November 29, 2012

Non-Negotiable Principles – How to Win the Productivity Game

Productivity rears its ugly head again with the barrage of recent reports by McKinsey, Ernst and Young and, for good measure, Professor Roy Green – the latter being by all means the most insightful.

Reading statistical research reports can be as fascinating as the conspiracy theory or as dull as counting sheep.  In this case, it’s more of the latter. The findings are hardly surprising. We are not where we should be, as a country and as leaders of organisations in Australia.

In some of my recent articles I wrote about how China is now innovating – with  vibrant, self-organising industry clusters that set the new prototype for disruptive innovation – through agile co-creation, collaboration and shared responsibility for productive outcomes to fiercely compete. Productivity? A way of life!

But let’s look at some home truths for a moment. The Ernst and Young ‘Australian Productivity Survey’ quotes these facts from the responders, calling them ‘encouraging’. I call it leadership failure:

  • 68% of employees are proud to work for their employer – that’s one in three who are not. How do customers feel about it?
  • 69% believe their work is valued – that’s one in three who can’t possibly feel productive, motivated or inclined to be innovative and create value for the organisation.
  • 78% have a clear vision of what is expected of them in their role – that’s one in five employees who are blundering in the dark. Not their fault. But as a leader, consider the consequences, because, most probably it’s not the transactional employees but the ones who are in the best position to add value.

Furthermore, the Survey summarises ‘productivity levels of a worker’s average day’:

  • 58% of the day is spent on work that directly adds ‘real value’ – maybe that’s enough? Is the organisation achieving its current and future goals?
  • 24% is spent on networking, personal development and other activities that are important to both individual and business performance – great! But are these activities strategically focused?
  • 18% of each day is spent on work that wastes time and effort – I am just curious what activities are included here!

So, while I question the purpose, and, hey, the very ‘productivity’ of these reports, I concur: business needs to be productive or it won’t last. There is however a difference between trying to ‘manage’ people into more output and ‘leading’ them to achieve what’s necessary.

What is Productivity?

Simply, it is about achieving the desired results to delight and keep customers, be it customers using your real products and services, or the shareholders. There is nothing more and nothing less.

Having a business Strategy is yesterday’s news. The problem is that most organisations don’t get past that point fast enough. They also separate the execution of operational goals from creative continuous improvement and innovation – leaving the door wide open for competitors.

Over the past one hundred and fifty years, since the division of labour was established by engineers and economists, much of the management effort has been on creating impregnable bastions of ‘independent’ departments like finance, HR, logistics and IT, forgetting that they are nothing more than support resources in one purpose: to create and keep a customer.

The role of accounting for example is not just to control spending by holding on to the purse strings for dear life and creating artificial budgetary bottlenecks for marketing and innovation. It is to proactively support the organisation in clearing the best path to invest in competitive knowledge and innovation initiatives to grow value.

Similarly, the role of IT is to support the organisation in making it easier for people to do work for customer to engage with the organisation rather than creating obstacles in access to knowledge and cutting costs through debilitating automation that undermines the brand experience.

Without agile marketing and innovation, companies today can rise and fall overnight. And, the spiral is tightening. The real danger WILL come from new competitors who emerge with new business models and cannot be ‘watched’ like traditional competitors.

Agility and Simplicity.

Agility in driving Marketing and Innovation to compete is the source of business success today. To achieve agility, the whole organisation needs be prepared to move fast and to dramatically reduce the response time by shortening the distance between the strategy/leader and the front-line and back-office.

There is often a ‘disconnect’ between what the business wants and what employees are thinking and doing. Lack of productivity is caused by the lack of understanding of the shared purpose, lack of focus on what constitutes a good operational decision on every level and lack of understanding of why and what company and every employee should ‘innovate’.

When simple decisions are constantly deferred up the management chain and there is constant re-work caused by wrong decisions, the outcome is poor productivity. But the real flow-on effects are lost marketing opportunities and slow responsiveness to innovation opportunities. Opportunity cost? Sounds familiar?

The desired Future starts with the Leader’s Vision.

Here is a thing. The patriarchal era of command and control is over. We live in the age of influence. The main task of a Leader is to provide a Vision that paints a bold and relevant future for everyone. Only then it can inspire and motivate People to pull together, on every level: department, company, or the nation. Leaders need to personally take charge of the message and evangelise it until it becomes a common language and a desired, self-correcting behaviour.

Have you seen the iconic movie, “The Blues Brothers”? They set out on a Mission from God, mobilising resources and overcoming considerable obstacles (and making some great music in the process). Dramatised for the movie, this is however the reality for leaders.

Providing a clear Mission is mission-critical. When correctly executed, mission provides the ROADMAP for all employees. It remindspeople who they are and what they are best at, FOCUSING THEIR ACTIONS on what gives them a Competitive Advantage and how to defend it.

Exceptional organisations take it one step further. They are able to distil their Mission and Competitive Advantage to a single Non-Negotiable Principle that all employees can understand, relate to, and apply when making daily decisions to drive strategy, brand proposition, differentiation and customer experience delivery. By practicing it daily, they are conditioned for change and more agile.

Non-Negotiable Principle ‘translates’ the company’s Mission and Competitive Advantage into one short statement or phrase that can easily be tested with a single question: “Will this action support our Non-Negotiable Principle?”

Giving the employees a CLEAR FOCUS on what is to be achieved and how to know it is being achieved is the ticket to meeting strategic goals faster, cheaper, more often! When people become comfortable with applying the Non-Negotiable Principle, they become more productive, and more confident in the accuracy of their decisions that they find more time and more capacity to think “BIG” and “INNOVATION”.

The flow-on benefits are higher morale, lower staff turnover, and an environment and culture that attracts the best talent and creates value that drives profitable sales.

Non-Negotiable Principles is an essential strategic communication and operational tool, designed to give an organisation the agility required to succeed in the new economy.

Its power is the simplicity of design and implementation, and the ability to create value through daily practice. But there is still an obstacle: internal structures, roles, silos and time constraints of key people to make it work to gain full benefits fast!

The difference between successful, profitable companies, and the rest, lies in what behaviours are broadly adopted and whether these behaviours are purposefully shaped to encourage specific outcomes.

Here is what to do.

There are three steps every leader should embrace immediately to create a strategically focused organization:

  1. Develop a set of 1-3 Non-Negotiable Principles around your Vision and your Competitive Advantage, i.e. your key strengths.
  2. Communicate, train, coach, repeat – until it becomes a common language and behaviour.
  3. Build purposeful employee networks to open the channels of communication internally and externally.

And, these are some of the benefits of a Strategically Focused Organization. Worth considering?

  • Increased differentiation making it easier for customers to buy and spread the virus.
  • Increased productivity from faster decision cycle and improved quality of decisions.
  • Increased profitability from shorter sales cycles and customer pull.
  • Increased business stability from continuous improvement and high market relevance.
  • Increased capacity to innovate and extend business offerings to existing and new markets.

Finally, a manager’s role is not to know everything but to know when and how to mobilise necessary resources to get things done. You can’t afford to wait till the next strategic plan or next budget cycle to start crating an agile organisation. Getting the Non-Negotiable Principle in the hands of your people is urgent and important. Do it now and ask for help if necessary.