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Category Archives: process improvement

The Overlooked Lens of Process and Efficiency

NYC Executive Coaching avatarPosted on January 28, 2025 by Doug BrownJanuary 28, 2025

From my associate, Janice Giannini.

Efficiency is the lifeblood of business. From assembly lines to boardrooms, the pursuit of smoother processes and higher productivity drives innovation and success. Yet, for all its importance, discussions about efficiency often feel predictable. They focus on incremental improvements to tools and workflows, missing deeper, more human layers of the conversation. What about the emotional undercurrents of collaboration? The unseen work that keeps processes running?  The messiness that is essential to spark creativity?

By broadening our lens, we can uncover fresh insights into process design to address the persistent barriers that limit progress. Today, we explore four frequently neglected dimensions of process and efficiency. By thinking at deeper levels, organizations can unlock their full potential.

 

1. The Emotional Intelligence Lens

When we think of process efficiency, we often envision systems: smooth workflows, optimized tools, and clear metrics. What’s missing is the human element, specifically the role of emotional intelligence (EQ) in driving operational success. EQ is the ability to understand and manage emotions, both our own and those of others. While typically associated with leadership or team dynamics, it also profoundly impacts process efficiency.

Processes don’t run in a vacuum; they are about the humans in the loop and rely on people. Teams with high EQ navigate interpersonal challenges with fewer delays and higher morale. Miscommunications can cause costly breakdowns in efficiency. A team with credible emotional awareness can address underlying frustrations before they escalate into conflicts that disrupt workflows.

Processes designed for maximum efficiency can inadvertently create stress. Tight deadlines, rigid workflows, or overemphasizing incomplete metrics can disenfranchise employees. This level of rigidity leads to burnout, reduced productivity, and even turnover—hardly efficient outcomes. Integrating EQ into process design means considering the emotional impact of workflows and building flexibility where needed.

From a practical solution point of view, organizations can cultivate EQ through leadership development, promoting empathy in team interactions, and fostering a culture of psychological safety. Employees who feel heard and valued engage more fully, driving smoother processes.

 

2. The “Invisible Work” Perspective/Lens

Every efficient process has a hidden foundation: the invisible work that supports its success. This invisible work includes emotional labor, informal knowledge sharing, and the countless small tasks that often go unnoticed and are critical to a smooth workflow.

Why does invisible work matter? Consider a team that runs a high-stakes product launch. While the visible process might include deadlines, deliverables, and roles, real efficiency hinges on invisible efforts. A senior team member mentoring a junior colleague or a manager mediating tensions behind the scenes might save hours of missteps and confusion. These behaviors can be the difference between success and failure.

Traditional performance metrics do not include this invisible work, consequently undervaluing it. One significant example of overlooked invisible work is emotional labor, which disproportionately affects women and minorities. Organizations must investigate these contributions to take advantage of opportunities to strengthen processes.

To elevate the invisible, companies can adopt systems that track and reward invisible work to address this, such as recognizing mentorship or creating knowledge-sharing platforms. Highlighting and supporting these contributions ensures they don’t fall through the cracks, improving overall efficiency.

 

3. The Role of Chaos and Creativity in Process Design

Efficiency is typically associated with order, but the most effective processes often incorporate elements of chaos and creativity. Controlled chaos, periods of disruption or experimentation, can challenge rigid structures and yield innovative solutions that traditional methods overlook.

Over-optimization has unintended consequences. Processes designed to be perfectly efficient can have undesirable unintended consequences. They need more room for adaptability and creativity, essential in today’s fast-changing business environment. An over-optimized workflow might excel in routine tasks but collapse under the weight of an unexpected challenge.

Organizations can intentionally disrupt their processes through hackathons, brainstorming sprints, or cross-functional collaboration. These disruptive actions frequently discover breakthroughs, creating a safe space for employees to question the status quo, experiment with new ideas, and identify previously invisible inefficiencies. Stepping out of the zone is necessary to harness chaos for innovation.

