders should set and communicate a fixed expectation for a “rate of improvement in results” each year (e.g. 12%). And this “results improvement goal” must apply to every individual, team, and organizational unit, so that every employee will fully understand the need for innovation, speed, and agility. This is because you simply can’t succeed with the imbalance that occurs when half of the organization is moving at market speed, while the other is improving at a bureaucratic rate.
- Assign the executive committee the role of overseeing a startup approach – Everyone in the organization needs to accept responsibility for avoiding a slide into a bureaucracy; however, the executive leadership team needs to take ownership of implementing and maintaining an integrated approach.
- Create a startup/bureaucracy dashboard – The summary results for each manager should be distributed on a quarterly basis in a ranked list so that everyone will know the leaders and the key offenders.
- Calculate the dollar costs of bureaucratic behavior – Leaders must work with the CFO’s office to estimate the dollar impacts on corporate revenues as a result of a loss of speed, agility, and innovation.
- Put limits on overhead functions – Everyone must realize that the role of overhead functions should be to find a way to expedite and allow managers and innovators to do what is needed. They need to be measured and rewarded based on how operating managers rate them as supporting and directly contributing to (rather than inhibiting) an increase in speed, agility, risk-taking, collaboration, and innovation. Leanness and a limit on excessive rules, approvals, policies, and prohibitions must be continually assessed. In order to limit the proliferation of overhead programs, each function should be required to drop their lowest-ranked program or service every two years.
Actions to Increase Innovation, Speed, Agility, and Change
- Build speed, impatience, and acting with urgency into the organization – In today’s business world, it’s not the big that eat the small; it is the fast that eat the slow. The old adage is simply wrong: speed doesn’t kill, slow kills. Moving fast does increase error rates but moving too slowly guarantees that you will not be a leader in the marketplace. In order to set the appropriate speed target, executives must monitor and then match the speed in which the fastest competitors (especially startups) move. Many firms try developing a sense of urgency or they use so called “change agents,” but in order to guarantee success, you have to go further and focus on the required actions and behaviors. Indicators of organizational speed, like the number of approvals, the hierarchical levels, the time spent in meetings, and the rate of innovation should be monitored. Identifying speed-related best practices and critical success factors requires benchmarking the fastest-moving internal teams and functions, as well as a great product-testing process. Executives must set “stretch goals” when setting deadlines, but leaders must educate managers and employees on how to move fast while still minimizing errors. And finally, how individual employees act with urgency also needs to be assessed and rewarded.
- Develop a fast learning and sharing capability – The most important corporate competency may be rapid learning and the ability to use that learning because it drives innovation and speed. If you’re going to lead an industry, no employee can be exempt from fast learning. Startups thrive because everyone is responsible for continuously remaining on the leading edge, and their small size makes sharing learning and best practices easy. Faster learning is difficult when you go first and innovate, because there are few to benchmark against and learn from. If you want to remain “startup like,” don’t create a large corporate learning function. Instead concentrate on enhancing individual informal learning. One learning speed facilitation tool to consider is identifying and then sharing “how the best learn” (where you let everyone know the learning approaches and the sources that the very best performers use). Organizations also need a social-media-type approach to ensure that rapid sharing occurs across the organization. Another recommended tool is individual development budgets, so employees can own and drive their own learning. Because slow learners are a drag on fast learners and teams, they must be fixed or released. Incidentally, leaders should consider all major failures as learning opportunities, so they must require “failure analysis” so that errors are not repeated.
- Improve decision making speed – There are few things that indicate that you are a bureaucracy more than slow risk adverse decision-making. If you’re going to maintain the shortest time to market in the industry, the amount of time it takes to make major decisions must be tracked against a standard. Managers must be trained on how to make decisions with less-than-perfect information. In addition, you must identify those that make slow decisions and those that put up barriers and excessive approvals that restrict fast decision-making.
- Build obsolescence and scalability into everything – In order to ensure continuous renewal, every major product and internal process, tool, program and approach needs to include a “use by date” when the process must be reengineered or abandoned. In addition, every plan for a new program or tool must include the development of a next-generation process which will be capable of replacing the original design. And finally, every new program must be built to be scalable, so that it can continue to work as the organization grows dramatically in size.
