Creating a business that succeeds involves fostering a decision-making process that enables the organization to make solution-centric decisions. It’s a move away from a hierarchal process to one that places decision-making in the trenches of the day-to-day work, creates an organizational structure that eliminates information silos and shares decision-making with the most experienced, informed employees. How do you do this?
Leadership That Empowers
First, choose empowering leadership that helps build more creative and helpful employees. A recent publication in the Journal of Organizational Behavior revealed that appropriate delegation of authority and tasks that empowered subordinates resulted in increased trust in the leader as well as improved performance of employees in organizational citizenship and a level of creativity and willingness to share that creativity. The publication drew from 105 distinct studies and analyzed data from more than 30,000 employees in 30 countries.
Next, managers recognized that hierarchical decision-making doesn’t generally work because the most informed people aren’t making the decisions that enable departmental choices. Using methods of Kaizen, or similar to it, put the decision-making into the hands of line managers and departmental managers who observed problems and could fix them on the fly. This helps develop a positive decision-driven culture.
Multiple Methods of Compliance
Successful companies strike a balance between rule-based compliance and systems that reduce the change risks more holistically based on a culture of ethics and responsibility. When most companies organize or re-organize, the focus on assigning turf and creating fiefdoms and hierarchy creates problems. Those over-defined reporting lines discourage using decisions as a unit of analysis. The result is power-hungry managers demanding decision rights they shouldn’t own, while the other managers surrender their rights. With too broad or too narrow a responsibility set, the re-organization creates silos that should be illuminated.
It also discourages necessary employee and manager supervision and limits accountability. You need an appropriate balance of do-ers and few watchers. The watchers need to discourage micromanagement, so power struggles don’t develop. Discourage complex organizational infrastructure and ensure that your do-ers far outnumber your watchers.
Categorize Risk and Plan Appropriately
You can reduce risk by categorizing it and learning from your successes and failures. Ford Motor Company focused more on its notable achievements and worked to replicate them, while Yahoo noted its failures and instituted changes to stop them from repeating. Categorize your risks according to three types:
- Preventable risks which arise within the organization that you can eliminate through rules and compliance checks. This includes staff making unethical choices and unauthorized decisions or purchases.
- Strategy risks which an organization assumes willingly so it can increase returns based upon its strategy.
- External risks which arise due to externalities, such as macroeconomic shifts, natural and manmade disasters and political unrest. The organization cannot control or influence this risk type.
Conducting a decision audit identifies the needed structural changes. That starting point helps you understand which critical decisions drive company success and determine the organizational level that should make those decisions to create the greatest value and improve performance.
Manage Execution of Risks of Change
Managing the execution risks of change depends on properly leveraging your resources and challenges to organize for success. Your budget can be a resource and a challenge. The budget provides a critical method of planning and strategic development. You can use it as a planning tool for strategies and create milestones based upon line items. An inadequate budget can create challenges unless you look at the challenge using the Yahoo method. Devising ways to use the limited budgetary amount and still meet expectations avoids failed initiatives.
As The Wall Street Journal pointed out, “Change requires work and effort.” The staff that must execute the changes often doesn’t have time for the process because their workday is already devoted to their own work. The day-to-day machinations of the company overtake their schedule. Because they have no incentive to spend extra time on organizational change, they become a significant challenge. This requires determining what work can be paused to free up executives and managers to execute change initiatives. You also need to ensure that the changes don’t create extra work for employees.
Moving to a digitized system, also called going through a DX, can result in positive attitudes since it saves employees time and effort by making their work easier. If your change makes things more complex or slows down their work, they will balk and refuse.
You may lose key executives or managers. You need to design changes that benefit every employee and contractor, rather than making things easier for one department by making things more complex for others. Use the process-stakeholder analysis method to determine each stakeholder’s goals and vision. Your change needs to positively impact each person because you lose them when you get in their way. You need to keep your talent because you create a new organizational challenge if you lose your best and brightest because you were not looking out for their productivity or success. The best managers build better managers who go on to become their own bosses eventually. Bad managers lose good people who get out from under them, so they can shine.
Your data and systems must support the change initiatives, but this creates a challenge for change since legacy systems weren’t designed for modern management. Starting changes with updates to your system can help provide the needed infrastructure to support vital changes.
Contact Starr & Associates for help getting started with solutions planning for your company to institute a culture change. You can create a more productive, always-on, always successful company, but it takes work and effort. You may have to let some ideas and people go in order to make room for your success-driven, solution-centric decision-making company.