Consider the tech company that encourages employees to spend 20% of their time on passion projects or the design firm that rethinks workflows during innovation workshops. Some organizations set up separate teams in different locations, releasing them from the day-to-day constraints. These practices inject fresh ideas into static systems. By balancing structure with chaos, businesses can create processes that are not only efficient but also resilient and innovative.

 

 4. The Barriers to Process and Efficiency

Despite our best intentions, efficiency efforts often need to catch up. What stands in the way? Understanding these barriers, from cognitive biases to organizational culture, is critical to designing better processes.

‍Human biases, such as the sunk cost fallacy or confirmation bias, often hinder efficiency. Teams may cling to inefficient processes simply because they’ve invested significant time or resources.

Overcoming these biases requires a willingness to evaluate existing workflows, even when it’s uncomfortable critically.

Even the best-designed process improvements can fail if employees resist them. This resistance often stems from fear of change, failure, or loss of autonomy. Creating a culture of trust and open communication is essential to overcoming this hurdle.

Processes naturally grow more complex over time, especially in large organizations. This “complexity creep” can erode efficiency, making once-effective workflows cumbersome and outdated. Regular audits and simplification efforts are essential to combat this issue.

Practical strategies to break through barriers include:

  • Conducting root-cause analyses to identify bottlenecks.
  • Empowering employees to challenge inefficient norms.
  • Seeking outside perspectives to uncover blind spots.

By addressing these barriers head-on, organizations can unlock greater efficiency and foster continuous improvement.

 

Summary

Companies often treat process and efficiency as purely technical challenges through the lens of better tools and tighter workflow. But efficiency is, at its core, a human undertaking. By exploring the emotional dynamics of teamwork, recognizing invisible work, embracing controlled chaos, and addressing systemic barriers, organizations can take a more holistic approach to improvement.

Efficiency isn’t just about doing things faster or cheaper—it’s about creating processes that empower people to do their best work. It balances structure and creativity, visibility and acknowledgment, logic, and emotion. By rethinking efficiency through these lenses, businesses can achieve higher productivity and greater resilience, innovation, and employee satisfaction. Ultimately, the most efficient process works with people, not against them.

Posted in process improvement | Tagged efficiency, process excellence, process improvement

Building Scalable Systems: The Backbone of Sustainable Growth

NYC Executive Coaching avatarPosted on December 18, 2024 by Doug BrownDecember 18, 2024

[Editors note – This is the second of our 5-part series to help ensure your organization becomes hardwired for efficiency and effectiveness. These articles will reflect our current thoughts as well as insights gleaned from Lex Sisney’s book- Designed to Scale: How to Structure Your Business for Exponential Growth]

Building scalable systems‍As organizations grow, the complexity of operations increases exponentially. Without suitable systems, this complexity can quickly become overwhelming, leading to inefficiencies, bottlenecks, and a decline in overall performance. In this second article of our series, we focus on the critical importance of building scalable systems and processes, as outlined in Designed to Scale.

The Complexity Challenge

For smaller and medium-sized organizations, the leap from managing a single location or product line to overseeing multiple operations can be daunting. As your number of customers, employees, and transactions grows, so does the potential for errors, delays, and miscommunications. The system(s) that worked well for your organization in the past may no longer be sufficient as the business scales.

Designed to Scale highlights the need for systems that can grow with your business. These systems should be robust enough to handle increased complexity but flexible enough to adapt to changing circumstances. They form the backbone of sustainable growth, enabling your organization to operate efficiently despite growing demands.

Designing Scalable Systems

Scalable systems can expand and adapt without requiring a complete overhaul. This can apply to various aspects of your business, from IT infrastructure to human resources to supply chain management. The key is to build systems with growth in mind from the outset.