- Identify barriers to innovation, collaboration, and productivity — What is needed is a proactive approach which uses manager and employee surveys, as well as metrics, to identify these hideous barriers. In addition, individuals who are responsible for creating these barriers need to be fixed or released. Because collaboration is critical for innovation, there should also be measures of process integration, the degree of cross-functional collaboration, the level of cooperation, and whether there are organizational silos.
- Make innovators, game-changers, and pioneers heroes, not managers – Making heroes of innovators not only increases their rates of innovation but it makes everyone want to become one. There is a tendency to give innovators formal titles but this burdens them with administrative responsibilities. A superior approach is to instead let them select their own team members and to allow them to operate with some degree of autonomy on a project (for at least one year), while receiving management level pay.
- An external competitive focus – In order to limit this arrogance, everyone needs to adopt a competitive focus and to continually do competitive analysis. Organizations need to continually compare themselves to the products, services, speed, agility, innovation, and results produced by first-movers, startups, international firms, and rapid growth firms in related industries. Leaders need to ensure that their employees also use their competitors’ products and services in order to fully understand their capabilities and weaknesses.
- Fix bad managers – To counter this hideous problem, there must be a formal “bad manager identification program,” coupled with a metrics-driven approach that rapidly fixes, demotes, or releases weak managers. In order to avoid creating “little dictators,” the role of a manager must also shift, so that they become influencers and coaches more than those that give orders.
- What you measure and reward drives behavior – In a startup, it is obvious to everyone what is important. However, as an organization gets larger, it’s common to overly rely on the corporate culture to communicate your message about the importance of performance, innovation, speed, and calculated risk-taking. Because, “what you measure and what you reward … gets done,” your cultural message must be unambiguously reinforced on a daily basis through your measurement, reporting, and reward processes. Providing significant differences in rewards is critical because if employees receive almost the same rewards for playing it safe as they do from innovating and taking risks, many will eventually settle into the “playing-it-safe mode.” And finally, transparency in reward criteria can make it crystal clear what is really important, and widely reporting the ranked performance of managers by name can help to increase internal competition.
- Release the evildoers quickly – Rather than going through all of the legal issues related to a formal firing, a superior and faster approach is to simply bite the bullet and pay these individuals to leave before they can do more damage. Rapidly releasing evildoers also sends a message to everyone else that you simply won’t tolerate bad, blocking, political, or bureaucratic behavior.
- Getting managers to pay attention to great hiring — You can minimize this problem by directly measuring and rewarding hiring managers for their number of quality hires that benefit the entire firm. In addition, managers must be provided with powerful data-supported recruiting tools like modern employee referral programs that are tied to social media efforts. That means that just like when you were a startup, every manager and employee must accept their role as a 24/7 “talent scout.”
- Focused retention is a superior approach – Managers must own retention but they can’t be expected to excel at it unless they are provided with powerful data-supported retention tools. These tools should include helping managers identify who might leave, why they might leave, why they stay, and what are the most effective personalized approaches for keeping key employees.
- Internal movement and development must be accelerated – A superior approach is proactive internal movement, where an internal recruiting team facilitates the rapid and accurate placement of employees, in order to increase productivity, development, excitement, and retention. This effort should be supplemented by a “project marketplace” that makes everyone aware of virtual and part-time projects which serve the dual purpose of getting work done as well as broadly exposing employees. Managers must also be measured and rewarded for developing and then releasing talent to other functions and business units.
- Great assimilation is required to maintain your culture – When startups grow, they almost always do so partially through acquisitions. In order to ensure that these newly acquired employees (as well as new hires) don’t rapidly dilute your culture, a strong data-supported assimilation program must be developed. Acquired individual employees must also be measured on their level of acculturation and those who miss the mark must be fixed, released, or isolated.
- Individual motivation and management – An alternative method is to target your motivation and excitement approach only on your key employees and innovators. Start by having their manager survey or interview them in order to identify their key motivators, excitement factors, and turnoffs. Also consider asking for their help in identifying the most effective way to manage them and then make sure that their manager adapts their style in order to maximize their performance. If you have the time and resources, you can also survey every employee and simply ask them for their preferences in motivation, communications, scheduling, and the most effective way to manage them. Obviously managers can’t meet every individual need but a few small steps alone may be a major motivator.