1. IT Infrastructure: As your organization grows, so does the need for reliable, scalable IT systems. Cloud-based solutions offer flexibility and scalability, allowing you to add resources as needed without significant upfront investment. Cloud solutions can help you grow your business through data storage, customer relationship management (CRM), or enterprise resource planning (ERP) systems.

2. Process Standardization: Standardizing processes is another critical component of scalability. You can ensure consistency and efficiency across your organization by establishing clear, repeatable processes for tasks like onboarding new employees, managing inventory, or handling customer service inquiries. Standardized processes also make training new employees and integrating new locations or product lines into your existing operations easier to accomplish.

‍3. Automation: Automation is a powerful tool for managing complexity. Automate routine tasks to free up your team to focus on higher-value activities that drive growth. This can include everything from automated billing and payroll systems to AI-driven customer service chatbots. The key is to identify repetitive and time-consuming tasks and implement automated solutions that reduce the burden on your staff.

Case Study: Scaling with Smart Systems

Consider a mid-sized e-commerce company that experienced rapid growth due to increased online shopping demand. Initially, the company’s systems were not equipped to handle the surge in orders, leading to delayed shipments, inventory shortages, and frustrated customers.

‍Recognizing the need for scalable systems, the company invested in a cloud-based inventory management system that provided real-time tracking and automated reordering processes. They also standardized their order fulfillment process across all warehouses, ensuring consistency and efficiency. These changes allowed the company to scale its operations without sacrificing customer satisfaction, leading to sustainable growth and a stronger market position.

Actionable Steps for Executives

1. Assess Current Systems: Conduct a thorough assessment of your current systems and processes. Identify areas where inefficiencies exist, or systems struggle to keep up with growth.

‍2. Invest in Scalable Solutions: Prioritize investments in scalable systems, particularly within IT infrastructure and automation opportunities. Choose solutions that can grow with your business and adapt to its changing needs.

3. Standardize Processes: Work with your leadership team to standardize mission-critical organizational processes. Document these key processes and ensure they are communicated clearly to all employees.

4. Monitorand Adapt: As your organization grows, regularly review and reassess the strengths of your systems and processes to ensure they remain effective. Be prepared to make adjustments as needed to address new challenges or opportunities.

By building scalable systems, your organization can manage the increased complexity that comes with growth. These systems (all critical for sustainable growth) will enable you to maintain efficiency, reduce errors, and ensure consistency across your operations.

In our next installment, we’ll explore the evolving role of leadership in a growing organization. As your business scales, your leadership style and focus must adapt to meet new challenges and guide your team through the complexities of expansion.

Posted in process improvement | Tagged business growth, business operations, scalable systems

Wait! Don’t Mess Up Our Process

NYC Executive Coaching avatarPosted on January 9, 2024 by Doug BrownJanuary 9, 2024

Our crack failure analysis team in Quality Engineering received the first call when a hi-tech manufacturing process started turning out defective products. They rapidly went to work, examining process data, taking measurements, assessing raw materials, asking questions about operators’ training levels, and calming down panicking manufacturing managers. Most often, the team defined the problem and corrected it within an hour or so. The team asked, “What changed?”

However, some of the most frustrating problems to identify and correct fell under the category of innovation. Yes…innovation—when operators responsible for an important step in the process thought they would take the initiative to change the process without asking for permission or telling anyone. Someone had an idea but did not test it or implement it in a controlled way.

We want our employees to be creative and look for improvements, but innovation is a process in and of itself. How do we encourage new ideas? How do we identify the best? How do we test them? How do we implement the best in a systematic, controlled way?

In crucial manufacturing or business processes, innovations should be tested outside the ongoing process. This makes sure the change to a particular step in the process produces the required result in quality and efficiency. After passing that analysis, the step can then be introduced to the ongoing process in a closely observed experiment where all affected participants are aware of the change and on board with it.

Innovation itself is a process. Innovative organizations encourage good ideas and let all employees know how ideas will be collected, evaluated, and put into practice. Recognition and rewards can make this process work in all segments of the organization. Those creative rogues can be exceptional contributors if they have a well-recognized innovation process where their ideas bear fruit.

Posted in process improvement | Tagged process excellence, process improvement

Process Excellence Progress: Navigating Pitfalls and Powering Success

NYC Executive Coaching avatarPosted on January 4, 2024 by Doug BrownJanuary 4, 2024

Starting any process improvement initiative can be challenging, and it’s not uncommon for organizations to encounter various errors and oversights. Here are ten of the biggest mistakes often made by teams in their early stages of process excellence initiatives:

‍1.    Lack of Clear Objectives: Defining clear, measurable goals for the process improvement initiative can lead to clarity and efficiency. With specific objectives, it’s easier to gauge success or progress.

2.    Need for Stakeholder Engagement: Not involving key stakeholders, including those directly affected by changes, can lead to resistance and a lack of buy-in. Engaging stakeholders early and often is crucial for success.

3.    Ignoring Current Process Understanding: Not fully understanding or documenting the current processes before attempting to improve them can lead to misguided efforts. A thorough analysis of the existing processes is necessary to identify actual issues and areas for improvement.

4.    Underestimating Resource Requirements: When organizations grossly underestimate the time, budget, and personnel needed for successful process improvement, resource constraints hinder the initiative’s progress.

5.    Overlooking Change Management: Change management is a critical component of process improvement. Neglecting the human aspect of change can lead to resistance, low morale, and a failure to adopt new processes.

6.    Jumping to Solutions Without Proper Analysis: Implementing solutions without a thorough problem analysis often leads to suboptimal or counterproductive results. It’s essential to take the time to properly diagnose issues before jumping to solutions.

7.    Failing to Establish Metrics for Success: It requires defining what success looks like and how it will be measured to evaluate the effectiveness of the improvement efforts. Clear metrics allow for the tracking of progress and outcomes.

8.    Inadequate Training and Communication: To avoid confusion and non-compliance, provide sufficient training and communication about the new processes. People need to understand what is changing, why, and how it impacts their work.

9.    Ignoring the Need for Continuous Improvement: Process improvement is not a one-time event but a continuous journey. Organizations need to establish mechanisms for ongoing improvement, orthey may find their processes becoming outdated or inefficient over time.

10.  Overcomplicating the Process: Sometimes, in an effort to achieve perfection, organizations over-engineer solutions, making them too complex to implement or sustain. Simplicity and practicality should be guiding principles in process improvement.

Avoiding these common pitfalls can significantly increase the chances of a successful process improvement initiative.

In addition to the pitfalls, there are several other key considerations and best practices that can help ensure the success of your process improvement initiatives:

‍1.    Prioritize Processes for Improvement: Identify and prioritize which processes need improvement based on their impact on the organization’s goals and objectives. Trying to improve everything at once can spread resources too thin.

2.    Employee Involvement and Ownership: Encourage employees to be part of the solution by involving them in the process improvement initiatives. Engaging diverse perspectives can foster a sense of ownership and commitment among the team members.

3.    Utilize Proven Methodologies: Employ established methodologies like Lean, Six Sigma, or Total Quality Management (TQM) to guide your process improvement efforts. These methodologies provide structured approaches that have been tested and proven over time.

4.    Data-Driven Decision Making: Base your decisions on data and facts rather than assumptions or intuition. Data-driven insights can lead to more effective and efficient improvements.

5.    Regular Review and Adaptation: Continuously review the progress of your initiatives and be prepared to adapt your approach based on what is or isn’t working. Flexibility and adaptability are key in responding to new challenges or insights.

6.    Celebrate Small Wins: Recognizing and celebrating even minor improvements can boost morale and encourage continued effort toward process improvement. It’s important to acknowledge any progress made, even when seemingly incremental.

7.    Risk Management: Anticipate potential risks and challenges associated with process changes and develop contingency plans. This proactive approach helps minimize disruptions.

8.    Sustainable Implementation: Ensure that all improvements suggested or made can be sustained over the long term. Note: this may involve changing processes and altering your underlying systems, structures, and cultures to support the new way of doing things.

9.    Customer-Centric Approach: Always consider the impact of process improvements on your customers. The ultimate goal of any process improvement should be to enhance customer satisfaction and value.

10.  Leadership and Support: Strong leadership and support from top management are crucial for driving process improvement initiatives. Leadership should actively sponsor and champion these efforts to ensure they receive the necessary resources and attention.

‍By considering these additional perspectives, you can further enhance the effectiveness of your process improvement initiatives and avoid common pitfalls that might hinder their success.

Posted in process improvement | Tagged process excellence, process improvement

Your Business Execution Checklist

NYC Executive Coaching avatarPosted on January 18, 2023 by Doug BrownJanuary 18, 2023

From my associate Howard Litwak.

A successful organization is one where all the parts are working together (are in alignment). These organizations are innovative, customer responsive, and prevent fires – they’re not spending their time putting out fires. The Star Model provides a model for alignment.

Organizations of all sizes that have taken the time to master alignment will maximize the short and long-term payout both from a financial and emotional perspective. This alignment is what creates a company that is “World Class,” “Remarkable,” and “Best.” (Fill in your own descriptive term)

Notice that nothing in this model stands alone. Everything touches everything else. All of the points of the star are foundational to the fundamentals of business: getting customers and best-serving customers in order to retain them. I’ve broken down the specifics of each point of the star below.

CUSTOMER LOYALTY and RESULTS

  • All departments have goals established that support overall objectives
  • All points of connection with customers are identified
  • Areas of opportunity to improve points of connection to deliver remarkable service are identified, and best practices established
  • Indicators of the company’s financial health are identified and tracked in order to know whether the business is on track to produce the desired results or not

 

STRATEGY

  • Compelling Vision is established and well communicated
  • Core Values are established and alive throughout the organization
  • Yearly objectives are identified
  • Target markets are clearly defined with demographics and psychographics
  • A unique selling proposition is created for each market
  • Additional resources needed to achieve yearly objectives are identified
  • Additional skills and knowledge needed to obtain objectives are identified.

 

STRUCTURE

  • An organizational chart is created showing the accountabilities of roles
  • Position descriptions are completed for each role, including responsibilities, results expected, standards, and key performance indicators
  • All identified systems are documented in writing using checklists where ever possible to create an operations manual
  • Ensure that roles and responsibilities are aligned with team member’s strengths

 

PEOPLE

  • Ensure that success-oriented habits and attitudes are developed and reinforced
  • Make sure that team members understand each other’s strengths, weaknesses, and behavioral styles
  • Succession plans are in place for key roles

 

PROCESS

  • All organizational systems are identified
  • “Done Right” for each process is clearly defined
  • All processes are regularly evaluated for continuous improvement

 

REWARDS

  • Performance is measured against desired results and core values
  • Recognition programs encourage behaviors that lead to desired results

 

LEADERSHIP

Company culture revolves around:

  1. Always provide the best service to the customer,
  2. Always do the best job possible
  3. The workplace should be where one constantly learns, grows, and improves
  • Up to 5 quarterly priorities are identified, which support yearly objectives. A #1 priority is clearly defined
  • A tracking system for Key Performance Indicators is implemented
  • Necessary information flows daily and weekly through a meeting rhythm
  • Goals are established to obtain needed resources

 

Here are some questions you can use to evaluate where your business stands now on each of the points of the star:

Strategy

  • Are employees aware of your objectives? Do they agree? Are they in alignment?
  • How are your current efforts securing your pre-determined business objectives?
  • Can you tie your business decisions and actions back to your core values?
  • Do you have a picture of the future that you believe you will realize?
  • What are your top priorities?

 

Structure

  • Do you have the right people on the rights seats of the bus, and are resources allocated correctly? How do you know?
  • Do you spend a lot of time putting out fires?
  • How do departments know what other departments are doing?

 

People

  • What is the biggest issue you have in managing your people?
  • Do you feel your people have the skills necessary to implement your plan?
  • How do you gauge your people’s productivity?
  • How do you measure the morale of your employees?
  • Do you have people ready to fill succession plans?
  • How do you make people feel that they are an important part of the organizational whole?
  • How well do you know what your strengths and weaknesses are? What are your people’s strengths and weaknesses?
  • Does each person in the organization have a detailed development plan with short and long-term goals and action steps?

 

Process

  • When was the last time you improved your core processes (i.e., taking out waste, inefficiencies, and extensive costs?
  • Are you meeting process deadlines?
  • What does “done right” look like, and how long does it take?
  • How well are you meeting speed and quality delivery?
  • How are you challenging everyone to seek innovative and improved methods of doing business and growing the company?
  • Do you ask your people to analyze processes that interfere with their performance and the performance of the organization?

 

Rewards & Recognition

  • How do you currently measure performance?
  • What do you reward and why?
  • When things aren’t going well, what do you reward?
  • How often do you review employees?
  • Is there a recognition program that shows your people you appreciate your efforts and that their accomplishments are recognized?

 

Leadership

  • How do you develop leaders?
  • How would you differentiate the difference between a leader and a manager and what is more important to the success of your organization?
  • Do day-to-day operations reflect a “How can we make things better” philosophy?
  • What qualities do you need to develop to be a better leader?
  • What qualities do your people need to develop to be better self-leaders?
  • Is everyone in the organization committed and focused on achieving organizational success?
  • Is the culture one which encourages people to be their best and perform their best?

 

Results

  • How do you measure success?
  • How do you know if you’re moving in the right direction?
  • How satisfied are you with your current business results?
  • How do you measure your customers’ satisfaction?
  • How are you maintaining consistent growth and improvement?
  • Are you focusing on results rather than activities?
  • What is standing in the way of achieving your goals?

 

This is your road map to an organization that is proactive and innovative. One which develops loyal customers, not just satisfied customers. These are your keys to a high-performance organization. If you focus on aligning the points of the star in your organization, you will be rewarded with higher profits, better standing in the marketplace, and less stress!

Posted in process improvement, Strategic Thinking | Tagged strategic thinking

Do You Want Your Business To Thrive? It’s About the People

NYC Executive Coaching avatarPosted on January 4, 2023 by Doug BrownJanuary 4, 2023

From my associate Janice Giannini.

In today’s rapidly changing environment, companies either thrive or die. Thriving requires closely integrating the business and people imperatives into the processes driving the business. Inadequate recognition and integration will fail to deliver the needed business results. I opine that looking through a few different lenses might be helpful:

  • Are you focused on the right things? How do you know? Typically, any number of metrics are in place that “answer” this question. If the metrics are going in the right direction, you’re focusing on the right things. Right? Well, that conclusion assumes that the environment around you is relatively stable and similar to the past. Is that a valid assumption?
  • If you are focused on the right things, are you doing them the right way? How do we know? Again there may be metrics in place to measure the “wasted energy” in a business. In many cases, the metrics are comparisons to the past. Is the “wasted energy” in the industry getting better or worse? This question only makes sense if the environment is similar to the past. It doesn’t answer the question, “how much better could you do if your processes are highly effective/efficient in an environment in constant flux?”
  • When looking at the operations in a business to streamline and improve operational efficiency and effectiveness, the technical aspects of these processes typically take center stage. And while necessary and critical, they are not sufficient sans the people.

 

So, what does it look like to do the right stuff in the right way in a highly fluid environment? How much change is required? How do you get everybody on board? And what gets in the way? A rapidly changing environment requires high degrees of adjustments and modifications.

These last few questions are critical. Perhaps the most unsettling query is how to get folks on board. Everybody must be on board at the outset to thrive and reach the business’ potential. When people are on board, it is easier to define how much process change is required and what gets in the way.

Greater awareness of what causes people to change may enable a simple approach to forging a path through these murky waters. Moreover, incorporating that understanding of what causes people to change into the alignment process leads to better results.

I love the simple way John Maxwell articulated the four reasons people change:

  • They hurt enough that they need to
  • They see enough that they are inspired to
  • They learn enough that they want to
  • They receive enough that they are able to

 

As business leaders at the Board, C-Suite, as well as tactical levels, how are you incorporating this knowledge into the processes you use to:

  • Strategically drive the enterprise
  • Align execution processes in the company to the strategic goals, and
  • Resource the operations to achieve or exceed your stretch goals

 

A point to ponder: “how much better could you do if your processes are highly effective/efficient in an environment in constant flux?”

Posted in process improvement | Tagged process improvement

Transitioning From an Entrepreneurship to a Professionally Managed Firm Part III

NYC Executive Coaching avatarPosted on October 12, 2022 by Doug BrownOctober 12, 2022

Editor’s Note:This is the second installment of an ongoing series surrounding what it takes to move from a relatively small, micro-business to a more robust, larger organization. Each article explores a different aspect of that journey.

In the previous issues, I discussed the initial phases of transitioning from a business in its infancy to becoming a sustainable business. I discussed the challenges and the growing pains that are experienced by many companies in that part of the growth curve and understanding the six key organizational development tasks to navigate.

In this issue, we will identify and help you better understand the four major stages and the typical characteristics of those stages that an organization must pass through on its way to greatness.

Those stages and characteristics are:

DescriptionDevelopmental NeedsTypical Revenue Size
1. New VentureNiche and marketsLess than $2 million
2. ExpandingResources and operations$2-$10 million
3. DevelopingProcess management$10-$100 million
4. IntegratingOrganizational cultureMore than $100 million

 

Stage One: In the first stage, revenue ranges from a pure startup to revenues approaching $2 million. As we have covered in detail previously, the essential thing that the owner must be concerned with is developing a focused approach to building the business and securing customers. This happens by identifying, defining, and developing appropriate niches and the carriers and markets to serve them.

Stage Two: In the second stage, the firm has expanded beyond the $2 million range and may hit $10 million. At this stage of development, it is not unusual for the firm to experience a period or periods of rapid expansion. This expansion obviously will involve top-line sales revenues but will likely affect any number of employees and multiple locations.

Stage 2, therefore, provides the management of the firm or organization with a new set of challenges surrounding development. How often have people talked to us about their resources being stretched almost to the breaking point when increased sales require ever-increasing people resources, cash flow, office equipment, supplies or office space.

Simultaneously, just trying “to get the work out the door” is restricting the owner’s attention to recruiting new staff, managing the ongoing training of staff and paying adequate attention to customers and clients other than the renewal period. Since the problems of this period tend to be more associated with growth than survival, this is when people will be pulling their hair out.
It may play out as follows:

  • Supplies run out unexpectedly
  • Some invoices get paid multiple times while others don’t get paid at all for months on end
  • The quality of customer care and responsiveness for existing customers is decreasing with nobody inside catching on to it
  • Fighting fires and dealing with the crisis of the hour or day becomes the norm
  • Staff turnover begins to spike at the worst possible time due to the stress or burnout
  • The impact of poorly designed and executed recruitment processes and lousy hiring decisions come home to roost
  • Errors in handling paperwork (in a paper-based system) lead to missing files, letters, backup documentation, or requests for changes that lead to blaming, confusion, wasted time, and embarrassment
  • Errors in scheduling discipline or too many promises made by too many people may mean the staff will need to be in two places at once or crisscrossing all over the state or country on the same day

 

Ultimately, it can become so devastating that the organization collapses and goes out of business. Usually, this is because the founder or owner did not deal effectively with the issues and managerial challenges that occurred as the organization grew. Having an effective operational system infrastructure that is scalable as the organization grows may be more critical than many people realize. Often owners are not as concerned with what has been dubbed by some as “organizational plumbing” as maybe they should be.

Stage Three: At Stage 3, the owners, and any partners and managers, realize that there is more to becoming even more successful in the future than strictly throwing money into people, equipment, and space. It will be critical that a transition to a different type of organization occur. The movement from an entrepreneurial management style known for its informality to a much more professional leadership style must occur.

It is time to have well-defined strategic plans and operational goals and plans. Regularly scheduled meetings are needed to ensure that everyone stays on the same page and doesn’t feel left out during the quickly changing pace of business. Everyone should have a position description and a well-articulated scope of responsibility used as day-to-day management tools. If not yet in place, it is time for a performance appraisal process to be part of the overall management control system. The people who manage the firm also must change their role and skill sets, approaches to their position, and competencies to keep up with business developments. They probably started as a hands-on manager or a super-worker. They may have maintained that posture through the first two phases. It is unlikely that this same style will serve them well in the future.

Increasingly, what will be needed are the skills associated with formalized planning and administration and overall motivation, including reward and recognition systems and leadership competencies. One tendency to avoid using attention to detail is to under-invest in the management infrastructure until it is almost excruciating.

Stage Four: During Stage 4, the main focus is integrating. Once the organization has somewhat mastered the issues discussed in the prior stages, the crucial work of organizational development begins- the care and feeding of the corporate culture. The culture impacts the day-to-day running of the business. It can also have a considerable effect on the level of profitability.

Since day one, the organization has hired multiple people. They may have come in waves (almost referred to as the class of ‘XX) as the business surged through various levels. In many cases, the staff hired early on probably was hired using a much less formal environment and process. Often, one only needed to demonstrate the basic skills to be hired. Culture, whatever existed, was transmitted via word of mouth and observations surrounding, “That’s how we do things around here.” During the second bout of growth and hiring, the employees who were hired early on in the firm’s history become the carriers and keepers of the culture.

As this process becomes replicated, maintaining the culture gets harder and harder for two reasons. First, the sheer number of people hired can overwhelm the number of early hires. The second challenge comes from expanding via branch offices and locations. It is almost impossible to establish and maintain the desired culture while only relying on casual means. It is time to bite the bullet and establish a formal approach to groom the culture. So how do we characterize the differences between an entrepreneurial style and a professional management style?

In simple terms, many entrepreneurs tend to be relatively informal in their operations, lack processes, and systems, and have a freewheeling nature. They are much more likely to decide based on a gut feeling. An organization with professional management tends to be more formal, has well-developed processes and systems, and exerts internal discipline to achieve its business and profitability targets.

In his book, Making the Transition from an Entrepreneurship to a Professionally Managed Firm Eric G. Flamholtz articulated nine discreet result areas that differ between the entrepreneurial and professional management styles: profit; planning; organization; control; management and development; budgeting; innovation; leadership; and culture. The differences are striking, and understanding the methods behind each form of management leads to an enhanced sense of purpose for an organization during this change.

In the next installment, we will discuss developmental items and tactics, explain and assess the organizational growing pains, and plan the transitions that the leader must successfully execute. Watch for the next installment.

Posted in Organizational Development, process improvement | Tagged effective leadership, strategic planning, strategic thinking

Are You a Complexifier?

NYC Executive Coaching avatarPosted on November 2, 2020 by Doug BrownNovember 2, 2020
Complexifier

It may be a funny word when we first hear it. But when we let the impact sink in, it may be one of the most costly words on the planet. The true cost may be well more than the … Read More

Posted in process improvement | Tagged process improvement

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